UK is a haven for 'cowboy' temp agencies

Attention: Industrial, business and employment correspondents

The unregulated and fragmented market of temporary employment agencies in the UK is a haven for ‘cowboy’ agencies that undercut the quality operators by paying the lowest possible rates.

The EU Temporary Agency Workers Directive, which could be agreed by the EU Council of Ministers on June 2, would introduce equal pay and basic employment rights for all agency workers. But the UK government and employers’ groups are pressing for these rights to apply only after an agency worker has been with an employer for a qualifying period. The TUC maintains that equal pay and basic rights should apply from the first day of employment. 'Agency work in Britain today’, a TUC report out next week, will argue that any qualifying period would leave the market open to sub-standard agencies and prevent quality agencies gaining a bigger share of the market.

The report will show, amongst other things, that the fragmentation of operators in the UK agency work market prevents shared best practice raising standards. In the UK, the top five temporary workers agencies have the lowest market share in Europe (15%). In Sweden, France, Belgium and the Netherlands the top five’s share of the temporary agency work market is from around 70 per cent to 85 per cent. Anyone can open an agency in the UK therefore a large number of small outfits open and close every year, and over three quarters of UK agencies operate from a single office (1).

Brendan Barber, TUC General Secretary Elect, said:

'The lack of employment protections for agency workers in the UK is allowing ‘cowboy’ agencies to exploit vulnerable workers and undercut agencies that offer decent pay and protections.

'The UK economy and workforce needs a smaller number of agencies with these agencies sharing quality practices underpinned by legal minimums.'

Findings on the UK’s unregulated and fragmented temporary agency work market:

Market concentration in the European agency labour market (2)

• Survey estimates suggest that up to a third of UK agencies had been in business for less than a year, suggesting high rates of both entry and exit. (3)

• There is no licensing requirement in the UK and no requirement to join a professional body that might enforce a code of best practice. The Government estimates that about half the agencies eligible to join the main industry-wide body, the Recruitment Employers Confederation, do so.

Notes to Editors:

The full TUC report ‘Agency work in Britain today’ (and accompanying news release) will be out the week of 19 May.

On Friday 30 May the TUC is organising ‘Working on the edge’, a conference on the issues facing atypical workers. Speakers include: Alan Johnson MP, Minster for Employment and Industry; Frances O’Grady, TUC Deputy General Secretary; Margaret Prosser, Low Pay Commission; Stephen Cavalier, Thompsons Solicitors. Congress House, 9:30am - 4:15pm, contact the TUC press office for media credentials.

Sources:

(1) ‘Temporary work in the UK’, European foundation for Living and Working Conditions 2002; quoting a survey carried out by Bostock Marketing Group for the HSE (Survey of the Recruitment Agencies Industry, by Wiseman and Gilbert, HSE Contract Research Report 284/200).

(2) ‘Temporary Agency Work in the European Union’, European Foundation for Living and Working Conditions 2002, p.37, based on estimates by the International Confederation of private Employment Agencies (CIETT); Fortis Bank; ABN-AMRO, One Source and Deloitte and Touche Analysis. Estimates not available for Greece, Ireland, and Austria.

(3) ‘Revision of the Regulations Covering the Private Recruitment Industry’, Cabinet Office Regulatory Impact Assessment, para 24, p9.

Contacts:

Media enquiries: Ben Hurley 020 7467 1248 or 07626 317903 (pager) or email bhurley@tuc.org.uk