Agency Worker Reforms will Stop Small Firms Hiring Temps

A Government plan to give temporary workers the same rights as permanent staff may stop small firms hiring temps, the Federation of Small Businesses (FSB) has warned.

The proposals, endorsed by the Trades Union Congress (TUC) and the Confederation of British Industry (CBI), would give agency staff equal employment rights after 12 weeks on the job. This means they would receive equal pay and holiday entitlements, as well as the right to regular work breaks.

According to the Government, a reform of temporary worker rights is needed as temporary staff are often treated unjustly and need more legal protection.

The FSB warned the reforms may make employers reluctant to hire temporary staff, thereby restricting their labour pool.

“This is a disastrous deal for small businesses, which rely on the flexibility provided by agency workers,” said FSB EU and international affairs chair Tina Sommer.

“Agency fees and high hourly rates mean temporary workers are already a costly but useful way of responding to fluctuations in demand,” she added. “If that flexibility is lost, many small businesses will stop using temporary employees.”

The FSB added that temporary staff should receive equal rights after six months employment – which is already common practice in most businesses.

The British Retail Consortium (BRC) said that the proposed changes will damage the UK labour market’s flexibility, leading to fewer offers of employment for agency workers and a reduced ability for businesses to accommodate them.

“The unions are wrong to regard this as a victory for workers,” said BRC director general Stephen Robertson. “They will see flexible working opportunities disappear, yet not be replaced by permanent jobs, while businesses will struggle to respond to peaks and troughs in demand and to cover for permanent staff.”

Secretary of State for Business, John Hutton, said:

“The agreement achieves our twin objectives of flexibility for British employers and fairness for workers. It will give people a fair deal at work without putting their jobs at risk or cutting off a valuable route into employment.”

Implementation of the reforms will depend on the passing of an EU directive in June on agency workers’ rights. If that is approved, the proposals may become law in the UK in the autumn.

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