Agency Workers Directive could be diluted by Government after legal advice

The controversial European directive on agency workers' employment rights could be watered down  by the Government after the Prime Minister’s office took independent legal advice on the effects of the new laws, which are due to come into effect on 1 October 2011.

The Agency Workers Directive will give over one million workers employment rights that they currently don’t enjoy. A worker who has been in a position for twelve weeks will be entitled to the same rights regarding pay, holiday and maternity leave as a permanent employee.

Critics of the European legislation say it will cost British businesses £2 billion a year. Small employers are expected to pay out an extra £2,493 per year, and larger employers are expected to pay out an extra £73,188 per year. Some businesses may simply stop hiring agency staff as a result of the extra costs they could incur.

The extra costs to business and the possible effects on the rate of employment have caused considerable concern in Downing Street, so much so that Steve Hilton, the Prime Minister’s director of policy, secretly hired outside legal counsel from Martin Howe QC, according to the Telegraph.

The legal advice concluded that the Government does have options in regard to the Agency Workers Directive.

The UK’s instrument implementing the directive, the Agency Workers Regulations, had been ‘gold plated’ by the Business Secretary’s department according to the legal advice. This means the Government can dilute the regulations to ease their effect on businesses and delay their implementation.

The ‘gold plating’ occurred despite the coalition’s pledge to not implement regulations that would hinder growth and business.

Another option would be to introduce new legislation that would override the European directive. Thirdly, the Government could ignore the directive entirely. This final option could cost the Government dearly in expensive fines from Europe.

Although the Government does have options, it appears none are solid, as they would require gaining approval from the Liberal Democrats and appeasing the trade unions.

The Telegraph suggests that the Business Secretary, Vince Cable, is in the Government’s bad books, especially as it is extremely unusual for the Government to seek external legal advice rather than relying on its own lawyers in Whitehall.

Let’s not forget – although businesses may suffer from the implementation of the Agency Workers Directive, if it is watered down or delayed, over one million agency workers will miss out on some of the basic employment rights enjoyed by employees throughout Europe.

For legal advice on the new regulations and their implementation, contact Job Justice today. We work with excellent employment solicitors throughout the UK who can advise you on this matter, and any other employment-law related issues.