Business group, the CBI reported these findings in its analysis of the impact of the Agency Workers Regulations (AWRs) a year after they came into force, and its priorities for the upcoming Government review of the regulations.
Neil Carberry, CBI Director of Employment and Skills, said: “Agency jobs are a crucial way into employment both for people looking for flexible work, and for those seeking experience and a way into the workforce.
“But one year on from the introduction of the regulations, the business verdict is that they are a drag on job creation in this vital sector.
“The regulations are thought to have cost businesses more than £1.5bn in their first year, but temps have not reaped the rewards – instead, the vast majority of this cost has paid for paper-pushing to ensure compliance. This has in turn led to a reduction in temps hired in eight out of nine months in 2012, despite a rise in permanent staff being hired.
“We cannot afford to be complacent, given that we would expect increased demand for agency temps in uncertain economic times, not a drop. The Government must not shy away from a review of all aspects of the regulations that are left to the UK to decide. Given the very significant costs of complying with the EU directive, we should be bold in stripping out needless administration that threatens hiring and does nothing to benefit temporary workers.”
The CBI has identified several key areas where it believes the Government should focus its efforts to simplify the regulation, including:
- Streamlining the highly complex definition of pay to allow for easier comparison
- Simplifying the 12-week qualification period so that those on short-term assignments aren’t needlessly caught up in the regulations
- Removing gold-plating where the regulations specifically go beyond that required by the directive and UK implementation agreement
- Stripping out the perverse incentive in the regulations to lodge opportunistic tribunal claims
The report also pulled together some key statistics about the agency sector in the UK:
- 57 per cent of firms that use temps have reduced their use as a result of the regulations, three per cent have increased their use, while eight per cent have stopped using temps all together
- 38% of agencies reported a decline in assignments as a result of the regulations with 18 per cent reporting an increase
- 62 per cent of agencies reported a negative experience of the regulations
- research prior to the implementation of the regulations showed that agency workers received, on average, 96 per cent of the pay of comparable employees.
The EU-inspired regulations which were the subject of much contention from the CBI for a number of years gives similar employment rights to agency or temporary staff after a 12-week qualifying period as are given to permanent employees.
Another recent survey has showed a low awareness and low impact of the regulations among contractors. This could be due, in the main, to freelancers who are genuinely 'in business on their own account' being exempt from the regulations. (See: Low awareness of agency rights one year on - Sept 2012, Shout99).
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Susie Hughes © Shout99 2012