Relevant Legislation
On the ball
With ARM’s proactive approach to Compliance ever in mind, the
Legal Support Team are always on the ball – and usually one step
ahead. The Team keep a constant watch on current and upcoming
legislation in the UK and EU to ensure ARM’s best possible service
to workseekers, contractors and clients alike.
Relevant legislation currently in force
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UK |
European Union |
| The Employment Equality (Age)
Regulations 2006 |
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Conduct of Employment Agencies and Employment Businesses
Regulations 2003 (amended 2010) (‘EAA
Regs’)
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| The Immigration, Asylum & Nationality Act 2006 (‘IANA’) |
Treaty on the European Union 1992 (‘Maastricht Treaty’) |
|
Working Time Regulations 1998 (amended 1999) &
Working Time Regulations (amendment) 2003 (‘ WTR’) |
Treaty of Amsterdam 1999 (‘ToA’) |
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|
Working Time Directive 1993 (‘ WTD’) |
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| Agency Workers Regulations 2010
‘AWR’ |
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EAA Regulations
Introduced in April 2004 the EAA Regulations are a major step
towards regulation of the recruitment industry, benefitting clients
and workseekers alike. In brief:-
For Candidates and Contractors
Anyone who registers with a recruitment consultancy must
provide proof of identification and of any qualifications required
for the role they apply for. Recruitment consultancies are unable
to put registrants’ CVs forward until the necessary documentation
has been received and verified.
For Limited Company Contractors
The EAA Regulations recognise to some extent the unique
position Limited Company Contractors (‘LCCs’) enjoy in the UK.
Because acceptance of the protection the EAA Regulations offer all
workseekers could have an adverse affect on an LCC’s tax position
under IR35, LCCs are offered the opportunity to opt-out of the EAA
Regulations and thus declare the Regulations non-applicable to
their services. An LCC’s decision to opt-out must be documented by
means of a signed declaration, and is not final – upon termination
of an assignment the LCC is fully entitled to revoke the Opt-Out
declaration and recognise the EAA Regulations as applicable to
their services once again. Unless an LCC clearly indicates their
choice to opt-out of the EAA Regulations they are considered to be
protected by the Regulations.
For Clients
Under the EAA Regulations recruitment consultancies are
obliged to obtain details regarding any Health and Safety risks
relevant to the role the client wishes the consultancy to recruit
for, and will request this information from their clients.
Recruitment and Employment Confederation (REC) have produced
some EAA guidance leaflets which you may wish to read:-
Click
here for more information
for Candidates
Click
here for more information
for Clients
Click
here for more information
for Limited Company Contractors regarding opting out of the
regulations
The 2010 amendment of the EAA regulations can be found online
at:
IANA / Immigration Rules
Amended 1 May 2004, section 8 of the Asylum and Immigration Act
1996 (‘AIA’) establishes a detailed obligation to for all UK
employers to establish all (potential) employees are indeed
eligible to work in the UK. In line with the REC Code of
Professional Practice and increasingly clients’ requirements, ARM
proactively seek to establish its candidates’ / contractors’
eligibility to work in the UK in order to afford its clients the
Defence against the Offence of employing / engaging illegal workers
as defined in section 8 AIA.
ARM has always exercised diligence in ensuring that we are
compliant with all relevant employment legislation when placing
candidates and working with clients.
Section 8 of the Asylum and Immigration Act required that we
obtain certain documentation from candidates proving their
eligibility to work in the UK.
As of February 29th 2008, the requirements of this act
are superceded by:
The Immigration, Asylum & Nationality Act 2006
(“IANA”)
What does it mean for workseekers?
Roughly the same requirements apply as under the AIA 1996, save
that documentation to be provided has been sharpened up
somewhat:-
The primary document remains a valid passport or national
identity card. Where the document provided is a passport, the
following pages must be provided:-
- The photopage and all other pages bearing personal details
(incl. pages bearing date of birth and the expiry date of the
passport), AND
- All pages bearing UK government endorsements, including current
and previous visa stamps / stickers, AND
- The front inside and outside cover pages of the passport,
particularly those stating the passport number, AND, if
applicable
- A valid work permit
In the absence of a valid passport a combination of the
following may establish one’s eligibility to work in the UK:-
- A Birth Certificate (“long form”, stating the name of at least
one parent; issued in the United Kingdom, Isle of Man, Channel
Islands or Republic of Ireland); AND
- An official document bearing one’s name and National Insurance
number, f.e. NI card, P45/60, NHS card, letter from government
agency with reference to tax credits or benefits etc.
Workseekers who do not have Indefinite Leave to Remain should be
aware that employers are now obliged to carry out annual checks on
the validity of their employees’ Leave to Remain.
For more information about the IANA and the various visa
categories, please consult the website of the Border &
Immigration Agency on http://www.ind.homeoffice.gov.uk
What does it mean for clients?
The act requires employers to carry out annual checks on the
validity of leave for all workers whose visa is subject to time
limits (“limited leave to remain”).
REC
Under the Asylum and Immigration Act 1996, the onus for checking
a prospective employee's eligibility to work in the UK falls firmly
with the employer. In the situation where a person is working with
through an agency, the Home Office could view either the agency or
the client or both as the employer for such purposes.
Technically you do not have to check documents, but you should
inform your client if you have not done the necessary checks for
immigration purposes. They may not be very happy with that as it
would leave both of you open to a potential sanction of a fine of
up to £5,000, if it was found that you placed an illegal
worker.
That is part of the reason why the REC advises all their members
to make the necessary immigration checks. If you decide not to,
then that is at your own risk.
The main reason is that if you want a guaranteed defence to this
Act, you must have checked those documents which the Home Office
have listed.
