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That statement was made because, as was noted, a balance between temporary and agency workers’ rights and the employer’s business needs had been struck. Temporary employment provides flexibility to employers and thus benefits businesses. Temporary agency workers benefit from many of the minimum rights introduced since 1997. They are covered by the minimum wage, working time legislation, and health and safety and social security provisions, such as maternity and sick pay. Legislation has already been changed to ensure
that part-time workers have the same rights in relation to pay, access to pensions and bonuses. They are also protected from discrimination. As for the workers’ opinions, according to YouGov, 53 per cent. of temporary workers felt that they were treated fairly by their agency and 24 per cent. neither agreed nor disagreed.
The business position was also broadly in agreement. The Engineering Employers Federation said:
“UK manufacturing competes successfully in a global market. Part of the reason for this success is the UK’s comparatively flexible labour market. A vital element of that flexibility is the agency workers market which enables companies to respond to fluctuations in demand as they occur.”
It would seem that the situation was broadly satisfactory to Government, to business and to most of the workers concerned—that is, until the EU brought out yet another proposal, which aims yet again to level down employment legislation to the lowest common denominator.
The Conservative party has consistently supported the Government in resisting the European Council draft directive on agency workers since May 2000. During the discussions in the Council on 5 December 2007, the Portuguese presidency suggested that the temporary workers directive should be discussed together with the proposals to amend the working time directive 2003/88/EC, which would prohibit the UK’s opt-out from the general limit of 48 hours on the working week. I shall not discuss this in detail today, but it would clearly have serious implications in the UK.
Instead, I quote from an article in the Financial Times, dated November 2007, which reported on the run-up to the December 2007 meeting of the European Council. It stated:
“The government is adamantly opposed to any such deal, backing employers’ concerns that the temporary workers measure would damage the UK’s flexible labour market. ‘Our position hasn’t changed...we don’t think the temporary workers measure as it stands strikes the right balance,’ the Department for Business, Enterprise and Regulatory Reform said.”
But now, out of the blue, it would seem that the Government are to create an independent commission to consider the rights of agency and temporary workers. Can the Minister explain to the House where that proposal came from and why? Whenever the Government wish to indulge their passion for dithering and sitting on the fence, they launch another commission. In this case, they want to say yes to the unions and their Back Benchers, but dare not for fear of upsetting business; but they also want to say yes to business, but dare not for fear of upsetting the unions and their Back Benchers.
Ms Dari Taylor (Stockton, South) (Lab): Is the hon. Gentleman making a different statement from that of the CBI? On Radio 4 this morning, it made the clear statement that it was prepared to sit on a temporary workers commission, as it had sat on a low-pay commission, to see this Bill put into action? Is he taking a very different line from the CBI?
Charles Hendry:
That must be a different interview from the interview I heard with the CBI this morning, in which it explained that it was fundamentally opposed to the Bill. It did say that it would take part in commissions when the Government asked it to do so,
but it sees that as part of its duty as an employers organisation, rather than a duty it should take on because it supports what the Bill is about.
Philip Davies (Shipley) (Con): Further to that point, does my hon. Friend agree that the CBI has also said that the Bill as it currently stands could lead to 250,000 job losses in this country?
Charles Hendry: My hon. Friend is absolutely right. It was noticeable that, when the hon. Member for Ellesmere Port and Neston (Andrew Miller) introduced the Bill, which he did with his normal sincerity and commitment, and was asked about the costs to business, there were groans from the Labour Benches, as if the costs to business did not matter. On these issues, a balance must be struck between the interests of employers and employees to ensure that our economy remains strong.
In this case, the Government are ignoring their own position, as stated in their response to the 2007 European Commission Green Paper. Question 10 of the Green Paper asked:
“is there a need to clarify the employment status of temporary agency workers?”
The Department of Trade and Industry, as it then was, responded that
“we see no need to further clarify the employment status of temporary agency workers.”
The DTI went on to explain that the
“thriving agency and temporary work sector”
is fine as it is. None the less, the Government now produce the idea of a commission.
I therefore hope that the Minister will take this opportunity to tell the House, rather than talking to the media, what the commission will do and who will be on it. For example, although I assume that it will look to see how temporary workers could be given pay and conditions comparable with those of permanent workers, will it also be charged with looking at making their positions identical, and will it be instructed to review whether that is in itself a desirable objective? Frankly, our concern here is that the commission is going to be asked to review not only the mechanical issues but the economic and political issues that the Government are so desperate to avoid in their rush to another policy fudge.
Back on the European Union front, it is our understanding that France is expected to push on the issue when it takes over the EU presidency on 1 July. Indeed, it is said that France is likely to revive the proposed EU directive, which could suggest that rights to equal treatment begin after just six days in employment. We also believe that the continued support of Poland and Germany will be crucial to Britain, but I note that the Financial Times reports that
“a Polish spokeswoman recently said that Warsaw was looking at the Portuguese proposal, and wanted to reach an agreement on both directives.”
