In short the simple answer is no, an Umbrella Company cannot indemnify a company against being called to an employment tribunal brought about by a claim under the AWR. To quote the AWR guidance directly:
“The Regulations ensure that any party in the chain of relationships (i.e. a hirer or a TWA) can be named at the outset or joined to a claim and be liable to the extent that the Tribunal finds they are to blame for the infringement”
An Umbrella Company could put a spin on it and offer to cover the costs of an employment tribunal, but this something quite different to offering indemnity. This does however place a huge risk on the part of the Umbrella Company, as without any legal precedent set out in case law, the potential liability and legal costs could be massive.
Rather than offer this type of uncertain guarantee, ContractorUmbrella follows a policy of ‘best business practice’. We ensure that both ourselves and our agency partners are fully compliant and have taken all of the ‘reasonable steps’ that the legislation requires so that there is nothing to fear from a claim being brought. To this end, we have adapted our administrative and procedural instruments in preparation for October and are happy to work with our recruiting partners to secure mutual compliance.
If you would like to discuss any aspect of the AWR you can contact one of our expert advisors on 01206 713 680 or email us at info@contractorumbrella.com.
