CBI: Agency Workers Regulations “a drag on job creation”

Posted on 1 Oct 2012

The CBI has today said that, a year after they came into force, the Agency Workers Regulations are thought to have cost businesses over £1.5bn with temp workers not reaping the expected rewards.

Analysing the impact of the regulations, Neil Carberry, CBI director of employment and skills, said: “The vast majority of the £1.5bn has paid for paper-pushing to ensure compliance. This has in turn led to a reduction in temps hired in eight out of nine months in 2012, despite a rise in permanent staff being hired.

“We cannot afford to be complacent, given that we would expect increased demand for agency temps in uncertain economic times, not a drop.”

Addressing the upcoming review of the AWRs, the business organisation has identified the areas where the government should focus its efforts to simplify the regulation.

Among the recommendations are the streamlining of the definition of pay to allow for easier comparison; the simplification of the 12-week qualification period to ensure those on short-term assignments aren’t needlessly caught up in the regulations; the removal of gold-plating where the regulations specifically go beyond that required by the directive and UK implementation agreement; and the stripping out of the incentive in the regulations to lodge opportunistic tribunal claims.

Mr Carberry continued: “The government must not shy away from a review of all aspects of the regulations that are left to the UK to decide. Given the very significant costs of complying with the EU directive, we should be bold in stripping out needless administration that threatens hiring and does nothing to benefit temporary workers.”

CBI research has shown that 57% of firms that use temps have reduced their use as a result of the regulations – 3% have increased their use, while 8% have stopped using temps altogether. According to TEAM research, 62% of agencies have reported a negative experience of the regulations.