Freelance accountancy professionals must get to grips with the AWR

Later on this year, a new piece of EU legislation will come into effect that will impact on freelance accountants and finance professionals everywhere. However, as the clock ticks down to its introduction, a failure to get to grips with the new rules could be costly and damaging.

The Agency Worker Regulations (AWR) will come into force in the UK in October 2011. It has huge implications for temporary work agencies and the contractors, freelancers and temps who find work through them. The aim of the AWR is to protect vulnerable workers from exploitation and ensure them the same basic employment conditions as their permanent equivalents after 12 weeks of service – mainly the right to the same pay, working hours and holidays. However, it also has implications for skilled accountancy and finance freelancers as the legislation makes no distinction between them and low-paid, low-skilled temporary workers.

To say that the evolution of the AWR has been controversial is an understatement, and the legislation as it currently stands is the result of a plenty of horse trading between the Government, the TUC and the CBI.

Perhaps the biggest confusion seems to be around what constitutes an agency worker.

The traditional view of agency workers seems to be blue collar production line workers such as those caught up in the row between BMW and the union Unite in 2009 (which, although you can trace the beginnings of the AWR back to 2000, led to a marked step change towards its introduction). However, an agency worker can range from those working in agriculture and food production industries to temporary secretarial staff, or from jobbing actors through to highly skilled freelance accountants and consultants.

The official definition of an agency worker is a person who has a contract of employment with a temporary work agency and is supplied by them to work temporarily for, and under the supervision of, a hirer or client. They can also be known as temps, interims, contractors, freelancers or flexible workers and in the more heated moments of the AWR debate, as vulnerable workers.

Like a lot of the legislation introduced in recent years to the temporary workers market (IR35, MSC etc), the legislation has not made a distinction between these two ends of the agency worker spectrum: the vulnerable agency workers who deserve the protection of the AWR, and the highly skilled, high-earning contractors who provide their services to end users via a recruiter. It’s fair to say that most of the highly skilled, high paid agency workers do not see themselves as vulnerable or in need or want of protection.

In fact, when we polled our own base of the 8,000 contractors we work with, over 80% hadn’t even heard of the AWR, despite the impact it could have on the way they work. In addition, a survey of contractors by www.contractorcalculator.co.uk concluded that 75% of professional contractors and temps don’t want employee rights in the first place.

Temps, freelancers and interim managers need to be talking to their recruitment agents and clients now and use resources such as www.understandingawr.co.uk to brush up on their own working knowledge of the AWR.

It is absolutely right that vulnerable workers are protected in this country. However, this shouldn’t be to the detriment of the UK’s highly skilled temporary and freelance workforce who make such a valuable contribution to the economy and are supporting the fledging recovery.

If the industry gets this wrong, then a lot of time and money will be wasted as it moves to the courts and employment tribunals to sort this out. Sensible discussion now, 8 months before its introduction, will ensure that all parties in the temporary labour market can develop a robust solution in order to work within the legislation and ensure that freelancing remains a profitable option for accountancy professionals and a valued service for businesses.


Rob Crossland is the Chief executive of the Parasol family of companies, which also includes ClearSky Accounting, and provides umbrella PAYE services to over 9,000 freelancers in the UK.