PCG
While there is no requirement for identity to be checked when a
proper contract for services exists, realistically agencies and
Employment Businesses are likely to want to adopt ID checks as
standard procedure. It is also clearly the intention of the
government that agencies and Employment Businesses should check
workers' identity. There is no requirement on contractors to
provide such evidence. PCG advice is, however, that there is no
compelling reason not to comply with such requests. Any contractor
who declines to co-operate does so at the risk of ruling themselves
out of a contract. While members may have understandable concerns
over, for instance, the risk, albeit low, of identity theft, it is
of course for the individual to consider these against the
possibility of having to decline an engagement.
Some members have observed that a contractor employed by a big
consultancy firm would not be required to provide ID. Of course
this is true, but only because the firm for which they work will
have checked their identity. With a one person company, this is not
self-evident and agencies' caution is understandable. Members who
have questioned the legality of reproducing passports and other
documents may also be assured that, as ATSCo observed when offering
their official position, such reproduction for these purposes is
common practice and entirely legitimate. Members may wish to
arrange for copies to be verified and signed by a solicitor or
doctor and retain a number of these for future use. Unverified
copies will often be acceptable in practice. To avoid their
accidental loss, PCG advises members not to send original documents
unless necessary and to satisfy themselves that any documents sent
are stored securely.
We can further reassure members, in line with advice from both
Accountax and Lawspeed, that providing ID would have no adverse
implications with regard to IR35. It would not be related to the
actual work and, as a request by the agency, would not have any
impact on the hypothetical contract between contractor and
end-user. It does not, therefore, have any bearing on the criteria
by which IR35 status is assessed.
For more information, click here for the official Home Office
guidance booklet detailing among others what documents can prove an
individual’s eligibility to work in the UK.
WTR / WTD
The Working Time Regulations 1998 came into force on 1 October
1998 and have been amended in part by the Working Time Regulations
1999 and the Working Time (Amendment) Regulations 2003. The
Regulations implement the European Working Time Directive into UK
law. They are primarily health and safety legislation and are
intended to protect workers from the risks that arise out of
working excessively long hours or for long periods without
breaks.
The Regulations apply to PAYE temporary workers working through
employment businesses as well as employees. Employment businesses
are therefore “employers” for the purposes of the Working Time
Regulations and are directly responsible to their temporary workers
under the provisions of the Regulations.
Of immediate interest is the fact that employees’ and PAYE
temporary workers’ entitlement to paid leave increased from 20 to
24 days per year on 1st October 2007, and is set to increase to 28
days per year on 1st April 2009.
Limited Company Contractors do not fall within the definition of
“worker” and are therefore outside the Regulations’ scope.
For further information you may wish to contact:-
Department of Trade and Industry:
020 7215 5000
Health & Safety Executive
0845 345 0055
IR35
IR35 is tax legislation that affects all Limited Company
Contractors. A contractor who is deemed to be genuinely
self-employed by the Inland Revenue (i.e. ‘outside IR35’) enjoys
the advantage of an income out of dividend, which is taxed at a
significantly lower rate than Income Tax.
The process that leads to a final decision as to whether a
Limited Company Contractor is genuinely self-employed is long and
arduous and more often than not ends up being decided in favour of
the contractor. Key aspects influencing that decision are the
degree of control an (end) client has over the contractor; the
absence of mutuality of obligation in the contract and actual
working relationship; whether or not the contractor has the right
of substitution and many other less significant factors.
ARM’s contracts are IR35 friendly, and ARM actively encourages
its clients to treat contractors as self-employed
individuals.
EU Treaties
The EU Treaties establish ‘the four freedoms’ which constitute
the single market:-
- Free movement of Persons
- Free movement of Goods
- Free movement of Capital
- Free movement of Services
It is by virtue of these four freedoms that businesses and EEA
citizens throughout the European Union can establishes themselves
and do business in any EEA member state. UK businesses can freely
engage with EEA citizens, their spouses and dependants, whom are
per default eligible to work in the UK.
Age Discrimination
From 1 October 2006 contractors will be protected from Age
Discrimination
- In contrast to employees, contractors will not be able to claim
Unfair Dismissal, unless they can successfully establish Implied
Employment
- Discrimination may be allowed where it can be objectively
justified
- Be aware of wording and requirements that may be indicative of
an age requirement
- Reg. 5 protects the recruiter from detrimental action if he
refuses to carry out a client’s discriminatory instruction.
Affected aspects of employment
It will be unlawful for an employer to discriminate:-
- in the arrangements he makes for the purposes of determining to
whom he should offer employment; or
- in the terms on which he offers that person employment; or
- by refusing to offer, or deliberately not offering to employ
him; or
- in the terms of employment which he affords him; or
- in the opportunities which he affords him for promotion,
transfer, training or receiving benefits; or
- by refusing to afford him, or deliberately not affording him,
any such opportunity; or
- by dismissing him, or subjecting him to any other detriment;
or
- to subject to harassment any person whom he employs or who has
applied to him for employment.
Temporary workers
Temporary workers (including self-employed contractors) are
expressly included in the Regulations. It is unlawful for a client
or an employment business to discriminate against “contract
workers”:-
- in the terms under which he allows the contract worker to do
that work; or
- by not allowing the contract worker to do the work; or
- in the way he affords the contract worker access to any
benefits; or
- by subjecting the contract worker to any other detrimental
treatment.
Challenge Assumptions
Employers, and perhaps recruiters, have many misconceptions
about training, productivity and sickness levels in relation to
particular age brackets. However, research indicates that:-
- Age is a poor indicator of work performance;
- Older workers are as adaptable as younger ones and tend to
respond equally well to training;
- Older and younger workers are equally effective in their work
activities;
- There is little difference in absenteeism between older and
younger workers; and
- Older workers tend to stay in their jobs longer.