In other words, if there were ever a time for the Government not to dither, but to remain firm, it is now. Therefore, we simply do not understand how the proposed commission ties in with the EU agenda. In
particular, can the Minister now urgently confirm that the commission will report before the decision has been taken by the EU?
Mr. Chope: Does my hon. Friend think that there is an extraordinary inconsistency in the Government’s approach, because this Bill goes much further than the proposed directive, yet the Government were trying to get allies to block the directive a few months ago? Now it seems as though they think that that directive will be all right.
Charles Hendry: My hon. Friend seems surprised that there may be an extraordinary inconsistency in the Government’s approach. We have learnt that there is always an extraordinary inconsistency in their approach. They will say different things on different occasions.
We also want to know whether the reality is that the commission is just another fudge by a weak and vacillating Government who are dithering on one matter after the next. I have some sympathy for the Minister. He was in the papers just a few weeks ago saying that he has the most difficult job in government, closing down post offices all over the country, upsetting all his own Back benchers and everyone else. Today he has to come to the House to explain to those same Back Benchers why he is blocking the Bill as well. However, we need some clarity from him on the issue.
Mark Pritchard: Does my hon. Friend agree that—I suspect that this is to the slight embarrassment of those on the Government Front Bench, given that the Minister is a west midlands MP—all over the country, and in particular in the west midlands, the Government are laying off highly qualified permanent staff and replacing them with very expensive temporary, often inexperienced, staff in the public sector?
Charles Hendry: The Government have many issues to address on that front. Considering the general level of competence that one sometimes finds on these issues, perhaps we should be replacing some of the Ministers with temporary staff. That might improve the way in which the country is run.
To make matters worse, even union leaders are sceptical and want clear terms of reference before agreeing to a commission. Of course, they are open to saying that they do not want a commission—they want this Bill. Therefore, it seems that the unions have rejected the commission before it has even started. The Government are not leading here, they are simply treading water, hoping that the issue will go away.
To show how this Bill is unnecessary, let me go back to the fundamental issues. There are 1.4 million agency and temporary workers in the United Kingdom. According to the Department:
“In the UK some 94 per cent of the workforce works under traditional contracts, with less than 6 per cent on temporary contracts. However, temporary work, such as agency work, is greatly valued by employers and many individuals. We have a thriving agency and temporary work sector that is a key part of our economy and in which many choose to work for positive reasons.”
Those are the words of the Department for Business, Enterprise and Regulatory Reform. The CBI confirms that, stating:
“Agency workers value the opportunity to work on a flexible basis around other commitments, such as students during vacation or those with caring responsibilities. Others choose temping as a long term career and like the freedom, flexibility and high pay. Up to half of agency workers are not seeking a permanent job. Industry surveys show around half (52%) of agency workers choose temping for positive reasons such as increased flexibility, better pay or to gain valuable work experience and a fifth (20%) use temporary work as a route into a permanent job.”
For those seeking a permanent job, agency work is a route to employment for young people, for those who have been out of work for a long time, perhaps due to long-term illness, or time in prison, and for mothers returning to work. It enables businesses to take on inexperienced staff as agency workers, thus giving those people invaluable work experience. That removes the “no job without experience and no experience without a job” trap.
For the employer, temporary workers do not just fill a need in private businesses. According to the Federation of Small Businesses, many Government Departments also rely on temporary workers to fulfil a specific short-term need. In 2006, the Department for Work and Pensions estimated that it had 120 agency staff. Between 2005 and 2006, the Department of Health spent £12 million on employing agency staff. In 2006, to meet the single farm payment scheme, 53 per cent. of the staff working in that area in the Department for Environment, Food and Rural Affairs were agency workers. In the case of small businesses, the FSB notes that temporary workers may help to meet big orders while a business is growing but cannot sustain an extra member of staff long term. Temporary workers also help to cover sickness leave, which is a far greater problem in a small team of people. In short, temporary workers help businesses to get by and to grow.
Let us not forget the tidal wave of Labour employment legislation, which has forced companies bogged down in red tape to rely on agencies to sort out additional administration. The extension of maternity leave in particular will mean that businesses must take on temporary workers for up to 12 months from 2009. [Hon. Members: “Hooray!”] The CBI anticipates that that will lead to a greater number of women taking a longer period of maternity leave. Labour Members cheer but they must look at the full range of consequences. It will be important that firms are able to cover that absence with temporary workers. However, if the Bill were to go through, a small business might find itself paying for maternity leave for a temporary worker who was covering for a permanent employee who was on maternity leave as well.
Philip Davies: Does my hon. Friend agree that the jeering on the Labour Benches reflects the fact that many Labour Members have no idea about anything to do with wealth creation, running a business, ever employing anyone or trying to make a profit? Lots of Labour Members, despite being well meaning, live in a parallel universe to that inhabited by most businesses that are trying to create some wealth in this country.
