Last nights Dispatches program on Channel4 put some practices into sharp emphasis around how Agency workers are paid and “employed” (or not as the case may be). The practice of using self employed status and / or running people on contracts for service was an emphasis of the program and it was clear that many a worker had not understood what they were getting involved in. The issue of self employment is a tricky one because there will be circumstances where that becomes potentially lucrative for the worker and there is a counter issue of whether someone should be self employed when in fact the actual practices look and smell like employment. If workers are being coerced or forced into a self employment status with proper status checks, then everyone is very right to question that approach. However, self employment per se is not wrong, it just needs to be understood and used appropriately. Clearly many a company pass the liability for that down the line and implementation of a process to check all this easily gets overlooked.
Turning to the issue around “employment” and agency working. The program rightly exposed alleged breaches in minimum wage legislation and it’s a well know fact (in this industry) that aggressive operators (agency and provider) use a combination of expense and pay rates to create a “minimum wage” like calculation but often on the basis of manufactured expense values. There is also the issue around using zero hours contracts and contracts for service, both of which afford little protection to the worker (and ironically the agency and end-client).
In my world there is no concept of “employment lite”; you are either employer properly or you’re not (and then were back to the self employment debate). That means that the worker (with Parasol for example) is paid at least minimum wage (and not artificially created) and received a guaranteed hours contract and is entitled to the range of statutory benefits plus any other benefits the employer offers. This creates a clear employment condition (as tested in the courts!) and is a win win for all in my opinion. The end client knows that there is responsibility and brand and employment risk mitigation from being exposed as an aggressive user of labour, the recruitment agency has employment risk mitigated along with the same brand protection and the employee is a solid overarching employment condition with no short cuts! So what’s the downside? Well… for many in the lower paid sector this means that the end client and agency have to agree to a proper rate for the role and in particular be clear that the Agency or Provider is not retaining margin by being “clever” with calculations. It’s called transparency.
I think we would all agree that the recession has been tough for everyone but that can’t be used as an excuse for propping up margins or forcibly reducing costs when using a valuable asset, the flexible workforce. I am convinced that a flexible contingent workforce operating under ethical and compliant conditions still affords everyone in the supply chain a huge range of benefits and protections at every stage.