By Claire West

With awareness levels of the Agency Worker Regulations (AWR) continuing to rise, recruiters are increasingly being asked by clients to look at alternative supply models. On the back of this, the Recruitment and Employment Confederation (REC) has underlined the need to evaluate the potential risks that these can create for agencies.

One area of interest is the so-called 'Swedish Derogation' - whereby the agency essentially employs the temporary workers. The benefit for workers is that it will afford greater employment rights and job security.

Although this kind of model can derogate from the principle of equal treatment in terms of pay, there are a number of practical implications that agencies must consider - in particular the fact that the workers would acquire full employment rights with the agency and would have to be paid even when not placed on assignment.

Underlining the need to weigh up the potential risks, REC Solicitor Lorraine Laryea says:

"Queries to the REC's Legal Helpline confirm that many clients are interested in alternative models of supply. Agencies will need to decide whether the so-called 'Swedish Derogation' is a commercially viable proposition and it is crucial that the full implications are taken into account. New regulations can bring new opportunities but there are also new risks to factor in.”

Recent client events have confirmed that some employers may be jumping the gun somewhat by focusing on new models before being clear about whether such a shift will really be needed.

Commenting on this, Lorraine concludes:

“Radical changes to the way recruitment services are delivered may not be necessary in many sectors where the impact of the new regulations on current pay rates will be minimal. The key is for agencies and clients to go through a thorough impact assessment in order to agree an effective and legally compliant implementation plan.”

The REC Legal Services Team has produced a specific briefing document on the 'Swedish Derogation'. The pros and cons of alternative models will also be covered during the REC's forthcoming AWR Training Workshops.

Following last month's meeting with Employment Relations Minister Ed Davey, the REC will continue to push for a limited review of the current regulations and to work with BIS Officials on practical guidance. The timescales for the official guidance documents should be made clearer over the coming weeks.