Parliament may have been in recess for much of the summer, but there’s no rest for the weary when it comes to implementing the many proposals the Labour party initially outlined in its pre-election campaign. For the recruitment sector, it is largely the Employment Rights Bill that has remained front of mind and for some, of greatest concern.
While we are expecting a consultation on the Bill before it is ratified, we are already beginning to feed our insights and the views of our members to Government largely due to the fact that the foundations of the Bill are already being worked on. We anticipate that any consultation will be a short one, making action from the recruitment sector now critical.
So, what’s the reaction from staffing businesses so far and what recommendations are being put to policy makers?
Zero-hour contracts
While a ban on zero-hour contracts was a key component in Labour’s initial campaign for office, for the professional staffing market there’s arguably little concern from the removal of this working style. This is largely because this type of employment is uncommon in the highly skilled segment of the market, with placements instead having a contracted notice period or mutually agreed timeframe between the worker and the client.
However, while there is likely to be less of an impact on the majority of our members, there is still a sentiment that flexibility must be afforded in this decision. The agility that is afforded in these types of contracts goes both ways. The employer has the chance to change worker requirements to respond to immediate demands, while the worker also has the ability to decline shifts as well. Yes, there are unscrupulous practices which need to be stamped out, but this shouldn’t be to the detriment of the flexibility of the workforce that individuals and employers alike can benefit from.
Working definitions into law
One of the common challenges that has cropped up both in our conversations with members and indeed our discussions with Government officials and shadow party representatives over recent years has been the issue of defining elements of what is a flexible labour market.
One prime example is zero-hour contracts having no formal definition, which has no doubt exacerbated the challenge of controlling and limiting exploitative contracts. As we have long stated, the law should reflect the reality of working relations and be flexible enough to accommodate the significant nuances of the labour market as it evolves. Lumping all workers who have a flexible engagement under one category doesn’t account for the differing needs of more at-risk agency workers and highly skilled contractors, or the self-employed.
Day one rights
The plans for day one rights are of more significant concern to many in the professional recruitment sector. Working with our members we have identified a number of issues which need to be addressed in the draft Act, including:
- Temporary worker contracts of less than an agreed period should not have a probationary period or be subject to unfair dismissal rights.They should retain flexible termination terms, to be exercised reasonably. There should be anti-avoidance measures to prevent, for example contract extensions to avoid provisions.
- Changes to unfair dismissal claims will create an administrative burden on recruiters with temporary workers on their books. As they do not supervise workers on site, they are not in a position to asses or manage their performance. This means they are unable to determine if a contract should be terminated, but will be responsible for this.
- Given that there are already a back log of unfair dismissal cases, the potential to over burden the system with an influx of claims is another issue. It’s important that a situation isn’t created whereby employers or recruiters are simply settling to get the case off their books.
- There is the potential that an unintended consequence of the day one rights is a rise in ‘self-employment’ or consultancy working packages to reduce the risk to employers. APSCo supports genuine self-employed consultancy and sees it as critical to boosting productivity, but the concern is that this may inadvertently be used as a tool to reduce headcount, which will be counter-productive to the initial plans.
A fair approach
It was evident from day one that the new Government planned swift and significant changes as part of its New Deal for Worker Rights. However, for anything on this scale to have a meaningful impact to all parties involved and the economy in general, it requires a considered approach to the implementation. We have advised policy representatives that an enactment period of at least six months is needed to allow employers and the recruitment supply chain to modify relevant contractual arrangements.
The Fair Work Agency will obviously play a critical role in implementing the eventual Bill once it passes through Parliament, but we know from our engagement with the Director of Labour Market Enforcement that it will take a while to get this new body up and running. In the meantime, it is crucial that the staffing sector’s voice is heard. Recruiters will be instrumental in making the plans work. What APSCo is certainly keen to ensure is that the elements of the Bill don’t inadvertently have a detrimental impact on the strength of the UK’s labour market.
There is already a feeling that skilled workers can be found elsewhere globally. Making it more costly and difficult to recruit for specialist roles – which are already in short supply across the country – will not help build a sustainable talent pool in the UK.
