Tuesday, 3 March 2009

Agency Workers: Cannon Fodder of the UK Economy

One of the worst legacies of the Thatcher era (1979-90) and the Thatcherist politics we have seen since has been the casualisation of the workforce in the UK. I suppose this was a natural evolution of the anti-trade union policies that the Thatcherites felt were necessary such as the breaking down of the closed shop (i.e. it being compulsory for workers in a company to belong to a union) and the further erosion of the rights of trade unions in the early to mid-1980s. Beyond this though was the New Right attitude, that for companies to prosper they had to be able to recruit and discard workers as easily as possible without having to worry about things such as contracts and redundancy pay, effectively moving back to the kind of employment patterns prevalent before the Second World War. Along with this desire to have a 'flexible' labour force and reduce employment costs was a wish to remove the other seemingly burdensome cost of things such as sick pay, paid holiday, pensions and the costs of training staff. There was an expectation that you should be able to employ workers that were ready to work precisely for your company, the exact way you worked. This is why business has such problem with universities. It does not want educated, thinking people who may question their employers, instead they want people churned out who can fit into their particular company without any need to induction or retraining.

This attitude that this is the correct pattern of employment, with the workers giving unquestioning loyalty to a company even after they are laid off, has not really been challenged since Thatcher established as what she felt was the only 'logical' way to run workforces. The easiest way to get workforces like this is to employ them through agencies. The advantage of this is that they are not employed directly by your company, it is the agency who is responsible for the workers. They usually charge double the hourly rate that the workers are paid, but many companies and sections of the civil service and education prefer to pay these higher costs to get the flexible workforce that they feel they need. In fact this is often a fantasy as the case of a worker kept on temporary contracts for nine years at the University of Glasgow proved when he took his employers to court last year. In fact the university would have saved itself thousands of pounds if they had given the worker a contract themselves. The rights of agency workers have improved. The European Union's Social Chapter which was introduced in 1989 but which the UK finally signed up to in 1997 and The Fixed Term Employees Regulations of 2002 prompted by EU pressure have moved things on. The UK remains exempt from the Working Hours Directive of 1993. However, such rules allowed contract workers to pay into pension schemes and if their contract stopped (after a 13-week probation period) they were entitled to redundancy pay. Agencies have also introduced paid leave and sometimes sick pay, so things are getting better than in the 1990s when I was an agency employee.

My own experiences are not the worst out there but I know them well and they show up some of the difficulties that this approach to agency workers cause. I was on a contract for 2.5 years for one employer. It was a weekly contract which meant any Friday I could be laid off. My employer saw themselves as generous as they usually told me if I would be needed for the next four weeks. They reduced this to three weeks which caused difficulty for me as I had to travel for an hour on public transport to reach my workplace and buying a monthly season ticket saved me a lot of money. However, if I bought a monthly season ticket and then only needed it for three weeks my income would suffer (I was on that marginal an income). They did not understand why that was such a difficulty. They had enough work for 2.5 years, in fact for longer as it was me who resigned the job in the end, I could have stayed there longer there was more than enough for me to do and they had the money to pay me. I earned £10 per hour and worked a 36-hour week. Whilst they did not have to pay me holiday leave (I did not take one day off in 2.5 years) or sick leave, they had to pay the agency £20 per hour (half of which I received) to employ me which meant over the space of the 2.5 years (i.e. 130 weeks) x 36 hours x £10 = £46,800 for using the agency, which far exceeded any holiday pay, sick pay and redundancy pay that I would have received if I had been a member of staff.

The problems of being an agency worker did not simply extend to having no sick cover, no holiday pay or redundancy, it also prevented me improving myself. When new software was being introduced I suggested that I was sent on training to learn how to use it. I was told very directly that there was no point, when it came in, I would simply be laid off and someone who knew the software would be employed in my place. It was assumed that there would be people out there who knew this specialist software and would be willing to be employed at the same rate as me. Of course that is the 'logic' of the flexible labour market. The implication was that I should pay for training myself to make myself a suitable employee. This assumption that the burden of training should always lie outside companies whether in colleges and universities or through individuals paying for it is an enduring one. There is no comprehension that to have a new employee would lose all the expertise and experiences I had built up working for their company let alone the damage it did to my morale. No employer seems to understand that no-one wants to feel they are disposable and that if they do they are not inspired to do anything except go slow or sabotage the company. Most training courses are outside the reach of the average worker's income and as an agency worker you lose twice as you are not being paid anything while you are shelling out for the training.

