Europe, and more specifically its various state organs such as the European Commission and European Parliament, gets blamed for all sorts of perceived injustices. And sometimes with good reason. But for once, it seems, Europe was wearing its sensible hat when it handed us just six pages of the Agency Workers Directive (AWD).
Then the UK government, through the newly dubbed Department for Business Innovation and Skills (BIS), turned that into 116 pages of a consultation paper. And, on close analysis, one wonders if those at BIS responsible for drafting the consultation were allowed to reflect what was actually in the directive. Or what impact it might have on hardworking contractors, those in the recruitment sector and the UK economy as a whole.
The AWD, as constituted by Europe, is a fine initiative that should genuinely help low-paid temporary workers suffering exploitation, some of whom in recent years have even lost their lives due to a lack of legal protection.
But the AWD was never intended to include high-earning contractors and freelance professionals, whose livelihoods would be under threat if the BIS proposals come into force without challenge.
Let’s remind ourselves why we’re all so afraid of the AWD. The directive requires that temporary agency workers should receive the same pay and conditions as their permanent counterparts. That’s fine, when applied to the low-paid workers it is designed to protect. But apply it to contractors, and the law of unintended consequences would see things spiralling out of control.
For starters, it would result in: a) a huge extra expense for clients and agencies; and b) a huge increase in employment rights tribunals. Neither is desirable, and when you put both together you would undoubtedly see clients leaving the UK in droves, to run their projects in more client-friendly countries. Not only that, but many agencies would go bust and contractors would have many fewer contracts, much lower rates, and greatly reduced number of agencies to act as their de facto sales teams. Shocking.
The first shock, revealed to ContractorCalculator and others invited to an exclusive seminar held by Lawspeed last week, was to learn that the directive was never meant to apply to all client organisations. Europe said the AWD was quite explicitly only meant to apply to organisations that have published scales of pay and conditions, generally agreed with unions and other employee organisations.
That, of course, works for many mainland European countries, as there are many more of those types of agreements in place. It would also suit UK plc, because most large private sector employers and probably 95% of small to medium sized businesses in the UK don’t have such agreements in place and would therefore be excluded.
So, it begs the question, why does the consultation paper from BIS say that all organisations – from corner shops up to the NHS – would be affected, when that was not the intention of the original directive? Who slipped that one in?
There are MPs who think this is a good idea (those who have never worked outside of politics, presumably) but it appears that the government has been bullied by unions and employee organisation lobbyists into including unnecessary provisions that could drastically reduce the competitiveness of UK PLC. Or maybe ministers and other politicians at the top have been too busy fighting fires elsewhere to notice?
Of course, the AWD only applies to workers working through employment agencies and businesses. So contractors, or any temporary worker for that matter, can go direct and circumvent the legislation. But this causes its own problems, and in fact potentially puts the UK’s highly skilled and flexible labour force back three decades, and into the dark ages of recruitment practices.
If contractors all go direct, agencies go out of business and the hugely efficient and talented recruitment sector largely disappears. Contractors would lose their ‘sales agents’, which is effectively what recruitment agencies are, and would see much more of their time, money and effort go into winning contractors.
Clients would have to find and manage their own contractors, which they used to pay agencies to do, and would most likely conclude that it isn’t worth the trouble. Many would simply move to a location where the rules are less restrictive. Same result – fewer contracts, fewer agencies help contractors find them, and lower rates.
Vulnerable agency workers should be protected, and can be protected with the AWD as devised by Europe. But contractors should take an active part in the BIS consultation to stop the UK government interpreting the AWD into legislation that would destroy contractor’s livelihoods, force agencies out of business, and drive clients abroad.
There is not much time left to have your views heard, so click here now to download the consultation paper and make sure YOUR voice is heard.