Agency workers: CBI and TUC go head to head

We take a look at the  Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007  which came into force on 6 April.

Q What is the main change to the agency workers amendments?

Neil Carberry
Head of employment policy,
CBI

Essentially the overriding line is that proper enforcement of the conduct regulations is the best way to protect agency workers. The government is doubling the number of inspectors and extending an agency worker’s rights to withdraw from work-related services, such as housing or transport schemes which may be connected to a job, without being penalised for it.

Alison Balchin
Employment rights officer,
TUC

In terms of positive change it is the right to withdraw from additional services that’s fundamental. In theory, workers shouldn’t be compelled to use these services anyway, but we all know that in reality these kinds of practices do go on – particularly for migrant workers. So it will potentially stop agencies from taking advantage of people who are new to the country and unsure what their employment rights are.

Q Do you see any problems with the amendments?

Neil Carberry There are some unscrupulous employers out there who tend to be at the low-skilled, low-pay end of the market, and it is obviously good to ensure workers are protected from them. But to do this you need to make sure the rules are enforced.

What this amendment betrays is an approach that says if you outlaw something then it no longer exists. In reality that’s not true: you pass a law and enforce it, and then, hopefully, you change behaviour.

Since 1997 we have had a lot of regulation in the labour market around agency and migrant workers and the major problem is one of enforcement.

It’s good that the government is doubling the number of agency inspectors, but when inspectors visit agencies they tend to contact the owners in advance. In most cases they find the good guys are easy to get hold of but the bad guys are more difficult – for obvious reasons.

Alison Balchin It raises the question of how it works in practice. The nature of agency work is that it is insecure and has no notice period, so in practical terms it may be difficult to exercise this new right, as you have to demonstrate you suffered a detriment by withdrawing from these services.

But how do you prove what the detriment is when it may simply be a case of not getting as much work or the most beneficial assignments, something that is intrinsic to the insecure nature of agency work?

Agency workers face an uphill struggle to prove that something like this is related to the withdrawal of services.

It will take a brave person to stand up for themselves at the risk of losing their only source of income.

Q Is this the best path to take to regulate employment agencies? Or should more be done?

Neil Carberry From our point of view it is the right way to regulate agencies as it deals with unscrupulous employers.

The Private Member’s Bill, sponsored by MP Andrew Miller, about the equal treatment of agency workers is marginally worse as it takes a more sweeping approach and is just another costly hoop for employers to jump through, when they probably offer decent pay and conditions anyway.

This Bill really targets the areas where there is already some concern.

Alison Balchin We fully welcome the amendments to opting out.

But the new regulations don’t offer any entitlement to equal treatment on pay and working conditions and that is something fundamental that needs to change.

At the moment agency workers can be paid less for doing the same job to the same standard as permanent staff and not have any of the basic working time provisions.

It raises questions about why they are being engaged on that basis and whether it is basically to get around employment law that would otherwise apply – particularly for agency workers on long-term contracts.

Q Do you think the government has got it right this time?

Neil Carberry Business has always argued for risk-based regulation.

With this Bill the government is taking the right step to regulating the labour market by adopting that exact same approach.

If the government adopted the EU approach, good employers would comply with it and incur a lot of costs that would, in turn, stop them from hiring as many agency workers.

It wouldn’t affect those at the bottom as they simply wouldn’t bother to enforce those rules either. So effectively it would punish the good employers.

Alison Balchin We welcome what they’ve done – with the exception of the removal of written confirmation of contracts, as we believe this will be counter-productive for the workers, the agencies and business.

Disputes arise from all forms of work and it is good for all sides to have something agreed in writing in case an issue arises further down the line.

In today’s world of text messages and e-mail it doesn’t even have to be a written letter sent in the post, it can be delivered electronically in a matter of seconds.

But that aside, I think it is well-intentioned step in the right direction but does not go far enough.

Agency workers’ contribution to UK

Temps may not have the employment protection of full-time employees, but the reality is that the UK economy simply can’t do without them.

Here’s why:

  • The UK recruitment industry is currently worth £26.673bn a year.
  • The Recruitment and Employment Confederation says there are about 1.2 million agency workers in the UK. However, the Office for National Statistics estimates the number at 1.8 million, with more than 40% to be found in the public sector.
  • About 787,000 employees are placed in permanent work each year. Just under one-third (30%) are in secretarial and clerical positions.
  • There are 101,286 people employed within the recruitment industry itself.
  • The UK has the second highest number of private employment agencies in the world (10,500). Only Japan has more (30,600).
  • Agency workers account for 4.5% of the total UK workforce – the highest percentage in the world.

Sources: Recruitment and Employment Confederation/The International Confederation of Private Employment Agencies (CIETT)

Viewpoint

Stephen Alambritis, head of public affairs, Federation of Small Businesses

“We welcome any clarification to the issue of agency workers, but would be unhappy to be saddled with a whole raft of new legislation, as it’s simply not needed. The rules as they stand are fine and the vast majority of employment agencies should be allowed to carry on as they are, rather than being too prescriptive about things.

At the same time, the government’s proposition to weed out bad practices and bad employers through a commission is a good idea, as it would help to protect agencies that have good practices and ensure they are able to continue trading.”

Anne Fairweather, head of public policy, Recruitment and Employment Confederation

“The increased ability to opt out of services should help protect vulnerable workers and is something we fully support. By and large it was already the case anyway, but it just clarifies things.

The change to regulation 21 is also welcome and is something we lobbied strongly for before 2003. In some scenarios hirers call up and say they want a worker within three hours, so writing a letter of confirmation within three days is a bit pointless as the agency worker may easily have completed the booking by the time the letter arrives. The whole thing just created unnecessary bureaucracy.”

Mike Emmott, employee relations adviser, CIPD

“There has always been a concern that some employment agencies are exploiting migrants or employing people on very low pay and in poor conditions, and these amendments are just closing loopholes in the existing legislation to stop that.

It is the wider issue of the EU Agency Workers Directive that has got employers excited as there are real fears that France will seek to make a deal on the issue when it assumes the EU presidency later this year. The big problem is that if you make agency workers unattractive to business you can inhibit people’s ability to use it as a route into the labour market.”

Michael Thompson, partner, HR practice group, Eversheds law firm

“The amendments are minor so their impact on businesses is likely to be minimal. In fact, there has been criticism about the low level of protection introduced by the amendment regulations, particularly as they do not even follow through some of the proposals set out in the consultation paper.

However, there are several indications that the government may now be reacting to the mounting pressure on both a European and domestic level to increase protection for agency workers. The issue therefore remains firmly on the agenda and employers – and HR professionals in particular – should watch for further developments over the coming months.”

Agency staff statistics

  • While the employment status of agency workers is still being debated in the EU, the industry itself is booming:
  • Europe accounts for 43% of worldwide employment agency revenues (£76bn)
  • Worldwide more than 8.9 million agency workers go to work every day.
  • Global revenues of the recruitment industry are now in excess of £150bn a year.
  • It’s estimated that employment agencies will provide 1.6 million new jobs by 2012 of which 1.2 million (80%) would not have been created without agency work.
  • If restrictions on agency work are lifted in the six main EU markets, it’s estimated that 2.1 million EU jobs will be created by 2012.
  • The number of employment agency branches in Germany and Spain tripled and doubled in the Netherlands, Austria, Ireland, UK, Belgium between 1996 and 2006.

Source: The International Confederation of Private Employment Agencies (CIETT)

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