The other problem I encountered when an agency worker was that no-one would take responsibility for me. This branch of the civil service employed 100 agency staff often rising to 150 over the Summer, out of a total workforce of 650 people. The Personnel Department would often refuse to communicate with me because I was not a member of staff. They did not see the problem in not signing timesheets on a Friday (a day they would pick to go on an 'away day'; I must say that the Personnel Department of that section of the civil service excelled in arrogance and self-centredness even among personnel staff) despite the fact that it meant the agency workers' wages would be delayed a week. The key problem came when the job came to an end. In Britain if you turn up at a Job Centre and have been dismissed or have resigned from your job and try to claim unemployment benefit (as opposed to income support) your benefits are frozen. You need a letter from your employer saying that they made you redundant. Now as an agency worker the Personnel Department said my work was coming to an end, but they said that because the agency was my employer it was up to the agency to write such a letter. However, the agency also refused to write me such a letter because they said it was up to the company if I kept working or not. Neither would accept responsibility for my work coming to an end despite the fact that they were condemning me to 6 months without benefits. They simply did not care what situation that left me in.

Thus, agency employment is a nightmare and leaves you very vulnerable. Of course originally employment agencies were supposed to be for people between permanent jobs or looking to find work to supplement their income as their main job was being a mother or they were retired. However, since the 1980s agency work has become the full-time main form of employment for thousands of people who have to battle to get any kind of protection. An interesting article by Owen Burcott and David Hencke in 'The Guardian' of 21st February 2009 reminded me of the extent to which agency workers are being used and how vulnerable they remain despite the legislative gains. It was found that 850 agency workers had been employed by car manufacturers BMW at their Cowley works outside Oxford and around 6,600 BT employees who were being laid off this year were agency workers. The BMW agency workers had a week's notice and received no redundancy pay, they are simply tossed aside because it is so easy. There is no thought about the fate of these people. Apparently the UK had 1.3 million agency workers, 4.5% of the workforce, almost one in every twenty workers, in 2006, a far higher percentage than elsewhere in the EU. Agency workers come from all kinds of professions from secretaries to warehouse workers to civil servants to skilled car makers to call centre staff.

The UK has a flexible labour force in its agency workers and yet it seems to have brought no benefits to the UK economy. As I have noted, companies actually delude themselves in thinking agency workers are cheaper than employing people directly, the reverse is actually the case. All that they relieve the company of is having to worry about the fate of these people. In doing this they forget about the damage to the morale of this workforce. Now, not everyone who works for an agency wants a permanent job, but from my own experience a large percentage do and settle for agency work because it is all that they can get.

There have been ongoing negotiations between trades unions and employers to get more rights for agency workers, particularly in terms of redundancy pay and periods of notice of termination of employment. Again it is only because Britain is being pressed by the EU (why can we not come up with some gains for workers without having to being pushed to do it) which wants such rights in position by 2011. You would think with a 'Labour' government in power they would be pressing ahead with such improvements, well they were until the evil (and I do not use that word lightly, I would add sleazy and corrupt to it too) Lord Mandelson who is Secretary of State for Business, Enterprise & Regulatory Reform and Pat McFadden Secretary of State for Work and Pensions are now trying to stop these minor improvements for fear of irritating business. In fact Mandelson, being an arch-Blairite rather than any Labour politician of course has no interest in benefiting workers simply in pandering to the wealthy who have got Britain into the appalling economic state it currently is in. We are supposed to get legislation before the summer but Mandelson is reviewing all that the EU is asking for to see what the minimum he can get away with and as union leaders have noted his decision to continue consultation is simply prevarication. In the meantime thousands of people are being thrown into poverty and dumped on the ritual pyre to the great false religion of flexible labour which simply means allowing employers to shaft their workforce and get away with it.

P.P. 19/03/2008 - It is interesting that the UK government this week is again resisting attempts to end its opt-out from the EU's Working Time Directive which would ensure that British workers would work no more than an average of 48 hours per week. The UK economy depends on workers doing long hours at low wages and they know it would mean a readjustment if people were stopped doing the 60 hours which are still common in some industries. Pathetically, they are using the case of volunteer fire-fighters, saying that they will be banned. There are 16,500 'retained' firefighters in the UK and 630 volunteer ones in Scotland, compared to 38,000 full-time firefighters. This is a tiny fraction of the working population. In addition, the UK is not unique in having volunteer firefighters, I know Germany has had them since the 19th century and yet they seem to have no problem with the Working Time Directive. The UK government should come clean and admit that the reason why they want British workers to be compelled to work such long hours is to keep employers on their side. These employers, despite their huge bonuses have set up a working economy based on long hours and low wages and to adjust it now would make them feel they had to lay off workers just as unemployment is rising. The British government, if it had any concern for the welfare of the British workforce, should have adopted the Working Time Directive at a time when they could have been less blackmailed by rapacious employers; it could have accompanied the introduction of the minimum wage. I find it incredible that the British government puts so much effort into fighting off legislation which would make the working lives of many of its citizens better.

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