Equal treatment for agency workers

16 June 2008

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20 May, 2008 may be a day that will be remembered as marking an end of an era - the era of the financially viable temporary worker - after a government move to resolve the issue of the Agency Workers Directive. Read on to find out how this could affect your business.

The Government's statement said that it had agreed a fair deal with the unions and the CBI representing (some) employers to establish points of agreement for entitling agency workers equal treatment to permanent workers.

The key points are:

After 12 weeks in a given job there will be entitlement to equal treatment. Equal treatment means basic working and employment conditions that would have applied to directly employed workers, but not social security schemes (maternity, sickness or pension benefits).
Arrangements are to be reviewed in the light of experience.
The Government proposes to move to reach agreement in relation to the formal implementation of the Directive with European partners.

There are more than one million agency workers in the United Kingdom, and the CBI estimate that some 42% would be affected by these measures. For many employers, the use of agency workers is a cost effective means of dealing with short-term projects or needs. The benefit is the ease with which these workers can be recruited and removed from the work force as circumstances change. The short qualifying period for equal entitlement with a permanent worker gives little time for evaluation of that agency worker before the full-cost impact will be felt.

Although the period appears to be based on a common probationary period of three months, many companies have an effective six-month trial period before their staff qualify for full benefits. Are the consequences of this to mean that agency workers could have better benefits than potential permanent, directly employed staff would have in a six-month probationary period?

The measures will increase costs due to the likelihood that there will have to be pay evaluations in relation to equal entitlement with permanent workers, bearing in mind the exclusion of social benefits. This will be a costly exercise to smaller organisations that use agency workers.

The outcome of these measures is likely to be a reduced use of agency workers, as they are replaced by short-term contract arrangements or more use of longer and effectively monitored probationary periods.

Click here to view the results of the Referendum vote on this issue.

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Equal treatment for agency workers

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