EXPERT OPINION: The AWR is likely to go

The election of Liz Truss as prime minister is likely to lead to the repeal of the Agency Workers Regulations 2010 (AWR) says John Hayes, managing partner at Constantine Law.

Liz Truss has just won the Tory leadership race on an avowedly right-wing platform. She has promised to repeal all EU-derived legislation and to “finish Brexit”. She has also promised a “bonfire of workers’ rights” in order to liberate business from red-tape. While a fundamental reform of employment law in the UK is unlikely (most of it actually works quite well), certain changes are likely.

Parts of the Working Time Regs (eg. maximum 48-hour week) are likely to go. Certain TUPE rules are like to be scrapped. The IR35 Reforms may be delayed or reversed. But what else? The obvious one, the big one, is AWR.

AWR 2010 (came into law in 2011) was required to give effect to the EU Temporary Workers Directive (2008). It was a piece of European, socialistic legislation: the basic proposition being that the provision of basic employment conditions for agency workers are no less favourable than if they had been recruited direct by the hirer. This covers remuneration, holiday, working hours, overtime, maternity, and anti-discrimination provisions and other entitlements. Regulation 5 applies in the UK after a 12-week qualifying period.

Agency workers are also entitled to access a hirer’s collective facilities and have access to information about job vacancies from day one.

AWR is a relatively complex piece of legislation, and it was introduced by way of regulations (ie. not under an Act of Parliament). It would therefore be relatively easy to scrap. AWR resulted (as we know) in the revision (and provision) of millions of re-written contracts between both the hirer (agency) and the worker; and also between the hirer and the end-user (client). It also necessitated the use of other novel forms of supply such as the Swedish derogation (now repealed).

At the time, there were predictions of doom and gloom in the agency sector (as there were when Working Time Regulations [WTR] was introduced in 1998, with the statutory right to paid holiday for the first time). As with WTR, so with AWR, the sector is ever-innovative and highly entrepreneurial and it absorbed AWR into its working practices and the sector continued to grow.

Nevertheless, there is no doubt that most agencies and end-user clients would prefer to see the AWR scrapped. There are many complexities: eg. working out, under Reg 5, whether an agency worker and comparable employee are paid the same (sounds simple, but in practice is not once commissions, overtime and bonuses are considered). Further, there can be joint liability (as between agency and client) for Reg 5 rights, only for the main (agency-client) commercial agreement to put those back on one of the parties.

My belief is that repeal of AWR will now happen. Strictly speaking, AWR is not now necessary under UK law (we have left the EU). It follows that AWR (and any other EU-derived law) only now exists as an act of political will. My view is that this ‘will’ disappeared on 6 September 2022 when Liz Truss became prime minister.

John Hayes is managing partner at Constantine Law and a leading employment law expert in the agency workers’ sector.

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