Sign of relief over AWD delay
Posted on 25 November 2009
What exactly is AWD?
As you’ve probably heard, it’s a new law the Government is bringing in to help protect so-called ‘vulnerable’ temps and contractors. Basically any temporary worker employed longer than 12 weeks will automatically be given the same employment rights as permanent staff - equal pay, holiday pay, sick leave and the like. And as umbrella companies like Parasol have been specifically mentioned for inclusion, it will directly affect our employees. End clients may very well be put off employing contractors for periods of longer than three months due to all the extra admin, paperwork and perceived hassle involved.
Of course, we’re all for protecting the vulnerable, but as our MD, Rob Crossland, points out, “The Government has missed a massive point here - vulnerable agency workers, who fully deserve protection, are very much in the minority. There is a massive amount of workers, many of them very highly skilled, who choose agency work because it suits their lifestyle.” He also states, “The really ironic thing for umbrella contractors is that much of what AWD tries to do (equal rights with permanent employees) is already provided by businesses like Parasol.”
So, why has the AWD been postponed?
The reason behind Lord Peter Mandleson’s announcement to delay the AWD until October 2011 is to help the country emerge out of the recession. For Parasol, and the rest of the umbrella industry, this decision has been met with a massive sigh of relief as it gives us a bit of security about the very near future.
What does this mean?
It means our contractors don’t need to panic because Parasol is on the case! Rob’s worries about the AWD were that the Government were trying to rush it through before the next election in April without properly thinking through its impact on our industry. Now that we’ve got some breathing space, it means contractors can carry on operating through an umbrella for at least two more years.
What’s the future of the industry?
This new law means that there will be a positive reshaping of the contracting industry in the run up to 2011. And, you can be confident that Rob and his team here at Parasol are already planning how we will revise our service model to deliver the very best solutions for our hard-working, loyal contractors. Rob says, “Contractors with contracts lasting less than the 12-week qualifying period can continue to use an umbrella solution. And there is sufficient time for alternative trading options outside of the AWD to make it onto the market before October 2011.”
What are contractors’ long-term options?
Setting up a Limited company may be the long-term solution to the AWD for some contractors, but there’s no immediate rush to go down that route just yet if you weren’t planning to.For those of our employees who don’t want that particular hassle, then rest assured that we’ll come up with a legal and compliant solution well before the October 2011 deadline to allow you to do just that. Watch this space!
What if I want to go Ltd now?
If this is an option that already appeals to you then, yes, this is something worth looking into. And the great thing is Parasol’s sister company ClearSky Accounting is fully set up to help you. A no-nonsense accounting service, with over twelve years experience in all things Ltd, they will be more than happy to talk things through with you.
We’ll continue lobbying …
Finally, as the debate continues, we would just like to reassure you that Rob and the team at Parasol will continue to lobby Government to make sure that when the law does come in, it’s fair. Rob is disappointed that despite the clear evidence provided by many contractor organisations in the first consultation, the distinctions between professional contractor and vulnerable agency worker haven’t been acknowledged.” I still urge everyone to lobby Government,’ says Rob. “We need to push the point around understanding the labour market in the 21st century. As without continued focus everyone will be classed as ‘vulnerable’…”
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