This article first appeared in Inside Recruitment: www.insiderecruitment.co.uk
The recruitment industry is facing its toughest challenge since the
original Employment Agencies Act proposals. It is now almost certain that
the initial draft of the European Commission's Agency Workers Directive
(AWD), leaked to several media and lobbying organisations, compares
temporary workers to permanent employees of the agency client organisation.
That is not good news for the UK recruitment industry or economy. Equal
rights equates to equal pay and working conditions, including pensions and
holiday, and could extend to areas such as health insurance, interest free
loans, non-discretionary bonuses and share schemes. If implemented, the
flexibility that the UK is famed for could become stifled by the one-size
fits all policy.
The UK recruitment industry wants legislation which compares temporary
agency workers to other agency workers doing a similar job, preferably at
the same client. What are the chances of any changes being made?
Heavyweight allies
Tim Nicholson, chief executive of the Recruitment and Employment
Confederation (REC), pointed out that changes may have already occurred.
Many drafts of the AWD have been passed through the corridors of Brussels
over the past four months and any one of these could have been leaked. He
told Inside Recruitment that opinion in Europe was shifting and that the
lobbying efforts made by the Government and employment groups was beginning
to pay off.
Indeed, the recruitment industry has some heavyweight allies in its battle
against this proposal. The Confederation of British Industry is fiercely
opposed, while the Department and Trade of Industry has been informally
lobbying member states hard. Downing Street has also come out firmly on the
side of employers.
Obviously it would be better to attempt to influence the commissioners
before any official draft is made public before March 20, and the various
lobbying groups have been doing this. However, if no change is made, the
real hard work will begin. In an attempt to get the directive changed, the
UK will need at least the backing of two member states to go before the
Council of Ministers, where the directive can by heavily blocked or
amended.
The obvious allies for the UK are Spain and Italy. Both have a history of
good diplomatic relations with the UK and Italy's Prime Minister Silvio
Berlusconi and Tony Blair have just released a joint statement calling for
soft employment regulations to stimulate workforce growth and flexibility.
It is believed the pair are attempting to get Spanish Prime Minister and
Blair sympathiser Jose Maria Aznar on their side ahead of the Barcelona
summit. Denmark and Ireland are also lining up on the UK side, while Sweden
is concerned about certain aspects. In Sweden there is equality of pay for
temporary staff working for the same agency.
However, the influence these countries have is questionable compared to the
big guns of France and Germany. It is believed that France is not backing
the UK's view.
In Germany, the situation is not quite so clear cut. A battle is being
waged between industry and the unions, though the scales may be tipped
slightly in the favour of the latter. Germany, along with Holland, has some
of the most restrictive laws in Europe, with agencies having to reach
national agreements with unions.
However, research has revealed that agency workers in Germany only receive
60 to 78 per cent of salary that permanent employees earn. Would Germany
employers really want to contend with those increases in costs with
unemployment teetering around the four million mark? The resounding answer
would be no, but the unions would prefer better rights for its members.
Whether the German or other EU governments act remains to be seen.
Currently, Germany, Austria, Spain, Luxembourg, the Netherlands and Sweden
already have legislation that governs the relationship linking the agency,
the client and the temporary worker. Belgium, France, Italy and Portugal
have regulations that cover not only the agency, temporary worker, client
relationship but also the status of the temporary worker.
A sidelined UK?
The AWD proposals, it must be remembered, will not mean drastic changes for
other European nations. Why should they object strongly to proposals that
won't drastically alter the way they operate?
This is exactly why the UK should avoid its usual insular stance to EC
proposed policy and not turn the AWD into a single nation issue.
So far the REC has worked hard to extol the virtues of temporary work in
creating flexibility; a sensible lobbying stance that avoids hysterical
catcalling. It is feared that the recent media coverage could scare the
commission into sidelining the UK and going ahead with a set of regulations
that could seriously damage the recruitment market. If it becomes a one
nation issue, the UK could find itself isolated and vulnerable.
If the worst case scenario does occur, ministers could adopt a similar
stance to that over fixed-term workers, obtaining an exclusion from pay and
pension regulations adopted by the rest of the member states. The UK was
eventually forced to include pay and pensions last year however following a
ruling by the European Court of Justice and ministers may struggle to get
another abstention.
Whatever route is taken, there is respite. Holland, Germany and France,
which along with the UK accounts for 80 per cent of temporary agency
workers, will not want to rush into a pan-European agreement directly
without fully examining the implications. The fact that the draft directive
has been delayed several times is a good sign, indicating that the
commission is open to consultation.
What is required now is careful, considered lobbying. Europe may surprise
us. It just may listen.