Supporting our customers to comply with the Agency Workers Regulations

1. Supporting our customers to comply with the Agency Workers Regulations

2. Agenda Overview • Introductions • Update • Purpose Agency Works Regulations • Overview & Timescales • Options • Preferred Options What can we do for our clients next? • Implementation of IT & Management systems • Implementation of robust contracts • Signed agreements with our clients Questions & Discussion

3. AWR Compliance & Monitoring The implementation of the Agency Workers Regulations (AWR) in October 2011 will require clients and Recruitment Agencies to work in partnership to ensure the regulations are adhered to. The Regulations are the most important legislation to affect employers since the Conduct of Employment Agencies and Employment Businesses Regulations came into force in 2003. As members of the REC we will keep our clients abreast of all legal implications and changes. Presently we are evaluating the impact on our clients. We will ensure our Planning Tools, Payroll system and Driver Passport System will ensure you are in compliance with the new legislation. We will also comply with any in-house systems our clients use going forward to monitor the new legislation and indemnify our clients against any liability associated.

4. The Team Gail Radley – Operations Director Charlotte Harper – Financial Director Richard Fenton - Operations Manager Marian Butterworth- Operations Manager

5. Our Business 4 Locations 500 Temporary Workers • 200 Permanent Workers 2nd Tier Agencies

6. Strategic Approach 1 Invoice • Aim to Create Savings • Enhances Relationship • & • Creates Partnership Value Partnerships Contract

7. Our Objective Reduce Exposure Enhance Relationships & Create Partnerships Main Supply Legal Compliance Visibility and Control

8. The Agency Workers Regulations

9. Implementation PRE 1st SEPTEMBER 2011AWR IMPACT ASSESSMENT COMPARATOR

10. Agency Workers Regulations 2011

11. Agency Workers Regulations 2011

12. Agency Workers Regulations 2011

13. Agency Workers Regulations 2011

14. Agency Workers Regulations 2011

15. Agency Workers Regulations 2011

16. Agency Workers Regulations 2011 • ‘Day One’ Rights • Access to collective facilities • Information on relevant vacancies 1st October Agency Workers get two sets of rights • Rights After 12 Weeks • Pay • Working Time • Annual Leave

17. Agency Workers Regulations 2011 Options Pay parity with permanent workers pay and benefits (not bonus) Companies Directly engage Temps True Self Employment Pay-between Assignments Terminate before 12 weeks • Does not fit with Operational needs or Ethics • 12 weeks after 1st October through Companies • Un-welcome addition to Perm Workforce • Reduces flexibility • Regulation 10 “Swedish Derogation” for PAYE Drivers only • Drivers must meet the criteria & adhere strictly to our advice

18. Swedish Derogation Pay between assignments Demand Why? Longevity Liability minimal Swedish Derogation

19. Our approach Workers supplied on Pay Between Assignments Contracts (Which Workers?) The Clients and H&G to confirm Contractual Commitment Required Indemnity from H&G for losses incurred where workers supplied without Pay Between Assignments Contract occur Workers signed to Pay Between Assignments Contracts by 1st September (which ones?) and reporting to and H&G on numbers signed

20. AWR Monitoring The popular consensus throughout most of our clients is the derogation route which we have been trialing by adopting a “pay between assignments philosophy” H&G understand that our clients will require us to manage the AWR for them. We expect to demonstrate our knowledge of the legislation and accept the need to invest heavily in our IT infrastructure.

21. How it works Employment Contract with H&G Employment Contract defines suitable work for worker Operational commitment to assignments of 16 to 20 hours per week Express waiver of Regulation 5 pay right Pay-between assignments for minimum of 4 weeks

22. AWR - Conclusion H&G has installed robust technology to ensure legal compliance. • Has bespoke client terms in place for all legally compliant options. • Has legally compliant terms in place for the supply of mobile & general workers through a derogation model paid via PAYE. • Has legally compliant terms in place for the supply of mobile & general workers paid via umbrella companies via derogation model. • Has legally compliant terms in place for Ltd company contractors who have opted out of the AWR. • Has legally compliant comparator contracts for PAYE workers. All our contracts (terms & conditions) are viewable on our AWR portal, please go to www.H-G-Recruitment.com or email questions to AWR@H-G-Recruitment.com for an informed answer by our legal department.

23. Client = Control (no Direct Relationship LTD Model Umbrella – (Paye Day) Client Client • H&G • Terms • - LTD Co. Terms Terms Terms H&G = Control H&G Worker (SE / PAYE) Paye Day P/S (LTD) Terms (Over arching) Terms Worker

