Briefings & Newsletters
The Spec - Recruitment Industry update
Date: 18th December 2007
Categories: Recruitment Industry team
The recruitment industry is currently receiving a great deal of attention at an Employment Tribunal, governmental and European level; both at the way it is regulated and the protection afforded to the workers it places. To mark the formation of the Kingsley Napley cross-practice specialist Recruitment Industry Team, we have produced an update on recent and forthcoming developments.
EU Agency Workers Directive
The proposed EU Agency Workers Directive planning to give temporary workers full employment rights after just six weeks of employment (in relation to remuneration, paid holiday, working hours, overtime, maternity and anti-discrimination provisions and, arguably, pension contributions) has attracted strong opposition from employers' pressure groups. Such groups consider that temporary staff should have to work for a full year before having the same rights as permanent staff. The CBI claim the proposals could lead to the loss of quarter of a million jobs in the UK. However, the TUC argue that, unless temporary workers are given rights from the first day of employment an "underclass" will be created and it will become less likely for temporary workers to secure a permanent contract.
The British Government opposes the new directive but risks losing the right to the 48-hour opt-out from the Working Time Directive if they do not agree to the six-week qualifying period. Other countries have attempted to bargain with the UK to agree to the proposed Directive in return for securing the current exemption on working hours. Talks are ongoing.
New Employment Tribunal Practice Direction
The President of the Employment Tribunals has issued a Directive "staying" all cases involving agency workers pending the outcome of the case of James v London Borough of Greenwich ("LBC").
This case involved an asylum support worker, Ms James, "engaged" by LBC through an employment agency. There was no express contract between Ms James and LBC. Ms James's contract with the agency provided that it was a contract for services and did not create a contract of employment with either the agency or LBC. Ms James worked for LBC from September 2001 to September 2004, changing agents in 2003. Following a bout of sickness in September 2004 (during which the agency provided another worker) Ms James was informed by LBC that she was no longer required. The Employment Tribunal found that Ms James was not an employee of LBC as there was no mutuality of obligation between the parties. Ms James was not required to provide services to LBC and LBC was not required to provide Ms James with work, sick pay or holiday pay. Ms James appealed.
The Employment Appeals Tribunal considered whether a contract could be implied between an agency worker and the end-user. They held that, on the facts of the case it was not possible to imply such a contract and that the mere passage of time was not sufficient to require this implication.
Ms James has appealed to the Court of Appeal and a hearing took place on 30 October 2007. Judgement was reserved but a decision is expected early in the New Year. A Court of Appeal decision in this area is long over due and should help settle an area of constant change.
Protecting Vulnerable Agency Workers - Government Consultation
In March 2006 the Government launched a strategy known as "Success at Work" which aimed to protect vulnerable workers and support good employers. As a result of the bad practices highlighted in Success at Work, "vulnerable" agency workers are to be protected but without placing burdens on the majority of reputable agencies. At the same time, the consultation sought to reduce the burdens on reputable agencies without removing protection for workers. Responses to the consultation document were received from individual agency workers, recruitment agencies, legal experts and organisations representing agencies and workers. The Government published their response to the consultation in November 2007 and as a result of their findings have made consequent amendments to the Conduct of Employment Agencies and Employment Business (Amendment) Regulations 2007. The House of Commons approved them on 11 December 2007. In summary the following proposals will be pursued:
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Creating a right for agency workers to withdraw from services provided by an agency upon giving reasonable notice. The agency is to provide written confirmation of the right in writing.
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Simplification of the information agencies are required to give workers for short-term assignments (being assignments under 5 days in duration).
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Clearer guidance to be given to agencies that supply drivers, on their obligations.
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Small amendments to the legislation in general to improve clarity.
Temporary and Agency Workers (Equal Treatment) Bill 2007-08
As a response to the previous collapse of the EU Directive, the Temporary and Agency Workers (Equal Treatment) Bill 2007-08 has been laid before Parliament. If passed, it would require the principle of equal treatment to be applied to temporary and agency workers and make provisions about the enforcement of rights of temporary and agency workers. The Bill will be read for a second time on 22 February 2008.
This is a private member's bill brought by Andrew Miller MP. A similar private member's bill was introduced in the last Parliament, without success.
Employment Bill
On Friday 7 December 2007 the Government published their long awaited Employment Bill proposing various changes to employment law to protect workers and benefit employers.
The Government propose to make several changes to legislation in respect of employment agencies and agency workers. It is proposed that:
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There will be tougher penalties for employers breaching the law on employing agency workers. The most serious cases will be transferred to the Crown Court for prosecution where the court may impose an unlimited fine.
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The investigative powers of the Employment Agency Standards Inspectorate will be enhanced to increase enforcement.
At present there is no published date of commencement but we will update you as and when the position changes.
Illegal Working
The government are introducing new sanctions against employers who employ foreign nationals who do not have the right to work in the UK. The new measures are contained in the Immigration, Asylum and Nationality Act 2006 and will come into force on 29 February 2008. They will affect the "employer" in a tri-partite arrangement with an employment business.
The measures include:
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a system of civil penalties for employers who employ illegal migrant workers - it is proposed that the maximum civil penalty per illegal worker will be £10,000;
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a new criminal offence for employers who knowingly employ illegal migrant workers - this offence will carry a maximum two year prison sentence and/or an unlimited fine; and
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a continuing responsibility for employers of foreign nationals with a time-limited immigration status to check their ongoing entitlement to work in the United Kingdom. Previously, employers have only had to check an individual's immigration status prior to their initial employment.