Union calls for equal rights for temporary agency workers

In February 2007, the Trades Union Congress published a report on the employment conditions of temporary agency workers. The report sets out the legal position of agency workers, and makes suggestions for future legislation aimed at improving their labour market position. The proposals include the demand of equal employment rights for all workers and employees, and of licensing all employment agencies, as well as abolishing unreasonable fees.

Report coverage and definitions

The Trades Union Congress (TUC) report Agency Workers – Counting the cost of flexibility (288Kb PDF) takes data from the nationally representative Labour Force Survey (LFS, Summer 2006) of 60,000 private household addresses in the UK. It supplements them with case study data from the hospitality and social care sectors. These datasets, together with a review of the employment legislation, are used to highlight the problems faced by temporary agency workers due to their vulnerable position in the labour market. Moreover, these datasets are also used to make a case for legislative intervention to bring parity of employment status between employees.

Temporary agency workers are entitled to the basic employment rights which apply to all workers. They are entitled to the national minimum wage and the rights provided under the Working Time Regulations. The report notes, however, that there is an important distinction between ‘employee’ and ‘worker’ in UK law. Most agency workers fall into the latter category and as such are not legally entitled to all the rights afforded to employees.

Key findings

Using the LFS data, the report finds that:

• temporary work accounts for 6% of total UK employment while temporary agency work accounts for 1%;
• agency workers tend to be drawn from groups that are particularly vulnerable to exploitation, notably young people, ethnic minorities and those with lower levels of qualifications;
• nearly half of temporary agency workers would prefer a permanent job;
• as of mid 2006, a quarter of temporary agency workers had been in their respective employment positions for over one year;
• the average wage differential between permanent and all temporary workers is 20%. Between permanent workers and temporary agency workers, the disparity is expected to be greater (small cell sizes preclude a robust comparison).

Source: LFS, Summer 2006 (as cited in TUC, 2006, p.41)

Case study evidence revealed the following examples of temporary agency workers being exploited by their agencies:

• agencies taking deductions for non-refusable benefits, such as meals;
• agencies taking deductions for uniforms, equipment and transport, and counting these against the national minimum wage, in direct contravention of the legislation;
• migrant agency workers being forced to live in overcrowded, employer-provided accommodation, and then being charged a premium to do so.

TUC response to government consultation

The report is part of a wave of activity relating to temporary agency workers. The UK government, through its Success at work (547Kb PDF) policy statement published in March 2006, has committed itself to consult on some issues pertaining to agency workers. In addition to this, Labour Member of Parliament (MP) Paul Farrelly has also introduced a Private Members’ bill on the prevention of less favourable treatment of temporary and agency workers, which also seeks to address some of the issues highlighted in the TUC report. TUC contends that the government’s consultation exercise is unlikely to produce major benefits for temporary agency workers as the remit appears to rule out legislation.

Furthermore, TUC argues that the limited range of consultation areas militates against any major positive outcomes for agency workers. In particular, TUC is concerned that the government has not addressed what it considers to be the key issue – that is, flexibility – when legislating with regard to temporary agency workers: flexibility is achieved for the employer through the nature of the employment contract, rather than through ineffective employment rights for agency workers. TUC also claims that the government focus is on making temporary agency workers aware of their rights, yet unequal treatment of agency workers is still admissible under existing legislation. It thus proposes legislative change to ensure the following:

• equal treatment of all workers and employees;
• elimination of unreasonable transfer fees;
• elimination of up-front fees;
• licensing of all employment agencies;
• strengthening of the current provisions governing the supply of workers to organisations where official industrial action is taking place.

Duncan Adam, University of Warwick