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Demand for temporary workers who use recruitment agencies is set to plummet if a European directive to give them the same pay as permanent staff is introduced. Almost two-thirds of employers believe they will reduce their reliance on agency workers should they be legally entitled to equal pay and conditions after 12 weeks. Exactly how equality of employment rights, including holiday pay, will work for temps and employers alike is likely to remain unclear until 2009, at the earliest. The directive may not affect the UK until 2010 but employers are already worried about how it might develop, and are sure it will dramatically change their hiring practices. Questioned by law firm Eversheds, the overwhelming majority of employers said the new rules would “force them to change the way they structure their workforce”. Reorganising their permanent staff was the preferred option, while equal priority went to recruiting temps for less than 12 weeks, and taking on more direct employees. Illustrating the consensus of change – just 12 per cent expected no impact – one employer responded: “We will need to completely rethink the way we up-man and down-man projects”. The greatest expected impact of the regulations is cost related: just over 80% of employers believed employment costs for their UK workforces will increase. More paperwork and administration from increased monitoring and a quicker turnover of agency staff were identified as the biggest expenses. For more than half of employers, staffing costs will rise by between 6% and 25%, compared with one fifth who were unsure, and 7 per cent who predicted a spike of at least 26%. Service delivery problems, more tribunal claims and, given higher agency staff turnover, a need for bigger training budgets, in turn increasing workloads or pressure for existing staff, were forecast. Moreover, another concern, which employers fear will inflate their costs, is having “reduced flexibility” in their workforces, “as it likely that fewer agency staff will be engaged.” “These findings show that there are some strong feelings about the proposed legislation among UK employers,” reflected Martin Warren, head of employment law at Eversheds “However it is important to note that employers are still waiting for the detail on how the directive will impact in practice and therefore there are currently many unanswered questions on the issue.” Less ambiguous is the importance of the role the UK’s 1m agency workers play in the economy: in the survey, agency workers accounted for up to 50% of some firms’ workforces. For the average business responding, agency workers were less dominant but still “important”, and made up between 5 per cent and 25 per cent of their organisation. Despite their intake of agency staff varying, out of the employers questioned about 75% said agency workers “should not be able to receive the same rights as full-time staff after 12 weeks of service.” Yet at this stage, the Recruitment and Employment Confederation said employers could hold off from making any “rash decisions” about their use of agency workers. “There is a great deal of uncertainty and misinformation around what the directive might mean in practice,” said Kevin Green, its chief executive. “The UK’s flexible labour market has been hugely important and will continue to be even more so in the difficult times ahead. It is crucial that the government does not jeopardise the jobs market and ensuring that the details of the EU directive are workable will be a key test within this context.” Sep 3, 2008 Email this article Printer friendly page Previous Page
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