Agency Workers Directive: have the arguments just begun?

The UK government has three years to implement the Agency Workers Directive, which gives equal treatment to agency workers. With the planned qualifying period of 12 weeks dependent on an agreement between the national social partners, consultant editor Darren Newman asks if the employer and union sides are really clear about the benefits to be excluded from the concept of equality.

On 22 October 2008, the European parliament passed the Agency Workers Directive. No amendments were made to the common position (PDF format, 169K) (on the Europa website) adopted by the council earlier in the year, so the Directive will come into force when it has been translated into all the official EU languages and entered in the Official Journal.

The Directive aims to ensure that agency workers enjoy the same basic working and employment conditions as they would if they had been directly employed by the end user. It assumes that equality of treatment is a right that agency workers enjoy from day one of each engagement. However, in a provision clearly aimed at the UK, art. 5(4) provides that member states in which collective agreements cannot be extended by law to whole sectors or geographical areas can derogate from the principle of equal treatment, "after consulting the social partners at national level and on the basis of an agreement concluded by them". Article 5(4) specifically states that such arrangements may include a qualifying period for equal treatment.

It is this provision that has been key in securing the adoption of the Directive, because it allows the UK government to give effect to a joint declaration between the TUC and the CBI (PDF format, 23K) (on the BERR website) that the qualifying period "in any given job" will be 12 weeks.

The joint declaration is short and leaves most of the details of implementation to later consultations. In particular, there will need to be consultation about how the 12 weeks will be counted. For example, suppose the employer moves the agency worker from job to job. How much of a break between assignments will there need to be for the clock to be reset? However, perhaps the most controversial area still to be settled is the scope of the equality to which agency workers will be entitled. On this issue, the TUC/CBI agreement seems to be something of a fudge. The agreement stipulates that equal treatment means "basic working and employment conditions", but goes on to say that this does not include "occupational social security schemes".

What does that mean? Article 5(4) requires member states to specify whether or not occupational social security schemes, "including pension, sick pay or financial participation schemes", are included within the definition of basic working and employment conditions. The use of the phrase in the agreement therefore seems to indicate that the TUC and the CBI have agreed that these benefits should not be available to agency workers.

However, my hunch is that using this obscure phrase is simply a way of avoiding a key issue. Most people would probably expect that agency workers should not be entitled to join the end-user employer's pension scheme. A more contentious question, however, is whether or not agency workers should be entitled to contractual sick pay. The employers' lobby will no doubt say that the position is entirely clear: sick pay is an occupational social security scheme and should be excluded from the forthcoming Regulations. I would be surprised if that view were shared by the union side. I would expect it to argue that benefits such as permanent health insurance are excluded, but that contractual sick pay - surely an important and basic term of employment - is not.

I'm not privy to the details of the negotiations that have taken place, but the TUC would be in a strong position to push this issue. The 12-week qualifying period can be introduced only on the basis of agreement between the TUC and the CBI. If either side were to withdraw from the agreement, the default position would be equality for agency workers from day one in a job. It is therefore in the interests of the employers' side to ensure that the TUC remains committed to the agreement.

Member states have three years to implement the Directive (rather than the usual two), so, in theory, implementation could be postponed until after the next election. However, the TUC/CBI agreement envisages implementation in the "next parliamentary session". I suspect that, when the first draft of the Regulations is published, we will see that the arguments have only just begun.

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