Limited companies are 'specific challenge' for agency rules

The impact of the agency workers rules will be assessed over the coming months in time for its one year anniversary next October.

The EU-inspired Directive gives similar rights to agency or temporary workers as employees in terms of pay and conditions. Limited company contractors had been the subject of considerable controversy amid concerns that freelancers would be included in the rules giving them rights they did not want and making them less attractive to potential clients.

In the end, freelancers are excluded from the rules provided they are working in a genuine business to business arrangement.

However, agency body, the REC, has been conducting on-going monitoring of the rules and has reported that the status of limited company contractors has been among the specific challenges its members face.

In summary, some of the main messages from REC's latest AWR Monitor are as follows:

• The impact of the regulations continues to vary by sector. Overall, temporary billings have shown a slight but sustained contraction over recent months;
  
• Where agencies have flagged specific challenges over the last month, these have focused on the status of Limited Company Contractors and practical implications of 'pay between assignments' models (PBA);
  
• The future outlook remains more positive. REC's recent survey showed that 81 per cent of employers plan to increase or maintain current use of temporary or contract staff over the next three months. The number of employers planning to take on more agency staff in both the short and long term has increased;
  
• Recent feedback has confirmed that on the whole recruiters have made the necessary changes and are focusing on the 'day-job' of providing the best possible service to employers and workers;
  
• There are few signs at present of a surge in information requests and tribunal activity. The one tribunal case that has so far been brought to the REC's attention is likely to be heard next month;
  
• One emerging trend is that agencies are having to come to terms with employing temporary staff under a PBA model. This brings with it the whole challenge of managing an employment relationship, including disciplinary procedures, absence and performance management.