At least one of the big unions is gunning for contractors, branding them immoral for using a piece of law that was brought in by the unions themselves.
Contractors and recruiters who have adopted trading solutions to mitigate the impact of the Agency Workers Regulation’s (AWR) equal pay measures are, according to Communications Workers Union (CWU) general secretary Billy Hayes, to be bracketed with tax avoiding corporations as ‘immoral’.
This is despite that fact that they are forced to do so, as AWR has hit contractors hard by scaring off potential clients. The negative impact is well documented, including in a recent report by the Chartered Institute of Personnel and Development (CIPD), which highlights that: “One in four organisations…have reduced their use of agency workers since October 2011 when the Agency Workers Regulations came into force.”
Considering what a bad few days the supporters of AWR have had, losing two tribunal cases, this attack on agencies and temporary workers smacks of sour grapes.
The Trades Union Congress (TUC) fought for many years to secure the adoption of the Agency Workers Directive, and now one of its larger members has decided that the legislation isn’t strong enough. In fact, the CWU boss has gone so far as to attack Regulation 10 of AWR as a ‘loophole’.
Umbrella company contractors who fall inside AWR are more likely to describe Regulation 10 as a lifeline than a loophole. It’s generally better known as the ‘Swedish Derogation’ or ‘pay between assignments’ (PBA).
It enables clients to continue to hire contractors on an ‘as needed’ basis without incurring additional costs. Regulation 10 means that clients can continue to transfer any employment risk to the agency or umbrella company. And that’s important, because one of the reasons clients use contractors in the first place is because they don’t want to employ someone to do the job.
In fact, without the Swedish Derogation, the livelihoods of umbrella contractors and temporary workers are likely to be jeopardised: Independent research by the Confederation of British Industry (CBI) , recruiter Harvey Nash and law firm Eversheds shows client adoption of the Swedish Derogation is high, in excess of 17% according to Eversheds. Remove Regulation 10 and you remove jobs and contracts.
From the CWU’s attack on it, you’d think the Swedish derogation was dreamed up by evil recruiters and contractors, rather than something carefully negotiated and agreed to by the unions themselves.
The TUC promised last year to complain to the European Commission if it believed clients were abusing Regulation 10. Any attempt by the unions to renegotiate AWR could lose contractors their contracts and temps their jobs. Is this really what unions want to be about – destroying jobs?
Who really is the ‘immoral’ party in the AWR debate?