Employment status and increased rights for agency workers

In our last AZ we brought you news of the Court of Appeal's decision in the case of James v Greenwich. In this case it was accepted that where agency workers' arrangements are explained by and consistent with the agency contracts (agency to hirer, and agency to worker) that it will not usually be necessary for a contract to be implied between the agency workers and hirer. In th absence of any direct implied or express contract the worker cannot be an employee of the hirer. This decision was excellent news for recruiters. However, the issue of employment status and an increase rights for agency workers is one that remains very much in the news.

The Agency Workers Directive ("AWD") remains live in the EU. It was debated in December 2007 and although agreement could not be reached at that time, it remains very much alive. France, an ardent supporter of the Directive, takes up the EU presidency in July 2008 and it is widely expected that the Agency Workers Directive will be a major focus, with it possibly coming into law in the EU later this year.

In the meantime, the trade unions and Labour back benchers have taken matters into their own hands, mounting a campaign for domestic legislation. The unions have, amongst other things, asserted that agency workers do not receive sick pay, receive less pay and less holiday than directly employed workers. What this assessment neglects to address is that minimum rights already exist to cover off most of these areas complained about. For example the national minimum wage, statutory sick pay, holiday entitlement under the Working Time Regulations and anti-discrimination legislation, all of which apply to both employees and agency workers. The real issue of course is the extension of entitlement to claim unfair dismissal. If agency workers are not actually employees, and do not have a two way employment commitment to work for a particular employer, why should that worker be entitled to claim unfair dismissal, or alternatively unfair termination of an assignment?

There are many arguments against both the AWD and the Temporary and Agency Workers (Equal Treatment) Bill. However, the Bill passed its second reading in the House of Commons on February 22nd 2008 by a vote of 147 to 11 from which it is clear that does not have government support and most MPs are not interested. It is unlikely to become law, but nevertheless most agencies will probably wish to voice their concern that it has got this far. Remember that complacency is always the enemy.

For more information on employment status issues, and correct operating terms that minimise risk, call Theresa Mimnagh or Ravi Murphy on 01273 236236.