DON’T BE COMPLACENT, BE PREPARED

CONSTRUCTION INDUSTRY URGED TO GET IN SHAPE FOR THE AGENCY WORKERS DIRECTIVE

The government may have delayed the implementation date of the Agency Workers Directive (AWD) until October 2011, but this should not encourage contractors to be complacent, warns Bibby Financial Services, the UK’s leading independent invoice finance provider.

Plans to give the UK’s 1.4 million temporary workers the same employment rights as permanent staff after 12 weeks’ work, including pay, holidays and the ability to bring a claim to an employment tribunal, were originally intended to come into play as early as Spring this year, giving the construction industry less than three months to prepare.

However, in a bid to cut the cost of business regulation and in response to warnings from business groups that an early implementation would be damaging to the delicate economy, the government announced last year that the reforms will now be deferred until late 2011.

Despite the extension allowing a greater lead-in time for contractors to assess their staffing needs and plan for life after the implementation of the directive, time is ticking and with the final consultation deadline on the proposed new legislation already passed (11 December 2009), the construction industry must prepare for the far-reaching implications the new law will bring.

Jason Heath, construction finance specialist at Bibby Financial Services commented: “While contractors and sub contractors may now be tempted to place the agency worker file at the bottom of their paperwork, prudent employers should take advantage of the longer lead time to better plan their resourcing needs.

“Temporary workers are proving an increasingly popular resource in the current climate, providing vital businesses resource and enabling organisations to benefit from a truly flexible workforce.

“There is no doubt that the new legislation will have a significant impact on the way many businesses structure their PAYE to cater for the growing number of workers and ensure compliance with the AWD, creating more bureaucracy for business owners and managers.

“Therefore, it is more important than ever for firms to ensure they have an effective credit management system to meet the demands of the new legislation and avoid cash flow difficulties. With this in mind, alternative cash flow solutions, such as invoice finance, can ensure a regular and smooth flow of cash into the business and make all the difference between boom and bust.”

Bibby Financial Services provides a unique construction finance package which is specifically designed to meet the business needs of the industry. It supplies funding against invoices and applications for work completed under most forms of contract and provides this service with bad debt protection so the construction firm gets paid, even if one of their customers becomes insolvent. Outsourcing packages such as this may help businesses comply with the AWD more effectively.

Heath concluded: “We would urge all contractors to use this time to tighten up their processes - if they have not already done so - to ensure that the AWD does not reduce temporary workers’ employment opportunities and adversely impact the competitiveness of UK industry as a whole.”