Food industry ‘will see dip in agency workers’

By Graham Holter

- Last updated on GMT

Related tags Agency workers Minimum wage Food

The number of agency workers hired by the food industry could dip
The number of agency workers hired by the food industry could dip
The number of agency workers hired by the food industry is expected to dip with the arrival of new labour regulations that come into force this week.

But the Association of Labour Providers (ALP) predicts that agency staff will quickly revert to normal levels in the food production and processing sector, which it estimates at about 30% over the course of a year.

The ALP view contrasts with the warnings from the Open Europe think tank, which has said the cost of complying with the Agency Workers’ Directive (AWD) will force nearly 30,000 workers out of the labour market.

The new regulations give agency workers the same pay rates and benefits as directly-employed staff after 12 weeks.

ALP director David Camp said: “I think we will see a short-term dip, and then we will see a return to levels that have established themselves in recent years. It’s something new and it will take a bit of time to get used to.

“The use of agency labour – flexible labour – is an intrinsic part of the food industry now.”

Lower pay

Unions have criticised companies such as Park Cakes for overhauling its pay structures to help offset the costs of complying with the AWD.

Camp said: “Some organisations have introduced entry-level grades as a way of balancing their whole labour budget,” ​adding that companies were generally “well prepared” for the changes.

He said agencies had a desire to comply with the regulations and that supermarkets were keen to remind suppliers of their obligations to agency workers.

“There will be organisations that will seek to avoid this law as they seek to avoid other laws, such as the requirement to pay holiday pay or the national minimum wage,” ​said Camp.

But he said retailers were being particularly vigilant about companies which might simply switch to new agency workers after 12 weeks to get around the regulations, or agencies which falsely claim staff are self-employed.

“A number of supermarkets have given guidance to their supply chain to make it clear that if organisations implement certain activities they would regard that as a failure of ethical trading standards,”​ he said.

Improved image

Camp said the regulations would “drive a closer relationship​” between companies in the food supply chain and “legitimise agency working as an intrinsic part of the UK labour model​”.

The government recently issued guidance to help companies navigate their way through the new regulations.

Angela Coleshill, competitiveness director at the Food and Drink Federation, said: “The guidance makes the legislation easier to understand and, in places, has come up with helpful solutions to some of the problems, such as allowing agency workers to be paid in lieu for additional contractual holiday pay.

“However, the guidance has not addressed all the grey areas and questions remain unanswered, such as whether attendance bonuses are in or out of scope or whether hirers have to tell agency workers about a job if they intend to fill it with an existing employee to develop their career.

Despite the guidance, this difficult legislation will “pose complex challenges for business at a critical time in the UK's economic recovery”, ​she added.

Policing the new regulations will be the responsibility of the Department for Business, Innovation & Skills rather than the Gangmasters Licensing Authority.

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