IT recruiters attack Agency Workers Directive

The government is facing tough opposition from professional bodies of the IT industry over fears its controversial EU Agency Workers Directive could harm the contract market.

The Association of Technology Staffing companies (ATSCo) says the plan to give freelance professionals the same benefits as permie staff is likely to damage UK competitiveness.

"UK plc is being sold down the river because there's an election coming up and Tony Blair needs the unions on his side," said Ann Swain, chief executive at Atsco.

"He has back-tracked on what he's said all along. We're really disappointed about this."

ATSCo claims the move to give equal benefits for contactors will force companies either to reduce pay rates or employ fewer temporary workers.

"It's not good for business and it's unnecessary," says Swain. "The UK has a flexible workforce that is the envy of Europe. To damage that is ridiculous."

ATSCo's concern supports warnings from the Recruitment and Employment Confederation (REC) that the directive could lead to greater levels of offshoring because of higher cost in hiring domestic contractors.

In particular, they argue treating temps as permanent employees after six weeks of work would create a great deal of bureaucracy for agencies and employers.

As temporary workers under the draft become more expensive for businesses to employ, enterprise will see less need for contracted professionals.

Companies using call centres, which typically hire staff on a part time basis, are expected to be the hardest hit as lower rates of pay become available from workers in countries such as India as well as China.

The impact of the directive is billed as substantial, considering the one million temporary workers registered on any given day in the UK.

The majority working as a temporary worker also want to keep their part-time status and not be regarded as an employee, according to REC research.

Gareth Osborne, Managing Director of the REC, said: "The unions have been strongly criticising UK business for offshoring jobs overseas, yet the Agency Workers Directive in its current form is likely to increase levels of offshoring even further.

"While we're not opposed to the overall aims of the Directive, we must ensure that any proposed solution is workable and does not damage the UK recruitment industry."

In a solution to the directive, ATSCo and the CBI are supporting a concession that would allow contractors and temporary staff to 'opt-out' of the directive.

"That would be Tony Blair's get-out of jail card," argues Ms Swain.

"It helps our members but frankly it doesn't help the rest of UK plc. This legislation is sensible for a number of European countries, but it's wrong for us."