The Department for Business (BIS) published its draft regulations on the 15th October outlining how the EU Agency Workers Directive (AWD) will be implemented in the UK. There will now be an 8 week consultation which closes on 11th December 2009 on the draft regulations. One of the key outcomes is that the Government has taken on board the REC’s (Recruitment & Employment Confederation) argument that implementation of the Directive must be delayed until 2011. Despite considerable pressure from trade unions, the REC strongly argued the case that recruitment agencies and their clients need time to prepare for the change.

It is clear from the consultation that BIS has listened to the views of the Agency Work Commission which was established at the end of 2008 to address some of the practical concerns around implementing the AWD and BIS have taken on board many of its recommendations. Below is an initial analysis of some of the key issues for recruiters:

• Scope of who equal treatment applies to – the draft regulations confirm that the genuinely self employed workers will not be covered. This is an excellent result particularly for providers at the higher end of the jobs market (e.g. interim management businesses and technology agencies)
• Scope of what equal treatment covers – the regulations reflect REC’s argument that the definition of pay should not include wider benefits such as bonuses related to organisational performance. Essentially the agency and the employer will simply have to focus on basic salary with a few additional benefits such as overtime payments and piecemeal rates. REC lobbied strongly against making the definition of pay any wider.
• Holiday entitlement – REC had argued for holidays to be limited to the statutory minimum. Unfortunately the Government has decided that they are legally bound to include holiday entitlements within the scope of what equal treatment covers. This is an area that we will continue to push on and we will look to ensure that at the very least, any additional holiday that the temp is entitled to can be paid in lieu. In particular we will seek to clarify how the holiday entitlement of supply teachers will be calculated.
• The 12 week qualifying period – This is a positive result with a six week break between assignments before the clock goes back to zero. However many question marks remain about how recruiters will cope with workers who have a series of ad hoc assignments with the same employer, as is the case in driving and social care. We will be considering this matter with members moving forward.
• Liability – REC is happy to see that BIS has recognised that agencies will have a ‘defence’ if employers do not provide the right information regarding comparable pay rates of direct recruits. BIS has accepted the Commission’s suggestion that like health and safety duties, the agency should take ‘reasonable steps’ to find the information but cannot be held wholly responsible if that information turns out to be incorrect.
• Establishing Equal treatment – The Government have taken on board the REC’s concern over the practicalities of identifying a ‘flesh and blood’ comparator. Sometimes there will not be a comparator and equal treatment should instead be the same as the conditions that ”apply generally” in the workforce. There are still a number of practical issues which REC will continue to raise.

By Ralph Atkins in Frankfurt and Chris Giles in London
Published: October 23 2009 18:29 | Last updated: October 25 2009 16:14
Prospects for European economic recovery became more confused on Friday after official data showed the UK still mired in its longest recession since the second world war, at the same time as a eurozone survey was much more upbeat about recovery in continental Europe.
Powered largely by France, eurozone private sector activity appeared to expand this month at its fastest rate for almost two years, according to purchasing managers’ indices for the region.
The results boosted hopes that the second half of this year had seen a sustainable rebound, with government and central bank actions helping to avert a slide back into recession.
Morgan Stanley believes the eurozone could have expanded by as much as 0.9 per cent in the third quarter, after a 0.2 per cent contraction in the second quarter – thanks largely to companies destocking less aggressively than before.
Marco Annunziata, chief economist at Unicredit, said: “It’s time to learn to stop worrying and love the recovery, enjoy the strength of the current upswing – and prepare for the less exciting track ahead of us.”
Such a sentiment was absent across the English Channel, where the UK has also enjoyed strength in the equivalent survey in recent months. Widespread hopes of growth in the third quarter were dashed as the Office for National Statistics said the economy contracted by 0.4 per cent in its preliminary estimate.
Weakness in oil and gas extraction, distribution, restaurants and construction prevented the UK economy expanding and left the government with the difficult task of explaining how it has presided over the longest recession since the 1940s with the downturn now on a par with that of the 1980s.
Alistair Darling, UK chancellor, insisted his predictions were still on track: “I have always been clear that growth will return at the end of the year as my Budget forecast assumed.”
But many economists questioned whether the official figures were plausible in light of stronger labour market, survey and production data. Kevin Daly of Goldman Sachs said the initial gross domestic product figures were routinely revised so much the contraction was “unbelievable. Literally.” He added: “Amazingly, if one wants to know in real time what is happening in the UK economy, it has been better to follow the eurozone’s early GDP estimates than the UK’s GDP estimates.”

October’s eurozone purchasing managers’ indices were consistent with quarterly GDP growth of about 0.4 per cent, according to Markit, which publishes the survey.
France appeared to be enjoying a broader recovery. Its composite purchasing managers’ index, covering industry and services, leapt from 54.8 in September to 58.4, the highest for almost three years.
Chris Williamson, chief economist at Markit, said: “In France there is a greater air of confidence among businesses and households that we are very much over the worst.”
For the eurozone, the composite index rose from 51.1 last month to 53.0. With a figure above 50 indicating an expansion in activity, it marked the third consecutive month of growth and the strongest monthly gain since December 2007.
The evidence of a sustained, if gradual, eurozone economic recovery could result in the European Central Bank adopting a less cautious stance.
Striking an upbeat tone, Axel Weber, Germany’s Bundesbank president, and Ewald Nowotny, his Austrian counterpart – who both sit on the ECB’s governing council – this week said a eurozone “double dip” recession was unlikely.
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