Recruiters: How to prepare for legal changes in 2020

From 6 April 2020, the government is making a number of changes recruiters need to start to prepare for, which are designed to protect job seekers.

Swedish Derogation contracts

Recruiters will not be able to engage new or continue to employ existing workers under Swedish derogation contracts. You will have to change the terms and conditions of employment of staff employed under these types of contracts and make sure they receive at least the same hourly rate as workers engaged directly by the hirer after they have worked for 12 weeks.

The government has not yet published legislation to enact this change but has said it will take effect in April next year. It believes this will affect around 8-10% of agency workers and cost the industry around £3 million, the majority of which equates to increased wages.

How to prepare

1. Stop using (or start to phase out) Swedish derogation contracts
2. Identify those individuals working under Swedish derogation contracts who have at least two years' service (as this will potentially give them the right to claim unfair dismissal)
3. Work out your strategy: One option is to terminate workers with less than 2 years' service and re-engage them on worker contracts but we suggest you take advice first as you may have to collectively consult before making any changes. 
4. Review pricing structures/ arrangements with end users to account for the increased costs

Temporary workers: Right to receive a "Key Information Document"

Work seekers must be given a Key Information Document before they sign up to accept any work.

The requirements are prescriptive. The document must be titled "Key Information Document" and be:

• Written in a clear and succinct manner (so no waffling or using ambiguous or misleading language)
• A maximum of two sides of A4 sized paper, and 
• Presented in a way that is easy to read using characters of a readable size

It must be separate from any other document you provide and set out the worker’s status, the employment business’ identity, the rate of remuneration (or the minimum amount if this is not known), how often they will be paid and what deductions will be made (including how these are calculated), any other non monetary benefits they will receive and their holiday pay entitlement.

In addition, you must provide an example pay statement (a bit like a pay slip) which is based on the financial information set out in the Key Information Document so the worker can understand how much pay they can expect to take home and what deductions will be made.

You can give the work seeker more than one Key Information Document before terms are agreed, for example, to set out different options that might apply.  But, once the worker has agreed terms, you must give them a Key Information document setting out the final agreement. If any of the information changes after the worker starts work, you must give them a revised statement within five business days of the change.

 The legislation - The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 (currently in draft form and not yet approved) is expected to come into force on 6 April 2020. 

How to prepare

1. Prepare a pro-forma that contains the required information
2. From 6 April 2020, put diary notes on your systems to ensure that Final Key Information Documents are provided on time.

Need more information?

Please contact our expert, Padma Tadi who will be pleased to help you. 

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