Employment Law Update (November 2009)
New rights for agency workers to be pushed through before
election
The government has announced that it will press ahead with
getting legislation to improve the rights of agency workers through
parliament before the general election next summer. However, the
new rights will not come into force until October 2011, to allow
businesses time to prepare.
Along with the proposed timetable, which now gives employers a
good degree of certainty about what is happening and when, details
have also been published for final consultation about how the
scheme will work in practice.
Where do the proposals come from?
The proposals are based on a European Union requirement to give
greater rights to agency workers, alongside a requirement for
member states to end many restrictions on the use of agency
staff.
An agreement between the CBI and the TUC - representing both
sides of business - was reached in 2008. The main headline of this
agreement was the facility to exempt agency workers from the new
rights for the first 12 weeks of any assignment. After 12 weeks,
agency workers will be entitled to parity in most of their terms
and conditions with equivalent permanent workers.
What is likely to happen?
The draft proposals deal with such matters as:
- how the 12 week period is calculated for part-time workers (it
is proposed to be 12 calendar weeks, regardless of work
pattern);
- how long a break between assignments needs to be to stop the 12
week period running (it is proposed that a six week break will
break the continuity); and
- importantly, which terms and conditions need to be "comparable"
(it is proposed that this will include basic pay; overtime; shift
allowances and certain bonuses).
The proposals will not give agency workers
"employee" status, so businesses will still enjoy certain benefits
from using agency workers, even after 12 weeks' work. However, it
is acknowledged by the government and the employment agencies that
businesses might begin to plan their work differently.
What will the impact be on business?
Businesses will need to consider how they co-operate better with
agencies they use and look at the cost of longer-term agency
workers compared to permanent staff. Employers who use agency staff
for longer than 12 weeks will have co-operate with the agency by
passing on details of the terms and conditions of their own
employees who are doing comparable work to the agency worker.
Employers are also likely to incur additional costs for staff
employed longer than 12 weeks, as agencies may pass the cost of
additional wages and benefits they must pay the worker on to the
end user.
What happens next?
Following the consultation, the final Regulations are expected
to be passed early in 2010, giving business over 18 months to
prepare.
When the final details are known, Mentor will provide full
information, but in the meantime, if you are concerned about how
the new regulations will affect your business, speak to the
Employment Law team.