Agency workers – the background
How many agency workers are there?
Estimates of the number of agency workers vary. One recent government report put the number in the UK for 2006 at a relatively low 560,000 (Consultation on Measures to Protect Vulnerable Agency Workers, BERR, February 2007, page 36) but other estimates are higher. The Recruitment and Employment Confederation says there are 1,377,740 temporary workers “out on assignment in any given week”.
There doesn’t seem to be any doubt that agency staff can come to make up a large proportion of the workforce in some organizations. The University and College Union UCU says that some FE colleges employ more than 50% of their staff through agencies while the PCS union reports proportions as high as 80% in some parts of the civil service. Evidence from across the European Union suggests that they tend to be much younger than other workers with lower educational achievement, with mixed chances of moving onto permanent employment. Only a minority have positively chosen temporary and agency work over a permanent job (TUC June 2005).
Migrant workers
Many agency workers are low-paid migrant workers. There are indications of this in the Labour Force Survey where 12% of employed nationals from the A8 states that have now joined the European Union said they are not in permanent work, compared with 6% of employees in the UK as a whole. A TUC report found that 46% of recent migrants who had been made redundant did not receive redundancy pay, pay in lieu or any other kind of payment, compared with 33% of all workers (Labour Research January 2009). UCATT says there are 300,000 migrant workers in the construction industry where agency working and “bogus” self-employment is common.
In research by the Merseyside Social Inclusion Observatory (Supporting Migrant Workers in the North West of England, May-Sept 06) reported concerns over the role of employment/recruitment agencies, the availability of accessible, practical information, and language skills. The report noted that “in all cases the English language was seen to be the key to ‘getting on’ as opposed to ‘getting by’”. Unions can help by ensuring that migrant agency workers get the training and support they need.
Uncertain status
A three-cornered relationship with the agency they are contracted to work by, and the ‘end user’ they actually work for, can leave them in an employment rights limbo. Even if they’ve been working for the same end-user for some time it is difficult for an individual to establish the existence of an implied contract of employment with the end user. In fact, following the decision of the Court of Appeal in James v LB Greenwich that implying a contract will only rarely be appropriate, opportunities to run this argument have been severely curtailed.
They may not even be an employee of the agency either (although that is ordinarily the position with some of the biggest agencies such as Manpower). Their contract may even be with another intermediary; or - as one report on migrant workers recently noted – they may be established as a separate company themselves, allowing the agency to avoid any ‘duty of care’ as an employer (Merseyside Social Inclusion Observatory).
Companies and organisations that use agency workers may go out of their way to be seen to be not treating agency workers as employees, for fear that they end up having some longer-term responsibility for them. This of course risks leaving agency workers potentially isolated in relation to concerns about their work conditions or challenging unfair disciplinary action. In research by the Working Lives Research Institute some employers claimed not even to know the terms and conditions offered to agency staff on their premises.
They are just as likely to be counted as “self-employed”, although this can be assessed by looking at various factors such as the degree of control exercised by the organisation for which they are working; the mutuality of obligation that exists between them, the agency and the end user; and whether the individual is personally responsible for carrying out the work or can provide a substitute.
Construction union UCATT has warned that the European Temporary Agency Workers Directive will not help exploited construction workers if the government doesn’t do something about bogus self-employment under the CIS (Construction Industry Scheme) tax scheme. A report by Professor Mark Harvey and Felix Behling for the union argues that there are up to 400,000 construction workers who are falsely classified as self-employed (www.ucatt.info/images/stories/Evasion_economy.pdf).
Employment rights
Employment status can be the key to employment rights for agency workers. Employees have a wide range of rights (including protection from unfair dismissal, redundancy pay, statutory minimum notice and time off with pay for a variety of reasons). Self-employed workers, by comparison, have relatively few employment rights although they may be covered by anti-discrimination legislation. Under the construction industry CIS tax system “bogus” self-employment can mean losing out on social benefits as well as holiday pay, sick pay and employer pension contributions, UCATT points out.
In between these two categories, there are “workers” who have some of the same rights as employees. Most agency workers are likely to meet this definition and there are some employment laws (the Working Time Regulations 1998 and National Minimum Wage Act 1998), which include special provision to cover agency workers. As workers they should benefit from protection against unlawful pay deductions, less favourable treatment because of being part-time, being refused work because of union membership, detriment for “whistle blowing”, and discrimination on all unlawful grounds. They should have the right to be accompanied at a disciplinary or grievance hearing. As agency workers the government points out they also have the right to maternity, paternity or adoption pay (but not leave) and to statutory sick pay (SSP) if they have worked for the same agency for more than three months. But enforcing these rights can be another matter if they have no union to which to turn.
Licensing and inspection
Agencies do not have to have a license except in industries covered by the Gangmasters Licensing Authority (agriculture, forestry, horticulture, shellfish gathering, and food processing and packaging). Other agency workers do however have limited legal protections under the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (as amended in 2007). These are policed by the Employment Agency Standards Inspectorate (EAS).
The government’s Success at Work consultation in 2007 identified a range of bad practices (pointing to the need for the amendments made to the regulations which came into effect in 2008):
- Abuses around the provisions of services and loans to vulnerable workers
- Drivers supplied by agencies working beyond their legally permitted hours and driving without proper qualifications
- Hard sell tactics used by unscrupulous agencies to persuade would-be entertainers and models to pay high fees for services
These laws should make it unlawful for an agency to charge a worker to find them work (with a very few exceptions, including performers, models and professional sportspeople), and place limits on the right of agencies to charge fees where a temp placed by the agency is offered a permanent job with the employer. They also require an agency to inform its workers of the method and calculation of pay and holiday entitlement, and make it unlawful for an agency to withhold pay if a worker cannot produce a timesheet. The regulations were strengthened in certain ways from 6 April 2008, but they do not resolve the problem of uncertain employment status or provide a right to equal treatment alongside directly-employed staff.
Health and safety
Agency workers are covered by health and safety legislation. The agency and end-user have a shared responsibility for this and should agree at the start of the contract what the arrangements are for the day-to-day supervision, direction and control of the work the agency workers will be doing. They also need to make sure that health and safety information is capable of being understood by agency workers and if necessary making arrangements for those who may not be able to read and understand English well.
Unions have a role to play in policing health and safety policies affecting agency staff. The Unite general union suggests that Safety Reps could consider carrying out a special inspection to focus on agency workers”. Guidance from the CWU communications union emphasises the need for risks to be controlled through effective co-operation between the employment agency business and the business hiring the workers. It also covers information and training, consultation, equipment, monitoring and health checks.
European Temporary Agency Workers Directive
We don’t yet know exactly how the Directive will be implemented in UK law but these are some of its key terms:
Equal Treatment: The Directive (2008/104/EC) says that basic working and employment conditions for temporary agency staff should be at least those that would apply if they had been recruited directly by that undertaking to occupy the same job (article 5.1). Rules on protection and equal treatment for pregnant women, children, and on grounds of gender and race must be complied with.
What it should cover: By basic working and employment conditions the directive means working and employment conditions laid down by legislation, regulation, administrative provisions, collective agreements and/or other binding general provisions in force in the user undertaking relating to the duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays; and pay (article 3.1(f)).
Who will be affected: The TUC and CBI have already agreed (last May) that, when implemented, this protection should apply to agency workers “after 12 weeks in a given job”.
When will it apply: Exactly what the UK regulations implementing the Directive will say, which agency workers they will apply to, and when they will come into force isn’t known yet. The latest that the UK government can comply is 5 December 2011. But there is nothing to stop agencies and their end-user clients agreeing to apply the equal treatment principle right now.
LRD 30/01/09
