Breaking the chains

Mar 12 2002 by Brian Amble Print This Article

This article first appeared in Inside Recruitment:

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.