Agency Workers Regulations to be introduced unamended

Following a review of the Agency Workers Regulations, the government announced in October 2010 that the legislation would not be amended. This was because employers’ proposals for a simplification of the rules had not been acceptable to both parties to the 2008 CBI-TUC agreement that underpins the regulations. Employers’ groups have criticised this outcome, with one describing the regulations as ‘one of the worst pieces of employment regulation in the last 10 years’.

Background

The Agency Workers Regulations 2010, implementing the EU agency workers directive, were drawn up by the previous Labour government in January 2010 and are due to come into force in October 2011.

The regulations took account of an agreement in May 2008 between the government, the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) on the implementation of equal treatment for temporary agency workers (UK0806039I). The central element of the agreement was that temporary agency workers would be entitled to equal treatment with directly-employed staff after 12 weeks in a given job. The move facilitated political agreement at European level on the EU agency work directive and its eventual adoption.

Since the change of government in the UK following the general election of May 2010, some employer organisations have been lobbying the present Conservative-Liberal Democrat coalition government for changes to the regulations. For example, a report (700Kb PDF) issued by the CBI in June 2010 (UK1007039I) called for the simplification of the UK Agency Workers Regulations, arguing that:

Over the years, agency work has proved to be one of the most effective tools that businesses can use to adapt to changing economic circumstances. Agency working also provides many people with the opportunity to enter the labour market for the first time or a route back after a sustained period away from work. As the economy enters recovery, it is vital that this flexible route into employment is retained. While the basic approach to the regulations has been agreed, the government should look to simplify the agency rules to ensure existing work opportunities are maintained and new openings can be created. A prime area in need of attention is to ensure . . . that those who have to operate and apply the law are given as much clarity as possible.

Ministerial statement

Government ministers have reportedly been sympathetic to employer demands on this issue. However, on 19 October 2010, Ed Davey, Minister for Employment Relations at the Department for Business, Innovation and Skill s (BIS), announced in the House of Commons that the government would not be amending the regulations. This is because the government’s ability to make changes to the regulations is constrained by the fact that they are based on an agreement between the CBI and TUC. The ‘default position’ in the directive is that the equal treatment of temporary agency workers in terms of their basic employment and working conditions should apply from the first day of an agency worker’s assignment. However, the directive also allows Member States some flexibility as to how this principle is applied, including the possibility of a qualifying period before the right to equal treatment takes effect, provided this is based on an agreement reached by national-level ‘social partners’.

The minister explained that the effect of this is that any amendments proposed to the regulations that affect the subject matter of the CBI and TUC agreement, and which did not have the agreement of those parties, would risk being set aside in the courts in the event of a legal challenge. Discussions with the CBI and TUC over changes that the government considered would have ‘improved the implementation regime’ failed to reach agreement – hence the government’s announcement that the regulations will be introduced unamended.

Employer reaction

Employers’ groups have been critical of the outcome of this review.

For the CBI, Deputy Director-General John Cridland said in a statement that it was ‘disappointing’ that the government had decided not to reopen discussion of the Agency Workers Regulations and implicitly blamed the TUC for this. He said:

While we agree that preserving the 12-week qualifying period is essential, changes proposed by employers would have cut red tape without changing the overall effect of the regulations. We regret that the government hasn’t been able to reach agreement with the trade unions on this. The priority now has to be timely, high-quality guidance, so that employers know where they stand well before the new rules come into force.

A spokesperson for the Institute of Directors (IoD), Alistair Tebbit, branded the regulations as ‘one of the worst pieces of employment regulation in the last 10 years’. He said:

A 12-week exemption is all very well for big companies, but there is no requirement at all in the EU Directive for the vast majority of small and medium-sized firms to be caught by the new regulations . . . The interests of entrepreneurs, small businesses and, ultimately, the UK’s flexible labour market have been sacrificed to preserve a deal between multi-nationals and trade unions.

Mark Hall, IRRU, University of Warwick

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