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Delay to Agency Workers Directive a welcome first step

Delay to Agency Workers Directive a welcome first step

Adrian Marlowe

Adrian Marlowe

Amongst a series of other proposals to delay new laws, the government has announced that it intends to delay implementation of the Agency Workers Directive in the UK until late 2011. However it is understood that the legislation will be laid before Parliament as soon as possible after conclusion of a 2nd consultation which is expected to end early in 2010.

Adrian Marlowe, Chairman of the Association of Recruitment Consultancies, (ARC) commenting on the Government proposals said:

“The delay in implementing the Agency Workers Directive is welcome news. We and many others had pressed for this and there is no doubt that many businesses will breathe a sigh of relief. However, it is crystal clear that the real deal is to get the terms of the legislation right, to minimise the potential damage to businesses. In its proposed “gold-plated” form it will do untold damage to the industry and to agency work.

ARC has proposed a trial to assess the true cost and impact of any new legislation and the delay would give the Government time to give this idea the go-ahead.

“The ideas set out in the first consultation document are extremely complex, with the potential for massive disruption and real chaos in the temporary and contract recruitment industry. Faced with that prospect it makes sense to trial the scheme first.”

Adrian went on to say “The fact that there is to be delay in implementation must not lead to complacency. The 2nd consultation is imminent and is absolutely critical since it will set out the Government’s final plans in the form of draft legislation. This legislation is proposed to be on the statute books by early next year, and this is what everyone must now focus on. ARC remains determined to oppose any excessive Government proposals.”

ARC has put forward a number of its own proposals including

  1. The Directive must not be ‘gold-plated’, and the limitations set out in the text of the Directive as determined by the EU Parliament should apply in the UK. This will avoid many issues relating to pay scales and the establishment of a comparator and removes the application of the equal pay and conditions rules from the vast majority of hirers. This is of key importance.
  2. The Government should undertake a pilot scheme of the proposed legislation first as the costings in their impact assessment could be wildly inaccurate, and the fallout could be considerable . ARC’s estimates of additional cost indicate some £2bn a year above that published by the government, and the Conservatives estimate some £40bn over a 10 year period.  
  3. The second consultation period (originally planned to run for one month only) should be long enough to ensure that government complies with its own internal rules about consultations, and to allow sufficient time for a proper response from stakeholders to be considered.
  4. The 12 week derogation period should only apply to the lowest paid and there should be a one year derogation period for everyone else.
    Adrian concluded “ARC’s proposals all are designed to protect businesses and agency work to the maximum possible extent, whilst recognising that agency workers are entitled to more rights under the Directive.

In reaching its conclusions ARC has been in dialogue with members, other recruiters, and various other trade bodies including the Institute of Directors, the Federation of Small Businesses, the CBI, the British Chamber of Commerce, the Institute of Interim Managers, the REC, the Association of Labour Providers, and various local Chambers of Commerce.

ARC has run a campaign since June 2009 to gather support for its primary drive to limit the UK implementation in line with the EU Directive (point 1 above). Following this campaign the government’s proposal to gold plate was eventually exposed in the Financial Times in July. Support for this proposition is now widespread.”

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