Newsletter - February 2010

THE AGENCY WORKERS DIRECTIVE - WHAT YOU NEED TO KNOW

The Government has announced the final regulations for the UK implementation of the EU Agency Workers Directive.  The legislation will give agency temps a right to equal treatment with permanent employees engaged by the end user after 12 weeks of an assignment.  In order to prepare for its impact, What do you need to know to prepare yourself for its introduction in autumn 2011?  These are the main features of the act:

1.  Both pay and bonuses related to work done are to be equalised along with working time, breaks and holiday entitlement.
2.  You will have to provide the agency with details of the pay and conditions of equivelant employees to allow the agency to comply with the legislation.
3.  An agency worker will continue to accrue rights under the regulations even when they are not required by you for a short period (less than 6 weeks) due to a lack of work or even when they are on holiday
4.  The regulations also contain provisions for a £5000 award and a two weeks pay award to affected employees to clamp down on organisations that flout the legislation

Other benefits will apply from the first day of an assignment. These include the right to information about internal vacancies, giving temporary workers the same opportunity as other workers to find permanent employment, and equal access to on-site facilities such as child care and transport services.

Business Minister, Pat McFadden said: “This change in the law is aimed at ensuring fairness for agency workers in relation to the permanent employees they work alongside. They are being implemented in line with the TUC/CBI agreement which sought to ensure fairness while maintaining flexibility for the UK labour market – a very important factor in our ability to create jobs.”

The CBI, however, expressed concerns.

John Cridland, the CBI’s deputy director general, said: “These regulations are bad news for the economy as they will hamper job creation. Employment agencies help over a million people find work and these proposals will make it more expensive for companies to use agency temps by increasing bureaucracy.”

Mr Cridland added that the government has gone further than it needed to under EU rules by forcing employers to include temps in performance appraisals designed to set pay for employees.

He continued: “This extra bureaucracy will only discourage firms from taking on temporary workers when they’re unable to create permanent jobs.

“Agency temps’ employment relationship is with the employment agency, not the agency’s client, and the law should recognise this. The economy would benefit from a much simpler definition of pay, giving agency workers equal treatment without the substantial burdens in the government’s approach.”

The Recruitment and Employment Confederation has fought an eight year lobbying campaign to ensure that the final draft of the propsed regulations were workable for the recruitment industry.  Commenting on the implications for the UK recruitment industry, the REC Chief Executive Kevin Green has said:

"We are pleased that a number of practical recommendations from our Agency Work Commission have been taken on board despite heavy trade union pressure.  There are a number of areas in the final regulations that give cause for concern and our priority now is to work with Government on the official guidance documents to inluence the way that the new requirements on recruiters will be interpreted.  The industry's voice has been at the forefront of the political debate on AWD implementation, the next phase is about giving REC members the practical tools to work with clients and prepare for implementation"

Drake will be urging its existing customer base and any new employers that may be worried about the 2011 implemetation to examine their use of agency staff and their current staffing structures to ensure that the regulations can be met without huge increases in agency costs.  Gary Joyce, Area Director of Drake in South Wales has said:

"Employers will need to look closely at how they utilise agency workers and review the relationship and terms they have with their current agency to make sure that they are well prepared for autumn 2011.  We are confident that any adverse effects associated with implementation can be avoided if employers start planning for its introduction now"

HAS THE UK ECONOMY EMERGED FROM RECESSION?

Figures released this week has shown that the UK economy has grown by 0.1% in the final quarter of 2009.  The economy had previously contracted for six consecutive quarters through the last three quarters of 2008 and the first three quarters of 2009.  The UK economy is the last major economy to come out of recession after Germany, France and the US emerged from recession last year. 

It is fair to say, however, that the UK's recovery is much slower and weaker than analysts' expectations.  Many commentators are putting the move out of recession down to the boost caused by the government car scrappage scheme and a seasonal boost in retail spending.  The prediction for growth in the next six months remains cautious as questions remain over the health of wider economy.  At best 2010 is likely to see an extremely lacklustre recovery as we proceed through the remainder of the year.

