During the last few months, NES Group has closely monitored debates both in the UK and Europe in regard to the Temporary (Agency) Workers Directive. There have been significant developments that are summarised below by NES Group’s Commercial Director Stephen Rookes:
During early 2008, MP Andrew Miller tabled in Parliament his Private Member's Temporary and Agency Workers (Equal Treatment) Bill. The Bill was aimed at giving agency workers ‘equal rights’ to those of fulltime employees.
There was concern expressed by many in the recruitment industry that the impact of the Bill would be so far-reaching, it would potentially cause damage to the engineering and IT industries, and adversely impact on the competitiveness of UK plc.
However, on 21st May 2008 we received good news, as the Bill was formally withdrawn following a number of key announcements by the UK Government.
One announcement confirmed that business organisations and unions had agreed 'in principle' that an agency worker should be entitled to 'equal treatment' after 12 weeks of being on an assignment. The Government also confirmed that its attention would focus on supporting the proposed European Temporary (Agency) Workers Directive.
After being debated for many years, a revised draft of the Temporary (Agency) Workers Directive was agreed by Employment Ministers from across the 27 EU member states on 9th June 2008 at the Employment and Social Affairs Council held in Luxembourg.
The Directive agreed that ‘the basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, be at least those that would apply if they had been recruited directly by that undertaking to occupy the same job’. It is now expected that the Directive will come into effect in 2010.
What does 'equal working and employment conditions’ mean?
The definition has not been finally agreed but it is expected to mean that an agency worker will be entitled to the same basic pay as 'comparable' permanent employees of the end-user after 12 weeks on an assignment.
Other 'equal conditions’ would include access to collective facilities (canteen, child care facilities, transport services provided), being informed of permanent employment opportunities, duration of working time, overtime breaks, rest periods, night work, holidays and public holidays. It is up to each individual member state to decide whether they should also include social security schemes.
In the UK, its is unlikely that 'equal conditions’ will include occupational benefits such as the right to financial participation schemes, sick pay or to join occupational pension schemes (however the new Pensions Bill in 2009 may require agency workers to be offered pensions).
The complexity of understanding what a 'comparable' permanent employee will no doubt require test cases to remove the current ambiguity.
How will this impact on contractors in the engineering and IT industries?
While it seems unlikely that 'equal pay' will adversely affect agency workers in skilled professional roles in the engineering and IT industries (as many are better paid than 'comparable' permanent employees), the additional costs of providing other equal conditions and the additional bureaucracy are likley to impact on clients and therefore the competitive nature of a temporary workforce.
As there is a lack of clarity as to what a temporary agency worker is, there will be further debates and lobbying to ensure contractors who supply their services through limited companies are not caught by the Temporary (Agency) Workers Directive. If they were, there is the potential for their IR35 status to be affected.
NES will continue to work closely with recruitment industry bodies to lobby the key stakeholders to ensure that the issues above are properly discussed to understand their impact and to ensure that there is clarity in the definitions to enable the legislation to be practical.
NES will be lobbying to ensure that its clients and contractors are able to maximise the benefits of the legislation, whilst minimising any potential negative impact on the ability of clients to utilise the skills of contractors to support key projects and allow contractors to continue with their lifestyle choice of flexible working.
