Agency Workers Directive - Radical changes in the temp market
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As drafted the Directive provisions on pay apply to temps once they have been employed for 6 weeks. For other benefits the Directive will apply from the first day of the contract. The CBI have argued that the qualifying period on pay should be 12 months and the UK Government have also supported a longer period. The concern is that the current benefits that agency workers bring to employers will be undermined if firms are required to make constant comparisons between agency and permanent staff. It is unlikely, however, that the qualifying period will be greatly extended, with 3 months being the probable compromise.
Other key points in the Directive
· Temps should be informed of vacant posts available at the employer.
· Temps should not be restricted from taking up a permanent post at the employer once the temp contract ends (although agencies will be able to charge a “reasonable” fee)
· UK should take steps to improve temps training opportunities through both the agency and end user
If the Directive were implemented in its current form, how would UK employers be affected in practice.
John works as a chartered accountant for Albery Accountants. He takes up the senior partner’s offer of a 6 month sabbatical for his good work over the past 5 years. Trusty Temps supply Annie to fill the gap. John is paid an annual salary of £35,000 and his contract entitles him to 5 weeks paid annual leave, 3 months’ full sick pay, £100 towards local gym membership, standard BUPA cover for himself, his wife and two children and he usually eats in the subsidized staff canteen.
Annie is paid an equivalent annual salary of £45,000 and has a contract with her agency Always Accounts, stating that her work is provided on a “freelance basis”. She receives no additional benefits. After 2 months Annie requests time off to visit her parents in the US for a fortnight.
Under the Directives provisions, it is unclear whether the legal obligation to provide equivalent treatment will be the responsibility of the agency or the end user. In practice the final result will be the same since the end user picks up the tab. Annie’s salary is greater than John’s. However, Albery Accountants will be legally required to afford her the same benefits as John from day one, including 2 weeks paid annual leave and BUPA cover. In negotiations with the agency it will be advantageous to stress the additional benefits available to the temp, which may also encourage a temp to take a lower level of pay.
In rival accounting firm Firton Finance, Barry suffers a severe ear infection which leaves the firm suddenly short staffed. Barry is expected to be absent for a maximum of two weeks. Barry is the star of the team and is paid £50,000 annual salary.
Unfortunately Barry’s infection spreads and since year end is approaching, Firton are forced to hire Benny from the Always agency to cope with the backlog.
Benny argue hard with Firton and secure Benny for an equivalent of £35,000.
Barry’s condition deteriorates. After 6 weeks Benny speaks to the senior partner about raising his salary.
Under the Directive, Benny will be entitled to receive Barry’s rate of pay after having been with the firm for 6 weeks.
More information
http://www.eu.int/eur-lex/en/com/reg/en_register_052020.html (text of the Draft Directive)
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