Many people remain unaware of the potential impact of the Agency Workers Directive (AWD) which will be introduced into European Legislation in October 2011. The precise wording of this Directive is still being drafted but it could have a massive impact on any organisation that utilise large numbers of temporary labour.

 

Most people would fully support the aims and objectives of the AWD, which is to give temporary agency workers equal treatment to permanent employees. Based on current negotiations, the “Least worse option” would mean that Temps are entitled to the same basic pay & conditions as equivalent permanent staff after 12 wks as if employed directly. At the moment, this excludes 50% of assignments, so is this a damp squib or big problem?

 

The reasons for using Agency Workers are interesting. A recent BCC Workforce Survey found that employers use Temp staff for the following reasons:

 

67%     Improves flexibility of workforce

18%     Short term staff cover

10%     less regulation around agency staff

7%       Expensive to recruit directly

6%       Seasonal requirements

3%       Agency paid less than perm staff

 

I guess most respondents would be a little candid about using Temps purely as a least cost measure, but my experience corresponds with the above. Temporary labour is generally used to provide staff flexibility, not to drive down unit cost at the expense of the worker. Employers always attack the Agencies margin, but usually seek a fair hourly rate for the worker. So is the AWD a piece of legislation required?

 

 

The current areas of debate around the AWD are:

 

•         Equal treatment to be limited to basic hourly rate?

•         Holiday should not be included?

•         Comparator or direct employee?

•         4 week break between assignments?

•         12 Calendar weeks

•         Specific Job & Specific Location

•         Liability - agency or end user?

•         Resolution through the Employment Tribunals

•         Ltd Companies & Umbrella companies excluded?

•         Derogation through workplace agreements?

•         End of Temp to Perm fees?

 

 

As is often the case with new legislation, there is an administrative burden that will almost certainly be passed on the Recruitment Agencies and their clients; specifically:

 

 

 

•         Need to amend Terms Of Business to include info on equal treatment

•         Update software to flag when an assignment at 12 weeks

•         Update software to show how and when equal treatment started.

•         Potentially chase client for info on equal treatment

•         Renegotiate cost of temp placement as assignment reaches 12 weeks

 

 

•         Appraise current pay scales to see if entry rates are suitable for temps

•         Manage use of temp staff – be aware costs may change after 12 weeks

•         Update agency of any changes to pay and benefits structure

•         Create responsibility and awareness of responsibility for providing info.

 

 

For businesses that use a significant amount of Temporary staff, the time is right to consider alternative staffing models such as Staff Outsourcing to derive the full benefits of a truly integrated and least cost staffing solution. Through this, you will carry:

 

 

 

Call Andy Howard on 01905 827125 to discuss how OSN can help deliver significant cost savings to your business.