The government has delayed the introduction of the Agency Workers Directive (AWD) until October 2011 as part of efforts to cut the cost of business regulation.
The AWD gives temporary staff the same employment rights as permanent staff after 12 weeks’ work, including pay. There had been speculation that the directive could have been implemented as early as next spring, but the legislation has now been delayed until October 2011.
Employers' groups including the EEF, CBI and Chartered Institute of Personnel and Development have been campaigning for the government to introduce the legislation at the latest possible date: October-December 2011.
David Yeandle, EEF head of employment policy, said: “We are pleased the government has listened to the concerns of business and delayed the implementation for as long as possible. This decision gives manufacturers more time to prepare for the impact it will have on their business and avoids it being implemented when companies are struggling to recover from the economic downturn.
"Government must now ensure that the detailed legislation does not impose unnecessary costs and administrative burdens on manufacturers."
The announcement today by the Business Department is part of moves to cut the costs of regulation to business by £6.5bn by 2015.
Mike Emmott, employee relations adviser at the CIPD, said: “We’re pleased that the government has pushed back the implementation of the Agency Workers Directive to the last possible date – we’ve consistently called for such a delay.
"Implementing the directive in the early stages of a recovery could have been particularly damaging, as firms will be willing to take on temporary workers at an earlier stage than they are willing to commit to permanent appointments. Early implementation could therefore have delayed the recovery and prolonged unemployment.”
Lord Mandelson also revealed a delay to the implementation of the right to request training in small firms.
David Frost, director-general of the British Chambers of Commerce, said: “With these announcements, the government is sending out a positive message to business. Additional employment legislation would be a real barrier to job creation at a time when unemployment could approach three million."