Contradictory views about effects of the Agency Workers Regulations on PAYE umbrella contractors and other temporary workers emerged this week, with one expert maintaining that the regulations will have negligible impact on employment while a major industry body claims the exact opposite.

James Carmody, of the specialist employment law solicitors Reculver, suggests that the AWR will not prevent employers from taking on temporary staff, although they may become more cautious about letting temporary placements ‘drag on’.

He added “There are certain rights that affect employees from day one, but these are unlikely to have a significant financial impact on employers. Therefore the regulations are unlikely to have a significant impact on temps who are taken on for a few weeks to cover say, holidays, or busy periods.” Moreover, he believes that employers will not be faced with burdensome additional costs in the early weeks of employment.

His comments more or less coincide with observations from the Pertemps recruitment agency, whose spokesman Tim Watts recently told the BBC’s On the Money podcast that the marketplace in flexible working was “booming.”

Other voices are altogether more pessimistic about the AWR. The CBI has already called for an early review to assess its impact on employment, a move endorsed by the Association of Recruitment Consultancies (ARC).

According to a survey conducted by ARC this month, many of its members believe the AWR is already impacting negatively on UK employers and undermining the market for agency workers.

Contractors working through umbrella companies are less vulnerable to any adverse effects the regulations may bring, however, as they invariably possess highly prized skills that employers are eager to acquire.

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