Bosses criticise agency staff rights

May 21 2008 By Andrew Mernin

Equal rights for agency workers

The Government, CBI and TUC have finally reached agreement on legislating to give Britain's estimated 1.4 million agency workers equal treatment with comparable permanent employees after 12 weeks employment in a given job. This has been a political hot potato at a European level for a number of years and it looks like a deal has been done at UK level in order to preserve the working hours opt-out from the Working Time Directive, which the CBIhas described as "vital to the future of the British economy".

"Equal treatment" will mean that agency workers will be entitled after 12 weeks to at least the same basic working and employment conditions, such as pay and holidays, that would apply if they had been recruited directly by that employer to do the same job. However, employers will notbe required to make the same pension or sickness benefit provisions for their agency workers as for their their permanent staff. The Government has made it clear that it will look at anti-avoidance mechanisms and particularly at what will happen where there are repeat contracts for the same workers when formulating the law.

Under the agreement that has been reached, the new arrangements could be in place as soon as April 2009 dependent on how discussions proceed at the European level in relation to the necessary implementing legislation.

From an employer's perspective the timing of the announcement at a difficult period for the labour market generally is not ideal. In its press release the CBI described the agreement as "the least worst outcome available for British business". It estimates that half of agency assignments will be unaffected by the changes as they last less than 12 weeks and that it will therefore protect businesses’ ability to deal with peaks and troughs in demand and shorter-term staff absences. Other employer groups have been far more pessimistic with Tina Sommer of the Federation of Small Businesses describing the agreement as "disastrous" for small businesses for which it will only add another layer of legislation to comply with.

Employers will have to consider the changes extremely closely as many have come to rely on a pool of flexible agency workers to provide long periods of cover. It also remains to be seen whether the practice will match the sentiment and whether all that will happen is more uncertainty for agency workers who will be pushed from job to job every few months by employers and agencies seeking to avoid the provisions.

Helen Kay is a solicitor in the employment service group at Commercial law firm Muckle LLP.