Agency Workers Regulations Could Have Unexpected Effects

27th September 2011

Last year's changes in labour law promise to end discrimination against people who work for employment agencies, but these regulations may have unintended side effects for their careers and employers.

According to the new Agency Workers Regulations, agency workers are entitled to the same conditions as standard employees after working in the same role by a certain hirer for 12 weeks. These include pay, holidays and performance-related bonuses.

However, many employers are either unsure or wary about how this will affect their businesses. 37% admit they have not figured out how to appraise temp workers for performance-related bonuses and 35% have not deduced how much this will cost them when pension and auto-enrolment rules are added next year.

In addition, many companies simply do not want to have to deal with the extra costs.

"The advantages of using a flexible workforce during the current economic climate will be compromised as employers feel the burden of additional rules and regulations," said Stefan Martin, employment partner at the Allen & Overy law firm.

In a report by his firm, one third of medium or large companies admitted they may cancel temp workers' jobs early to avoid extra costs. "This may actually make the position of agency workers much more uncertain," he said.

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