Gordon's last hurrah!

Depending on how you take your politics, last week’s Queen’s Speech was either the final ramblings of a dying government or a canny piece of showboating, aimed squarely at the opinion polls. What’s generally agreed though, is that it was largely academic. With an election on the cards next spring (or earlier if Gordon’s feeling particularly suicidal), much of its legislation has little chance of hitting the statute books.

But buried away in Her Majesty’s prose, ignored by most commentators and sketch writers, was a significant change in employment law that could have a major impact on British businesses. And because it’s being driven by an EU directive, it has to take effect by October 2011 at the latest. The nub of it is this: agency workers with 12 weeks in a job will now have the same pay, holiday and other basic rights as permanent employees. 

With the economy still to emerge from its bank induced coma, these changes could hardly come at a worse time. Right now, employers love agency workers because of their lower cost and greater flexibility. They’re paid less than permanent staff and can be hired and released as business ebbs and flows. But with the new legislation giving them equal employment rights, the affair could end badly. Rather than bear the increased cost of recruiting agency staff, without the upside of total flexibility, many businesses may choose not to hire them at all.

The government insists that a final agreement on the EU directive will allow it to be implemented in a way that meets its twin objectives of providing greater fairness for agency workers while maintaining flexibility in the labour market. But the devil will be in the detail. As to whether it will prove a bureaucratic and untimely burden to employers, the jury remains out. 

Of course unless pigs fly next May or Gordon gets a visit from his fairy godmother, it’s not likely to be his problem in the long term. But it will be ours.

For further information please contact Paula Morris. T: 029 2047 4401 E: p.morris@capitallaw.co.uk