Government must resist EU law on agency workers or jeopardise up to 250,000 UK temp placements

Latest CBI/Pertemps survey also shows big increases in flexible working

The new Brown Government must stand firm against renewed EU and union pressure to resurrect the draft Agency Workers Directive, the CBI said today (Monday).

On the first day of the TUC congress and with EU Governments meeting to discuss the Portuguese Presidency's proposals on the directive later this week1, the UK's biggest employers' organisation and recruitment specialists Pertemps published a new survey showing that up to 250,000 placements would be jeopardised by the directive as drafted.

Using temporary agency staff allows employers to meet extra demand during busier periods and the jobs created offer convenient, quality employment for many thousands of people. But putting agency workers on an equal footing with permanent staff after just six weeks on an assignment would heavily reduce the key benefit of flexibility that such workers offer to firms, undermining the incentive to employ them.

The 2007 CBI/Pertemps annual employment trends survey of over 500 firms, which between them employ some 1.1 million staff, shows that at any one time three per cent of employees in the workplace are temporary.

Fifty eight per cent of employers said that such a law would lead to a 'significant' cut in the use of such temporary workers, meaning 252,000 placements would be put at serious risk.

The CBI's Deputy-Director General, John Cridland said:

Use of temporary agency staff is vital for employers seeking to manage surges in demand. At the same time, these jobs offer quality work to people who actively choose a form of employment that allows them to balance responsibilities or pursue other interests. Many are women returning to employment after having a family or young people for whom this is a first essential step into further employment.

But this important section of the workforce has an uncertain future if the Government caves into pressure for a new EU law. Hundreds of thousands of jobs will be put at risk unless Gordon Brown rejects it outright, or at least insists on a qualifying period of a year before full employment rights apply to a temporary post.

As proposed, the directive would seriously undermine the flexibility that temps offer to firms, hurting the economy and making them far more likely to rely on overtime flexibility from existing workers instead.

Use of temporary workers among surveyed employers is greatest in utility sectors like energy and water, where they typically represent 7% of the workforce and in manufacturing where they account for 5%. Contrary to popular belief, fewer temporary agency workers are employed in lower paid, lower skilled sectors like retail, at just 1% of the workforce. Today, many agency jobs require higher skills.

Tim Watts, Chairman of recruitment specialists Pertemps, said:

People take up temporary work for a variety of reasons, sometimes to gain experience with a view to securing a permanent role or to build work around their other commitments, like caring for a family or elderly relative.

We should not confuse people who choose to work flexibly with people who are 'vulnerable'. From my experience, making the conditions for temporary agency workers the same as for permanent staff would actually make them less attractive in the job market and that would risk the livelihoods on which they depend.

Of the firms surveyed, 62% said the directive in its current form would damage flexibility, 65% believed it would significantly increase costs and 58% said it would mean additional bureaucracy. Cost increases would hit the largest firms (81%) hardest.

Labour market flexibility continues to be a key strength of the UK economy but, equally, staff are benefiting from the increasing range of flexible work options being offered by employers. Part-time, job share and variable hours working has increased staff motivation and retention at the same time as enabling businesses to be more competitive.

This year, 95% of employers are offering at least one form of flexible working practice. About two-thirds (60%) offer staff more than three forms - up significantly from a third (35%) two years ago.

All types of flexible working have increased since 2004:

- Part-time is now offered by 91%, up from 84%
- Job-sharing by 55%, up from 38%
- Flexi-time by 45%, up from 31%
- Career-breaks/sabbaticals by 37%, up from 20%
- Term-time working by 27%, up from 11%

But the most dramatic increase has been in 'teleworking' ñ staff working on the move or from home ñ which is now offered by almost half (46%) of employers, four times as many as in 2004 (11%). The onset of new mobile communications technologies has played a major part but so has an inadequate transport system and the desire by companies to avoid non-productive travel time.

John Cridland commented:

That teleworking has quadrupled in three years is testament to how far and fast firms have come in adopting new technologies for the benefit of staff and the business. Others will also be using the technology to reduce their carbon footprint, as ever increasing numbers of firms seek to help combat climate change.

This is good news for all of us, but the Government should not see teleworking as an alternative to putting real investment into improving our creaking transport infrastructure. There is no doubt firms have had enough of struggling with the clogged arteries of our transport system and the latest official figures reveal that, though slightly fewer journeys are made overall, people are still travelling further to work than they did ten years ago.

Even though the right to request flexible working was extended in April this year to include over two million carers, employers have accepted a higher proportion of requests to work flexibly. The percentage of requests accepted has remained high since 2003 when the right was given to parents of children under six and disabled children under 18. This year employers granted well over nine out of ten requests (94% from parents and 93% from carers) slightly higher than the 92% of parents' requests accepted in 2004.

In addition, over half of employers offer a right to request flexible working to parents with children under 12 (52%) and under 16 (51%) and exactly half say they offer the right to all employees. Some firms are unable to extend it beyond groups with a legal right to request because their business would suffer as a result.

John Cridland said:

The phased introduction of the right to request flexible working has been successful precisely because it is a right to request, not an automatic right, which takes into account the needs of the business. As a result, increasing numbers of firms have been able to say 'yes'.

As more firms seek to formalise the way they deal with such requests, flexibility should become even more widespread. There are also increasing signs of flexible working further up the pay scale, with quality part-time roles and job-sharing enabling women, in particular, to access the top posts. Clearly, it takes some time for culture change to occur and we must remember that for some businesses working on a more flexible basis simply isn't an option.

Increasing numbers of firms perceive the right to request to have had a positive impact on their employee relations (74% - up 10 percentage points on 2006) and recruitment and retention (65% - up 13 percentage points). Most firms consider its impact on productivity, rates of absence and customer service has been neutral. Some felt the right had had a negative impact on labour costs.

The survey also posed questions ahead of the creation in October of a new umbrella body for rights and equality issues, the Commission for Equality and Human Rights (CEHR).

It shows that almost all employers take action on diversity and equality and a third take positive action to improve equality in the workplace. However, just over a quarter (27%) of firms said they have not taken positive action because they lack sufficient knowledge or resources and are unsure about what constitutes allowable 'positive action' as against unlawful 'positive discrimination'.

Over two-thirds of employers (68%) see the provision of clear and simple guidance as the main priority for the CEHR. An overwhelming 85% of small firms ranked guidance as the number one priority.