Working Conditions for Temporary Workers

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Alan Johnson: The hon. Gentleman makes a similar point to that made by my hon. Friend the Member for South Thanet (Dr. Ladyman). The personal services category includes nursing, and it is clear that, on average, nurses receive more as agency workers than as permanent staff. However, the directive does not require people to be brought down to an average level; it only brings people up. It would have no effect on employers such as the national health service that pay more to agency workers—unless, crucially, it distorts the agency market. In other words, there would be no effect unless a European directive caused such problems for the supply side that fewer agency jobs were available and fewer agencies operated. In the United Kingdom, some 17,000 of those employment agencies are small and medium enterprises, which is unusual compared with the rest of Europe, where the big five employment agencies cater for a much higher percentage of placements. That is a concern, and when hon. Members have had a chance to read my reply, which has just been circulated, they will see that there is not enough evidence to suggest that this proposal will not have a negative effect on employment opportunities. That is a still an open question.

Dr. Ladyman: Many of the temporaries whom I employed got fed up working for agencies, so they set up their own companies to employ themselves. Many of them were one-person companies whose only resource was their own services. How will they fit into this overall picture?

Alan Johnson: I had a feeling that the term IR35 would pass my hon. Friend's lips.

Dr. Ladyman: It never did.

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Alan Johnson: I congratulate my hon. Friend. He asked a good question. Unusually, we have gone out to consultation on a Commission proposal. Many businesses will welcome that, because too often Governments of all persuasions are criticised for consulting on a directive after it has been set in concrete. We are certainly considering the directive's impact on limited company contracts.

Rev. Martin Smyth (Belfast, South): May I press the Minister? Does the directive cover just workers from the European Union or does it also cover those from outside the EU? When we speak about not levelling down, will he accept that some agencies have tended to recruit people into the health service and then employed them not as nurses, for which they were qualified, but in care homes where they were paid less?

Alan Johnson: In the first instance, the directive covers workers working in the EU from wherever they come. Secondly, I accept the hon. Gentleman's concerns. Similar concerns have already been expressed. The proposal could have an impact on job opportunities. I am unaware of the particular details in the health service that he mentions, but certainly in our review of the regulations that apply to agency workers, which have been in existence since 1976, we have found a need to look at how we can protect agency workers from the kind of misuse that he describes. That can be done in domestic legislation; it is not necessarily part of the European directive.

Mr. Hammond: I want to return to my previous question. One of the frustrations of this format is that it is designed to enable Ministers not to answer questions and not to be pulled up with interventions. The Minister seemed to imply that he had never been opposed to this matter being dealt with by European directive and the only question in his mind was about flexibility. However, in his submission to the European Scrutiny Committee he raised the issue of subsidiary. He said:

    ''In particular, it is not clear that the objectives in question cannot be sufficiently achieved by member states' action.''

Can the Minister confirm that the European Scrutiny Committee was correct in interpreting him to be questioning whether this was properly a matter for the EU to deal with by directive rather than something that could be adequately dealt with by member states' national legislation? If the Scrutiny Committee correctly interpreted what he said then, has he now changed his position and what has caused him to do so?

Alan Johnson: I am not, at any stage, suggesting that we did not have a concern about subsidiarity. It is always good to question subsidiarity in these matters. Things have moved on from there. I also clearly said that the Government believe that temporary agency workers deserve adequate protection. The Commission is now producing a proposal. The social partners did not break down on the part-time workers directive or on the fixed-term workers directive, but they broke down on this. In those circumstances, it was argued that we should not seek to take the matter forward. The Commission took a different view. The Government will not have anyone misconstrue our position and claim that we are not interested in

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protecting agency workers. We are, which is precisely why we have argued on matters such as the six-week issue.

Mr. Anthony D. Wright (Great Yarmouth): Will the Minister comment on agency workers from eastern bloc countries such as the Czech Republic? Many students come to work on farms in my constituency, for example, often for a 10 to 16-week period on a temporary contract. Would the directive cover them?

Alan Johnson: It is not clear whether such workers would be covered by this or by the fixed-term workers directive. If they were placed by an agency, the present directive would cover them. If my hon. Friend is concerned about what is happening in his constituency, he should ring the employment agency's standards inspectorate—the appropriate body for examining complaints.

Dr. Murrison: The Government—shamefully, in my view—negotiated with the Commission an exclusion for junior doctors from the working time directive. Will this directive cover locum doctors?

Alan Johnson: If locum doctors are placed by an employment agency, they will be covered.

Mr. Ivan Henderson (Harwich): What are the laws of other European countries on how much time it takes a temporary worker to gain employment protection? In this country it is a year. We are encouraging more temporary work, but some employers intentionally keep their employees in job insecurity and then get rid of them before the year is up. That stops them from having to meet any obligations on working conditions.

Alan Johnson: This is a complex area. There is a difference between agency workers and fixed-term workers, and when we debated the fixed-time workers directive in connection with the Employment Act 2002—we felt that pay should be covered, but through domestic legislation—we made it clear that it was important to be aware of the difference.

My hon. Friend's first question was about when rights to unfair dismissal kick in in the rest of the European Union, but there are day-one rights in this country and in the EU: it is a mixed picture. However, Committee members should not get bogged down on that aspect because this directive focuses specifically on workers whose relationship and contract of employment are governed by an employment agency rather than by the company in which they are placed.

Other member states may apply statutory rights to agency workers. In Ireland, it depends on whether people are employees or self-employed, which adds another level of complexity. We shall be consulting later this month on the question of who is an ''employee'' and who is a ''worker'' in this country. Debating that would add considerably to our two and a half hours. We need to focus on agency workers whose relationship is with an employment agency that places them with an employer.

Mr. Hammond: The Minister has expressed the Government's clear view that article 137 prevents the inclusion of pay within the scope of the directive. The Government fudged the issue on the previous two

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occasions by incorporating pay through domestic legislation, which prevented them from engaging with the Commission. The Trades Union Congress shares the view that pay can be included. Can the Minister give a clear commitment now, on behalf of the Government, that if the Commission persists in maintaining that pay can be included in the scope of the directive under article 137, the British Government will test it by taking the Commission to court?

Alan Johnson: I do not accept that we fudged the issue. The part-time and fixed-term workers directives did not mention pay. Article 137(6)—the article on which the proposal is based—states:

    ''The provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.''

We informed the Commission of our view that it should not cover pay. The hon. Gentleman asked if we would ever legislate domestically to cover pay; we were seized with the argument that, for part-time and fixed-term workers whose relationship is with the employer, it was right to cover pay and pensions directly, not under the directive—as I explained, it is based on article 137—and we did that domestically. We do not have the same view about agency workers. I cannot say now, because we are at the start of a consultative process, that that will never change, but I am not convinced that agency workers are in the same position.

Dr. Ladyman: One of my hon. Friend's main concerns is about competitiveness with people outside the European Union. What research has been done—or commissioned—into how the issues are handled in the United States, Canada or Japan, for example? Will the findings of such research be published?

Alan Johnson: It is difficult enough to get manageable statistics to enable analysis of matters in the European Union, but we will look at other non-EU, G7 countries because it is important to our competitive position. However, that work has not been done yet.

Mr. Hammond: I have to ask the Minister my question again, because if it contains more than one sentence he manages to avoid answering the important part. Will the Government take the Commission to court in order to get a definitive decision on their view that pay cannot be included within the scope of the directive?

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