Agency Workers Regulations - Swedish Derogation

A report in the Sunday Telegraph this week claims that businesses are set to cut down on their use of agency workers when the Agency Workers Regulations become law in October 2011; a view rejected by a leading recruitment body.

According to the article, several major business groups have warned that the new rules will have a dramatic effect on the hiring of temporary workers, with one piece of unpublished research showing that 20% of employers plan to stop using agency workers altogether.

Many employers fear that the AWR will reduce the attractiveness of using agency staff, as these workers will become entitled to a wide range of 'permanent' benefits after 12 weeks in any role.

David Frost, director general of the British Chambers of Commerce (BCC) told the paper:

"Many firms tell us that the new directive will mean they will use fewer agency workers. Since businesses use temporary workers to improve the flexibility of their workforce and to cover any short-term periods of increased demand or staff absence, it is reasonable to assume these jobs will be lost and productivity hit."

Recruitment organisation refutes job loss claims

However, the Recruitment & Employment Confederation (REC) says that these pessimistic findings do not tally with data collected by recruiters and their clients around the UK.

According to REC, 75% of employers are aware of the Agency Workers Regulations, and 79% of businesses actually intend to increase agency worker numbers over the next 12 months, with only 5% planning to significantly cut the number of agency workers they use.

Although the recruiters' organisation acknowledges that the AWR will have an impact on businesses, it points to CIPD estimates that only 13% of agency workers will even be affected by the new rules, as half of all agency workers work less than 12 weeks anyway.

Kevin Green, chief executive of REC, commented:

"While many in the business community including the REC didn't see a need for AWR, the concessions gained from Government mean the impact will not be as serious as initially anticipated.

"We are confident that the careful preparations by businesses and recruiters across the country will mitigate the negative effects on UK employment."