'Gold plated' Agency Workers Regulations could be moderated, say reports

The Telegraph has reported that the Prime Minister's office secretly commissioned its own legal advice on the terms of the Agency Workers' Directive and concluded that they could change regulations brought in by the previous Labour Government.

The Agency Workers' Regulations implement the EU's Agency Workers Directive and will give temporary agency workers the same rights to "basic working and employment conditions", such as pay and holidays, as directly employed staff doing the same work.

The new laws, which come into force from 1 October, will apply to agency workers who successfully complete a 12 week qualifying period. They will cost firms more than £1.8billion a year according to figures from the Department for Business, Innovation and Skills (BIS).

The report claims that lawyers told Downing Street that the Business Secretary's Department had "gold plated" the legislation with stricter requirements than those proscribed by Europe, despite Government commitments to reduce the administrative burden of "red tape" on businesses.

Martin Howe QC, an expert on EU law, provided confidential legal advice on the Government's options regarding the Directive, according to the paper.

He suggested the Government had three choices if it did not wish to adopt the Directive in its entirety: to water down and delay the planned laws, to introduce new legislation in Parliament to overrule it or to ignore the Directive altogether.

A Downing Street spokesman told Out-Law.com that as the Regulations had been introduced by the previous Government, their application would be considered as part of the Government's "red tape challenge".

"We are now looking at every part of employment law as part of the red tape challenge. We want to do everything we can to help employers and drive growth," he said.

However an employment law expert with Pinsent Masons, the law firm behind Out-Law.com, insisted that the Regulations as they stand are manageable.

Simon Horsfield pointed out that industry bodies already accused the Government of "gold-plating" the Regulations in 2009.

The comment dates back to an opinion obtained from the European Commission by the Institute of Directors and the Association of Recruitment Consultants about the definition of "basic working and employment conditions" as outlined in the Regulations, said Horsfield.

The Commission indicated that the conditions in relation to pay and holiday which will apply to an agency worker after 12 weeks only cover what is set down in a country's laws, collective agreements with trade unions and other "binding general provisions".

The reference to "binding general provisions" relates to company level agreements or pay scales. Most small and medium-sized businesses will not have these, instead negotiating pay with employees on an individual basis, said Horsfield.

BIS guidance (50-page / 335KB PDF), published in May, does in fact indicate that the equal treatment provision in the Regulations cannot be established where there are "genuinely no 'basic working and employment conditions' that apply generally," he said.

"Compliance with the Regulations is manageable. BIS has provided comprehensive guidance to allow companies to prepare for them coming into force," said Horsfield.