The Agency Workers Directive – don’t let it catch you out.

There have been proposals for the introduction of an AWD since 2002. For a number of years there was a blocking minority, primarily the UK and Poland, which prevented the directive progressing. Ultimately, the UK withdrew its opposition to the draft directive, partly due to union pressure and partly to save the UK “opt-out” to the working time directive.

A revised draft of the directive was agreed by the Employment Ministers of EU member states at the Employment and Social Affairs Council on 9 June 2008 and the directive adopted by the EU in late 2008. Member States must implement by Dec 2011.

On 8 May 2009, BIS (formerly BERR) issued its consultation paper on the implementation of the Directive. This is the first stage of the consultation, a second consultation on the actual regulations will occur at the end of the year. Responses to this initial consultation are to be provided by 31 July 2009.

AWD – A reminder of what the Directive is all about

The Directive provides that:

• “The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at the user undertaking at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.”
• “Basic working and employment conditions” are expressed to include:
  • The duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays.
  • Pay
• The definition of worker is “a worker with a contract of employment or an employment relationship with a temporary agency with a view to being assigned to a user undertaking to work temporarily under its supervision or direction”.
• Temporary workers are to be informed about permanent employment opportunities in the user enterprise and given equal access to collective facilities (canteen, child care facilities, transport service)

The Consultation

The Department for Business Innovation and Skills (BIS) has identified the key concerns and issues that need to be addressed. They are now seeking views on their proposed implementation of the Directive and the consultation period opens up this debate. Their proposal is not set in stone and we can still lobby on these issues.

The current proposal is as follows:

• The status of temporary workers will be unchanged and they will not have additional employment rights.
• It will apply to temporary work via an employment business – and workers will be defined as in the working time regulations – but amended to include those who work via umbrella companies.
• The right to equal treatment will apply after 12 weeks, in line with the CBI/TUC agreement. This will be calculated as 12 calendar weeks regardless of working patterns.
• Workers who are genuinely self-employed (e.g. work via their own limited company) will be outside the scope of the legislation.
• Equal treatment is to include
  • Duration of working time
  • Rest
  • Holiday – including where more generous than statutory minimums
• Pay is to include
  • Basic pay
  • Holiday pay
  • Overtime, shift allowances, unsocial hours premiums/bonuses
  • Certain bonuses which apply to personal and individual performance.
• Pay is to exclude
  • Remuneration which recognises a long term relationship between employer and permanent employee, e.g profit sharing schemes.
• The comparator is a “comparable worker doing broadly similar work in the same organisation”.
• Primary liability for compliance is with the employment business. Employment businesses should have a defence that they have taken “reasonable steps” or “best endeavours” to obtain information from the hirer. The hirer would become liable if information provided was inaccurate or incomplete.
• Workers would be entitled to ask the employment business for the information relating to their equal treatment rights.

What remains unclear?

There are some issues which remain unclear to us, despite a generally pragmatic approach so far. We’ve highlighted the issues that we would like to see clarity on in order to avoid uncertainty, bureaucracy and additional cost associated with the employment of temporary workers.

• The position of umbrella company workers
• The treatment of temporary workers employed by an employment business, in particular their pay and hours when not on assignment with a client
• Determination of a “comparable worker”
• The position of Master/Neutral Vendors
• Calculation of 12 weeks, and particularly how breaks between assignments should be dealt with.
• Enforcement and apportionment of responsibility and risk between clients and employment businesses

Should you be concerned?

It is estimated that around 50% of temporary assignments in the UK are under 12 weeks’ duration and on the face of it the pay of most temporary workers is already on a par with permanent employees. If that’s the case, the impact will be on those employers who use temporary workers at below permanent equivalent market rates for periods in excess of 12 weeks.

But we know that in the professional services specialisms, agency workers are well paid, often undertaking lengthy and complex project work – out of choice – to help businesses succeed. These are not vulnerable workers and arguably do not need the protection of the 12 week rule.

Will forcing through measures that may discourage employers from taking on new staff undermine the UK’s ability to keep ahead of its competitors, vital to help keep the economy moving?

We don’t have all the answers, but we do value your opinions. So do take part in the consultation, or share your thoughts with us below.