Stuart Gentle Publisher at Onrec

ATSCo disappointed with European Parliament vote on agency workers directive

says Ann Swain

Will harm those it seeks most to protect
''Temp to perm'' fees accepted in principle
Limited company contractors exempted

The bad news

The European Parliament vote in favour of the Agency Workers Directive (November 21) could damage the UK economy and harm those it seeks to protect most says Ann Swain, Chief Executive of the Association of Technology Staffing Companies (ATSCo).

The proposed Directive accepted by the European Parliament seeks to give temporary workers the right to the same pay, holiday cover, sick and maternity leave and other benefits enjoyed by permanent employees, from day one.

Comments Ann Swain; Not only will the Directive cause significant damage to the 780,000 strong UK temp market (the largest in Europe) but those agency workers most in need of protection are likely to come off worst.
According to ATSCo, the extension of pay and benefits to temporary workers undermines the position of permanent employees and erodes UK competitiveness.

Says Ann Swain; It doesn''t seem fair that an agency worker could begin working for a company and enjoy the same pay and rights as an employee who has, for example, given ten years loyal service.
On top of that the Agency Workers Directive will be harmful to UK productivity as temporary workers will be less attractive to employ.

The Directive states that the terms and conditions of agency workers should be determined in comparison with permanent staff in the company to which they are assigned. Currently, in the UK, pay and conditions of temporary workers are determined by the employment agency usually taking into consideration the terms and conditions of other comparable agency workers and market forces.

Says Ann Swain; The current proposal would gravely affect the ability of companies to utilise flexible workforces and for individuals to ply their trade as they wish. We also consider that in no circumstances should the Directive cover ''pay'' as a comparable employment condition.
According to ATSCo, the one size fits all approach adopted by the EU fails to take into account the differences between recruitment sectors.

Says Ann Swain; Many agency workers (particularly in IT) receive higher levels of benefits than a comparable worker in the user company.

The ''exemption'' period - when equivalent rights for temps are enacted - was reduced by the EU Employment and Social Affairs Committee from six weeks to one day and has been upheld by the Parliament.

Says Ann Swain; ATSCo would argue that the time period should be extended to at least 12 months and preferably 18 months to allow the agency worker to have established a longer term relationship with the user company. This relationship would then be much more comparable to the permanent staff in that company.

ATSCo also point out that the Directive would increase the burden of ''red tape'' on employers by making them draw up individual contracts or pay scales for every temporary worker hired and make these available to employment agencies. Employers could also be accountable for a breach of contract if they discuss confidential information about employee''s salaries.

The good news

The vote in the European Parliament accepted ''temp to perm'' fees, the costs agencies incur when recruiting a temporary worker that are reimbursed via the charges they make when temporary workers are taken on permanently following an assignment.

Comments Ann Swain; We are pleased the EU has seen the recruitment industry''s point of view on this matter. It is essential that an agency is properly compensated for the time and investment made in resourcing, selecting and introducing a temporary worker. The loss of this revenue would have placed a serious constraint on our members'' businesses.

The draft Directive will exclude contractors who provide their services through their own personal service company.
Says Ann Swain; The majority of IT contractors do not feel that they need the type of protection which the Directive proposes. ATSCo will continue to lobby for those contractors who do not operate through a personal service company to be excluded from this Directive.
ATSCo also welcomes the inclusion of public sector as well as private sector agencies. It is very important to have as level a playing field as possible.


Comments Ann Swain: We still believe strongly that the current form of the Directive would have serious consequences not only for our members, but also those we employ, our end users and, therefore, the wider economy.
In the UK there are already clear regulations in place on the use of agency workers, which are enforced by the DTI''s Employment Agency Standards Inspectorate, so we do not believe that there is any justification for the EU to introduce this directive in the first place.
She continues: ATSCo believes that each member state should be given the option of regulating their own market in the way that they believe best fits with their own situation, rather than accepting that the EU has the right to insist on total harmonisation.

However, assuming that the Directive will be implemented in one form or another, ATSCo look forward to the following:
Allowing individual member states to decide between ''agency'' or ''user'' comparisons
If ''user'' comparisons are included in the directive then there should be a clause allowing that this does not apply for a time period of at least 12 months
That the directions should in no circumstances cover ''pay'' as a comparable employment condition
The use of ''temp to perm'' fees should be allowed to continue.
ATSCo hopes that good sense will prevail when the Directive comes to be debated in the Council of Ministers meets on December 3.