The final consultation on the Agency Workers Directive (AWD) was held on this week at the Department for Business, Innovation and Skills (BIS) in London. It is now likely the directive will include umbrella company contractors, whereas contractors who provide their services through a limited company will be exempt.

There was an intense debate regarding the definition of a ‘worker’. It is now likely that the definition used in the Working Time Regulations 1998 will also apply to the agency workers covered by the Agency Workers Directive. Umbrella company contractors tend to view themselves as independent contractors but their working arrangements actually make them employees.

BIS has published the consultation document which classifies a worker as, “someone who works under a contract of employment”. It continues, “Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer or any profession or business undertaking carried on by that individual.”

Union delegates to the consultation did not want any exclusions to the directive, claiming that vulnerable workers would be forced to use those particular working practices to stay outside the AWD. Therefore the BIS are still questioning the apparent exclusion of limited company contractors.

The BIS consultation is open for responses until the end of this month and contractors can use the BIS website to make their views known. They can also write to their MP to request a delay in the implementation of the directive. It does not need to come into force until December 2011 but many groups are calling for the directive to enter the statute books as early as April 2010.

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