Agency directive – is it a permanent end to temps?

After the European Parliament voted to support the proposed Agency Workers
Directive, could this be the beginning of the end for temporary workers?

The European Commission’s proposed Directive on working conditions for
temporary agency workers has provoked much debate, particularly since the
European Parliament voted to support the Commission proposal on 21 November.

As with much European legislation, the problems have arisen because the
legal structure in Europe is very different to the UK. Nine member states
already have an equal treatment requirement between agency workers and other
similar workers in the user company where they work. In these member states
wage levels and other terms and conditions are routinely fixed for entire
sectors by collective agreements. This is very different from the traditional
collective bargaining arrangements in the UK.

The basic structure in the UK involves workers signing up with employment
agencies. Those agencies will contract with companies who need temporary
workers (‘user companies’) and provide them with workers in return for fees.
The agencies pay the workers.

The draft directive operates by giving agency workers an entitlement to pay
and basic working and employment conditions which are at least as good as those
they would enjoy if employed directly by the user company. The working and
employment conditions referred to will include work and rest periods, paid
holidays, pay, overtime pay and health and safety.

The original Commission proposal would not have applied to temps on
assignments of six weeks or less. Unfortunately, on 21 November the European
Parliament removed this exclusion but did, in a specific provision recognising
the difference in the temporary agency work market in the UK and Ireland, grant
a transitional five-year period for the UK and Ireland to make use of the
six-week exemption but only in respect of pay but not other terms and
conditions, and if an adequate level of pay is provided from day one.

The Commission claims that the proposal would make temporary agency work
more attractive. There are an estimated 700,000 agency workers in the UK,
representing 2.8 per cent of the workforce. Thirty-three per cent of these have
been on assignment with the user company for less than three months and 70 per
cent for under 12 months.

The UK Government is trying to negotiate a provision that agency workers
should only be entitled to equal treatment on pay after 12 months. Given the
views expressed in the European Parliament, its chances of success do not look

Agency temps tend to be employed by employment agencies and the directive
provides for agencies to assume this role. The onus of providing comparable
terms and conditions fall on the agency. Interesting issues arise as to how the
agencies will ascertain the terms and conditions for comparable workers in the
user organisation. If they succeed, temporary workers might find themselves
with different terms and conditions depending on their assignments, possibly
changing week-to-week or month-to-month.

The DTI’s consultation paper on the directive states that agency work
provides a useful way into the labour market and can increase flexibility and
lead to permanent jobs for workers. This benefits both businesses and workers,
and allows workers who want to control or vary their patterns of work greater
choice than permanent work.

The Government wants to implement the directive in a manner compatible with
this. Whether that will be achieved or whether it will mark the beginning of
the end for the agency temp remains to be seen.

By Glenn Calvert, head of employment at Dickinson Dees

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