Agency workers deal 'disastrous' for small firms

A deal reached between government and employers to give agency workers the same rights as full-time staff after 12 weeks in a job is a huge blow for SMEs, the Federation of Small Businesses (FSB) has said

The lobby group made the claim following a deal brokered by the government on an issue which has provoked fierce debate for many years.

While trade unions have called for greater protection for agency workers, employers have argued that extending their rights would lead to businesses taking on less staff.

But amid pressure from Labour MPs on ministers to reach a settlement, a joint declaration by the government, Confederation of British Industry (CBI) and the Trades Union Congress today confirmed that legislation will be tabled later this year which provides for "equal treatment" of agency staff after 12 weeks in employment.

Although business secretary John Hutton described the agreement as "the right deal for Britain", the CBI called it the "least worst option" while the FSB went further saying it was a disaster for small business owners who rely on the flexibility provided by agency employees.

"Agency fees and high hourly rates mean temporary workers, far from being seen as cheap labour, are already a costly but useful way of responding to fluctuations in demand," said the FSB's Tina Sommer. "If that flexibility is lost, many small businesses will stop using temporary employees.

"Part of the reason for the UK's relative economic success in the past decade has been the flexibility of its workforce. This deal could put all that at risk at the worst possible time."

Sommer added that with unemployment rising and economic growth at its lowest point since the last recession, Tuesday's agreement is "the last thing small businesses need".

BusinessZONE 20th May 2008



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