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There has been concerns in the freelance community that the EU-inspired Directive would give contractors similar rights to employees in terms of pay, hours, conditions, holidays etc, making them less attractive to potential clients. The initial aim of the Directive was to protect vulnerable workers who were forced in agency operations so that their employers could avoid statutory rights and benefits.
In the Government's latest response to the consultation process, it sets out its current thinking for the regulations.
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"....the scope of the definition does, however, include agency workers contracted to an 'umbrella company', or who operate a personal service company but are not genuinely self-employed, or who are supplied through 'intermediaries' such as Master/Neutral Vendors and any similar 'chain' arrangements. Despite concerns expressed by some respondents, we are concerned that not to include these structures would provide a relatively straightforward way for the unscrupulous to evade the regulations."
Flawed
However, one agency representative body thought that the distinction between limited company and umbrella contractors was flawed.
Ann Swain, Chief Executive of the Association of Professional Staffing Companies (APSCo), said: "While the Government is right to exclude limited company contractors, including umbrella company contractors within this legislation creates an artificial distinction based on corporate structure which does not meaningfully reflect the status of the worker.
"Is the Government really saying that umbrella company contractors are always 'vulnerable' but limited company contractors are not? Clearly there are many umbrella company contractors who earn more than limited company contractors, so this distinction is flawed."
The new rights will apply to agency workers who have been in a position for 12 weeks. It will come into force on October 1, 2011, at the end of the time-scale available to the UK Government for implementation.
For more information see:Implementation of the Agency Workers Directive: Consultation on draft regulations (pdf)
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Susie Hughes © Shout99 2009
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