REC writes to Secretary of State regarding Workers (Predictable Terms & Conditions) Bill

This week, the REC wrote to the Secretary of State for Business and Trade (DBT) to reiterate our concerns about the Workers (Predictable Terms & Conditions) Bill and the potential impact on the industry, and wider supply chain. We provided evidence from our members about the potential damage the Bill could create and suggested that four amendments be added to the Bill, as it continues to progress through Parliament. The suggested amendments will still help government achieve its ambitions for the Bill but will ensure the genuinely two-sided flexibility that agency workers enjoy is not undermined and will shield agencies from unnecessary administrative burden. You can read the text of the letter below.

Dear Secretary of State,

Further to the REC's letter dated 26 May 2023, we are getting in touch today to make clear the impact that will be felt across the wider business community if the above Bill is introduced. We are concerned that some of the proposals will create unnecessary and costly burdens to businesses at a time when it could do the most damage. Against a backdrop of high inflation and ongoing labour and skills shortages, we need to increase productivity, boost investment, and support businesses to grow and work efficiently, not pass unnecessary burden onto them. 

Evidence from recruiters - the scale of the problem created by this Bill

An REC member operating nationwide said that if just 3% of their temporary workforce submitted requests to have more stable contracts, they would have to process 270 such requests every week. They estimate that the additional administration would require them to hire 7.5 more staff. While getting more people into employment is a focus for the government, it shouldn't come at the expense of overall growth. Based on the median weekly pay for a full-time member of staff in the UK of £640 a week, it would cost almost £250,000 a year for this business to handle the administrative burden this Bill will create. Across the UK's recruitment industry, this requirement would potentially cost hundreds of millions of pounds. And it’s not just a cost to the industry, this proposed legislation will have a huge impact on the wider supply chain, pushing up costs at a time when inflation is already high, and could significantly exacerbate existing labour shortages - resulting in consumers ultimately paying more for goods and services.

Suggested amendments

 1. Remove agency workers from the scope of the Bill

The flexibility of temporary work is what enables it to play a key role in the UK labour market by allowing workers, particularly those with caring needs or other commitments, to work to their own schedule. It also allows businesses to respond to peaks and troughs in demand quickly and easily. We know that the genuine two-sided flexibility working via an agency offers is the main reason why workers choose to work in this way. Deleting “Chapter 3" from the Bill would remove temporary workers working via an agency from the scope of the Bill but without diminishing the protections that are already afforded to these workers.

 2. Extend the right to request to 12-months

The current proposals would allow a worker to request a more stable contract after only 12 weeks. This makes no sense for temporary workers or the end-hirers who use them, as it undermines the inherent flexibility that both the worker and hirer are seeking. Although the Bill allows for employers to reject these requests, the process of reviewing the request and potential claims against rejected requests would be a huge waste of time and resource. Extending the right to request to 12 months, as originally suggested by Matthew Taylor in his ‘Good Work Plan’, would prevent the number of unsuitable requests but still see the government meet its 2019 manifesto commitment.

3. Remove right to request contracts from hirers

Hirers are not involved in the contractual arrangements between the worker and the temporary work agency and in many cases, have no knowledge of the terms of the contract between the worker and agency. Forcing hirers to pick up some of this administrative burden will very likely dissuade them from engaging temporary workers. In addition, because an end hirer isn’t likely to be aware of a worker’s contractual arrangements, the request would almost certainly end up being passed to an agency anyway.

4. Explicitly include umbrella companies within the scope of this legislation 

The regulations as proposed will apply to all “temporary work agencies” as defined in the Agency Worker Regulations 2010. This legislation would need to be specifically amended to include reference to umbrella companies should these proposals go ahead. Last year's call for evidence on umbrella companies is now being taken forward through consultation, so presumably the government should not be inadvertently encouraging more people into a model before they have decided how to proceed on more effective regulation for the sector.