One of the most defining moments of Ed Miliband’s leadership campaign was his commitment to take firm action on agency workers. His recognition that the two-tier workforce which had been allowed to develop was bad for both workers and wider society was a significant moment.
Unsurprisingly, his admission that, when in government, “we didn’t get it”, prompted a backlash from the CBI and Institute of Directors which said businesses would be worried by his statement.
Some business groups still do not seem to realise that a properly cared-for workforce is an essential basis for good business. After the banking crisis and the News International scandal, it is astonishing that the requirement on business to act ethically remains a matter for debate.
Last year, the Equality and Human Rights Commission reported physical and verbal abuse of agency workers, particular mistreatment of pregnant women, and a climate of confusion and fear in relation to workplace rights. It also found that firms which treated their workforce well “benefitted as a result, by being able to attract and retain well motivated, loyal and increasingly skilled workers”. The Government recently proposed to abolish the EHRC.
Later this year, a European Union directive designed to protect agency workers will belatedly come into force in this country. From October, they will have the right to the same pay, holiday and other basic working conditions as their colleagues after 12 weeks of work. Already it seems there is an industry of experts working to find a way round the new rules.
Construction union UCATT reports that firms in my constituency are making plans to dismiss and then re-engage workers just before the 12-week deadline, thus avoiding giving them the protection they deserve. Other companies are seeking to cash in on this by making available online tools to track how long agency workers have been engaged and then issue reminders to employers in advance of the 12-week period. This strategy of “rotating” agency workers was predicted years ago, yet Britain still lobbied for the qualifying period to be as long as possible.
The Communication Workers Union has raised concerns that employment agencies are seeking to avoid equal treatment by taking on agency workers on permanent contracts between assignments for just a small number of hours a week. This avoids those workers being classified as agency workers and allows them to be paid lower overall rates.
The CWU has cited one leading firm it says is already putting agency workers onto permanent contracts, giving them just four hours work a week between assignments. This makes it incredibly difficult for them to find other work and ties them into a low income. The union says law firms and private agencies are explicitly recommending this approach to agencies, despite the fact it is at odds with the spirit and intention of the directive and is clearly unethical.
In 2008, the Labour Government, the CBI and the TUC agreed that such anti-avoidance measures would be explicitly banned by Government guidance. The resulting guidance makes some attempt to do this, but places the onus on the worker – who is in an extraordinarily vulnerable position – to make the challenge.
It is often argued that providing workers with basic rights is somehow inherently anti-enterprise and would place us at a competitive disadvantage. Yet, over the past year, I have worked with national and multinational businesses that are doing everything they can to act in an ethical and socially responsible manner.
Allowing some companies the freedom to opt out of these standards puts those leading the way in upholding human rights and environmental standards at a significant, competitive disadvantage. Companies need help to operate at the highest standards, not engage in a race to the bottom. It is imperative that ministers take the lead to create this level playing field. Labour must stand by its recent, welcome commitment to hold them to this.
