FEATURES
READY TO RUMBLE
Jim Tanfield looks at the AWD and its potential impact on the UK staffing industry
When REC chief executive Kevin Green told BBC Wales last month that the Agency Workers Directive could force 50,000 Welshmen out of work a collective gasp was breathed in by the industry.
Coupled with his declaration that 250 agencies could go in Wales as well, these were indeed worrying figures.
Despite the REC insisting it has always been concerned over the ramifications of the directive, Mr Green’s latest figures – while wholly worst case scenario - have reflected others’ predictions.
All parties have consistently appealed for the directive to be implemented at the latest possible stage – November 2011.
For those of you that don’t know already, the directive will give temps similar rights to permanent workers following 12 weeks work.
The consultation period for the directive seems grossly inadequate for legislation which could change the face of the labour market – all comments are to be made before July 31.
And yet the importance of the legislation seems to have passed its authors by, as highlighted by comments made to Recruitment Consultant by skills minister Lord Young.
On one hand he is saying how important the staffing sector is to the UK economy, yet on the other accepting there are some areas of the directive which are open to interpretation.
Grey areas? On a directive which could affect tens of thousands of jobs? This is surely not good enough.
When commenting to us, however, he was very much interested in accentuating the positive.
One of the main criticisms from within the industry of the directive is that it tars all temporary recruiters with the same brush – a vast majority of the temporary workforce is not vulnerable, so it seems a lot of change for the majority is to protect the tiny minority – all bodies, however, accept the need to protect the exploited.
So what does ‘vulnerable worker’ mean to Lord Young? He says: “To me, vulnerable workers are people who face a high risk of being denied employment rights and who need help protecting themselves from exploitation. One of my priorities as a minister is to help these people and protect them from the small minority of employers who neglect their responsibilities.”
Lord young also says that many people would see the fact agency workers can work alongside permanent colleagues for fewer benefits as unfair – but it appears the mirror is one way – what about the permanent employee who may have seen years of working up through the company to be usurped – or at least equalled – by someone three months in.
Who is being compared to whom?
Lord Young was asked this question and says: “This is an important part of the implementation of the directive and one where there are many views. We have set out proposals on how the comparison could be made - including comparison with a permanent employee doing broadly similar work in the same organisation, but other factors may also be relevant such as pay scales and collective agreements. We are interested in the views of stakeholders on our proposals and how they would work in practice.”
And finally does he think there are any negative aspects to the directive? Apparently not: “These new measures will protect agency workers while preserving the place of agency work as a key part of the UK's flexible labour market. We are not underestimating the task given the directive is open to interpretation, but we are working hard to get this right.”
“The recruitment industry is a valuable and important part of the UK economy. It provides a pool of readily accessible people who can be deployed at short notice to cover short or longer term requirements, for example to cover seasonal fluctuations or absences of permanent staff.
“This will be particularly important in enabling employers and workers take full advantage of the upturn.”
Bottom line, however, especially following the REC’s comments, is about the potential job losses. Recruitment Consultant asked Lord Young whether any were anticipated.
“No. We aim to implement the directive in a balanced way that gives agency workers a fairer deal, but without a disproportionate and negative impact on businesses.
“Our approach builds on an agreement between the CBI and Trades Union Congress, reached in May 2008, on how fairer treatment for agency workers should be promoted while not removing the important flexibility that agency work can offer both employers and workers.
“We are of course also talking to other key stakeholders, including the recruitment industry and small business representatives, to hear their views on how we can implement detailed aspects of the directive.
“Our initial consultation on proposals to implement the directive is open until 31 July and we welcome all contributions to it.”
The chairman of the Association of Recruitment Consultancies, Adrian Marlowe, has been the most bellicose of the directive’s critics. He is also the managing director of recruitment law specialist Lawspeed, which held the latest of its AWD seminars in London last month.
Speaking at the event was Jonathan Djanogly, Conservative shadow business minister.
During the event Mr Marlowe said the agreement between the Government and the CBI earlier this year was almost worthless, as the Government has not done the necessary research into its effects and is not fighting for the promised last minute implementation – November 2011.
The directive will be in place before the next prorogation – when Parliament’s year ends this November!
The Right Honourable Mr Djanogly is equally scathing of the time frame and the lack of decent and thorough consultation.
The MP for Huntingdon told delegates: “The directive is going to be a significant burden on businesses and will put off hirers from using agencies.
“The cost of the AWD is going to be immense and will seriously undermine the flexibility of the UK’s current labour market.”
Mr Marlowe’s scepticism regarding the directive is based on research into the true potential impact.
He believes the Government has grossly underestimated the figures. He is also annoyed about the lacklustre way in which the Government’s own wording for a consultation has been ignored.
