4 Agency workers
38. In March 2002, the European Commission proposed
a directive governing the working conditions of temporary agency
workers—the so-called Agency Workers Directive (AWD). The
AWD arose from a concern that agency workers are an exploited
sector of the workforce with lower pay, limited opportunities
for training or for transferring to permanent employment, and
lacking both the job security and pension entitlements of their
colleagues employed directly by the 'user undertaking'.[43]
Agreement on the directive has yet to be reached in the Employment
Council, with the UK one of the countries leading the opposition
to the proposed directive.
39. The AWD aims to establish the principle of non-discrimination
against temporary workers, meaning that they "may not be
treated worse, in terms of basic conditions, than a comparable
worker in the user undertaking in an identical or similar job".[44]
This means that agency staff would have a right to pay, hours,
and holidays equivalent to those that their directly employed
colleagues are entitled to, after a qualifying period of six weeks.[45]
It also requires that: there should be improved access to training;
agency workers should be covered by requirements for workers information,
consultation, and representation; agency workers should be allowed
equal access to the collective facilities of the user undertaking;
and temporary agency workers should be informed about permanent
vacancies in the user undertaking. [46]
40. There has been a steady increase in the number
of temporary agency workers in the UK over the last two decades.
Currently, the Government estimates that there are approximately
600,000 people employed as temporary agency workers. There are
large numbers in manufacturing, where they comprise around 17
percent of the total manufacturing workforce, with real estate,
renting and business, and health and social work also employing
significant numbers (10.8 percent and 11.6 percent, respectively).
These temporary agency workers are heavily concentrated in administrative
and secretarial, elementary occupation, and process, plant and
machine operative work.[47]
41. The consequence of the directive, as it currently
stands, would be to improve conditions of work for agency workers
in the UK. As well as increasing the availability of paid holiday
leave, it would lead to a pay increase for approximately half
of all agency workers. However this would vary between sectors:
for instance, it seems that agency nursing staff are, on average,
paid more than their directly employed colleagues.[48]
The directive would also increase the provision of training as
it is estimated that only 20 percent of temporary agency staff
have received work related training within the previous 13 weeks,
compared with 57 percent of permanent workers.[49]
As a result, the effect might be to make temporary agency work
a more attractive option and consequently to increase the supply
of people in this type of work.
42. However, the Government also predict that it
will increase the cost of employing temporary workers. The agencies
will be faced with higher costs and will pass these on to the
user undertakings, which is likely, other things being equal,
to lower demand for agency workers.
43. Opponents of the AWD suggested that the extent
to which temporary agency workers were exploited has been exaggerated
and pointed out that they were already covered by a variety of
regulations in areas such as working time, minimum wage, non-discrimination,
and health and safety.[50]
The benefit of temporary work to the economy as a whole was also
emphasised. Employers argued that it provided companies with the
flexibility to cope with peaks in demand. They also suggested
there were benefits for the temporary agency workers themselves.
Temporary work could provide people with a route back into permanent
employment, and they stressed the flexibility that temporary work
gave. One witness explained how his company used temporary agency
staff as the basis for recruitment, treating the duration of the
temporary assignment as a trial period before deciding whether
to employ the worker permanently.[51]
44. The primary areas of concern amongst opponents
of the AWD were the six week qualifying period, and the notion
of equality with the staff of the user undertaking and how this
would be interpreted.
45. The business organisations who gave evidence
were particularly unhappy with the proposed six week qualifying
period. At the moment, the Government estimates that only 12 percent
of temporary agency assignments fall within the six week qualifying
period.[52] The majority
of our witnesses who opposed the six week qualification thought
a period of one year would be more appropriate. This was, as Manpower
told us, because any employer should be able to judge whether
a position had become permanent after 12 months.[53]
It was also pointed out that a twelve months qualification period
would more closely tie in with the parental leave entitlements,
allowing , for example, the work of a permanent employee away
on maternity leave to be covered by an agency temp, without the
AWD terms taking effect.[54]
The vast majority of temporary assignments, we were told, lasted
less than 12 months.[55]
Consequently a 12 month derogation from the AWD would mean that
very few temporary agency workers would be covered by its terms.
46. The principle of equivalence for temporary agency
workers with the pay and conditions of directly employed staff
also exercised the opponents of the AWD on a number of levels.
The CBI argued forcefully that, beyond the minimum standards which
apply to all workers, temporary agency workers should remain the
responsibility of the agency supplying them. They emphasised that
the key contractual relationship was, and should remain, that
between the user undertaking and the agency, and not between the
user undertaking and the agency worker: "the reason…user
companies make use of agency temps is a commercial one, not an
employment one. They reach a commercial arrangement with an employment
agency, a commercial arrangement whereby they outsource the employment
relationship to the agency".[56]
47. On this basis, there was significant opposition
to the idea of equivalence of pay between temporary agency staff
and user undertaking staff. The CBI emphasised that, given the
user undertaking wanted no relationship with the temporary agency
worker, they rejected the idea of an equivalence of pay with directly
employed staff, at least within 12 months.
