Legal loophole used to exploit agency workers must be closed

Day-in, day-out agency workers doing exactly the same job as their colleagues are receiving up to £500 less in their pay packet every month. Why the gaping disparity? Because employers are using a clever legal loophole to undercut permanent employees and exploit temporary workers.

This week is part of Fair Pay Fortnight and the Communication Workers Union – who represents over 200,000 postal and telecoms workers – is shining a light on the injustice facing workers on the little known ‘Pay Between Assignment’ (PBA) contracts. These contracts are as appalling as zero hour contracts, permitting employment agencies to pay workers from as little as one hour a week when not on assignments.

The EU’s Temporary Agency Workers Directive was originally passed to protect the rights of agency workers. Yet, the UK’s interpretation of the Directive has turned the intention of the European legislation to work against agency staff instead of for them.

In 2010 the UK Government decided to include two ‘derogations’ (exemptions) in the Agency Worker Regulations (AWR). The first, which was agreed by the TUC, the Confederation of Business Industry (CBI) and the Government, allowed a 12 week qualifying period in the UK before agency workers qualified for equal treatment. In many other countries, equal treatment applies from day one of employment. The second exemption allows for workers on PBA contracts to be exempted from equal treatment on the grounds of pay.

In its truest form, the AWR – based on the EU Directive – was supposed to give a new generation of agency workers hard won rights to equal treatment. It was hailed as an essential piece of legislation. Yet the UK Government’s attempt to evade EU employment law has proved extremely successful. The loophole allows employers a legal framework to exploit agency workers. As a result PBA contracts, previously unheard of in the UK, have now become commonplace.

The union has appealed to offending employers to stop using legal loopholes to reinvent exactly the unequal treatment that European lawmakers intended to ban. However there are still a number of major UK companies who can take their place on the roll call of shame – companies across all industries including telecommunications, food production, logistics firms and manufacturing.

The British loophole was based on the Swedish model, which allowed recruitment agencies to employ workers on a permanent basis, whilst guaranteeing they will be paid between assignments. However, in Sweden agency employees on permanent contracts are guaranteed up to 90%t of their salary when not working. This is patently not the case in the UK.

Critics such as the CBI will continue to claim any change to the status quo will result in a loss of jobs. It’s a familiar argument and one that gets wheeled out anytime there is a call for an improvement in the pay or conditions of low-paid workers. We heard these arguments 15 years ago against the introduction of the national minimum wage but now it is felt to have been a resounding success. As we will be arguing during Fair Pay Fortnight, decent wages benefits workers, the economy and society.

Low-paid agency workers are being used to undercut and undermine permanent employees, who, as union members, have organised to secure higher wages and better conditions.  The number of agency workers in the UK is increasing faster than any other type of employment. In the run up to the 2015 election all political parties will be taking a stand against zero hour contracts. But let’s fight for those workers on PBA contracts as well who are all too often sidelined.

Billy Hayes is the General Secretary of the CWU