Temporary and Agency Workers (Equal Treatment) Bill

I thank my right hon. Friend. Serious discussion of the issues is exactly what is merited. We want an agreement that protects and treats fairly agency workers, but does not lead to fewer people having the opportunity to work or stifle the ability of business to be flexible in how it manages demand. We also want similar flexibility for our own labour market, as the directive would allow for labour markets with sets of institutions different from our own. That is an important point, and it is why the Government have engaged in discussions in recent weeks with both the unions and the CBI, with the aim of establishing a social partnership, akin in some ways to what we did on the minimum wage and the Low Pay Commission, to agree on some of the important details involved. The Government continue to support the principle of equal treatment, but there are specific issues to be addressed, some of which have been raised today. They include determining what qualifying period or periods would be appropriate, and how equal treatment should be calculated. For example, should an individual be compared with a worker who would have been hired that day in the same circumstances, or with someone who had been doing the job for years and who might have very different experience and qualifications from those of the agency worker? We have therefore proposed a process that brings together business and unions with an independent chairman to work through some of these issues. Although the parallel might not be exact—there are certain differences involved—the success of the Low Pay Commission demonstrates the strength of this approach in bringing durable, workable reform, so we have approached the CBI and the TUC to suggest an ad-hoc forum or commission, a body that would be tasked with making proposals concerning agency workers in the UK. That process would take account of the specific circumstances of the UK labour market and its institutions. The approach that I have set out offers a way forward on what has been a contentious issue. At this stage, the process has not been agreed by all the parties concerned, but the Government's point of view is that this is a constructive and positive suggestion to try to make progress in a way that offers greater protection while taking account of the specific conditions of the UK labour market, and that gives unions and business a voice in the outcome. I want to deal with some of the specific issues raised in the Bill and to register some of our concerns about its contents. As I have pointed out, agency workers are already protected by a combination of general legislation, which gives them core rights, and specific legislation governing the conduct of their agencies. The Bill, as drafted, is silent on the issue of a qualifying period, and we must therefore assume that it would give agency workers equal pay as compared with a permanent comparable worker on day one. It is not clear what that would mean, but it could lead to some companies deciding not to do the work, outsourcing it or asking their existing work force to work longer hours. The issue of a qualifying period is one that we would expect to be discussed by the proposed agency workers commission. It is important when taking forward the issue of equal treatment to do so in a way that does not result in the unintended consequence of creating barriers to entry into the labour market for people who may find agency work a valuable route back into employment. The Bill also appears to extend its coverage of agency workers to those placed by agencies in permanent posts. This goes beyond the draft EU directive, which applies only to temporary agency workers who have an ongoing relationship with the agency—for example, those who are paid by the agency and supplied to the hiring company. The Bill would take us into the field of regulating wages in mainstream permanent employment. Once an agency has placed a permanent employee in a company, the agency has no further contact and no further relationship with the worker. This is another issue about which we have concerns. The Bill also touches on the difficult issue of establishing what equal treatment really means in terms of who is being compared with whom. It seeks to address this in a number of ways, including through the creation of a hypothetical comparator. It does not use the comparator contained in the current draft of the agency workers directive, however. I acknowledge that this is a difficult and sensitive issue, in terms of achieving clarity and creating a mechanism for enforcement. This is another example of the kind of issue that the Government feel could usefully be worked through in the commission that we have proposed. The Bill suggests that, if there were ““no real comparable direct worker””, a ““tribunal”” could look at a wide range of circumstances to establish whether there was a hypothetical comparator. This needs careful examination, as it could encourage an increase in complex and costly litigation. Enforcement needs to be considered carefully, particularly when there is no readily available comparator, lest we establish a regime that proves over-complex and bureaucratic to operate. We have a very active agenda on the issue of preventing abuses at work.