Neil Carberry, Chief Executive at the Recruitment and Employment Confederation (REC) has warned of the threat of ‘false self-employment’ booming in response to elements of the government’s plan on zero-hours contracts in the Employment Rights Bill. His warnings came during a House of Commons Business and Trade Committee Make Work Pay programme inquiry meeting, held on Tuesday this week. Carberry also highlighted concerns about umbrella company compliance being unaddressed by the Bill and said the need to focus on better enforcement of existing law was a priority.
The government’s intention in the Bill is to tackle what it calls ‘one-sided flexibility in zero-hours contracts’ through a right to guaranteed hours, where the number of hours offered reflects the hours worked by the worker during a reference period. There should also be a right to reasonable notice of shifts and a right to payment for shifts cancelled or curtailed at short notice.
REC has argued for a ‘carve out’ for agency workers from much of the new legislation covering zero hours workers as agency workers have a fundamentally different, two-sided, flexible model of engagement. Some unions claim that agency workers shouldn’t be treated differently – but they already are, with enhanced rights delivered by their own Act of Parliament, enforcement body and two separate sets of specialist regulations. Agency workers are already well protected by law – better enforcement is what they need, not to be collateral damage in the government’s war against bad direct employers.
“Agency workers do not exist in a monopsony – they have choice,” said Carberry at the Committee meeting at the Palace of Westminster. “They sign up to multiple agencies and each agency has the ability to place them in many places. They feed back to us the value of being able to say, ‘I don’t like it there’, ‘I don’t want to go there’ or ‘put me somewhere else’.
“When we think about extending powers on Zero Hours Contracts to agency workers, we are talking about one million people who went to work as a temp this morning. The articulation from government as to why agency might be covered by these powers is that ‘we want to avoid direct employers using agency as a loophole’. I don’t think one million agency temps should be taken for granted like that. I think we need to accept that agency workers are protected by their own Act, two sets of regulations, an independent regulator – which needs some more resource – and defined statements in Key Information Documents (KIDs).
“Agency worker is largely two-sided flexibility and that is why we want to ensure agency workers have choice.”
Carberry went on to say agency workers should be treated differently and put forward two suggestions: strengthening some element of Agency Workers regulations, and doing more on hours in the KIDs. “It feels like there is a real risk of, in an attempt to avoid evasion by direct employers, bringing one million temps into this regime [will be] driving some of the behaviour we have seen reported in the past months where some direct employers are using platform sites to engage people who are patently workers as self-employed. The real enemy is false self-employment, that is our primary concern about reality of the Bill.”
REC is also advocating for greater regulation and transparency in the umbrella company sector, aiming to protect workers from unethical practices.
On umbrella companies, Neil Carberry told the MPs: “The Bill has nothing to say about the primary thing that my members think the government should regulate which is the use of umbrella companies, and that is a major lacuna.
“Umbrella companies are largely acting as employer of a percentage of temps,” said Carberry. “Once they exist in a sector, they are quite difficult for agencies who payroll their own temps to compete with. There are good standards around those who audit umbrella companies, like the FCSA, but there are examples of pretty poor payroll practice in the sector. We would like to see the kind of regulation that the Employment Agencies Act [and] the Conduct Regulations bring to employment businesses (agencies) brought to umbrella companies as well.”
REC suggest placing the burden for reasonable notice solely on the agency is unworkable, in many cases changes or cancellations to shifts occur because of client demands, or workers cancelling at short notice. In these scenarios, an agency should not be liable if they themselves have not been given reasonable notice of a shift, argues REC. Reasonable will vary according to custom and practice for different sectors.
