Time for facts in agency worker debate

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date: 20 February 2008

embargo: 13:00 hrs Wednesday 20 February 2008

To coincide with an employer briefing against better rights for agency workers, the TUC has produced a briefing for MPs on agency working. TUC General Secretary Brendan Barber said: 'Employers cannot claim that agency workers are all fairly paid and then say that it will be prohibitively expensive to pay them fairly. But even their more plausible arguments such as better rights will stop agency work providing a bridge into permanent jobs for the unemployed do not stack up.'

The text of the briefing follows:

How many agency workers are there?

The correct answer is that no one knows for sure. The Government's Labour Force Survey (LFS) says there are around 260,000, but agency trade body the Recruitment and Employment Confederation (REC) claims to place 1.25 million workers on any one day.

The LFS figures are certainly an underestimate as this is a telephone household survey. It makes no effort to trace workers living at their place of work - not uncommon in agency placed workers in agriculture, hospitality and care sectors - and seriously underestimates non-English speakers, long hours workers, multiple occupation households, which are all characteristic of migrant and other groups high in agency working.

The big difference means that either the REC figures are right and there are up to one million invisible agency workers, who do not show up in official statistics, or the REC figures are an overestimate. The LFS sample is usually used for the statistical profiling of agency workers but is likely to be skewed towards well paid, relatively stable workers. Put simply it is more likely that a supply teacher will be included in the LFS than a Lithuanian fruit picker.

What issues are at stake?

Unions are supporting two routes for better agency worker rights, and in particular giving agency workers the rights to equal treatment with permanent staff doing the same job.

The draft EU Temporary Agency Worker Directive (TAWD) has failed to make progress since 2002 due to a failure to reach agreement in the Council of Ministers. The UK has led a blocking minority, but there are signs that support for the UK is diminishing and that once the Lisbon Treaty has been ratified, ministers will no longer be able to block progress.

A second private members' bill on agency workers (moved by Andrew Miller MP) is to be debated in the House of Commons tomorrow (Friday 22 February). An earlier Bill introduced by Paul Farrelly MP was talked out with Government support.

  • The Directive is part of a family of three measures to improve protection for what the EU calls atypical workers. Yet the directives to protect part-time workers and temporary workers were passed in 1997 and 1999. Only agency workers remain unprotected.

There is a separate issue about whether there is effective enforcement of existing rights for agency workers, given the many media exposures of exploitation of migrant and other vulnerable workers placed through agencies. The Gangmaster's Licensing Scheme - opposed by the Government until the Morecambe cockle pickers' tragedy - only covers some sectors. Unions support better enforcement and licensing, but action on enforcement is not sufficient. Both agency and existing permanent staff deserve protection, by stopping the replacement of secure jobs with insecure agency staff on worse terms and conditions.

Are unions opposed to agency working in principle?

No. As TUC General Secretary Brendan Barber has said: 'There is nothing wrong with agency working. Matching employers with short-term needs with employees with short-term availability or who genuinely prefer working this way, as some do, is not just a perfectly respectable business, but good for the wider economy.'

What are the arguments against change?

'There is no need for change because agency workers are content'

Trade body REC claim that their survey finds that '77 per cent of temporary agency workers were satisfied with their work in 2006 and only 10 per cent were dissatisfied to any degree.' This survey is based on 100 postal questionnaires a month sent to agency workers whose names are supplied by volunteer REC members. This is not an accurate cross-section of agency workers as postal questionaires have a poor response rate and REC members are likely to operate at the quality end of the market.

A TUC/YouGov survey found higher degrees of complaint particularly among low paid agency workers. The survey commissioned last year by the TUC from YouGov interviewed almost 2,500 people who are either agency workers or who have done agency work in the past year.

Even though the sample significantly under-represents workers on the minimum wage - such as migrant workers - as they are difficult to poll, two in three (64 per cent) agree that the law should make it illegal for an employer to pay agency workers less than permanent staff for doing the same job.

More than half (56 per cent) don't have the same holiday rights as permanent staff, even though one in four agency workers have had assignments in excess of six months. Nearly two thirds (61 per cent) say that they don't have the same sick pay rights as permanent staff.

