Crystal Umbrella

The Queen’s speech confirmed that the Agency Workers Directive would not come into force until the end of 2011. However the implementation of the EU directive continues to cause potential issues for contractors. In fact, policy-makers are continuing to face issues regarding how to remove the threat to contractors’ work from the scope of the law.

The government has conceded that self-employed workers and limited companies would potentially suffer if caught by the scope of the directive. This resulted in the proposals to exclude contractors on managed service contracts, those working through limited companies and genuinely self-employed workers from the reaches of the legislation. However, last week an MP who is firmly behind the law said that the proposals to exclude these group weren’t “particularly encouraging”.

Speaking in an interview, Brookson founder Martin Hesketh said that Labour MP Andrew Miller believes that policy-makers “don’t have an answer” to this issue. He also stated that a recent discussion with recruiters of IT contractors resulted in the belief that current definitions within the draft regulations are “very unclear”.

This meeting was hosted by the Association of Professional Staffing Companies (APSCo) who stated that the current definition of personal service companies is ambiguous. Marilyn Davidson, APSCo director, has also stated that the policy unit for the Directive were willing to take these issues on board they were not able to answer questions relating to how it will affect the self-employed.

Speaking to Contractor UK, she said: “That [the exclusion for self-employed contractors] is an area that is very foggy and we need to clarify. We will seek clarification through the final draft.”

The Association of Professional Staffing Companies has surveyed its member firms on the recent swine flu pandemic and have found that IT contractors are reluctant to take time off work, even if they are suspected to have the virus. This could potentially cause others in the workforce to become infected with the H1N1 virus. APSCo have attributed this reluctance on behalf of contractors and freelance workers to the current recession as they only get paid for the hours they actually work. Many contractors feel that they cannot afford to take time off due to illness. However, this issue could worsen later this year if the expected second wave of swine flu hits.

Marilyn Davidson, APSCo’s director, said: “In past years seasonal flu hasn’t been much of a problem and is considered an occupational hazard for contractors. This year though, the recession has exacerbated cashflow problems for contractors and there are compelling reasons for them to try and stay at work.”

The APSCo survey revealed that contractors who refuse to go home when sick are likely to cause “animosity” within their place of work. APSCo are recommending a pro-active approach, advising employers to ensure that their sickness policies were up to date and that “contractual terms are revised at the earliest opportunity.”

APSCo commented further: “Significant problems can arise of a sickness policy is ambiguous and a contractor with suspected swine flu stays on-site. This is something that is increasingly likely during the recession as contractors do not get sickness pay, so will be looking to maximise their income.”

The concerns regarding the forthcoming Temporary Agency Workers Directive continue. Its aim is to award agency workers the same rights that permanent employees have. APSCo, the agency group, has advised the government that freelance workers working through umbrella companies or personal service companies and earning three times the National Minimum Wage should be exempt from the directive. High earning freelance workers are apprehensive that this European Directive will have an impact on the work offered to them.

This directive must become UK law by 2011 and the government is currently consulting on its implementation. If they accept APSCo’s proposal, freelancers earning upwards of £17.40 per hour or £33,930 per year would be excluded from this legislation.

Chief Executive of APSCo, Ann Swain, said, “The Government has acknowledged that this legislation is intended to enhance the rights of ‘vulnerable’ workers and is receptive to the idea of excluding professional level temporary workers. It has indicated to APSCo that an exclusion based on an income threshold which is a multiple of the National Minimum Wage could be an appealing situation.”

She continues, “We feel that three times the National Minimum Wage is about the right income level for the exclusion. It means that about 90% of workers placed by APSCo members are outside the scope of the legislation. This would be a workable solution which would be easy to understand and enforce.”

The Agency Workers Directive aims to give agency workers working on the same assignment for twelve weeks or more ‘equal treatment’ to permanent members of staff. ‘Equal treatment’ is likely to include pay and basic working conditions.

The number of non-EU IT workers arriving in the UK has tripled since the dotcom boom. Statistics uncovered by the Association of Professional Staffing Companies (APSCo) under the Freedom of Information Act, show that the rate of foreign (non-EU) IT workers who entered the UK last year has increased almost three times since the onset of the current recession.

The data shows that from 12,726 in 2000, the work permits issued to IT workers from non-European Union countries increased to 35,430 in 2008. APSCo adds that the number continues to increase significantly despite the current economic situation, which has led to thousands of UK IT workers losing their jobs. However, the statistics uncovered by recruitment trade body APSCo also revealed that the number of non-EU IT workers coming to the UK in 2008 decreased by 8% from its high point of 38,450 in 2007.

APSCo also states that the data indicates that the new points-based immigration system introduced in 2008 seems to have very minimal effect on minimizing the entry of foreign (non-EU) IT workers coming to the UK. The vast majority of non-EU IT workers (80%) coming to the UK are on intra-company transfers, through which companies move IT workers between offices in different countries.

Ann Swain, Chief Executive of APSCo, says: “It seems crazy that with the economy in a severe downturn and thousands of IT workers having already lost their jobs we are still bringing three times as many foreign IT workers to the UK than during the dotcom boom when we had a chronic skills shortage.”