Shelving of Temp Workers Directive

Following the EUís decision this week to place the Temporary Workers Directive back on the drawing board, law firm, Tarlo Lyons, is warning companies against complacency. They assert that threats remain in respect of the potential blocking of the Services Directive and that case law is already giving increased protection to temporary workers.

ìWe have long said to clients that they should not worry about the Temporary (Agency) Workers Directive until it happens. Weíve been predicting its demise on political and practical grounds for three years, but itís only now been shelved in an initiative to reduce red tape.

ìThe premise of the Directive was based upon an incomplete understanding of the UK labour market, but it was only thanks to intense lobbying from the CBI, ATSCo, REC and other organisations that helped achieve this result.

ìI would sound two notes of caution though, namely the blocking of the Services Directive and the growth in rights for temps through case law.

ìThe abandonment of the workers directive may lead President Chirac and other supporters of the EU Social Model to block the long anticipated Services Directive so far as it benefits the recruitment sector. The Services Directive is designed to introduce a single market for services in the same way as the EU already provides a single market for goods. Among other things it would allow recruitment companies based in, say, the UK to trade across the EU without having to worry about local recruitment regulation which can be very burdensome in countries like France, Germany, Spain and Italy.

ìRecent case law in the UK suggests that, unless certain steps are taken to mitigate the risk, certain types of temp and contractor will in any event be deemed to be employees. This case law would give those temps and contractors many employment rights by the back door. Employers urgently need to take steps to minimise this risk otherwise the tax and employment claims repercussions could be very serious.î