During the seminar delegates were given the wording for the Consultation Code of Conduct: “All consultation documents follow the Cabinet Office’s code of practice. When Government consults it must: build a realistic timeframe for the consultation allowing plenty of time for each stage of the process; and make sure all responses are carefully and open-mindedly analysed and the results made widely available with an account of the views expressed and the reasons for the decisions finally taken.”
Mr Marlowe is sure the directive is being pushed through as a nod to the Socialist leanings of the Prime Minister and his need to appease the unions which were let down by his predecessor.
The Government had claimed only 40 per cent of agency workers were in temporary employment for 12 weeks or more at present. The cost of which – the Government believes which would be absorbed by the industry and employers – being £1.9bn.
But Mr Marlowe’s figures are a very different story; he has found an EIRO report which states that on average almost 60 per cent were on assignment for 12 weeks or more making his revised total of cost difference at £2.8bn.
“This is a quite unbelievable suggestion,” he says, “as we are talking about a difference of £900m. This is 10 per cent of the entire budget (at present) of the 2012 Olympics!”
He adds: “The other assumption in the directive is that the number of agency workers in the public sector is only 23 per cent. Our research with CEEP UK, which represents public sector workers, indicates that 30 per cent of agency workers are in public sector. So you can see straight away that the figure the Government has supplied here is understated.”
“It is not known at this stage, how or to what extent transfer fees (temp to perm) will be addressed and we would therefore ask the question how can the Government put a figure of between £250 and £500 on it?”
“On admin fees as well the Government has admitted taking a light touch on these meaning they could, and probably will be, a lot higher.”
While organisations such as the REC have to take a pragmatic approach to the directive as far as impact assessment goes by talking to members - it is almost unclear where the Government gets its figures, being so vastly different, even with those from its own departments.
While accusations of hoodwinking the industry are unhelpful now, what is the real solution to prevent the directive being made law? Well, there isn’t one. All the industry can do now is take part in the consultation and make their voices heard. Membership of ARC would go a long way to adding weight and industry clout to the arguments being sent over to Whitehall.
The REC will surely be trying to protect the 50,000 Welsh jobs, 250 Welsh agencies and who knows how many others across the UK potentially threatened.
During a recession, businesses must be thrown any lifeline to help them through – holding off this legislation will not cost anything, and will save jobs – after all the temporary recruitment industry is a vast employer in its own right - this is a lead weight for those in the deep.
Details of the rather flaky consultation are available on the website www.bis.gov.uk, including events the department is holding around the country to hear views directly. http://www.berr.gov.uk/whatwedo/employment/employment-agencies/consultation-2002/page30034.html.
Coupled with his declaration that 250 agencies could go in Wales as well, these were indeed worrying figures.
Despite the REC insisting it has always been concerned over the ramifications of the directive, Mr Green’s latest figures – while wholly worst case scenario - have reflected others’ predictions.
All parties have consistently appealed for the directive to be implemented at the latest possible stage – November 2011.
For those of you that don’t know already, the directive will give temps similar rights to permanent workers following 12 weeks work.
The consultation period for the directive seems grossly inadequate for legislation which could change the face of the labour market – all comments are to be made before July 31.
And yet the importance of the legislation seems to have passed its authors by, as highlighted by comments made to Recruitment Consultant by skills minister Lord Young.
On one hand he is saying how important the staffing sector is to the UK economy, yet on the other accepting there are some areas of the directive which are open to interpretation.
Grey areas? On a directive which could affect tens of thousands of jobs? This is surely not good enough.
When commenting to us, however, he was very much interested in accentuating the positive.
One of the main criticisms from within the industry of the directive is that it tars all temporary recruiters with the same brush – a vast majority of the temporary workforce is not vulnerable, so it seems a lot of change for the majority is to protect the tiny minority – all bodies, however, accept the need to protect the exploited.
So what does ‘vulnerable worker’ mean to Lord Young? He says: “To me, vulnerable workers are people who face a high risk of being denied employment rights and who need help protecting themselves from exploitation. One of my priorities as a minister is to help these people and protect them from the small minority of employers who neglect their responsibilities.”
Lord young also says that many people would see the fact agency workers can work alongside permanent colleagues for fewer benefits as unfair – but it appears the mirror is one way – what about the permanent employee who may have seen years of working up through the company to be usurped – or at least equalled – by someone three months in.
Who is being compared to whom?
Lord Young was asked this question and says: “This is an important part of the implementation of the directive and one where there are many views. We have set out proposals on how the comparison could be made - including comparison with a permanent employee doing broadly similar work in the same organisation, but other factors may also be relevant such as pay scales and collective agreements. We are interested in the views of stakeholders on our proposals and how they would work in practice.”
And finally does he think there are any negative aspects to the directive? Apparently not: “These new measures will protect agency workers while preserving the place of agency work as a key part of the UK's flexible labour market. We are not underestimating the task given the directive is open to interpretation, but we are working hard to get this right.”
