In a recent hearing of the House of Commons Business and Trade Committee, Neil Carberry (CEO of the Recruitment and Employment Confederation, REC) warned of ‘undercooked and inworkable’ aspects of the Employment Rights Bill.
Carberry warned that certain aspects could have unintended consequences such as an increase in fake self-employment. Carberry criticised the Bill because it failed to address compliance problems in the umbrella company industry, and suggested that better enforcement of the existing laws should be given priority.
The Employment Rights Bill is designed to combat “one-sided flexibilities” in zero-hours agreements. The key proposals include guaranteed working hours based on a worker’s reference period, reasonable advance notice of shifts and compensation for missed shifts. The REC, however, has called for agency workers not to be included in much of this legislation because their engagement model differs fundamentally.
Agency Workers and Flexible Employment
Carberry explained to MPs that workers at agencies benefit from a flexible model which gives them the freedom to decide where and when they want work. He said that agency workers are already protected by existing laws such as the Agency Workers Regulations, and have independent oversight. Carberry said that extending zero hours contract regulations to agency employees would unfairly affect approximately one million temporary workers, and undermine the flexibility they value.
He said: “We are talking about 1 million people that went to work this morning as temps when we consider extending the powers of Zero Hours Contracts.” “The government’s explanation for why these powers might apply to agency workers is that we want to prevent direct employers from using agency as an loophole.” I don’t believe that one million agency temp workers should be treated as a given.
Carberry said that putting agency workers in the framework proposed could unintentionally encourage falsely self-employment. He pointed out recent examples of direct employers misclassifying workers as self-employed using platforms, which he called the “real enemy of fair employment practices”.
Concerns Over Umbrella Companies
The REC criticised the Bill as well for failing to address unethical conduct in the umbrella companies sector. Carberry called on umbrella companies to be regulated more, in a similar way as employment agencies. He stated that some umbrella companies are ethical, but others have poor payroll practices which undermine fair employment.
“We’d like to see umbrella companies subject to the same kind of regulation as employment agencies (agencies), which is regulated by the Employment Agencies Act and the Conduct Regulations,” Carberry stated.
You can cancel your shifts with a reasonable notice.
A second point of contention was that agencies should be solely responsible for giving reasonable notice to shift cancellations or changes. Carberry said that this is not a viable approach, since many cancellations occur due to client requests or short-notice worker absences.
He suggested that the person responsible for making the decision in these cases, usually the client, should be liable for any compensation.
No one wants to be in a situation where they’ve paid for childcare, arranged the bus and are standing in line when they receive a text message [to cancel the shift]. Someone should get paid if they are there. He said that the only thing he would say is that people who make decisions should pay.
Carberry called for flexibility when defining the term “reasonable notification” in order to take into account differences between industries.
The REC defended also the use of “temp-to perm” fees that employment businesses charge clients when they hire a temporary employee permanently. Carberry said that eliminating these fees would encourage employers to exploit temporary workers as they transition them into permanent roles.
“We strongly believe that transfer fees should be kept no matter what. This is to prevent unscrupulous companies from hiring a bunch of temps, and then moving them to permanent status without cost. You could end up with people who were hired directly, but are now working as temps for six months. This is not what we want in the labour market.
