BMW was criticised for being opportunist when it recently terminated the engagement of a large number of agency workers at its Mini manufacturing plant in Cowley, Oxford, giving them only one hour's notice. The criticism is perhaps better aimed at the state of UK employment law, under which agency workers have far less protection than directly employed workers.

Agency workers do not have any of the following rights against the company in whose business they work:

  • right to statutory minimum notice;
  • right to a statutory redundancy payment;
  • right not to be unfairly dismissed; and
  • right to a protective award in respect of failure to carry out collective redundancy consultation.

Furthermore, they are usually not included within collective bargaining agreements negotiated with trade unions for the benefit of directly employed workers.

Thus, the current law almost invites employers to make them the first victims of a downturn because terminating their engagement is almost entirely without consequences for the employer.

What will change when the Directive is implemented?

The principle is that agency workers will get the same basic employment rights after 12 weeks' continuous engagement as directly employed workers. Exactly which basic employment rights will be covered in the UK is an issue that the UK government still has to clarify. However, expect the following to be included as a minimum:

  • right to statutory minimum notice; and
  • right to a statutory redundancy payment.

As soon as those rights are given to agency workers, they immediately become as expensive to dismiss as some directly employed workers.

Will that lead to "11 week churn", in which employers try to ensure that no agency workers clock up 12 weeks' continuous engagement? It may in some businesses, but such rapid turnover of staff would be an administrative nightmare for many and likely to impact adversely on standards of work or service to customers.

More likely perhaps is a "two year churn" effect: a directly employed worker only acquires the right to a statutory redundancy payment and to more than one week's statutory notice after two years' continuous service. If an agency worker must also serve two years to gain these rights, there will be a temptation on many employers to prevent them doing so by terminating them within the two years, even if they are later re-engaged. How the UK government frames the rules on continuity and on breaking engagements into separate chunks will be of great interest. The new legislation is expected to come into force next year.

Other future changes?

Much wider enforcement powers against employment agencies are being introduced in the Employment Act 2008. This is not part of the implementation of the Agency Workers Directive, but will nevertheless give inspectors wide powers to access documents and to share information with other agencies, such as HMRC, where infringement of rights such as the national minimum wage is suspected.

The courts' interpretation of who is an agency worker and who is directly employed has moved in the last few years, most recently in favour of employers. The current position, in brief, is that unless any documents setting out the relationship are a sham or obviously do not reflect reality, there is no reason to look behind them. However, if the effects of the downturn on agency workers result in further litigation on the issue, that could all change.