Time to reconsider the employment of temps

The
debate on giving temps more rights seems to be drawing to a close. Reviewing
your hiring strategy now will enable you to adapt quickly if the laws do change

The
signs are that the long debate about extending the rights of agency workers is
coming to an end. Contrary to expectations, the UK and Germany obtained enough
support for the draft directive on agency temps to be blocked altogether. at
the European Council meeting on 2 -3 June. The matter returns to the council in
October, when it should be clear whether or not the directive will be adopted.

That
will clear the way for reforming other aspects of the law on agency workers in
the UK.

It
is now more than two years since the DTI began consultations on reforming the
Employment Agencies Act 1973. Among other things, the draft regulations will
restrict ‘temp-to-perm’ fees. They will also identify the agency worker’s
employer, and give the temp the right to obtain a clear statement of their
terms and conditions.

The
issue of employment status is also currently under review by the DTI.

The
recent decision of the Court of Appeal in Reuters v Franks underlines the
current uncertainty in this area for temps.

Franks
started work with Reuters as an agency temp. He was employed there for five
years and claimed unfair dismissal against both the agency and Reuters when his
engagement ended. The Court of Appeal held that the employment tribunal should
have considered whether an implied contract of employment between Franks and
Reuters had come into existence at some point during the course of the five
years.

It
is hoped the final version of the regulations on employment agencies will
establish a clear framework within which all of the parties – the worker, the
agency and the agency’s client – can agree the employment status they want to
achieve with some certainty.

Costs
and policy issues

Once
it is clear how the law will change, companies will be able to calculate how
much the changes will cost. The CBI believes 47 per cent of companies will cut
the use of agency temps if the directive is adopted.

Of
course, many agency workers really are just ‘temps’ filling in for a few days
while someone is away. But there are many sectors, such as financial services,
where long-term or ‘permanent temps’ are common. In these sectors in
particular, now is a good time to clarify why your company employs them.

There
are at least three reasons for using temps long-term: cost, flexibility and the
fact that it may be the only basis on which particular workers can be hired.
Although cost is generally assumed to be the reason, the 1998 Work Place
Employment Relations Survey (WERS) found little evidence that companies use
agency temps to reduce costs. Agency temps and fixed-contract workers are often
taken on to ‘buttress’ the workforce and make short-term adjustments to its
size.

Tim
Johnson, Partner, KLegal

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