The news in Wales has not been so good with the announcement from Bosch that they will transferring work from the Miskin Plant in the Vale of Glamorgan to Hungary with the loss of almost 1000 jobs.  Official figures also show that manufacturing in Wales has fallen by 12% in the last year.  Some experts even suggest that the 'real' figure is far worse and could be as much as 20%.  This is further proof of the damage caused to the UK economy by the appeal of low wage economies overseas.   

THE VALUE OF FLEXIBLE STAFFING

As the UK economy struggles to come out of recession, more and more organisations are starting to look at their staffing levels and structures as a means to reduce waste and maximise profit.  The ebb and flow of the business world in 2010 will result in a high level of uncertainty and the potential for unnecessary costs in HR planning - When to staff up? When to cut back? An inaccurate calculation can have a real effect on operating expenses and bottom line results.

Flexible staffing can help many organisations in the UK reduce overheads, and increase profits and productivity through responsive, innovative flexible staffing solutions. Temporary staff can be brought in to handle peak workloads, special projects, and cover employee absences and many areas of the business can be Outsourced - especially those non-core functions which take time and investment without directly contributing to the success of the business. 

In the past, companies have always set their staffing levels to cover for peak workloads. When their workload declines, employers have been unable to utilize their employees' time effectively. Productivity has inevitably declined, accompanied by lower profits and greater cost inefficiency.

The successful staffing model for 2010 will provide a means to ensure that maximised productivity can be achieved by hiring only those core employees required for the period of the lowest workload. By utilising flexible staffing principles, organisations can be better positioned to handle increased workloads or peak periods of activity. Clever use of flexible staffing can control salary overheads, reduce operating costs and improve profitability.

In summary, the benefits of flexible staffing are:

• reduced overheads
• increased productivity
• greater flexibility in labour hour usage
• increased profits
• access to skills when needed
• immediate and reliable availability of staff
• minimised risk
• convenience / time saving

At Drake, we take the principles of flexible staffing and the concept of partnership with our clients seriously. More than simply searching for potential employees; Drake works closely with each client to develop human resources strategies to make the organisation more productive, competitive and profitable.

DROP THE DEFAULT RETIREMENT AGE SAYS EQUALITY COMMISSION

Employees should be allowed to continue working after the age of 65, the Equality and Human Rights Commission (EHRC) has argued.  The Commission has recommended that the compulsory retirement threshold of 65 be dropped, and that employers should be incentivised to enable older employees to work more flexibly.

An ageing population and a trend towards people working later on into life have rendered the default retirement age an anachronism, the EHRC said.

Abolishing the rule that permits employers to oblige employees to leave work at 65 would, the Commission continued, encourage more innovative approaches to flexible working and would improve the way in which firms handle the performance of workers of all ages.  To run in harness with the change, the EHRC also proposed that the right to request flexible working be extended to include all employees and that employers receive incentives for introducing flexible working patterns, especially for the over-50s.

In a survey carried out by the Commission, almost two thirds of women (64 per cent) and a quarter of men (24 per cent) claimed they would welcome the chance to remain economically active after the current state pension age.

Six out of ten respondents said they wished to continue working on a part-time basis, while 40 per cent wanted to stay in their current jobs but more flexibly.

Baroness Margaret Prosser, the EHRC’s deputy chair, said: “Britain has experienced a skills exodus during the recession, and as the economy recovers we face a very real threat of not having enough workers – a problem that is further exacerbated by the skills lost by many older workers being forced to retire at 65. Keeping older Britons healthy and in the workforce also benefits the economy more broadly by decreasing welfare costs and increasing the spending power of older Britons."

A spokesman for the Department for Work and Pensions said that it was aim of the government eventually to abolish fixed-age retirement thresholds.

He commented: “We have already committed to bringing forward our review of the default retirement age to this year. We are taking evidence now from business and individuals on the impact of retirement ages.

“Our review will reach a decision after full consideration of the evidence on whether the default retirement age is still appropriate.”

 

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