24. Q Frequently asked Questions & Answers

25. QIfa client pays double or treble time to its permanent employees for working a Bank Holiday after the 12 weeks, will they have to pay agency workers for the same rate? • A Yes, equal treatment after 12 weeks includes payment at the same pay rates. Pay includes holiday pay, shift allowances, overtime rates. It does not include bonuses relating to company performance or long service. (Straight forward supplied on PAYE) • QWhen preparing our contracts for drivers within the scope, can a contract be for a minimum of hours, usually 4 per day? Can we issue part-time contracts guaranteeing a minimum of hours? Currently we guarantee a 4 day week but it is a gentleman’s agreement. 8 hours per day, that would be a 36 hour contract? This would form the basis of the Swedish derogation. Do you think this is appropriate or too onerous? • A The Regulations do not change the status of agency workers. They are still workers unless you adopt the Swedish derogation model, in which case they become employees. The Swedish derogation model (Regulation 10 of AWR) provides that where an agency worker has a contract of employment with the agency (which meets the specific conditions set out in Regulation 10 of the AWR), then that worker is not entitled to equal pay. However, the agency worker will still be entitled to equal treatment in respect of working conditions (rights to know about vacancies and rights to on site collective facilities e.g. canteen) as all other agency workers from day one. • Two key factors relating to the Swedish derogation are that where an assignment has terminated, the agency must take reasonable steps to find suitable alternative employment for the agency worker. Where the agency cannot find suitable alternative work, the agency must provide the agency worker at least 50% of what they were being paid in their previous assignment, provided the amount is not less than the National Minimum Wage (£5.93). The agency must do this for a minimum of four weeks before it can terminate the contract of employment. So, you cannot fix the contract in the way you are suggesting – the amount you have to pay in between assignment depends on the amount they were paid in the previous assignment. The Swedish derogation option is only suitable where you can guarantee a volume of work and where you are prepared to accept the additional liabilities of a contract of employment (e.g. unfair dismissal and redundancy payment rights). If there is not a large volume of work, it would be extremely expensive. (Hence the need for continuity, regulatory and commitment)

26. Q Our client wishes to know if he pays his own driver’s meal allowance will he have to pay his agency the same after 12 weeks? (If the client classes this as expenses then, no the agency worker is not entitled). • A It is likely this will fall under the equal pay provisions and that he would have to pay it to agency workers too. We are awaiting detailed guidance on what the Government means by ‘pay’ (Drivers on PAYE would be entitled to LV not expenses e.g. vouchers, that can be turned into cash are seen as PAYE) • Q If he works his driver’s annualised hours’ contract but however, only has 36 hours available, the driver gets paid 48 but owes the client 12 hours free during a busy period. How could we safeguard that the driver would be available when it was next busy? Can the contract stipulate that they must work on specific dates? Or that if they have to give us notice before leaving they would pay us back from the final pay? • A The Regulations do not affect the status of the workers so you can continue as you have been previously unless you adopt the Swedish derogation model. In that case if you asked a driver to carry out certain work they would be contractually bound to do so. • Q If a client pays overtime after 12 hours basic to their own drivers, would they have to pay overtime to their agency on the same basis? • A Yes they would (Unless under Swedish or genuinely self employed). • Q If a client guarantees a minimum hour day 9:- 8 to his own driver, does he have to guarantee the same to an agency worker? • A Yes, they have to be paid the same after 12 weeks’ work in the same role with the same hirer. (Lower minimum hour guarantee is ok under the Swedish derogation only).

27. Q If the drivers are employed by us and work at a site on a regular basis, who does the disciplinary in the event after 12 weeks? • A Under the Swedish derogation model the agency would be the employer and responsible for discipline although you would need input from the client. If you do not adopt the Swedish derogation model you continue as normal. (Terms of business would insist that client participation was essential to carry out a process) • Q If different clients have different procedures, do we have to have a separate contract for each one? • A You will have your own disciplinary procedures with your own employee drivers under the Swedish derogation model; you will just need to inform the drivers what the rules of each workplace are in the same way as now. (Agency has its own set of procedures under the Swedish derogation PAYE, drivers would still be workers then they would not be subject to discipline). • Q When on site working under the direction and control of the client, is the welfare the client’s responsibility or the agency? e.g. lateness • A In the first instance, it is that of the client. However, the client may refer matters to you since the agency has the contract with the driver and you would be responsible for disciplining if you are adopting the Swedish derogation model. (Straight forward the client PAYE no disciplines. Swedish derogation agency discipline but clients must provide information trail). • Q If discipline is the agency’s responsibility, what responsibility does the client have in terms of providing accurate information? • A None unless you make this a contractual requirement (terms of business)

28. Q Many clients are talking about going down the Swedish derogation route as their preferred route. Do you have an example contract for this? • ANo, but it would be relatively straight forward to amend an existing contract of employment to specify that the driver is entitled to a certain minimum amount of work and pay between assignments. As for pros and cons, see response to point 2. (The REC will be publishing model contracts) • Q If a worker wants to work for multiple agencies how does this work? • A I am not sure whether you mean in the context of the Swedish derogation route, or just generally. Workers may work for multiple agencies and may have contracts with each agency. If they are in the same role for 12 weeks but supplied by different agencies they will be entitled to equal treatment after those 12 weeks. Therefore it is very important when they start working for the agency that you check where they have worked before and for how long. • Q How do notice periods work? • A These are only relevant under the Swedish derogation model. You would not normally have notice periods with agency workers and this will not change under the new legislation unless you adopt the derogation which will mean that, as set out above, if you are unable to supply new work, then you must pay at least 50% of the pay the worker was receiving on the previous assignment, as long as this is not less than the National Minimum Wage, for a minimum of four weeks. • Q If all the agencies involved needed the individual on the Bank Holiday and the contract included Bank Holiday working, how could we guarantee the worker’s services? If the worker called in sick, we would not know if he or she was working for one of the agencies. • A The legislation does not affect this situation unless you use the Swedish derogation model in which case you would ask the employee to work on a specific day. Otherwise you would ask the worker to self-certify that they were sick if they phone in sick as would be normal practice.