Keep up to date /
Agency Workers Rights & Tracking performance
Categories
Posted in Employers on Jul 05, 2011 by Richard Hayden
As of the 1st of October 2011 the Equal Rights for Agency Workers Act will come into effect. Below are outlined some legal points which should be considered when tracking the performance of temporary workers in relation to this. The three categories outlined are Data Protection, IR35 and Contractual.
The UK Data Protection Act sets out eight principles of good practice, which organisations must follow. These state that data must be:
Performance information which an organisation holds about a contractor will need to be managed in accordance with these principles. However, in relation to performance information there are a few specific questions which organisations are likely to have.
Do organisations need contractors’ consent in order to track their performance?
No, in general organisations do not need to obtain consent from contractors in order to track their performance. This is because organisations are likely to be able to show that they have a “legitimate interest” in the processing and storing of information regarding contractor performance in order to ensure the efficient management of their workforce and that this activity is not prejudice to the legitimate interests of the contractor.
Do contractors need to agree to the performance reviews which are written about them?
No, contractors do not need to explicitly agree to the performance reviews or ratings which are written about them. However, contractors do need to be informed that the organisation will be storing and processing information about their performance.
Contractors also have the right to view the personal information which an organisation holds about them. Therefore, it is good practice to have processes in place to show contractors any performance reviews or ratings that are written about them.
The tracking of contractor performance would have an impact on a contractor’s IR35 status if it made the relationship between the end user organisation and the contractor appear to be more like an employee/employer relationship and less like a business to business relationship. Key factors in deciding on a contractor’s IR35 status are:
During research carried out by the Recruiter with a number of industry experts regarding the IR35 implications of tracking contractor performance a few points in particular came to light. A key point which came out of these discussions was that capturing and storing performance information is unlikely to significantly affect the answers to any of the four questions listed above and therefore tracking a contractor’s performance, is unlikely to significantly impact their IR35 status.
If an organisation plans to continually rehire temporary workers after a break period has expired, this raises the question of to what degree is rehiring allowed by the contract between the organisation and the recruitment agency.
Typically, there is period of approximately six months either after the candidate is initially introduced to an organisation or after the temp finishes their assignment with the organisation, during which time the recruitment agency is entitled to charge the organisation a fee if the temp is hired. Therefore, during the restricted period organisations are unlikely to obtain a direct financial benefit (e.g. reduced agency fees) from rehiring contractors they’ve used previously. However, organisations will still achieve a quality benefit from being able to focus on using contractors who have performed well during previous assignments at their organisation.
Conclusion
Organisations may potentially be able to manage the introduction of AWR by creating a pool of temps who they reuse on numerous assignments. However, there are a number of requirements and obligations which they must be aware of and comply with in order to stay on the right side of the law.
The information in this guide is provided by The Recruiter and is intended as general information only.
If you use Agency workers within your business specialist legal advice should be sought in relation to any of the issues stated above. Key Appointments are happy to provide the details of a trusted and reputable law firm.
related articles... Equal Rights for Agency Workers
<< Key Appointments blog listing
Data Protection
The UK Data Protection Act sets out eight principles of good practice, which organisations must follow. These state that data must be:
- fairly and lawfully processed
- processed for limited purposes
- adequate, relevant and not excessive
- accurate
- not kept for longer than is necessary
- processed in accordance with the employee’s rights
- secure
- not transferred to countries without adequate data protection laws
Performance information which an organisation holds about a contractor will need to be managed in accordance with these principles. However, in relation to performance information there are a few specific questions which organisations are likely to have.
Do organisations need contractors’ consent in order to track their performance?
No, in general organisations do not need to obtain consent from contractors in order to track their performance. This is because organisations are likely to be able to show that they have a “legitimate interest” in the processing and storing of information regarding contractor performance in order to ensure the efficient management of their workforce and that this activity is not prejudice to the legitimate interests of the contractor.
Do contractors need to agree to the performance reviews which are written about them?
No, contractors do not need to explicitly agree to the performance reviews or ratings which are written about them. However, contractors do need to be informed that the organisation will be storing and processing information about their performance.
Contractors also have the right to view the personal information which an organisation holds about them. Therefore, it is good practice to have processes in place to show contractors any performance reviews or ratings that are written about them.
IR35 implications
The tracking of contractor performance would have an impact on a contractor’s IR35 status if it made the relationship between the end user organisation and the contractor appear to be more like an employee/employer relationship and less like a business to business relationship. Key factors in deciding on a contractor’s IR35 status are:
- Does the end user organisation have the right to control, how the contractor performs their services, what tasks they have to carry out or when and where those tasks must be performed?
- Is the contractor obliged to accept work and is the end user organisation obliged to supply work?
- Is the contractor committed to fulfilling the contract personally?
- Is the contractor committed to working for just one client?
During research carried out by the Recruiter with a number of industry experts regarding the IR35 implications of tracking contractor performance a few points in particular came to light. A key point which came out of these discussions was that capturing and storing performance information is unlikely to significantly affect the answers to any of the four questions listed above and therefore tracking a contractor’s performance, is unlikely to significantly impact their IR35 status.
Contractual
If an organisation plans to continually rehire temporary workers after a break period has expired, this raises the question of to what degree is rehiring allowed by the contract between the organisation and the recruitment agency.
Typically, there is period of approximately six months either after the candidate is initially introduced to an organisation or after the temp finishes their assignment with the organisation, during which time the recruitment agency is entitled to charge the organisation a fee if the temp is hired. Therefore, during the restricted period organisations are unlikely to obtain a direct financial benefit (e.g. reduced agency fees) from rehiring contractors they’ve used previously. However, organisations will still achieve a quality benefit from being able to focus on using contractors who have performed well during previous assignments at their organisation.
Conclusion
Organisations may potentially be able to manage the introduction of AWR by creating a pool of temps who they reuse on numerous assignments. However, there are a number of requirements and obligations which they must be aware of and comply with in order to stay on the right side of the law.
The information in this guide is provided by The Recruiter and is intended as general information only.
If you use Agency workers within your business specialist legal advice should be sought in relation to any of the issues stated above. Key Appointments are happy to provide the details of a trusted and reputable law firm.
related articles... Equal Rights for Agency Workers
At Key Appointments we want to supply you with relevant and useful information, if there are topics you would like more information on then please email us at info@key-appointments.co.uk
<< Key Appointments blog listing
