The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
The Agency Workers Regulations 2010, implementing the European Agency Workers Directive, were made by the previous Administration in January 2010 and are due to come into force in October 2011. The Government are aware of the different points of view that have been expressed by various stakeholders about certain aspects of these regulations and have been considering the way forward.
The directive sets out the principle of equal treatment—that
“the basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job”.
The default position in the directive is that this principle should apply from day one of an agency worker’s assignment. However, the directive also allows member states some flexibility as to how this principle is applied, including the possibility of a qualifying period before the right to equal treatment arises, as long as this is based on an agreement reached by “national level” social partners. Such an agreement was reached by the CBI and TUC, with the support of the previous Administration, in May 2008 and provides the legal basis for the legislation subsequently put in place, including its provision for a qualifying period of 12 weeks.
Since the formation of the coalition, the Secretary of State for Business, Innovation and Skills and I have discussed the way forward on this issue with a wide range of stakeholders. Employers and their representatives have expressed a range of concerns regarding the regulations, arguing for amendments before their entry into force that might reduce the burden they place on business. The Secretary of State and I have both had considerable sympathy for some of the arguments we have heard, particularly proposals to simplify the definition of “pay” under the regulations (especially as far as the administration of performance-related bonuses are concerned) and the administrative requirements around the application of the qualifying period to patterns of infrequent, short-term assignments.
However, the Government’s ability to make changes to address such matters is constrained by the fact that the regulations are based to a significant degree on the agreement brokered by the previous Administration between the CBI and TUC. Due to this unique legal situation, any amendments proposed to the regulations touching upon the subject matter of the CBI and TUC agreement, which did not have the agreement of those parties, would face the risk of being set aside in the courts in the event of a legal challenge.
Were that to happen, the effect could be to call into question the very foundation for the fundamentals of the implementing legislation, crucially including the 12-week qualifying period itself.
The Secretary of State and I have therefore discussed this matter on a number of occasions with both the CBI and the TUC, seeking agreement on changes that we consider would have improved the implementation regime, to the potential benefit of both employers and agency workers. Unfortunately it has not been possible to find a way forward that would be acceptable to both parties.
This outcome is clearly disappointing. However, the Government have taken the view that the absolute priority must be not to take any steps that could put at risk the 12-week qualifying period, which significantly mitigates the burdens the legislation will place on employers. The Government will not therefore be proceeding with any amendment of the regulations themselves. We will instead now use the time that is still available before the regulations’ entry into force to develop the best possible guidance to help employers comply with their new obligations.