Charles Hendry:
I commend my hon. Friend for that observation. It was striking that in introducing the Bill, the hon. Member for Ellesmere Port and Neston said that it would create wealth and jobs. It is intriguing that
not a single business has lined up to say that. The people whose job it is to create businesses, wealth and employment do not happen to believe that. Indeed, the harsh reality is that the Bill could increase discrimination against women being employed and create impossible situations for small businesses.
Of course, the cost of agency work needs to be taken into account. It is often more expensive than direct employment because employers pay a fee to the agency, which covers not only wages but agency costs. This is one reason why equal pay between agency temps and permanent employees cannot always be justified.
Mr. David Marshall (Glasgow, East) (Lab): So that we can all be perfectly clear where the hon. Gentleman and his party stand on the question of fair pay and conditions for all workers, will he tell the House whether he intends to vote against the Bill today?
Charles Hendry: We will most certainly vote against it today—we have made that position clear.
Mr. Skinner: You didn’t make a very good job of it.
Charles Hendry: I point out to the hon. Gentleman that I started off by saying that we oppose the Bill, which we believe to be unnecessary and misguided, so in my very opening sentence I explained that we would oppose it today.
Another reason why equal pay between agency temps and permanent employees cannot always be justified is that many agency workers get a higher rate of pay than they would in permanent roles. This is the case for skilled craftsmen and IT and accountancy temporary workers. The Association of Technology Staffing Companies has explained to us that highly skilled IT contractors do not want to be treated on a basis equal to their peers within the companies in which they are placed. They are recruited on the basis that they have a specialist skill that no comparable worker in the organisation has, and they are paid accordingly.
Some agency workers do receive pay equal to that of permanent staff, but not other benefits. Indeed, benefits such as workplace pension schemes, occupational sick pay or occupational maternity pay are often not appropriate for temporary workers as they are part of the package given by employers to reward loyalty and long service. In some areas, agency workers are paid less than permanent workers because the experience and commitment that they wish to provide are not equivalent to that required of permanent, experienced staff. Temporary workers may have the same level of qualification, but that does not necessarily mean that they have the same ability or inclination to do the same job as experienced staff who know how the firm works.
The Bill does nothing to improve the relationship between employers and temporary workers. Instead, it creates a grey area. It does not specify which rights and conditions are comparable between a permanent worker and a temporary worker. In particular, there is a profound lack of clarity in clause 1 regarding when an employer can lawfully pay an agency worker less than a comparable direct worker. Would it be “justified on objective grounds”, as the Bill says, to pay an agency
worker less than a direct worker, and how are the agency and client to know without a tribunal ruling? When would the provision apply? The Bill does not even specify whether the employer is allowed to take into account the experience of temporary workers when fixing the salary. Would it be justified, therefore, to pay the agency worker less for a probationary period while they learn the job? What if the agency worker is providing cover for an absent worker who is still receiving pay, including maternity or sick pay? Can this also be taken into account?
This Bill creates a complex and confusing regulatory regime for agency work. That would lead to high compliance costs for good employers, but it would fail to tackle those who already disregard employment rights. The CBI has said that the additional work required to take on an agency temp or to end an assignment could lead firms to use other methods, such as overtime, to meet demand, significantly reducing the number of assignments offered. Many multinationals cite labour market flexibility as the main reason why they choose to invest and to create jobs, permanent and temporary, in the UK. They have told the CBI that such a move would affect future inward investment decisions. Indeed, as my hon. Friend the Member for Shipley (Philip Davies) noted, the CBI said that 250,000 jobs could be lost as a result of the Bill.
The hon. Member for Ellesmere Port and Neston has referred in the past to exploitation being one of the issues behind the Bill. Yes, some workers in this country are being exploited, although they are just as likely to be directly employed as they are to be agency workers. Frequently, existing legislation is not being enforced, but that is a different issue from the Bill before us. For example, the CBI is working with the Government and unions through the ministerial vulnerable workers forum to tackle non-compliance and improve enforcement. It is the interest of agencies, temporary workers and employers that temporary workers are protected from abuse. Improving collaboration between the various inspectorates should also be a top priority.
Philip Davies: My hon. Friend moved on rather quickly from clause 1, and I want to bring him back somewhat. Does he agree that the lack of clarity regarding the “objective grounds” and exemptions from the Bill means that even those who might be in favour of its thrust should recognise that it is so badly drafted and poorly defined, and would leave so many employers in limbo—not knowing what they could and could not do—that it is not worthy of being made law?
Charles Hendry: My hon. Friend is absolutely right: the Bill is fundamentally flawed not only in its approach, but in what it seeks to achieve. Hopefully, the Minister can reassure the House regarding the amendments that will be sought in Committee, should the Bill be granted its Second Reading today.
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