On 10 June 2008, EU Employment Ministers agreed a landmark deal for agency workers which will have wide ranging implications for employers in the marketing and advertising sectors. Jenny Wotherspoon reports.
Topic: Equality
Who: Employers
Where: UK/EU
When: 10 June 2008
Law stated as at: 23 June 2008
What happened:
In marketinglaw editions past we reported on the debate over proposals to extend equal treatment to agency workers.
On 10 June 2008, EU Employment Ministers agreed a landmark deal for such workers which will have wide ranging implications for employers in the marketing and advertising sectors.
What has been agreed?
The key proposals are:
- Agency workers will be entitled to the same rights as their permanent counterparts in terms of pay, family friendly benefits, access to collective facilities and leave.
- Employers will be under an obligation to inform agency workers about permanent employment opportunities.
It is anticipated that equal treatment will not cover "occupational social security schemes" (which, we assume, means statutory sick pay and pension rights).
The UK will be able to implement a "grace" period where agency workers need to have 12 weeks' continuous service before these rights apply. This reflects the Government, TUC and CBI agreement in May 2008.
Anti-avoidance measures will also be introduced to prevent employers from implementing practices that circumvent these rules. Therefore, employers are unlikely to be able to manage this issue by dismissing and re-engaging their workers before the 12 week limit.
When will these rights kick in?
The Directive has a couple more rounds of approval at a European level. This includes European Parliament approval and a second round with EU employment ministers. The UK will then draft domestic legislation to implement the changes. Depending on the level of consultation in the UK, these proposals could become law in the UK from October 2009 onwards.
Will these rights extend to "limited company" contractors?
It is understood that this legislation is not intended to apply to limited company contractors. As such, genuinely self employed contractors who engage their services via limited companies will be excluded. However, this position will not be certain until the domestic UK legislation is drafted.
Contractors that are engaged via an employment agency will be caught by the legislation.
Why this matters:
These developments will lead to increased costs for employment agencies which they, in turn, are likely to pass onto businesses.
It remains to be seen whether businesses will restrict their use of agency staff in the future. The deal has attracted criticism from employers and contractors, in particular those in the marketing and advertising sectors, who suggest that agency workers will simply be released prior to 12 weeks or that employers will outsource overseas where this is viable.
The need for a 12 week qualification period should still allow businesses to deal with peaks and troughs in demand and shorter-term staff absences. Difficulties will arise where businesses rely on agency staff for longer term projects and appointments.
Employers who use long term agency workers will need to re-think their practice in this area and consider how expertise can be resourced under the new rules. The publication of the legislation will provide the detail which employers need to identify how it will manage this new environment for agency and temporary workers.
