Arguments as to the status of temporary staff have rumbled on for years but the recent announcement on the Agency Workers Directive may begin to bring clarity to the issue
by Sarah Maddock with Tim Woodward
12 June 2008
The agency worker 'cat' was first set among the employer 'pigeons' with the 2004 ruling in Dacas v Brook Street Bureau, when it was suggested that it may be possible for agency workers to be deemed employees after they had been engaged by the same organisation for a sufficiently long period of time.
However, no further guidance was provided. It was hoped that some judicial light might be thrown on this question when the case of James v Greenwich LBC was decided earlier this year. However, the courts declined to provide any definitive guidance on how long an employee must work for an agency's client before becoming an employee; but did curb the effect of Dacas by ruling that an agency worker can only be deemed to be an employee if it is necessary, in the absence of an express contract to the contrary between the agency and its client.
While the courts have been ruminating on the employment status of agency workers, the Agency Workers Directive (originally proposed in 2002) has been debated in Europe and, in the UK, the Temporary and Agency Workers (Equal Treatment) Bill, has been working its way through Parliament.
The progress of this bill, and lobbying from unions, has put increasing pressure on the government to resolve this issue. Since this February, an independent commission on the rights of temporary agency workers, bringing together the TUC and CBI, has been considering how agency workers' rights might be protected and how any voluntary agreement reached in the UK would work under a subsequent directive governing agency employment.
It could be worse
Matters came to a head last month with the announcement that an agreement has been reached and agency workers will be granted equality of treatment with employees after 12 weeks.
As the CBI put it in their public statement, this is the "least worst" outcome for businesses, or, it could be worse: unions had been pressing for employment rights for agency workers from day one of an assignment.
The 12-week restriction is also likely to curb the practical effect of the agreement. According to a report by Leeds University Business School published this month, 30 per cycle of agency workers stay in post for less than three months, and the majority of those surveyed said that their assignment lasted for one month.
At present, the proposals are as follows:
after an agency worker has been on an assignment for the same organisation for 12 weeks, they will be entitled to be treated equally to an employee
equal treatment will mean that agency workers will enjoy at least the same basic working and employment conditions as would apply to them if they had been recruited to perform the same job as an employee
"occupational social security schemes" will not be covered. Exactly what is meant by this has not been explained, but it is likely to mean that benefits such as pension and sick pay schemes will not be covered
there will be further consultation on the detail of the legislation, specifically,
(i) mechanisms for resolving disputes;
(ii) arrangements to enable industry and public services to reach appropriate agreements on the treatment of agency workers
(iii) appropriate anti-avoidance measures.
The new rules will be reviewed at an unspecified date.
The government has said that it will use these proposals as a platform for "engaging with its European partners to seek agreement on the terms of the Agency Workers Directive," which will allow the proposals to be brought into effect in UK legislation. The aim is that this legislation will be in place in the 2008/09 parliamentary session, so could be in force by the end of next year.
So, apart from that, how was the play Mrs Lincoln?
There is no doubt that this agreement, if implemented as it is proposed, will create major challenges for all those who engage agency workers, ie the majority of employers across the UK.
However, on a positive note, agreement on this issue may result in protection of the UK's opt-out of the 48-hour working week in the Working Time Directive. It had been thought that the UK's intransigence on the issue of agency workers may have resulted in the opt-out being threatened, but the CBI's view is that this will not now happen.
Sarah Maddock is the professional support lawyer and Tim Woodward is a partner at law firm Bevan Brittan
Employers should also bear in mind..
This agreement may have prevented more damaging provisions in the Agency Workers Directive
The Temporary and Agency Workers (Equal Treatment) Bill has now been withdrawn
The 12-week service requirement will mean that the majority of assignments will not be covered
Even once the 12-week period has passed, the range of rights available to agency workers will be limited; they will not have access to the valuable benefits of pension provision or sick pay and, presumably, until they have accrued 12 months' service they will not (like directly recruited employees) have any right to be fairly dismissed
Therefore, as it stands, it seems that "equal rights for agency workers" does not necessarily equate to all agency workers being treated like all employees.