Temporary agency labour billing increases

admin Blog, Procurement 0 Comments

A recent study, issued by Markit, has revealed that for the first time this year, the billing of temporary agency labour has gone up.

The report was released to coincide with the anniversary of the Agency Worker Regulation 2010 (AWR), which provides increased protection for temporary agency workers in the UK. Many expected the legislation, coupled with the financial climate, to reduce temporary labour, however, temporary billings have slightly increased.

Who is Affected by the Regulations?

The AWR sets out to provide temporary workers with the same basic employment and working conditions as permanent employees. As a result it affects temporary workers, agencies and employers.

The greatest impact occurs when a temporary worker is kept on for more than 12 weeks, in a role similar to that of a permanent employee. This is when the right to equal treatment comes into effect. This right is not limited to pay and basic working conditions, but also many of the terms and conditions incorporated into employee contracts. Some elements, such as pensions and profit share, are excluded.

The CIPD Labour Market Outlook Summer 2012 found that 75 per cent of temporary worker engagements are more than 12 weeks long. Manufacturing and production companies are the biggest employers of temporary labour.

Mitigating Costs

In light of the AWR, businesses employing an increasing amount of temporary labour need to consider several issues. Firstly, what is driving this need for temporary labour and, if the situation is long term, is there a better way to mitigate costs? Secondly, does a close working relationship exist with the agency and is it being used to guarantee compliance? Finally, this is good time to review, re-negotiate with and possibly change suppliers. Another option is to implement a Contract of Employment between the agency and their workers and continue paying between assignments. This is known as a as a Swedish Derogation contract.

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