HR to bypass Agency Workers Directive with internal temps

HR professionals are preparing to boycott the Agency Workers Directive (AWD) by creating their own banks of temporary staff to recruit from, Personnel Today has learned.

The directive – which must be implemented by December 2011 – will provide about 100,000 agency workers with equal rights to permanent staff, including pay, after they have worked with an organisation for 12 weeks.

But HR directors warned they would find ways to beat the AWD and avoid the rise in costs – estimated to top £1.5bn a year in the private sector alone – for taking on temporary staff.

Moira Brown, HR director at social care provider Care South, has been devising ways to get round the directive for the past 18 months.

She said: “Employers will adopt alternative strategies. We will create our own relief bank of workers to bypass the agencies. They would be like internal agency workers.

“We have been thinking about this for the past 18 months as we can see the costs of agency workers will have a huge impact on our margins.”

Ciara Hassan, HR director at Landmark Hotels, added she already operated an internal pool of up to 300 casual workers, and would look to extend this once the directive became law.

She said: “We have already got a good bank and can rely on them for short- and long-term work. We would absolutely look at extending this to save costs.

“The bank is quite difficult to manage because you have to call everyone regularly to arrange the work. But it already works for us and we are willing to do that to save costs and get the flexibility.”

Opinion: Alex Lock

Employers looking for ways to get round the AWD would end up generating at least as many problems as they would face in complying with the regulations.

When employers and their bank staff agree a period of work, an employment relationship is formed and this could be seen as a fixed-term contract. Fixed-term employees have rights not to be treated less favourably than comparable permanent employees, and that obligation exists from day one, so employers could end up having less flexibility than under the directive.

Unless employers have a big disparity between the pay and benefits permanent staff receive, and what agency workers get, then the amount of time and energy employers would expend would be greater than any savings they would make.

Alex Lock is an employment partner at Beachcroft law firm

Next week at its annual conference, the TUC will call for the directive’s implementation date to be brought forward to spring 2010.

But Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development, warned that bringing in the directive within six months would encourage more employers to look at “radical alternatives”.

He said: “If you give employers just a couple of months to figure out the directive, it’s quite likely they will simply look for radical alternatives, such as stopping their use of agency temps and hiring temporary workers directly.”

Anne Fairweather, head of public policy at the Recruitment and Employment Confederation, advised employers against trying to recreate the role of agencies in-house.

“Workers wouldn’t only sign up with one bank so employers wouldn’t have a bank of staff at their beck and call, which is the advantage that agencies have,” she said. “If employers can’t get hold of someone, they will end up calling agencies anyway.”

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