Could Equal Rights be a Bad Thing?
Under the Agency Worker Regulations that come into force in October agency staff that work for longer than 12 weeks are entitled to equal pay, bonuses and any benefits that are given to permanent employees. Whilst this is seen by many to be a good thing it could cost UK businesses an estimated £1.3 billion a year and many intend to avoid it at whenever possible.
Back in 2008, the BBC compiled a list of reactions to the plans for the European Union Agency Worker Regulation (AWR) and whilst it can be seen that many groups feel these laws protect vulnerable workers, most seems to agree that it is a “bad deal for business”.
Research done by the law firm, Allen and Overy, has shown that 54% of respondents do employ their agency staff for longer than the 12 week period, but that many will in future terminate the contract after 11 weeks to avoid this new rule. Due to the dates of when these new regulations come into force, the result may be many terminations of contracts in the month of December, weeks before Christmas.
Stefan Martin from Allen and Overy said that “rather than strengthening their rights, this may actually make the position of agency workers much more uncertain” particularly in the current economic climate. Agency staff are seen as valuable in uncertain economic situations due to their flexibility, but the increased costs that will be incurred for taking these agency staff on will minimise most, if not all, the benefits. It must also be noted that these regulations apply to both part-time and full-time agency staff and the 12 weeks will still count as “continuous service” even if you have a break of up to 6 calendar weeks but then return to the same job. This latter point was clearly designed to stop any attempts of employers hiring agency staff, terminating contracts and then immediately re-hiring them for the same job without having to give away equal benefits.
How then will businesses loophole this new system? By creating in-house flexible workers and forgoing the middle-man agency. If the employees are theirs directly, their contract length and flexibility is irrelevant and their contract will itself stipulate the benefits and wages that they are entitled to.
The differences in opinion among the Coalition are shown clearly by this issue with many Liberal Democrats believing in this law and the apparent protection it provides employees. Many Conservatives, on the other hand, fear the damage and inconvenience this will cause businesses at a time when they are trying to re-build the economy and provide stability and confidence for business owners. This is a reflection of the European views of both parties with the Conservatives traditionally being more Eurosceptic and many resenting laws being encouraged by the French and Germans that we must then abide by when it could be seen as detrimental to our own economy. This has regularly been shown since the recession with the European battle becoming more mainstream with MPs and even some MEPs being more overtly resistant against the power of the European Union.
Whether the AWR provides protection for these workers or actually makes them less employable we will have to wait and see but this may be one step too far for many Eurosceptics who are demanding a red tape reduction!