After a debate of some four hours, the Temporary and Agency Workers (Equal Treatment) Bill passed its second reading by 147 votes to 11.  Despite the majority backing by many Labour MPs, the Bill is opposed by the Government. Other political parties and employer organisations have also spoken out against it. What makes this Bill so controversial?

The Bill has been introduced as a Private Members Bill by the Labour MP, Andrew Miller. The fact that it has managed to reach this stage is not insignificant given the wider political context. In the last parliamentary session a similar bill ran out of time and was dropped. In Europe, a draft Agency Workers Directive was first introduced in 1992 but the UK has repeatedly stalled its implementation, failing to reach agreement on the qualifying period required before agency workers would receive the equal rights. The Government has always called for a qualifying period of one year, but had been willing to compromise at 6 months.
 
The delay at a European level is seemingly at the very heart of this matter; leading to the need to propose domestic legislation and, arguably, one of the reasons for the degree of support from Labour back benchers in spite of the Government’s opposition. In July 2004 the “Warwick agreement” came about as a compromise between the Labour Government and trade unions at the Labour Party's National Policy forum. One of the pledges made was that, if the Labour party was elected into government, it would support the EU Agency Workers Directive, and engage with the Commission with a view to reaching an early agreement.  Reportedly, union leaders have now put pressure on Labour MPs to vote in favour of the Bill and, in essence, fulfil their manifesto promises. On this basis, Labour has been criticised for being blackmailed into giving their support to the Bill, which, according the opposition, whilst attempting to achieve fairness and equality will have unintended consequences for employers and the economy.

The Bill is proposing that an agency worker has the right not be treated any less favourably by the agency or the end user with regard to their working and employment conditions when compared to a direct worker. Any less favourable treatment on the grounds that the worker is an agency worker will be unlawful unless it can be objectively justified. The comparator in such cases must be worker who has an employment contract, either permanent or fixed term, directly with the end user and who is engaged at the same establishment as the agency worker doing the same or broadly similar work, having regard, where relevant, to seniority, qualifications and skills.  If there is no direct comparator the employment tribunal must consider how a hypothetical comparator would have been treated. The Bill as it stands does not require a qualifying period and therefore this right would be conferred from day one of the assignment. In addition the agency worker would have a right to be notified by the end user of its vacancies for direct employment and be protected from detriment or dismissal for asserting his rights under the Bill’s provisions.
 
Andrew Miller presenting the Bill argued it was a necessity to fulfil the Prime Minister’s vision of the 2020 British economy, in which the current 6 million unskilled jobs will be far fewer, replaced by a demand for skilled labour. He claims the Bill would encourage employers to plan for the long term and to establish a well-trained and well-motivated work force, thereby reducing the exploitation of the so called “permatemps”. His second argument was that the Bill was morally right and that the concept of equal value should apply to direct workers and agency workers working alongside one another with the same skills doing the same task, as against using agency workers to avoid paying the cost of sick pay, holiday pay, pensions and any other benefits.

The opposing views included that legislation was unnecessary, as agency workers currently have the benefit of many of the minimum rights, including the minimum wage, working time legislation, health and safety and social security provisions, such as maternity and sick pay, and are also protected from discrimination. They argued that better awareness and enforcement of these current rights would do more to reduce the exploitation of agency workers, rather than introduce yet more legislation which would add to the burden of good employers, only still to be ignored by the unscrupulous ones. It was also pointed out that not all agency workers are exploited. In fact a YouGov survey revealed that 53% of temporary workers felt that they were treated fairly by their agency and 24% neither agreed nor disagreed.

The other key argument against the Bill was that it would cost British jobs. The CBI was quoted as saying that the Bill as it currently stands could lead to 250,000 job losses. Surveys carried out on employers on the proposed EU Directive concluded that legislation in this area would result in 68% of employers recruiting fewer agency workers and only 32% said that they would replace the need with permanent staff, preferring to use other methods such as overtime. 

There were also comments made about the practicalities of some of the Bill’s provisions and the issues that it has failed to address. Including that:  

• It is often more expensive to engage agency workers because employers have to pay the agency fee and therefore equal pay can not always be justified.
• Many agency workers get a higher rate of pay than they would in permanent roles, e.g.  skilled craftsmen and IT and accountancy temporary workers.
• Benefits such as pension schemes, occupational sick pay or occupational maternity pay are often not appropriate for temporary workers as they are part of the package given by employers to reward loyalty and long service.
• Temporary workers may have the same level of qualification, but that does not necessarily mean that they have the same ability or inclination to do the same job as experienced staff who know how the firm works.
• Many permanent employees normally have to serve a probationary period to qualify for rights such as company sick pay or company maternity pay and yet length of service is not considered relevant to the issue of a direct comparator
• The areas of “objective justification” and cases where there is no direct comparator will need to be tested in the tribunals resulting in an increase in  complex and costly litigation 

These areas, and the contentious issue of a qualifying period, will all need to be addressed during the Committee Stage or else some MPs, who did not oppose the Bill this time, have said that they will oppose it on its third reading. Meanwhile, the Government is hoping that its suggestion of establishing a joint independent commission to review this subject will be seen, not as a delaying tactic, but as a better route to clarify the issues and provide a well thought out solution.