10 July 2008

Equal treatment? Not quite


‘Temporary and agency workers will receive the same rights as permanent staff after 12 weeks’ declared last week’s headlines, announcing that at last the Government was able to confirm that a deal had been reached between unions and employers over an issue on which they have been divided for years.

But does the announcement of a new law that will see agency workers in the UK receive equal treatment after 12 weeks employment really mean what it suggests?

First of all, the agreement is not in itself a piece of draft legislation — it is merely an agreement between the CBI and the TUC which will allow the UK Government to go to the European Summit next month with a mandate to support the draft EU Directive on Temporary Agency Workers.

The Directive was first tabled in 2002, but it was withdrawn after the Member States failed to reach agreement on it.  At the time, it was trenchantly opposed by business leaders in the UK. The draft Directive was unexpectedly revived in 2007, but when European leaders last discussed it in December, it was politically linked to the question of the review of the Working Time Directive and, in particular, whether the UK should be permitted to retain its opt out from the 48 hour limit on weekly working time. The  Council of Ministers failed to reach agreement on either issue, but they did agree to continue to consider the two issues in tandem.

What the Government has now achieved is the ability to go to the Summit next month with a compromise proposal. The draft Directive provides for a right for agency workers to have:

  • equal pay after six weeks; and
  • equivalent provisions on working hours, overtime, breaks, rest periods, night work, paid holidays and public holidays from commencement of employment.

The UK Government is a proposing a 12 week threshold, as opposed to six, or, as the draft Directive suggests for terms other than pay, no qualifying period at all. It will have to convince its European partners to accept that compromise — and success is far from guaranteed.

The Government will also be hoping that its concessions on agency workers will achieve a continuation of the UK’s opt out of the 48 hour working week limit. But there are still arguments outstanding on that issue. When the debate closed last December the proposals on the table included a provision which would invalidate opt outs signed by employees at the beginning of employment. As that is the most favoured mechanism by UK employers for securing their employees’ agreement to exceed the weekly limit, there is likely to be strong resistance by business leaders to conceding that point.  The path to achieving the compromises and concessions that the Government wants — and with it the deal for agency workers – will therefore not be a smooth one. 

Even if it is achieved, there are some important exceptions to what is meant by ‘equal treatment’. Perhaps the most overlooked issue in this debate is that ‘equal treatment’ does not mean ‘equal status’. A temporary agency worker who is entitled to equality in terms of pay and other basic working conditions will still not be entitled to the rights which are, in UK law, only available to those who have the status of employees. These include not only the right not to be unfairly dismissed and the right to a redundancy payment but also the rights to time off for maternity, adoption, paternity or parental leave, the right to request flexible working, the right to request to continue working beyond retirement age, the right to belong to a trade union and rights under TUPE when a business is transferred. The recent decisions of the Court of Appeal concerning the employment status of temporary agency workers will remain as relevant after this proposal becomes law (if indeed it does) as they are now.

There also important exceptions to the principle of ‘equal treatment’ in both the draft Directive and the Government’s proposals, namely occupational social security schemes (including sick pay) and pensions. There will therefore continue to be major differences between the rights and entitlements of temporary agency workers and permanent staff. This important fact is obscured by the term ‘equal treatment’. The draft Directive does not in fact use the term at all, and refers instead to ‘working conditions for temporary workers’.

The Government has said that it hopes that EU agreement will be obtained in time for the necessary UK implementing legislation to be introduced in the next parliamentary session. That may prove to be a tall order — far more so than the recent headlines suggest — as well as delivering rather less to agency workers than some of the hype suggests. 

What has actually been agreed?  The Government press release confirms the following:

(a) After 12 weeks in a given job there will be an entitlement to equal treatment.

(b) Equal treatment will be defined to mean at least the basic working and employment conditions that would apply to the workers concerned if they had been recruited directly by that undertaking to occupy the same job. It will not cover occupational social security schemes.

© The Government will consult the social partners regarding the implementation of the Directive more generally, in particular:

(i) mechanisms for resolving disputes regarding the definition of equal treatment and compliance with the new rules that avoid undue delays for workers and unnecessary administrative burdens for business;

(ii) appropriate arrangements to enable the two sides of industry and also public services to reach appropriate agreements on the treatment of agency workers, while respecting the overall protection of agency workers; and

(iii) appropriate anti-avoidance measures reflecting Art 9(2), in particular relating to the treatment of repeat contracts for the same worker and the position of workers with permanent contracts of employment with agencies who continue to be paid between assignments; it is not intended that Art 5(2) will be used to evade the aims of the Directive.

(d) The new arrangements will be reviewed at an appropriate point in the light of experience.

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