Temporary Workers Directive - Early implementation could harm UK economy

26 February 2009

The EU directive on temporary agency workers should not be implemented in the UK until 2011, despite the plight of agency workers in the recession, employers groups have warned.

The controversial legislation, which will entitle agency workers to some of the same basic employment rights as permanent workers after 12 weeks’ employment, would have given some protection to agency workers laid off in recent weeks.

BMW’s decision to dismiss 850 agency workers because of a decline in sales caused controversy, because some of them had been working at the company for a number of years.

But Kevin Green, chief executive of the Recruitment and Employment Confederation, said that the legislation needed to be framed in such a way that firms should not be deterred from hiring agency workers in the first place.

"Employers fear that this will become a bureaucratic activity that could harm the UK’s economy and flexible labour market," said Green, who is also chairman of the Agency Work Commission, the body set up to make recommendations on the implementation of the directive.

Green’s comments came as the commission published its first report, based on input from organisations including the CIPD, before the government’s first public consultation on the directive, due before Easter.

David Yeandle, head of employment policy at EEF, the manufacturers' organisation, added that the government ought to take full advantage of the three-year implementation period set out in the directive, and not put the law into place until 5 December 2011.

Mike Emmott, CIPD adviser, employee relations, said it would be "useful" for the provisions of the directive to be on the statute book so that employers would "know roughly how they work. But neither employers nor government will want to see the new regulations introduced any earlier than necessary," he said. "Until we are clearer what exactly the government has in mind to legislate, people will assume the worst about what form the regulations will take."

The Agency Work Commission’s report recommends limiting the scope of equal treatment for agency workers to basic salary and other statutory rights and ensuring the 12-week qualifying period is easy to administer. It also states that highly skilled workers, who aren’t in the group of "vulnerable" workers that the law is designed to protect, should be excluded from the regulations to ease the administrative burden.

Des Thurlby, HR director at Jaguar Land Rover, said that agency workers were used extensively in the sector to support peaks in activity – the launch of a new model, for example.

"There are numerous areas in the directive that still need greater clarity," Thurlby said. "Anything that increases the cost of engaging agency employees will make it less attractive to us. For that reason alone, implementation should be as late as possible."

Content courtesy of CIPD (Chartered Institute for Personnel and Devlopment)