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30 September 2011

The food processing sector relies on agency workers to provide both skilled and unskilled labour on a flexible, cost-effective basis. However, new EU legislation introduced this autumn could leave many food manufacturers exposed to increased costs and even litigation if they don’t consider their temporary worker strategy carefully and comply with the new directive. Here, Emma Finlay, Quality Manager at food manufacturing recruitment specialist, Linear Recruitment, explains the changes, their i

New Rules
Aimed at ensuring that agency workers are fairly treated by their employers in terms of pay, conditions and facilities, the Agency Worker Regulations (AWR) came into force on 1st October. While the regulations stipulate some ‘day one’ rights such as equal facilities and the right to apply for internally advertised vacancies, the most significant element of the directive is the week 12 rights, which will begin to affect employers this December.

According to the new legislation, any agency worker that’s employed for 12 weeks or more is entitled to equivalent rights, pay and conditions to their permanently employed peers. This includes a long list of criteria, but perhaps the most significant impact on employers will be the rights to the same pay and holiday pay as equivalent permanent staff.

For many companies the bottom line is that the wages bill will go up. Agency workers will continue to work on a temporary contract basis but anti-avoidance mechanisms have been built into the legislation to prevent employers from simply breaking and re-starting their contracts to get around the new rules. Consequently, a much more strategic approach will be required to balance the need for staff with the necessity to keep overheads to a minimum.

Alternative Approaches
There are a number of ways to tackle the rule change and for some companies the common sense approach may be to stop hiring agency staff altogether. However, this solution can only work if the company has a workable alternative to staffing its production line cost effectively with casual workers and the cost of recruiting without the use of a recruitment agency may outweigh the wage savings.

Another solution is to use ‘Swedish Derogation’, whereby the worker becomes an employee of the recruitment company and is therefore not subject to the 12 week entitlement to equal pay and conditions. However, this means that notice periods apply so, unless the food manufacturer needs temporary staff for very defined periods allowing a notice periods to be planned in advance, it’s not really a viable approach for some businesses.

For employers that need large amounts of unskilled labour, employing agency workers for less than 12 weeks and changing staff on a 10-11 week basis may be possible but, once again, in most cases the draw backs are likely to outweigh the benefits. Even unskilled roles require an understanding of the task and there’s a lot to be said for holding on to the reliability of workers who have proved their value.

For most larger food manufacturers the answer lies in working closely with a trusted recruitment partner that can help devise a strategy aligned to the employer’s business. Some, like Linear, may even absorb some of the costs based on a minimum level of business or preferred supplier arrangement. At Linear we have been developing strategies in partnership with clients to prepare for the changes and have even offered to indemnify our clients against litigation if they provide us with the accurate, up-to-date information we need to advise them properly.

Joint Liability
Ultimately, the manufacturer and their recruitment agency have equal responsibility for ensuring that they comply with the AWR, so the most important advice is to communicate effectively with your recruitment partner and work together to achieve the best solution.

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