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Making equal treatment work in the UK
September 2008
Folllowing the recent announcement of equal pay for temporary workers after 12 weeks. REC director of external relations Tom Hadley looks at what the EU Directive will mean in practice and on how we can influence the details to ensure that they are workable for the industry.
The EU Directive on Agency Workers was inevitable at some point. Within an enlarged Europe, the UK position had become increasingly isolated which is why there was a real urgency in outing forward a more flexible approach for UK employers and recruiters – equal treatment after 12 weeks rather than from day one of the assignment.
Many assignments will not be affected by the legislation since 50% are under 12 weeks. Many temporary workers also get paid more than their permanent counterparts and so will not be affected. Nevertheless the new requirements could still be an administrative burden on the industry and could panic employers into making less use of agency workers. One of the key components of the REC’s developing campaign (See below) is to ensure that employers are made aware of what the Directive covers and to reassure clients.
The REC is optimistic that the compromise agreement negotiated in Brussels gives us enough wriggle room for equal treatment requirements to be implemented in the UK in a way that does not have negative impact on the provision of temporary and contract work.
In what has been a highly politicised debate, the REC is taking the lead in launching an Agency Work Commission to provide practical solutions. Its recommendations will be presented to government by the end of the year.
We have come a long way over the last five years in terms of the overall perception of the agency work model. The contribution to the economy and labour market is increasingly recognised by policy makers and to some extent by the trade unions themselves. It has been suggested that the principle of equal treatment could in fact accelerate and spread this recognition.
However our initial priority is to deal with the details and to ensure that the collective voice of the UK’s recruitment industry remains at the forefront of the debate.
12 weeks of service will give temporary workers the same rate of pay as a permanent employee
AWD MYTH-BUSTERS
As with any proposed new regulations, there is a certain amount of uncertainty and misinformation about what the EU Directive will actually mean. Here we look at some of the most common queries.
After 12 weeks will my temp become an employee of my client?
No. They will still be a temporary worker. The Directive does not give temporary workers full employment rights, However they will become entitled to the same rate of pay as a permanent employee after 12 weeks.
Does that mean that temporary workers will have the same rights as permanent employees after 12 weeks?
No. Temporary workers will not be entitled to occupational sick pay, occupational maternity pay or entitlement to pensions, However, they will be entitled to receive the same basic hourly pay, holiday and holiday pay, and entitlement to rest breaks as a permanent worker.
My temps get paid more than their permanent counterparts. Will I have to lower their rate of pay to match the rate paid to permanent workers
No. If your temps are on a higher rate of pay than their permanent counterparts then their pay does not need to be lowered. However, you will need to show that you have asked the employer what the rate of pay of a permanent worker would be.
Will temps covering permanent employees who are on leave need to be paid the same as them?
No. Temporary workers should be paid as if they were a permanent employee who had just joined the company rather than the employee they are covering. For example, were a senior permanent employee to go on maternity leave and the position be covered by a temporary worker they would not be entitled to the same pay. This is because the senior employee would probably be on a higher rate of pay due to their experience even if the temporary worker had joined as a permanent employee.
If a temp has been on my books for 12 weeks does this mean they are entitled to equal pay?
Only if a temporary worker has been working for the same client for 12 weeks will they be entitled to equal pay. If a temp moves to a completely different role within the same client company this may count as a new assignment, although this is one of the areas where further clarification is needed.
Will the EU Directive mean that using temps becomes more costly and complicated and therefore act as a disincentive for employers to use agencies?
If we get the implementation details right, the Directive should not have a negative impact on the use of temps. A high proportion of temps are paid on a par with permanent recruits and practical measures can be put in place to address some of the misconceptions which is why the REC has prepared a standard briefing document that can be circulated to employers.
FORWARD CAMPAIGN: NEXT STEPS
What does the EU Agency Workers Directive mean in practice?
A number of key details are still open for discussion but the proposed new measures are likely to mean that:
- Temporary workers and contract workers will be granted the same working conditions and rate of pay as somebody recruited to do the same job but on a permanent basis within the client’s organisation
- In the UK, these equal treatment measures will only kick in after 12 weeks. Employers and agencies providing relatively short-term assignments will not be impacted.
- If equal pay can be established from the outset, the 12 week milestone will be irrelevant. Initial feedback from REC members has been that in the majority of cases, the hourly wages earned by temps are already on par with permanent recruits.
- Contractual sick pay and occupational pension schemes will not be covered
WHAT IS STILL UP FOR GRABS
Key areas where further clarification is needed include:
- Who is the comparable worker?
- Who chooses the right comparator and establishes the right pay?
- Full definition of what equal treatment actually covers – for example does it cover bonuses and overtime?
- Are Limited Company Contractors (LCC’s) covered
- Mechanisms for resolving disputes to limit the number of employment tribunal:
- The extent to which temps on permanent contracts with the agency will be exempted from equal treatment with user company employees.
NEXT STEPS – HOW CAN WE INFLUENCE THE OUTCOME
- The current text (which allows for the 12 week derogation period in the UK) will be discussed by Members of the European Parliament (MEP’s) from September onwards.
- We need to make sure that MEP’s do not table amendments that could result in a worse deal for the UK industry. REC members can play a key role by contacting local MEP’s and taking part in the campaign as “Recruitment Champions”
- The REC will be making regular representations to the UK Government on how equal treatment can best be implemented in practice.
- REC sector groups and regional meetings will play a central role by focusing on the potential implication for the use of temps in different industrial sectors.
- The REC’s “Agency Work Commission” will drive the industry view and ensure that we take the lead in ensuring that equal treatment provisions are workable.
- A final report will collate the Commission’s conclusions and feedback from REC members and will go to Ministers by the end of the year.
WHAT ARE THE TIMESCALES?
- The Directive will go through the second reading in the European Parliament by the end of the year.
- The UK Government will then be drafting national implementing measures during 2009.
- The earliest likely date for implementation is April 2010.
Source: Recruiter 3 September 2008
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