48. Mr Arkless, a member of the executive board of
Manpower, a multinational employment agency, reiterated the idea
that the key employment relationship was between the agency and
the agency worker. He said that "we would like to see the
acceptance that agencies are employers and fully-fledged employers".[57]
The implication of this is that it is the responsibility of the
agency to ensure appropriate pay, pension provision, and training
and development opportunities.
49. Equivalence of pay was, in his view, difficult
to ensure and hard to justify on principle in many instances.
It is based on the assumption that someone providing temporary
agency cover is able to do a job as well as the person they are
covering for. There are instances where this will be the case,
but for the most part it will not: the agency worker is likely
to lack the knowledge and experience specific to that post, which
can only be gained by being in the job over a period of time.
Besides which, the user undertaking, he predicted, would probably
respond by stretching pay scales, meaning that the principle of
equality of pay would, in practice, mean nothing of the sort.
[58]
50. The business organisations and the Government,
by focussing on the six week derogation period, are missing the
more important issue which is the scope of the directive. We fully
support the principle that temporary agency workers should, in
most respects, enjoy the same working conditions as the permanent
staff. Whilst the agency worker is in place, he or she should
be entitled to the same hours and to have access to the same facilities,
for example, as directly employed colleagues. This should be the
case from the day that the assignment starts and should not be
subject to any derogation period whatsoever. If the intention
of the directive is to ensure that agency workers enjoy adequate
conditions in their temporary posts, we can see no reason why
they should have to wait six weeks before enjoying this 'privilege'.
A 12 month derogation would make the directive almost meaningless
given that only a very small minority of temporary assignments
last beyond 12 months.
51. Matters such as pay, pensions, and training
are more difficult. Whilst not, in principle, against attempts
to ensure equivalent pay for temporary agency workers, we are
mindful of the difficulties of implementing this. As Mr Arkless
of Manpower noted, there are clear means that the user undertakings
can employ to avoid this and we note the very real difficulties
that there are in using equal pay legislation to ensure equivalence
within companies.[59]
And it is not necessarily the case that temporary agency staff
will be able to do the same job to the same standards as those
they are covering for. The means by which wage levels are set
for agency workers also create difficulties for making proper
comparisons with the permanent staff. The agency charges the user
undertaking a fee which covers the wage of the agency worker and
a mark-up for overheads and profits.[60]
It is, therefore, not clear to us how, within this process, the
principle of equivalent pay could be put into practice. Furthermore,
if, as maintained, the key employment relationship is between
the agency and the agency worker, the responsibility for training
or for pensions falls to them rather than the user undertaking.
Whilst a company the size of Manpower is able to provide these
for their staff, it will certainly present problems to the smaller,
independent agencies.[61]
52. Whilst temporary agency work is, for many
(though not all), a less desirable option than permanent employment,
it does not seem that, in most instances, it is a straightforward
alternative: we were told that employers would not respond to
an increased cost for temps by substituting permanent employees.[62]
Instead, whilst the need for a degree of flexibility would still
result in the use of temporary agency workers, there would be
a reduced demand. The danger, then, is rather than promoting permanent
employment, the employment prospects of some of the more peripheral
members of the labour market are simply undermined.
53. We are, however, aware of clear abuses, where
agency workers are kept on long term, temporary contracts as employers
attempt to avoid making a proper commitment to them. We were told
that some of the large, financial institutions maintained large
pools of long term, temporary agency workers. We were approached
by one such person who told us that she had been in this position
for a number of years.[63]
The Higher Education sector is another where, it seems, long term
temporary contracts, renewed annually, are common. We are genuinely
concerned about situations such as these and can see no reason
why a temporary agency worker, after a period of 12 months in
a post, cannot then be considered permanent.
43 The clumsily-termed 'user undertaking' is the company
in which agency workers are posted. Back
44
Proposal for a Directive of the European Parliament and the Council
on working conditions for temporary workers explanatory memorandum
COD 2002/0072 Back
45
App 17, para 74 Back
46
DTI Regulatory Impact Assessment of Proposal for a Directive ofthe
European Parliament and of the Council on Working Conditions for
Temporary Agency Workers (January 2003) Back
47
Ibid, paras 55-56 Back
48
Ibid, para 54 Back
49
Though the directive does not suggest an equal right to training,
merely a dialogue to increase temporary workers' access to training. Back
50
Qq 253-254 Back
51
Qq 212-221 Back
52
DTI Regulatory Impact Assessment of Proposal for a Directive ofthe
European Parliament and of the Council on Working Conditions for
Temporary Agency Workers (January 2003), paras 27-31 Back
53
Q 389 Back
54
Q 117; Q 225 Back
55
Q 388 Back
56
Q 117 Back
57
Q 386 Back
58
Q 394 Back
59
Q 394 Back
60
Q 398 Back
61
We are aware that, in Denmark, temporary agency workers are seen
as the responsibility of the user undertaking, and entitled to
equivalent pay and conditions to their directly employed colleagues.
This is very much tied in with their encompassing collective bargaining
agreements, however. And we do not know whether it has resulted
in significantly higher wages for temporary agency workers Back
62
Q 118; Q 406; Back
63
Understandably, she did not wish her name to be published. Back
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