Member Article

Miliband irks business world over agency worker comments

Labour leader Ed Miliband has irked British business bodies following his pledge to close a loophole that allows employers to pay agency staff at different rates.

Writing in the Independent on Sunday, Mr Miliband said Labour would look to close the loophole known as the ‘Swedish derogaiton’, so called because Stockholm negotiated the concession to the EU Agency Workers Directive which introduced rights to equal pay and conditions for agency staff across Europe.

The model means such rights no longer exist for workers who are employed on a permanent basis by a recruitment company or temporary work agency, and receive pay between posts.

Mr Miliband said Labour would end the practice in the UK and agency workers could not be used to undercut other staff.

The plan has prompted indignation from parts of the business world, not least Kevin Green, chief executive of the Recruitment and Employment Confederation who said it was “misleading” to illustrate the practices as a loophole.

He said: “These arrangements are part of the 2010 Agency Workers Regulations that were agreed following consultation between the last Labour government, business and the unions and apply to British and non-British workers.

“Workers on PBA contracts are employed by their agency on a permanent basis, giving them greater security and all the benefits that come with permanent work such as protection from unfair dismissal, maternity leave and statutory redundancy pay.

“Is the Labour party really saying they want to deny British temps the option of permanent employment?”

Katja Hall, CBI chief policy director, said: “The flexible labour market in this country has saved jobs and kept our economy going during tough times.

“Undermining this flexibility would put the very system which has kept unemployment down at risk. The agency directive was not welcomed by business, and further gold plating of EU rules can only cost jobs.

“Many businesses prefer to pay an agency to provide temporary workers using the Swedish derogation. This is perfectly legal, was supported by trade unions at the time and also gives employees security of income between jobs.”

In his article, the Labour leader said: “What chance of giving everyone a fair shot when recruitment agencies are allowed to recruit only from overseas, excluding locals from even hearing about jobs?”

Mr Green retorted: “The pledge to ban recruiters from only advertising vacancies overseas is a ridiculous straw man. It is already illegal to do this. Ed Miliband has made this accusation against our industry before, we have asked to see any evidence that it is occurring and he has failed to produce any.

“It’s an unwarranted slur on the UK’s professional recruitment businesses who helped more than 600,000 people find new permanent jobs last year and on any given day place 1.1 million temps into work.”

This was posted in Bdaily's Members' News section by Tom Keighley .