Agency worker regulations and IR35

[LisaContractorUmbrella]

From the final guidance published by BIS:

"Simply putting earnings through a limited company would not in itself put individuals beyond the possible scope of the Regulations. Individuals may choose to do this for the sake of flexibility or for tax reasons. However where the relationship between the individual, TWA and hirer remains, in essence, a tripartite relationship and a hirer is not a client or customer of such individuals, they are likely to be in scope. In the event of a dispute, in order to establish if a worker is genuinely in business on their own account (B2B relationship) the courts have devised a number of tests which examine the individuals circumstances and consider all aspects of the relationship, including what a contract might say or what it does not say, the expectations of their parties and their conduct, to establish the reality of the relationship.

If the arrangements do not reflect the reality of the relationship (e.g. despite the wording of a contract, the actual reality is that the individual is not in business on their own account and they work under the supervision and direction of the hirer) or are an avoidance tactic, then the individuals are likely to fall into the scope of the regulations"

[bobspud]

Speaking to my Agent he was saying that as long as the contractor is not worse off than an employee in the same role then the rules are not a problem. The issue comes if the contractors rate is less than the permie when taking holidays and sickness into account. For instance he has several call centre guys that are probably not earning enough compared to the guys sat next to them with 4 weeks holidays and sick pay...

[craig1]

Speaking to my Agent he was saying that as long as the contractor is not worse off than an employee in the same role then the rules are not a problem. The issue comes if the contractors rate is less than the permie when taking holidays and sickness into account. For instance he has several call centre guys that are probably not earning enough compared to the guys sat next to them with 4 weeks holidays and sick pay...

That was the initial intentions when creating the regulations but when drafted they became generic, imprecise pieces of drivel that will help fund the pension funds of lawyers and tax accountants. You could be on £10,000 per day doing a similar job to a minimum wage permie and still be caught by the AWR's imprecision, if looked at with the right interpretations.

[Support Monkey]

From the final guidance published by BIS:

"Simply putting earnings through a limited company would not in itself put individuals beyond the possible scope of the Regulations. Individuals may choose to do this for the sake of flexibility or for tax reasons. However where the relationship between the individual, TWA and hirer remains, in essence, a tripartite relationship and a hirer is not a client or customer of such individuals, they are likely to be in scope. In the event of a dispute, in order to establish if a worker is genuinely in business on their own account (B2B relationship) the courts have devised a number of tests which examine the individuals circumstances and consider all aspects of the relationship, including what a contract might say or what it does not say, the expectations of their parties and their conduct, to establish the reality of the relationship.

If the arrangements do not reflect the reality of the relationship (e.g. despite the wording of a contract, the actual reality is that the individual is not in business on their own account and they work under the supervision and direction of the hirer) or are an avoidance tactic, then the individuals are likely to fall into the scope of the regulations"

And if they then fall inside the scope of the regulation then they would be entitled to holiday, Sick, Bonus payments from the client, YES , NO

[malvolio]

And if they then fall inside the scope of the regulation then they would be entitled to holiday, Sick, Bonus payments from the client, YES , NO

Yes. But (a) they still wouldn't actually be employees and (b) their contract would probably not last very long.

[Support Monkey]

Yes. But (a) they still wouldn't actually be employees and (b) their contract would probably not last very long.

Temps are not employees, under the terms of AWR they just have similar rights

I for one take every oppurtunity to prove i am a contractor in business for myself so would never look to go down this route but it does show that there is potential for this to happen however slim that chance maybe there is still a chance

maybe if this did happen it would force agencies/ clients to either make sure everyone they take on is definately outside IR35 or stop taking on contractors, wonder which one it would be

[LisaContractorUmbrella]

Speaking to my Agent he was saying that as long as the contractor is not worse off than an employee in the same role then the rules are not a problem. The issue comes if the contractors rate is less than the permie when taking holidays and sickness into account. For instance he has several call centre guys that are probably not earning enough compared to the guys sat next to them with 4 weeks holidays and sick pay...

The AWR doesn't only deal with pay, it also deals with holiday entitlements, working hours, rest breaks etc etc so your agent is not completely correct. When considering pay, you also have to think what is included in 'basic pay' as that is your comparator - basic pay includes overtime, bonus or incentive payments linked to performance, holiday pay and vouchers or stamps.

[LisaContractorUmbrella]

And if they then fall inside the scope of the regulation then they would be entitled to holiday, Sick, Bonus payments from the client, YES , NO

Yes, unless they were working through an umbrella company that operates the Swedish Derogation Model which means the contractor works under a permanent employment contract; the question of equal pay in these circumstances is then no longer an issue