"A quarter of a million UK jobs are on the line. The government has, rightly, been rock solid in opposing this legislation"

 

 

The rights of agency and temporary workers in the UK have polarised opinion perhaps more dramatically than any other employment issue in recent times. The above statements, from CBI deputy director-general John Cridland and TUC general secretary Brendan Barber respectively, are typical of a debate that continues to put its participants at loggerheads.

 

The issue has been reignited by the agency workers (equal treatment) private members’ bill, which was due for its second reading in the House of Commons as PM went to press. Brought by Labour MP Andrew Miller, the bill seeks to enhance protection for temporary workers who, it claims, “are subjected to inferior pay and conditions and blatant exploitation”.

 

The bill takes its lead from the EU agency workers directive (AWD), over which the UK has locked horns with the majority of the EU’s member states since 2002. The directive dictates that agency workers should be given equal employment conditions – including those relating to salary, working time, holidays and holiday pay – to a similar permanent worker if the assignment is for more than six weeks.

 

The UK has so far refused to adopt the legislation, arguing that increased administration and costs for employers would deter them from taking on temporary workers, who are considered vital to the UK economy. John Hutton, secretary of state for business, expressed strong opposition to the AWD, calling agency working “a bridge between long-time benefit dependency and the labour market” and saying that the directive “would consign thousands of people to benefit dependency”.

 

While unlikely to succeed without a government climb-down, the private members’ bill has struck a chord with some Labour backbenchers, who claim government opposition to the AWD breaks a manifesto commitment to act on the issue.

 

Its supporters say that more rights for agency workers are needed to prevent a two-tier workforce. Employees sitting side by side doing the same job are potentially receiving very different pay under very different conditions, unions argue.

 

Pauline Doyle, head of campaigns at Unite, tells PM that she is concerned by what she sees as a tendency to use temporary workers in place of a permanent workforce. She argues this creates growing insecurity for employees who hope one day to become permanently employed but receive no guarantees regarding the length of their contracts.

 

“Unite isn’t against temporary working,” Doyle says. “It’s a vital mechanism for industries to meet short-term gaps. But now agency working is popping up everywhere.” The AWD would “make employers think twice about putting people on never-ending temp contracts” and help “correct the way in which temp work is used”, she says.

 

Even if the bill doesn’t succeed, it looks likely that the UK will adopt the directive this year. Anne Fairweather, head of public policy at the Recruitment and Employment Confederation (REC), says she believes “endgame discussions” on the issue will soon be happening at a high level.

 

While Fairweather says the REC supports the directive in principle, she believes it should be made more flexible to fit with the UK labour market. “The temporary market itself is more embedded in the UK than elsewhere in Europe, and has a much longer history,” she points out.

 

If the directive did deter employers from taking on temporary staff, the impact on the workforce would be considerable – there are an estimated 1.4 million agency workers in the UK. The British Chambers of Commerce opposes the directive on the grounds that a third of all agency workers in Europe are employed in the UK, so the rules will have a disproportionate effect here.

 

The AWD may yet be amended to fit the UK’s flexible labour market better. A spokesperson for the Department for Business, Enterprise and Regulatory Reform tells PM: “At the end of the employment council in December, the presidency and member states agreed that the text of the AWD needed more work. The UK made clear it stood ready to support the presidency in future work to address these outstanding issues.”

 

An outstanding issue is the qualifying period for temps to receive full rights. David Yeandle, deputy director of employment policy for EEF, the manufacturers’ organisation, has said that “anything less than six months would be a serious problem and ideally we want it to be at least 12 months”.

 

According to the CIPD’s quarterly Labour Market Outlook, the most popular qualifying period among CIPD members is also 6-12 months. Gerwyn Davies, CIPD adviser, public policy, says this qualifying period would be “a sensible compromise”.

 

The CIPD is concerned that full rights for temps after six weeks would divide the workforce. Davies explains: “If a temporary employee is on the same pay and benefits as a permanent employee but has got the flexibility of being a temporary worker, this could open up divisions.”

 

In that case, the directive may not put an end to what trade unions call a two-tier workforce. But one thing that is clear is that divisions are more likely the longer a temporary role lasts.

 

Fairweather agrees problems arise when a temporary worker is in a role for too long. She says it seems wrong for a temporary worker who has been doing a job for five years to be paid less than a permanent worker in a similar role. “There are situations where agency contracts drag on and that’s down to agency mismanagement,” she argues.

 

Anthony Pearce, associate director of HR at Hudson Recruitment, says: “I can see where that point of view comes from. It’s a typical public-sector situation, where they don’t want permanent workers on the headcount because of cost implications and they forget about their temp contracts.”

 

However, Pearce doesn’t think the AWD will have a big impact on the UK’s temporary workforce. He says that the poor economic outlook means “temp work will go up over the next year”.

 

One of the biggest employers of temporary workers is the NHS, which uses temps at every level to meet short-term demands and fluctuations in activity. The AWD is unlikely to hit that demand, says Peter Absalom, staff resourcing manager at King’s College Hospital NHS Trust.

 

“Agency workers are extremely important to the NHS,” he says. “They make a valid and worthwhile contribution. I don’t think the directive’s impact would be as dramatic as some of the fears.”