Unions win U-turn on Agency Directive

Small business groups have accused the Government of U-turning on the Agency Workers Directive to appease the unions and win their backing for the next election.

The deal on a range of employment-related measures was struck during talks between trade union leaders and Ministers at Labour's national policy forum at Warwick University. Commentators predict the concessions will ensure that renegade unions now fall in behind the Labour Party ahead of the election.

Patricia Hewitt, Trade and Industry Secretary said the employment measures, including ending Britain’s opposition to the Agency Workers Directive, more statutory holidays, longer strike periods before employees can be sacked and a training levy, were 'balanced'.

The EU's Agency Workers Directive stalled last year when the UK Government continued its opposition to the measure.

Background

The Temporary Agency Workers Directive was aimed at providing temps with the same pay and conditions as their permanent counterparts. It was seen as a move to protect workers from employers who insisted on 'agency' status in order to avoid their statutory obligations.

The freelancing sector is much more mature in the UK than other parts of Europe and there was concern that the drafting of the Directive was so wide that freelancers, who neither wanted nor required protection, could also be caught in the net. This could have acted as a deterrent to large companies in using freelancers' services.

Big business, led by the CBI, had actively campaigned against the introduction of the measure, claiming that it was unnecessary and wrong to drag firms into negotiations over pay and conditions when hiring people from an agency for short periods. That should remain a matter for the agency and worker.... taking on temps will be less attractive and that will do irreparable damage, not just to business but to employees as well.

The unions on the other hand, led by the TUC, have campaigned vigorously in favour of the measure claiming that the government had sided with business interests to 'scupper' the prospect of agency workers getting equal pay and basic rights in the foreseeable future and that it is bad for business and unjust for agency workers to be denied protection from sub-standard treatment.

Meanwhile, freelancers, particularly in the UK, were caught in a no-man's land of uncertainty in the middle - not wanting protection from clients, clients not wanting to give it and conflicting views as to whether or not they would be affected by it.

Died a death

Last November it seemed that the Agency Workers Directive had all but died a death, much to the dismay of the trade unions. The Directive called for six weeks qualifying period, but the UK, Germany, Denmark and Ireland held firm to the CBI line that this should be extended to 12 months.

At the time, the unions pledged not to abandon the fight, now, it appears to be back on the Government's agenda and next time around, the UK is likely to support the measure in Europe.

Small business opposition

The U-turn has infuriated small business groups.

David Frost, chairman of the British Chambers of Commerce (BCC) said: "The Government must not back down from opposing this damaging Directive. It could add huge costs to business and further erode the flexibility of the UK’s labour market. Business and Government have worked together to fight the terms of this directive and any U-turn by the Government would jeopardise that relationship.

"The Directive currently gives temporary workers equal employment rights after just six weeks of employment. Equal treatment regarding pay and working conditions for temporary workers would put substantial additional financial and administrative burdens on business.

"This would further discourage firms from recruiting temporary staff and reduce employment opportunities for temporary workers.

"A great strength of the UK’s economy is its flexibility. The Government must not put UK productivity and jobs at risk by adding further regulations and costs. Small businesses in particular can not cope with an onslaught of new regulation."

The BCC also urged the Government not to offer further concessions to the Unions.

Gareth Osborne, managing director of the agency representative body, Recruitment and Employment Confederation, said: "If the Government accepts the directive, it will be reneging on pledges it has made to business and seriously damage UK productivity."

The Federation of Small Businesses (FSB) argued that there should be a period of stability in the next parliament to allow employers and employees alike to get to grips with the current rights and responsibilities and urged ministers to put the brakes on employment legislation.

Union support

Tony Woodley, General Secretary of the Transport and General Workers' Union, welcomed the plans. He said: "A third Labour term would strengthen the position of UK workers and provide greater employment justice.

"We now have commitments to tackling inequality between men and women at work, addressing low pay in those sectors worst affected, backing for the [EU] agency workers' directive, better pensions protection and more support for manufacturing.

"We worked together with constituencies and other members to achieve these commitments and it is a manifesto the whole of the party can unite behind."