Umbrella company contractors may have good reason to worry after APSCo said the AWR will cause 29% of firms to terminate contracts.
Nearly one in three of the organisations APSCo surveyed said they intend to terminate contracts when workers approach the 12-week qualifying period for equal rights. As a result, contractors in the future are likely to end up with more short-term contracts.
The chief executive of APSCo, Ann Swain, said AWR is definitely having an impact on all areas of the market. The first qualifying period expired during the Christmas break and if the results of the poll are accurate, tens of thousands of contractors could find themselves out of work this month.
G2 Recruitment’s operations manager, Phil Hutchinson, confirmed that some clients have already started terminating contractor’s assignments when the 12-week period approaches. Others want to ‘buy people out’ of their contract or transfer them onto a fixed term contract. A few are even considering taking on the contractor as a permanent member of staff.
Despite this, less than one in five recruiters think AWR has led to demand for contractors decreasing. However, 43% believe we will start to see a greater impact now that the initial qualifying period has passed.
Ann Swain said that recruiters and clients still face a significant compliance burden even in instances where temporary workers are paid more than their permanent counterparts, or fall outside the scope of AWR completely.
So far there are no figures available to back up APSCos claims, but once data for this month is available, it will be interesting to see whether APSCo’s concerns are justified.
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