Union’s pressure on Government set to reduce employees’ pay

The passing of the Agency Worker Regulations 2010 (“AWR”) through parliament was greatly influenced by union pressure on the Government. These regulations are now set to come into force in October 2011. The AWR creates new rights for agency workers to receive the same pay and working conditions as an employee who is directly engaged at the company the agency worker is assigned to, after the agency worker has worked there for a period of 12 weeks. The pay rate that will apply to an agency worker will be the same rate the company would have paid to an individual employed at the same time i.e. a starter rate.

If everyone stood still, the result of the legislation is likely in some cases to be increased costs to an end user. The solution is to address the reason why. Unless starter rates are set in stone, why not review them? Hirers that take this proactive approach could cut their costs base in line with market forces. The consequence may be, as is so often the case when unintended, to reduce workers pay rather than increase it. Some may say that is an own goal.

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