The problems are even more acute for those on the minimum wage. Fewer than two in five (37 per cent) of minimum wage earners say that their agency has always treated them fairly. The same proportion (35 per cent) say they have changed agency and more than three in five (61 per cent) complain that working for an agency makes it harder to complain when things go wrong. And three in five (60 per cent) say that they have had jobs where the employer was trying to get work done on the cheap.

In any case protection against exploitation and poor treatment should not be triggered only when it affects some arbitrary proportion of the workforce. Indeed if REC is saying that only a small minority would be protected by better rights then they can hardly say it will have a major impact.

'Agency working provides a gateway back to employment'

It may well be easier for some people who are unemployed to find temporary work than permanent work. It does not follow that improving their rights as agency workers would stop this. Nor is it obvious that it is easy for such workers to move from agency to permanent work, particularly if employers can pay them less by keeping them as agency staff. Agencies charge 'temp to perm' fees that mean employers have to pay a premium if they want to make an agency worker permanent. This is a barrier preventing agency workers moving into permanent jobs.

While the LFS gives an incomplete picture of agency workers, in its sample only 16 per cent of agency workers were not workers or full-time students a year earlier. This does suggest only a relatively small proportion of the agency workforce have moved from unemployment or sickness into agency work.

While many agency workers will move into permanent work, it does not mean that the agency work helped that move. For example many agency workers are students, and will move into better jobs when they gain qualifications.

In 2002 the OECD concluded that far from empowering workers, spending too long in temporary agency assignments could actually impede upward labour mobility and trap workers into low paid and insecure work. Evidence from the TUC/YouGov survey also presents a very mixed picture, with many respondents observing that their agency was failing to place them in suitable assignments that matched their skills and qualifications and that enabled them to gain valuable experience. Some respondents felt that their agency was failing to search for suitable permanent jobs for them as it was more lucrative to take the 'mark up' on their temporary assignment postings.

And there is some evidence that there is a pool of insecure workers who move between unemployment and temporary work. In a recent study carried out on behalf of the DWP 41 per cent of those with three or more JSA claims said that a main reason for the repeat claims was that they could only get temporary work, and 33 per cent of respondents said the reason they last left employment was because a temporary job had ended. Only 53 per cent said that their most recent job was permanent.

'Better rights for agency workers will cause unemployment'

This needs unpicking. If there is no longer an incentive for employers to substitute permanent staff with agency workers, there may be a decline in agency working but without any net effect on overall employment.

Employer organisations regularly predict that any advance in employee rights will cause unemployment. Similar arguments were made with regard to the introduction of the national minimum wage, and now no one - not even the business community - is claiming that the minimum wage has cost jobs. Since the minimum wage was introduced more than 2,250,000 extra jobs have been created. The same false claims were made when part-time workers were given protection; again, these extra rights did not cost jobs in the UK.

'Small businesses cannot afford to give temps equal rights'

This is a double-edged argument. Employer organisations cannot both claim that agency workers are not underpaid, and then say it is prohibitively expensive to pay them fairly.

In any case agency workers represent between 1-2.6 per cent of the total workforce in the UK, it is hard to see how regulations affecting such a small proportion of workers would have such disastrous economic effects on the labour market. Indeed, other countries that have introduced equal treatment provisions have similar levels of agency working to the UK (Belgium, France and the Netherlands all have between 2.2-2.5 per cent) and there has been little or no impact there on the level of growth of temporary agency work.

'Agency work is all about flexibility and filling short-term gaps'

Many agency workers do only have short-term placements, but large numbers have long-term placements. In the LFS sample of agency workers half have been more than six months in a placement - a third have been in a continuous placement for more than a year. Only one in four agency workers have beein their placement less than three months.

'There has been no growth in agency work so it can't be a problem'

This is untrue. The number of temporary workers has remained roughly constant, but agency work now makes up a greater proportion of the temporary workforce, perhaps not surprising given that EU protection covers non-agency temporary staff.


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