What are the Agency Workers Regulations (AWR)?

If you are looking for IPSE's Guide to the Agency Workers Regulations, please click here.

  • The Agency Workers Regulations (AWR) were introduced in 2010 and are designed to protect low paid ‘agency workers’ such as temps. They are also designed to stop permanent employees from being undercut by lower cost agency workers.
  • They do this by giving ‘agency workers’ a legal right to be treated the same as if they had been employed directly by their client.
  • This equal treatment applies in terms of how much they are paid, how much holiday they receive, and various other rights.
  • If an individual believes that their rights under the AWR are being ignored, ultimately they could bring an Employment Tribunal against their Hirer or Agency.
  • The regulations came about as the result of an EU Directive. Concern had been expressed in the EU that low paid ‘agency workers’ were subject to poorer terms and conditions of employment that those who were engaged permanently.
  • The regulations do not apply to genuine freelancers who are in business on their own account. Any worker who is not under the supervision and direction of their hirer is also out of scope.
  • Unfortunately, the way in which freelancers are exempted is unclear and potentially open to interpretation. This could have the effect of discouraging businesses and recruiters from using the UK’s most flexible, most skilled workforce.
  • Currently freelancers have reported minimal problems with these regulations, however IPSE remains vigilant for any potential issues.

A lack of clarity

  • The AWR is not intended to cover freelance workers. Freelance workers in business on their own account are out of scope of the legislation, as are those who do not work under the supervision and direction of their hirer. However, the guidance issued by the Government is unclear and leaves room for interpretation that could limit the appeal of freelance workers.
  • Some businesses may be unnecessarily put off engaging freelancers because they mistakenly believe they will need to provide rights under the AWR, adding significant bureaucracy and cost to businesses at a time when they most need support.
  • Freelancers, in particular those who work through their own limited companies do not need the protections the AWR offers.
  • They are exempt if in business on their own account, but this needs to be made as clear as possible.

Why should freelancers be out of scope?

  • Freelancers are not vulnerable workers, they are businesses. They negotiate their own terms of working (unlike an employee) and are engaged by their clients on a business to business basis.
  • The flexible skills that freelancers provide are vital to the economic success of the UK. The lack of clarity surrounding the AWR could put this in jeopardy.
  • Businesses need to have the confidence to procure services from contractors and freelancers without fear of unnecessary tribunal cases or legal action.

IPSE Action

  • IPSE has produced a guide to the Agency Workers Regulations for agencies, clients, and recruitment professionals, outlining the scope of the legislation. This guide makes it clear what steps need to be taken to ensure a freelancer is clearly out of scope of the AWR. This guide is available here.
  • Prior to the introduction of the AWR legislation, IPSE met with civil servants at the Department for Business, Innovation and Skills to ensure freelancers in business on their own account were out of scope. This was instrumental in the final decision to ensure those in business on their own account were excluded.
  • IPSE extensively liaised with key stakeholders such as the Recruitment and Employment Confederation to ensure implementation of the AWR was as smooth as possible.
  • IPSE has met with numerous agencies and end clients to brief them about the new law.
  • By being seen at numerous conferences, seminars, and breakfast briefings, IPSE has helped to make sure the new law has been implemented as smoothly as possible.
  • IPSE continues to monitor the impact of the AWR closely, and continues to inform and educate all those involved with freelancers on the issue.