The Agency Workers Directive

Introduction

The EU’s 2008 directive on Temporary Agency Work, usually known as the Agency Workers Directive, is intended to equalise the treatment of permanent and temporary workers in terms of pay and conditions.  Legislating on this issue had been under discussion since the 1990s and was revived at the time of discussions about the 2000 Lisbon Agenda for economic reform and development in the EU.  Guaranteeing rights for temporary workers was seen by the Commission as a way of increasing employment flexibility by making temporary work more appealing to people.

The United Kingdom was unhappy with the idea of granting temporary or agency workers the same or similar rights to permanent employees; its argument was the opposite of that of the Commission – guaranteeing rights would reduce flexibility in the economy and thus potentially reduce employment.  In 2008 the UK agreed to the directive following an agreement between the CBI (who opposed the directive) and the TUC (who supported it) on the rights of temporary workers.  Following the passing of the directive, and the implementing regulations in the United Kingdom, the directive came into force in the UK on 1 October 2011.  The coalition Government has expressed its unhappiness with the directive but has said that its ability to amend the UK regulations is constrained by the CBI-TUC agreement.

The Negotiations on the Draft Directive

In some EU Member States (including the UK) those working as temporary or agency staff have not enjoyed the same rights as permanent employees in terms of equal pay for the same work, holiday entitlement or occupational benefits such as pensions or sick pay.  From 1995, the Commission sought to address this question in discussions with employers and unions.  These discussions continued until May 2001 when the trade union and employer organisations in the EU admitted that they could not agree on a way forward.

A subsequent attempt by the Commission to bring forward legislation in 2002 did not succeed because of objections from the UK, Germany and some other Member States.  In fact, Germany implemented changes similar to those in the 2002 directive in its national law as a part of a wider set of employment and social security reforms but it maintained its objections at EU level.

Pressure for the 2002 legislation to be revived came particularly from the TUC and the Labour Party in Britain; two backbench parliamentary Bills in 2007 and 2008 that proposed similar measures to the draft directive achieved considerable support within the Parliamentary Labour Party.  In fact the Labour frontbench had agreed in principle to such a measure as part of a policy package agreed between the Labour Party and the trade unions prior to the 2005 general election but no action had been taken later.

The 2008 CBI-TUS Agreement

The Labour Government had stopped parliamentary consideration of the second backbench Bill by saying that it would seek agreement to a measure of its own from employers and unions.  In May 2008 a joint declaration from the Government, the CBI and the TUC said that agreement had been reached on “how fairer treatment for agency workers in the United Kingdom should be promoted, while not removing the important flexibility that agency work can offer both employers and workers”.

The main points of this agreement were:

• after 12 weeks in a job there would be entitlement to equal treatment;
• “equal treatment” would mean “at least” the basic working and employment conditions that would have applied to the temporary workers had they been recruited as permanent staff, excluding occupational social security schemes.

Following this agreement, the UK Government signalled its willingness to reach agreement with other Member States so that legislation could be finalised in the UK.

The 2008 Directive

Agreed in November 2008, the Agency Workers Directive, which reflects the CBI-TUC agreement, says that:

• there should be equal treatment of permanent and temporary staff in terms of basic conditions of work where temporary and permanent staff are performing the same role;
• the “basic conditions” are: duration of working time, overtime, breaks, holidays, public holidays, rest periods and night work;
• employers and unions can agree that conditions may differ in certain circumstances, for example by having a qualifying period before temporary workers achieve equal rights;
• public and private undertakings are covered by the legislation;
• prohibitions or restrictions on temporary work should only be permitted on very limited grounds (such as health and safety).

There are exclusions so that those on work experience or skills training do not get caught by the provisions of the directive.

The UK’s Position

The Labour Government consulted on the implementation of the Agency Workers Directive and then brought forward regulations shortly before the 2010 general election with 1 October 2011 as the date they would come into force.

The incoming coalition Government was unhappy with the regulations agreed by Parliament in January 2010 and consulted employers and unions about possible amendments.  The coalition had received representations from employers over the length of the qualifying period (12 weeks in the UK), the definition of “pay” in the regulations and the administrative issues with the qualifying period for people taking infrequent but repeated short-term assignments.  As a result of the 2008 agreement between the CBI and the TUC, the Government has argued that it would be difficult to amend the 2010 regulations without leaving Ministers open to legal challenge as the 2008 agreement defined the qualifying period.  An attempt to get agreement to changes between employers and unions failed so the 2010 regulations were therefore implemented on 1 October 2011 as previously planned.