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Time is up for temporary staff, say third of bosses

Taken from The Telegraph on line…

A third of employers will sack temporary workers to avoid having to pay them at the same level as permanent staff under new European legislation, research suggests. The first round of job losses is expected to hit workers this month, after the new rules came into force in October 2011.

Many short-term workers will have their employment terminated before completing 12-week trial periods, according to a survey. Under the new EU Agency Worker directive, after this time employers would be forced to give them the same rights and pay as permanent staff.

The survey of 42 recruitment agencies by the Association of Professional Staffing Companies (Apsco) showed that 29 per cent intended to terminate short-term contracts before the trial period was up. Ann Swain, chief executive of Apsco, said “tens of thousands” of workers would be affected. “At a time when unemployment among young people has surpassed one million, any barrier to securing work has to be questioned,” she added. Phil Hutchinson, operations manager at g2 recruitment, said: “Some clients have already begun the process of terminating contracts.”

The law comes into force despite a pledge by George Osborne, the Chancellor, to boost the UK economy by cutting red tape and removing obstacles that stand in the way of growth. The directive was first introduced by the Labour government, then reassessed by the Department for Business, Innovation and Skills (BIS) after the election. Liberal Democrat ministers later announced that it would be implemented as planned. The Government has conceded that it has effectively been forced to introduce the “disappointing” regulations following pressure from trade unions.

Since the decision was taken the economic situation has deteriorated significantly and senior Conservatives are understood to be angered by the change. An analysis of the new laws by BIS revealed that it will cost firms more than £1.8 billion a year, leading to warnings from big employers that they will have to cut jobs. A typical small business will have to pay an extra £2,493 a year, increasing to £73,188 for larger firms. Public sector employers, meanwhile, will have to pay an additional £259  million a year, although the Treasury expects to generate up to £332 million in taxes paid by workers earning more.

Analysts said that if ministers had refused to implement the new regulation they would have faced legal challenges from agency workers.

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