News

Employment Law Update (August 2009)

New rights for Agency workers a step closer as consultation closes

The Government's consultation on proposed new rights for Agency Workers closed on 31st July and it now looks increasingly likely that the government will seek to put legislation on the statute book before a general election, which must be held at the latest by June 2010. However, problems remain to be ironed out.

The Agency Workers' Directive is an EU initiative, and member states must put laws in place to implement it by December 2011 at the latest. The aim is to give agency workers some of the same rights as comparable permanent staff – although this does not mean that they will become permanent staff or be able to claim unfair dismissal.

The detail of the law is left to national governments to draw up, in line with local customs and conditions, and the UK government has been consulting with interested parties about its proposals. Mentor has taken part in the consultation process.

We set out below some of the unresolved issues, as well as some action you can take now to assess the likely impact of the measures on your business.

Key points

  • Under the Agency Workers Directive, Agency workers will be entitled to equal pay compared with equivalent permanent workers after 12 weeks' work;
  • However, this will not give them the same employment status as permanent employees.

Potential problems yet to be resolved include:

  • Which comparable permanent employee can the Agency worker compare him or herself with to claim "equality"?
  • Does "equality" include shift, overtime and bonus payments or just basic pay?
  • Could temporary workers employed directly by the employer be at a disadvantage as they will not have the same rights as agency workers to claim equality with permanent staff?

Action you should take

If you hire Agency workers within your business:

  • Review how many Agency workers you hire, and what their normal length of assignment is;
  • If the normal length of assignment is 12 weeks or more, consider which equivalent permanent employees they could compare themselves with;
  • If the Agency Workers receive less pay than these equivalent permanent staff, check with your Agency whether they expect they will be passing the additional costs on to you;
  • Consider talking the matter through with your Employment Law Consultant. Because the law is not changing straight away, you still have time to consider the pros and cons of the various alternatives;
  • Alternatives include directly hiring permanent or casual staff – but at a cost of loss of flexibility and greater employment rights for the staff concerned.