The REC has given its verdict on the first six months of the Agency Workers Regulations (AWR) and concluded that the legislation has not dented demand for PAYE umbrella contractors and other freelancers, despite adding considerable cost and bureaucracy burdens to the UK’s recruitment industry.

Demand for contractors working through either umbrella companies or limited companies has remained steady since the AWR was introduced on 1st October last year, even though many pundits warned at the time that the rules would decimate the contactor jobs market. Moreover, a recent REC survey of employer hiring intentions revealed that the overwhelming majority (84%) intended to increase or maintain their temporary personnel over the next three months, a proportion which rose to 89% for the longer term.

So far, there are few signs of a litigation deluge (the regulations permit workers to instigate employment tribunals if they believe equal treatment rules have been breached). The main impact of the regulations has largely been confined to particular sectors, notably driving and industrial, where the ‘Swedish derogation model’ has been most widely adopted (this obliges recruiters to pay workers between assignments).

The REC’s Director of Policy and Professional Services, Tom Hadley, said that the evidence so far is that recruiters across the country have managed the new requirements very efficiently, ensuring that arrangements for flexible working remain a “crucial outlet” for businesses and workers alike.

He added: “Rather than being a final call for agency work, the AWR has been a rallying call for the UK recruitment industry to demonstrate its resilience and ability to make things work on the ground.”

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