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Agency Workers: Be Prepared the Problem won’t go away Advises Expert.

As yet, nobody is sure what the impact will be of the new Agency Workers legislation.
It has been enacted but the detailed operational advice is still under wraps but one thing is for sure there will be changes because it is overarching European legislation that the UK has agreed to enforce from the 1 October 2011.
The legislation will mean businesses will have to make considerable changes to the way they use temporary agency workers, and ironically it will also increase the administrative burden on employers and recruitment agencies alike pushing up costs.
The truth is that the legal status of temporary workers is currently unclear under UK law and the market as a whole is largely unregulated. So the same person might be:
  • An employee of the agency
  • In some cases the client user is the employer.
  • In dubious circumstances the agency will regard the temp as self-employed. This means that, in practice, the temp is often outside a number of important employment laws applying to permanent staff, such as unfair dismissal claims and redundancy payments.
In recent years the recruitment industry has been cleaned up but continues to be unregulated outside of the food processing, horticultural and agricultural areas covered by the GLA.
The days of “swag bag” foreign suppliers and rogue recruiters are much reduced but there are still instances of users being able to get away with paying agency workers less than they should expect for the job that they are doing.
By putting temporary agency workers on equal terms with permanent workers, with regard to pay and some conditions, the Aency Workers Regulations presents an enormous challenge for the recruitment industry and companies who recruit agency staff but judging the absolute impact cannot occur until the detailed guidance notes are available.
The UK will be affected by this European regulation more so than any other country in the EU. Not only do we have more temporary agency workers than any other EU state, but we have more temporary recruitment agencies as well.
The irony is that with the Coalition looking to reduce public sector involvement in regulation the Agency Workers sector is about to be dumped on from Europe applying rules to stamp out one of the key aspects for which the UK is admired – a flexible workforce.
“Employers are well advised to start their preparation and to seek independent advice where necessary” said Chris Slay of Skills Provision “the issue is not going to go away.”

The British economy faces a triple whammy of higher inflation, lower growth and rising unemployment, according to one of the Bank of England’s most senior policy makers. Living standards over the next few years will rise only “minimally” or put another way could fall in real terms.

Also ‘quantitative easing’ – the Bank of England’s way of force-feeding money into the economy – is again at the centre of the Monetary Policy Committee minutes. We hope this is for academic completeness rather than a serious suggestion to start the printing presses again.

Andrew Sentance may continue to win headlines for his obduracy on interest rates, thinking they should rise to head off inflation, but the debate is moving on.

The combination of a soft American economy, Europe’s fiscal squeeze and Britain’s lending drought suggests that the UK economy faces rough times ahead, with a real drop in spending power.

There is worse to come with the fiscal squeeze starting to bite, real incomes under pressure and house prices, the primeval force in the UK economy, starting to flag badly.

So we could see:

Increasing interest rates to try to curb inflation
A House price drop of 15-20% in the next 12 months
Sharply increasing unemployment
Reduced expenditure, therefore lower demand leading to a double dip recession.

Tomorrow the results of the stress tests on 91 European banks will be released. If they all pass the wrong questions have been asked. If a number fail then tighten your belt, hang on to your hat we are on an economic rollercoaster and equities could fall sharply.


Author: Chris Slay

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