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Comments from The Association of Chartered Certified Accountants
September 2002

The Association of Chartered Certified Accountants (ACCA) is pleased to have this opportunity to comment on the DTI's consultation paper on the above.

We would not dispute that agency workers should be treated fairly vis-à-vis other workers doing the same type of work for the same firm. But we believe that the proposal is misconstrued in its present form.

The agency worker sector constitutes a valuable market option for both workers and employers. It provides the opportunity for individual workers to sample different types of work, and to earn money in the process, before making long-term career and life decisions. For those who are searching for a longer-term position, filling a temporary post provides the opportunity to impress a prospective employer in real work conditions but without prior commitment on either side. For employers, the agency sector enables them to fill short-term capacity gaps and to respond to temporary fluctuations in market conditions. We believe it would be detrimental to the economy and to the interests of both employers and workers if the supply of agency workers were to be disrupted by the provisions of the proposed Directive.

In our view, there is a danger that this would happen. If the statistics quoted in the consultation paper are correct, then agencies would be faced with raising the collective pay of agency workers by between £43m and £118m pa. If agencies were not to go out of business, they would have to pass these costs, as well as additional consequential costs, on to their client businesses. We fear that this would have a detrimental effect on businesses' use of temporary workers, which would in turn affect the viability of agencies themselves and hence reduce opportunities for agency workers.

We suspect that there would be practical difficulties in trying to ensure that the conditions of agency staff on a par with those of 'comparable' permanent staff. The agency and/or the assignee company would need to go to the trouble and expense of identifying comparable workers and their working conditions. In doing this, they will have to recognise that the pay of permanent staff very often acknowledges not only their competence to fulfil a particular role but their accumulated personal contacts and their knowledge of the business, its practices and culture. It would not, accordingly, be reasonable in all cases to expect the conditions of permanent staff to be smoothly transferable to temporary staff.

There must also be a question of whether it is in principle right that agency workers should benefit from parallel working conditions. Agency workers are, after all, contracted not to the assignee company but to their agency. As in all employment situations, agencies offer terms which they can afford and which, from their knowledge of the market in which they operate, are likely to attract clients. In the case of professional agency workers, such as accountants, temporary terms will often exceed the rates of pay earned by permanent staff. This state of affairs appeals to those who wish to work on a short-term basis and also to employers who do not see the need for a permanent post in the position concerned and do not wish to take on the employment costs associated with a direct contractual relationship. If pay rates paid by agencies are to be linked more closely to those enjoyed by contracted staff then the competitive advantage earned at this level may be lost, to the detriment of employers and the agency workers concerned.

Lastly, there appears to be a presumption behind the proposal that agency workers as a group wish to be put on a par with permanent staff. We suspect that this is not always true. Many individuals enjoy working on an agency basis, at least for a period, and are not always as concerned as the proposal suggests about comparative rates of pay. We consider that the flexibility of the agency sector is beneficial and should be retained; disruptive regulation should be avoided.

If the EU and the DTI consider that reform is desirable to protect the interests of agency workers, we consider that any such reform should concentrate more on remedying shortfalls in the contractual arrangements between agencies and their staff, and less on striving for direct comparability between agency and permanent staff in assignee companies.

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