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Agency Worker Directive – The Dangers & Solutions

"UK companies are ill prepared for the potentially devastating effect that the EU-inspired Agency Worker Directive (AWD) will have on employment costs", according to HR authority at outsourcing specialists Aktrion, Nick Savage. With the recent news that the UK Government intends to introduce this directive in 2009, or 2010 at the latest, this will be another blow to the UK employment figures at a time when the country's economy can ill afford it.

"UK employers should take action now to protect themselves from the restrictions that the Agency Worker Directive will create when it is implemented by the Government in 2009." States Nick Savage.

In effect, the AWD will substantially reduce the key flexibility benefit of using temporary staff. Under the AWD plans, agency workers will be entitled after 12 weeks to receive the same contractual terms, pay and benefits as the permanent staff doing the same work. This will have a potentially devastating impact on businesses which use agency labour to cover fluctuations in activity, especially the UK's already beleaguered manufacturing sector.

Therefore either companies accept these higher costs or look at alternative operating models. The two most likely options are to change temporary staffing before the 12 weeks has been completed or to outsource entire sections of the operation to a managed services provider using its own employed staff on its own discreet terms and conditions. The obvious and significant drawback with the first option is the high impact staff turnover can have on productivity, health & safety and absorption of management time on retraining new staff.

Despite the Department of Business Enterprise and Regulatory Reform (DBERR) planning a 2009 passage through Parliament, the draft legislation has not yet been circulated for consultation. “Until this happens, it is impossible to predict the precise, though potentially devastating, effect it will have on employers and loss of jobs,” says Nick. "While the Government dithers, companies should take advantage of moving to an outsourced Managed Services proposition as early as possible where the outsourcing company can maintain the flexibility previously enjoyed by using temporary staff and can provide additional benefits in terms of increased training and productivity gains."

"To introduce the AWD will surely require a transition period, and a decision to outsource today will inevitably be better than waiting for the legislation to be enacted, when any subsequent business model changes could be interpreted as deliberately circumnavigating the law and therefore potentially rendered invalid."