Speaking to FoodManufacture.co.uk as the CBI proposed a package of measures designed to help businesses emerge in one piece from the recession, CBI head of employment and pensions Neil Carberry said that the definition of pay and several administrative aspects of the legislation still had to be "nailed down".
While the basic approach to the regulations had already been agreed, the “government should look to simplify the agency rules to ensure existing work opportunities are maintained and new openings can be created”, he added.
He added: “The potential for high and rising levels of unemployment has been stemmed by the flexibilities firms and their employees have adopted to protect jobs, but harmful changes in areas such as the rules on agency work are putting our positive track record on job generation at risk.”
Under the Directive, which was laid before Parliament in the spring and will come into force in October 2011, agency staff that have been working for more than 12 consecutive weeks at a company will be entitled to the same pay, overtime and breaks as permanent staff doing the same job. They must also have equal access to intranets, internal job postings, canteens, transport and other benefits.
Quite apart from the increased costs and administrative headaches potentially resulting from this legislation, employers will lose flexibility, he claimed.
“Agency work has proved to be one of the most effective tools businesses can use to adapt to changing economic circumstances. It also provides many people with the opportunity to enter the labour market for the first time or a route back after a sustained period away from work. As the economy enters recovery, it is vital this flexible route into employment is retained.”
The Forum of Private Business (FPB) also fears that the Directive risks undermining job creation in smaller firms. FPB communications boss Phil McCabe told FoodManufacture.co.uk: “Staffing represents a huge cost for small business owners. For many start-ups, in particular, it can be extremely difficult for them to employ a large number of workers full time.
“In the past, the temporary labour market has been seen as the solution but the agency workers directive risks undermining its appeal because agency staff will have exactly the same benefits as full- time workers. It’s a case of legislation designed to help employees possibly undermining job creation in smaller firms.”
However, the GMB trade union said the legislation was long overdue: “All workers, irrespective of their contractual status, should be able to benefit from decent pay, proper health and safety protection, the right to training and opportunities to move into standard contracts, which should be re-enforced as being the norm rather than the exception.”
Legal room for manoeuvre
From a legal point of view, however, the room for manoeuvre when it came to changing the legislation was “fairly limited”, Eversheds partner Owen Warnock told FoodManufacture.co.uk.
“Some things that can be tweaked, however, are the length of the linking period between the 12-weeks of employment. There are also a number of changes which would reduce the administrative burden and make it less likely that companies would break the rules accidentally.
"It's also possible that definition of pay could be narrowed, but that is more controversial.”