DTI warns of spiralling wages after EC review

The latest draft of the European Commission's Agency Workers Directive could cost UK employers £381m in wage increases, the Department for Trade and Industry (DTI) has warned.

The directive aims to put an end to the inequality suffered by many agency workers kept on temporary contracts indefinitely, at lower rates of pay than their permanent colleagues.

The DTI figure takes into account changes made by the European Parliament to the directive in November 2002. The original directive proposed that any agency worker at a place of employment for six continuous weeks or longer would be granted parity with permanent workers in the same job.

After the European Parliament's autumn review, this was scrapped. Now workers will have the same benefits and conditions as permanents doing the same job, however long they've been there. The six-week period applies only to agency workers on permanent deals and so will have much greater impact on UK agencies.

"We're not too worried about the extra cost of pay," said Martin Couchman, deputy chief executive of the British Hotels Association, "but the massive amount of bureaucracy involved."

The UK government supports the directive's aims but says the qualification period should be reintroduced for pay and benefits and stand at a year.

"When considering the proposed directive, we need to balance the need to protect ‘perm-a-temps' with the need to ensure the availability of agency work is not diminished," said employment minister Alan Johnson.

Further development of the directive is expected in late 2003.

The DTI's regulatory impact of the directive can be found at: www.dti.gov.uk/er/agency/directive.htm

\* What do you think about the directive? How will it affect you? Contact Chris Druce on chris.druce@rbi.co.uk