Temporary Workers Directive still a Threat to UK Businesses

The Employment and Social Affairs Committee of the European Parliament voted on Monday 21 October to accept the European Commission's proposal for a Directive on the equal treatment of temporary agency workers subject to some significant amendments.

There has been an amendment to the "non-discrimination" principle. The Directive outlaws less favourable treatment of temporary agency workers. Originally, the comparable worker against whom a temporary worker was to be measured was a worker of the end-user who occupies an identical or similar post to that occupied by the temporary agency worker. The Employment Committee has opted for a more general focus deciding that the temporary agency worker should be treated as favourably and have working conditions as good as if they had been engaged directly by the end-user, rather than as compared with an identifiable permanent worker of the end-user. This can hardly be said to clarify matters although it probably does add a degree of flexibility.

A shock development is the Committee's rejection of the proposal that the same pay and benefits need not be given to workers engaged for six weeks or less. Opponents of the Directive had been lobbying for a significant extension to this period. Far from succeeding in this it seems instead that temporary agency workers will now be afforded protection from the first day of their assignment.

Emphasising its wish to balance workforce flexibility and protection of temporary workers, the Committee accepted that any bans or restrictions on temporary agency work should be reviewed by member states and maintained only if justified. They also decided that the grounds on which restrictions could be justified should be extended and that the scope of the reviews should be broader. Another amendment prevents temporary agency workers being used for strike-breaking.

It seems also that the Committee did not agree to exempt higher paid workers from the Directive, as pressed for recently by lobbyists.

In addition, the key question of the intended scope of the Directive does not appear to have been resolved in the Committee's report. As Tarlo Lyons has previously reported, the draft Directive could potentially extend to cover not only temporary PAYE agency workers, but also contractors supplying services through limited companies. Recruitment companies, particularly those specialising in supplying IT contractors, therefore remain confused as to how or whether the Directive will affect them and their clients.

What Happens next?

The Commission will have to take into consideration the proposals made by the Committee before issuing a new draft of the Directive and, although no timetable appears to have been laid down, it is fair to assume that the Commission will aim to have new proposals ready to go before the European Parliament in November. However, the Council of Ministers will also need to approve the draft sometime early next year.
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