New directive to have huge impact on temporary staff

Food manufacturers that rely heavily on agency workers could face a hefty bill and an administrative headache when the Agency Workers Directive comes into force next year, according to experts in employment law.

The Directive was laid before Parliament last month and will come into force next year. Under the new law, agency staff working for more than 12 consecutive weeks at a company can claim the same pay, overtime, breaks and holidays as directly employed staff doing an equivalent job.

They must also have equal access to intranets, internal job postings, canteens, transport and other benefits enjoyed by permanent staff, creating a lot of red tape, said Eversheds partner Owen Warnock.

Given the high use of agency workers in food manufacturing, this could have major ramifications predicted Warnock, speaking at Food Manufacture's business leaders' round table debate at Eversheds' London HQ last month.

"This is of real concern," he said. "You can't get around it by hiring an agency worker for 11 weeks, dropping him and then immediately re-hiring him; a minimum period of six weeks must elapse."

Although some agency workers were paid more than their permanent directly employed equivalents, he claimed, many were paid less: "It will probably still be cheaper to use agency staff than direct employees, but the problem is that it will cost more than it does now."

Food and Drink Federation HR director Angela Coleshill said there was "a real risk that employers will take flight from the agency model, which could result in lower employment levels"

She added: "In some cases it means changing the fundamental way that business is done and will have a wholesale impact on our industry. Many manufacturers are looking at the organisational models they employ to assess whether changes are needed in light of this."

She added: "The definition of pay is a major cause for concern. We think 'pay' should be limited to basic pay; our members have strong concerns about including bonuses in the definition. Many employers have bonus arrangements made up of various elements which would be extremely complicated to administer for agency workers."

Wragge & Co associate Sarah Gill said many firms were more concerned about the extra paperwork than pay rates per se. "Historically employers have not been good at monitoring use of agency workers, hence the case law we have seen on whether they have employment rights." Employers could have to pay up to £5,000 to an agency worker if an Employment Tribunal finds they have breached legislation.

Food Manufacture's round table debate was sponsored by Eversheds, Jardine Lloyd Thompson and TBM Consulting.