The main purpose of the Directive is to provide agency or temporary workers with equality of treatment with permanent workers in their basic employment rights. Originally, these rights were to include working hours, overtime, holiday, maternity protection and protection against less favourable treatment on the grounds of their temporary status from the start of their employment, and then the right to equal pay after a period of six weeks. However, the six week limit was a major cause for concern for small businesses.
Discussions with the CBI and the TUC led to an agreement that agency workers would be entitled to equal treatment after they had been employed for a qualifying period of 12 weeks.
There is still some concern that this qualifying period will lead to contracts for temporary workers either being terminated just short of the 12 week period, or being fixed for a lower period of time than the qualifying period. It remains to be seen whether employers will be willing to go through the process of selecting, interviewing and replacing temporary workers on such a regular and recurrent basis merely for the purpose of avoiding these additional obligations. The waste in management time and the corresponding cost may not be proportionate to the increase in cost that the Directive may place on the employer to justify such action.
There is still some concern that this qualifying period will lead to
contracts for temporary workers either being terminated just short of
the 12 week period
Whilst at first it appears that the most important right to be conferred by the Directive is equal pay with permanent workers, there is already evidence to suggest that some temporary workers already receive a higher rate of pay then their permanent counterparts. This is often dictated by the need of the employer to fill a role on short notice with specific requirements, and the fact that the temporary worker does not receive the same additional benefits the permanent worker does.
It is quite likely that when the Directive comes into force in English Law the job of the recruitment agent will be extended as there will be an obligation on them to ensure their candidates are on no worse terms than their clients' permanent employees. Such agencies will be required to obtain detailed information regarding the pay and benefits enjoyed by permanent employees to ensure the agencies do not fall foul of the regulations. Such additional work will be a cost to the agency which will no doubt be passed onto their clients in the form of enhanced introduction fees.
Smaller firms in particular may struggle to absorb the additional costs placed on them by recruitment agencies. As a result many smaller employers may consider dispensing with the use of recruitment agencies as far as possible. However, they will have to balance this with both the interruption to the running of their business in taking on the recruitment responsibility on a fairly regular basis, and the loss of the specialist function recruitment agencies provide in locating appropriate candidates for the specific role.
This Directive may have a greater impact in the UK than elsewhere in the EU as recruitment agencies are well established in the UK, whereas in Italy until recently the operation of an employment agency was deemed illegal. It is estimated that one third of all temporary workers in the EU are actually based in the UK so this consultation is significant and the implementation of this Directive into English Law could have far reaching ramifications for the recruitment industry as a whole.
It is worth remembering that at the moment the Government has merely launched a consultation and this is an opportunity for smaller firms and businesses to voice their concerns about the impact the Directive, in its current state, will have on them.
It may well be the case that the impact this Directive has on the market for temporary workers is to reduce the number who are employed through an agency as a result of the likely additional administrative costs. Employers may take the decision to dispense with the services provided by such agencies and hire the workers directly, or reduce the number of temporary workers being employed as a whole due to the parity that will need to exist between temporary workers and permanent employees.
For more information visit www.mablaw.co.uk
