Agency worker legislation could lead to less reliance on temps

Agency worker legislation laid before parliament yesterday will cause thousands of employers to review their staffing arrangements and could lead to a lesser reliance on agency workers, a lawyer has claimed.

The Agency Workers Directive gives two million temps the right to equal treatment after just 12 weeks, and will come into force in October 2011.

Employers have been warned to start preparing for the Act now, by reviewing their use of agency workers and temporary staff. The basic pay of temps who have worked with a hirer for more than 12 weeks, as well as bonuses and other terms regarding working time, holidays and breaks will all have to be equalised.

Mark Hammerton, partner at law firm Eversheds, said: “The initial reaction of employers may be to decide to limit future assignments to less than 12 weeks. Other employers may seek to consolidate by moving to exclusive arrangements with larger agencies.

“Other alternatives may be to reduce reliance on agency workers by recruiting employees directly, or perhaps creating an in-house ‘bank’ of casual staff. Other employers will simply expect their existing workforces to absorb the extra work rather than hiring additional temporary workers.”

Manufacturers’ group the EEF was glad the government had opted to implement the European legislation at the last possible date. However, David Yeandle, EEF head of employment policy, said: “We remain concerned about the costs and administrative burdens that this new legislation will impose on employers and, in particular, about the decision to include some bonus payments in the definition of pay that will be used for equal treatment.

John Cridland, CBI deputy director-general, stressed that the regulations were “bad news for the economy.” He said: “Employment agencies help more than a million people find work, and these proposals will make it more expensive for companies to use agency temps by increasing bureaucracy.

“In a week when the benefits of a flexible labour market have shown themselves in better-than-expected unemployment figures, it is regrettable that the government is implementing European legislation that will harm that flexibility.”

The Recruitment and Employment Confederation (REC), which represents the UK recruitment industry, warned that guidance for recruiters and employers must be effective and provide absolute clarity on how the directive should be implemented to avoid limiting temporary and contract job opportunities.

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