A question of security

Now, with the European Union’s Agency Workers Directive due to come into effect on October 1, many such workers must be wondering whether the new rules will make their jobs more or less secure.

And with good reason too, some might say. A report from lawyers Allen & Overy this week found the new directive could lead to nearly half a million agency workers nationwide losing their jobs just before Christmas (or 11 weeks after the new rules kick in) as employers find they can avoid the new rules that way.

Under the directive, staff employed by agencies will acquire equal rights to such things as pay, holidays, overtime, and maternity leave after working 12 weeks at a particular company.

There are safeguards against dismissing staff at 11 weeks and then re-hiring them, but not against companies dismissing staff and then taking on replacement staff.

Employment lawyer William Downing, a partner at Oxford solicitors Morgan Cole, which this week held a seminar to help employers to avoid falling foul of the new regulations, said: “There are about 1.4m agency workers in the UK and I am sure there will be job losses among them just before Christmas. The regulations will certainly increase costs and could make some agency workers’ jobs more uncertain.”

But the feeling is that such job losses will fall in smaller companies, many in the catering sector, where employers use agency workers to cut costs and avoid responsibilities, rather than among large and highly reputable firms who use them to achieve the flexibility necessary to meet fluctuating demands for their products.

Rebecca Baxter, spokesman for BMW’s Oxford Mini plant, said: “As a built-to-order brand, flexibility remains a key requirement for Mini Plant Oxford.

“For that reason, the introduction of the regulations on October 1 will have no impact on the use of agency workers at the plant.

“Our strategy has always been to utilise agency workers as a means of helping to smooth out fluctuations in demand and not as a way of managing business costs.”

BMW now employs about 3,000 full-time staff in Oxford. In addition, the Italian-owned agency GI Group provides around 600 agency workers to the plant.

GI Group spokesman Judith Thompson said: “We have been working closely with BMW since this new legislation was announced and, as a result, we foresee no issues regarding the ongoing supply of labour to the plant in Oxford.”

No spokesman for the trade union Unite was available to comment on the new regulations, but a BMW employee who did not want to be named and who had formerly been an agency worker at the plant, said: “I think on balance the new regulations will give agency workers at BMW more security, as they are designed to do.

“As an agency worker you never have the same feeling of security as you do as a BMW worker. Grade for grade agency workers get paid about the same as BMW workers so I think there is little incentive on the cost-cutting side for getting rid of them.”

But, speaking more generally and not referring to BMW specifically, Mr Downing said: “I think that a number of employers have not planned ahead and assessed the full impact of the new regulations.

“For example, from November next year agency workers will be entitled to receive pension contributions from their employers which will raise costs again.

“Also, the impact of the sheer amount of information that companies will have to share with agencies needs assessing.”

At Morgan Cole’s breakfast seminar on the new regulations, delegates studied imaginary case studies, among them that of “Jane”.

She was employed to cover for a receptionist, who was recovering from an operation, at a nearby company for four to six weeks. Then, after six weeks, she was asked to work another six weeks. Was she covered by the regulations?

The answer was yes, if she was employed by the agency and not directly by the company.

Mr Williams said: “Often an employer needs someone quickly and cannot go through the hassle of putting them on their company payroll.

“One delegate at our breakfast was a school and it was pointed out that when a teacher is suddenly absent you need someone there and then.”

“Jane” would be entitled to all the benefits of a company employee after 12 weeks, with the clock starting on October 1.

But Mr Williams said calculating the 12-week qualifying period may not be as straightforward as it sounds and both hirer and agency will have to monitor the time and any breaks carefully.

Notes to delegates read: “Calendar weeks will accrue regardless of how many hours the individual works but different types of breaks will have different consequences for the qualifying clock. For example, a break of no more than six weeks with the agency worker returning to the same role will pause the clock.

“Breaks for maternity, adoption or paternity leave on the other hand will mean the clock continues ticking.

“Where an agency worker begins a new assignment with a new hirer the clock is reset to zero.”

The devil, as always, is in the detail. But employers beware — anti-avoidance measures are in place to stop agencies and their client companies from structuring assignments in such a way as to avoid an employee from ever reaching the qualifying period.

Employment tribunals may fine transgressors up to £5,000.

Both the Confederation of British Industry and the Institute of Directors, even at that late date, are lobbying for the terms of the regulations to be diluted but, as another Oxford lawyer — Stephanie Slanikova of Blake Lapthorn — said: “Whenever new employment legislation comes into place there is always a knock-on effect during the settling-in period.

“But I hope the new regulations will help some people become better off.”

As for anyone losing their job just before Christmas, it will be doubly sad for them if they also miss out on the Christmas bonus — which of course also counts as a staff benefit.