AWR avoidance leads to a third of employers terminating temporary contracts

According to research carried out by the Association of Professional Staffing Companies (APSCo) nearly a third of organisations (29%) are likely to terminate contractors’ and temporary workers’ assignments prematurely because of the Agency Workers Regulations.

Contractors and temporary workers who work for less than twelve weeks are not entitled to equal rights including pay. A survey which was carried out among recruiters found that close to a third of hirers are expecting to terminate contracts before the 12 week period is over.

The twelve week period after the AWR came into force on 1^st October 2011 expired at the end of December; this means that thousands of contractors could find themselves out of work this month.

The survey was carried out amongst APSCo members that supply professional-level candidates in markets such as IT, banking & finance and engineering.

 Ann Swain, Chief Executive at APSCo, said: "The AWR is clearly having an impact, even at the professional end of the market. Contractors and temps in areas such as IT or banking usually earn more than permanent staff, but this is not true for all roles, particularly at the entry level, where the AWR may lead to increased costs.

"The initial 12-week qualifying period expired at the end of December, so if these concerns are even close to being accurate, we could see tens of thousands of temporary workers jettisoned onto the labour market in January.

"The majority of workers affected are likely to be young graduates. At a time when unemployment among young people has surpassed one million, any barrier to securing work has to be questioned."

Although there is a concern over hirers terminating contracts early, only 19% of recruiters think that the AWR is contributing towards reduced demand for contractors and temporary workers. However 43% of APSCo members felt that the impact was likely to be greater once the first 12 week qualifying period ends.