“The recruitment industry is a valuable and important part of the UK economy. It provides a pool of readily accessible people who can be deployed at short notice to cover short or longer term requirements, for example to cover seasonal fluctuations or absences of permanent staff.
“This will be particularly important in enabling employers and workers take full advantage of the upturn.”
Bottom line, however, especially following the REC’s comments, is about the potential job losses. Recruitment Consultant asked Lord Young whether any were anticipated.
“No. We aim to implement the directive in a balanced way that gives agency workers a fairer deal, but without a disproportionate and negative impact on businesses.
“Our approach builds on an agreement between the CBI and Trades Union Congress, reached in May 2008, on how fairer treatment for agency workers should be promoted while not removing the important flexibility that agency work can offer both employers and workers.
“We are of course also talking to other key stakeholders, including the recruitment industry and small business representatives, to hear their views on how we can implement detailed aspects of the directive.
“Our initial consultation on proposals to implement the directive is open until 31 July and we welcome all contributions to it.”
The chairman of the Association of Recruitment Consultancies, Adrian Marlowe, has been the most bellicose of the directive’s critics. He is also the managing director of recruitment law specialist Lawspeed, which held the latest of its AWD seminars in London last month.
Speaking at the event was Jonathan Djanogly, Conservative shadow business minister.
During the event Mr Marlowe said the agreement between the Government and the CBI earlier this year was almost worthless, as the Government has not done the necessary research into its effects and is not fighting for the promised last minute implementation – November 2011.
The directive will be in place before the next prorogation – when Parliament’s year ends this November!
The Right Honourable Mr Djanogly is equally scathing of the time frame and the lack of decent and thorough consultation.
The MP for Huntingdon told delegates: “The directive is going to be a significant burden on businesses and will put off hirers from using agencies.
“The cost of the AWD is going to be immense and will seriously undermine the flexibility of the UK’s current labour market.”
Mr Marlowe’s scepticism regarding the directive is based on research into the true potential impact.
He believes the Government has grossly underestimated the figures. He is also annoyed about the lacklustre way in which the Government’s own wording for a consultation has been ignored.
During the seminar delegates were given the wording for the Consultation Code of Conduct: “All consultation documents follow the Cabinet Office’s code of practice. When Government consults it must: build a realistic timeframe for the consultation allowing plenty of time for each stage of the process; and make sure all responses are carefully and open-mindedly analysed and the results made widely available with an account of the views expressed and the reasons for the decisions finally taken.”
Mr Marlowe is sure the directive is being pushed through as a nod to the Socialist leanings of the Prime Minister and his need to appease the unions which were let down by his predecessor.
The Government had claimed only 40 per cent of agency workers were in temporary employment for 12 weeks or more at present. The cost of which – the Government believes which would be absorbed by the industry and employers – being £1.9bn.
But Mr Marlowe’s figures are a very different story; he has found an EIRO report which states that on average almost 60 per cent were on assignment for 12 weeks or more making his revised total of cost difference at £2.8bn.
“This is a quite unbelievable suggestion,” he says, “as we are talking about a difference of £900m. This is 10 per cent of the entire budget (at present) of the 2012 Olympics!”
He adds: “The other assumption in the directive is that the number of agency workers in the public sector is only 23 per cent. Our research with CEEP UK, which represents public sector workers, indicates that 30 per cent of agency workers are in public sector. So you can see straight away that the figure the Government has supplied here is understated.”
“It is not known at this stage, how or to what extent transfer fees (temp to perm) will be addressed and we would therefore ask the question how can the Government put a figure of between £250 and £500 on it?”
“On admin fees as well the Government has admitted taking a light touch on these meaning they could, and probably will be, a lot higher.”
While organisations such as the REC have to take a pragmatic approach to the directive as far as impact assessment goes by talking to members - it is almost unclear where the Government gets its figures, being so vastly different, even with those from its own departments.
While accusations of hoodwinking the industry are unhelpful now, what is the real solution to prevent the directive being made law? Well, there isn’t one. All the industry can do now is take part in the consultation and make their voices heard. Membership of ARC would go a long way to adding weight and industry clout to the arguments being sent over to Whitehall.
The REC will surely be trying to protect the 50,000 Welsh jobs, 250 Welsh agencies and who knows how many others across the UK potentially threatened.
During a recession, businesses must be thrown any lifeline to help them through – holding off this legislation will not cost anything, and will save jobs – after all the temporary recruitment industry is a vast employer in its own right - this is a lead weight for those in the deep.
Details of the rather flaky consultation are available on the website www.bis.gov.uk, including events the department is holding around the country to hear views directly. http://www.berr.gov.uk/whatwedo/employment/employment-agencies/consultation-2002/page30034.html.
