Guaranteed hours for agency workers

This is the Extraman response to the government consultation, which proposes that agency workers are given guaranteed hours, once they have worked for the agency for 12 weeks.

I write concerning the application of guaranteed hours after 12 weeks to agency workers.

I appreciate that the government is concerned that, if agency workers are not included in the legislation, then the use of recruitment agencies will escalate and be seen as a way of circumventing the regulations. However, the unintended consequences of what is currently proposed would be devastating.

I have worked in the recruitment industry for nearly 40 years. It is an industry with an unlimited capacity for circumventing regulations and the current proposals would be vulnerable in the extreme to manipulation.

As a precedent, I will reference the Swedish derogation. This was brought in as an opt out to the equal pay element of the Agency Workers Regulations. The idea was that workers could opt out of equal pay with a permanent comparator after 12 weeks but instead be paid when between assignments (at a specified rate). The larger agencies in particular developed sophisticated systems to ensure that workers were never “between assignments”. I attended a meeting with Chukka Umunna at the House of Commons, where instances of the methods used to circumnavigate the regulations were provided by workers from a large factory in Liverpool. They would be texted by their agency at any hour of day or night, including weekends, with the offer of work, often being required to attend within an hour. (Even when they responded immediately, the workers said they were told the work had already been taken). When they failed to respond, they were deemed to have broken their contracts, which included clauses stating that workers must be available at all times and in all locations in the UK. As a result, they made themselves ineligible for payment between assignments.

Other workers gave examples of how they were offered work for just a few hours at locations where the fares would have exceeded the wages. Again, turning down such offers was seen to be a breach of contract.

The Swedish derogation was eventually outlawed, but not before the practices outlined above were baked into almost every agency in the unskilled sector. Hundreds of thousands of workers suffered permanent detriment and the equal pay element of the regulations ceased to apply to these workers. Furthermore, agencies that wished to abide by the spirit of the regulations were unable to compete commercially, as my own agency found many times.

Another example of the recruitment industry’s capacity to profit from unsound regulation is the proliferation of mini umbrella companies when the employers’ NI allowance was introduced. My own work brought two stories of abuse to public attention via the BBB and The Guardian. Many millions of pounds were, and continue to be, siphoned from HMRC’s coffers.

If either end users or the agencies themselves are responsible for guaranteed hours after 12 weeks, I can see the following options being considered by recruitment agencies.

Using contracts, as per the Swedish derogation practices, which place unreasonable obligations on workers, which cannot be fulfilled, thus negating the guaranteed hours.Systematically offering work that the worker is not interested in, or in remote locations. (Large, nationwide agencies would prosper in particular)Establishing myriad companies, as per mini umbrella examples, so that workers never reach 12 weeks for any of them.

Another option would be simply to ensure that no-one works for 12 weeks.

The examples I give refer back to previous practices from the recruitment industry. There will undoubtedly be other approaches that I have not thought of. What is absolutely certain is that placing an obligation on agencies to provide guaranteed hours will render business models uneconomic and, therefore, agencies that devise avoidance strategies will prosper, as they have done so richly in the past, while those seeking to be compliant will face impossible commercial obstacles.

Adopting the current proposals with regard to recruitment agency workers will achieve the exact opposite of what the legislation intends to achieve. End users will turn increasingly to recruitment agencies as a way to free themselves of the obligation of providing guaranteed hours after 12 weeks; those agencies that most effectively dodge the legislation will be the beneficiaries.