Working Conditions for Temporary Workers

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Alan Johnson: The hon. Member for Runnymede and Weybridge (Mr. Hammond) said that when he came into the Committee Room he was ready to give me his unstinting support. I have enough problems with this measure without having the unstinting support of the Opposition, especially as it would be based on the tired, hackneyed old argument that we have the problem because the Government signed up to the social chapter.

I want to make it absolutely clear that we were pleased to sign up to the social chapter. We agree with

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the principles and the values that underpin the European social model, as we told the electorate in 1997 and 2001. That is one of many clear differences between the Government and the Opposition. Not signing the social chapter led the Conservative Government into even more problems in Europe than they had already. On the European works councils directive, for example, because of the opt-out from the social chapter transnational companies based in this country were governed by a European works councils model that affected their employees but over which they had no influence.

The hon. Gentleman now seems to support the working time directive; when asked what minimum standards he supported, working times were one of them. Working times, which are part of this directive, too, are dealt with under health and safety. The previous Government found themselves in a terrible mess because they did not realise that; they ended up in front of the European Court of Justice and lost hands down, not on the steps of the court, but inside it. The only thing that they achieved related to the one day off, which under the European works councils directive was to be a Sunday. The party of the church and the family managed to get that proposition removed so that it could be any day of the week.

Mr. Ivan Henderson: Was it not the case that while the Tories opposed the social chapter, companies in this country, including one that I used to work for, were volunteering to sign up to the European works council even though the previous Government discouraged it? In those years, the Conservative party used temporary labour to force down permanent labour conditions. Protection was necessary for people in work and for those in temporary labour.

The Chairman: Order. We are not debating the social chapter. We should stick to the proposals before us.

Alan Johnson: My hon. Friend the Member for Harwich (Mr. Henderson) has made his points eloquently. We have signed up to the social chapter, which brings us to the current position. The Conservative Government were not concerned about protecting workers' rights. The opt-out was not about protecting UK workers, but giving the Tory Government the opportunity, by abolishing wages councils and so forth, to make the UK the sweatshop of Europe. We are now in dialogue and people recognise that we approach the issues from a different position. Where the Tory Government were simply hostile to workers' rights, we want to exert some influence to protect them.

If the issue still depended on unanimity, we could have used another method to block an unattractive proposal, but it now depends on qualified majority voting. Why? That is because the Thatcher Government, under the Single European Act 1985, extended qualified majority voting for these very issues. Rather than waving our bludgeons in the air and opposing anything to do with protecting agency workers, our approach is to influence the European Commission's proposals.

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The hon. Member for Runnymede and Weybridge should understand that the proposal is based on two principles: to promote employment and to open up agency working. My hon. Friend the Member for Harwich was right when he said that it would not affect our competitive position. Until recently, employment agency working was illegal in some areas of the EU: it became legal in Italy in 1997 and in Germany 25 years ago. The UK, however, has more than 100 years' experience of agency working and regulation. [Interruption.] I am advised on a late wire that temporary agency work became legal in Greece in November 2001.

Dr. Ladyman: The hon. Member for Runnymede and Weybridge can speak longer than the chairman of the North Korean communist party. Buried somewhere in his long tirade was an attack on workers' rights and ideas that would fundamentally undermine British agencies, which would not be able to compete with agencies employing British workers abroad.

Mr. Hammond: Nonsense.

Alan Johnson: No, that is not nonsense. My hon. Friend is right. The transnational position is sorted out, but large agencies operate all over Europe. We do not accept that there is no need for the directive. Agency workers deserve protection and we agree with the directive's principles, particularly the opening up of employment agency working in countries with no prior experience of it because it was illegal, and in countries where the protection of permanent jobs militates against agency working. The proposals thus contain advantages for the EU.

However, I acknowledge some problems and agree with some of the concerns expressed by the hon. Member for Runnymede and Weybridge. If pay is included—we believe that the directive's legal basis will not allow it—it could cause problems in this country. Let us say that employment agency staff—my wife was one of them—decide to work for a secretarial temping agency that pays £12 an hour. The workers could go to another agency that pays £14 an hour or one that pays £10. There are 17,000 employment agencies that are small and medium enterprises. No one press-gangs people to work for agencies; people choose which agency to work for and know basically what the hourly rate will be wherever they work.

If that situation were to change, and the hourly rate fluctuated depending on where workers were placed, there would not only be a huge bureaucratic burden on the agency and the hiring company; the agency workers would also be affected, and their voice has not been clearly heard in the debate so far. Only 7 per cent. are unionised. Temporary jobs are an important stepping-stone to permanent employment. The percentage of people from ethnic minorities who work for agencies is three times higher than that of ethnic minorities in permanent work. People get into permanent work by going down the agency route, so there is an important social advantage. Our concern is that, if we do not get the directive right, particularly in respect of pay, there will be an adverse effect on employment opportunities for that important group of people.

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Another statistic is interesting, given that the Government want to end the long working hours culture. I do not know whether hon. Members heard this morning's report from Japan about people who work 60 hours a week as opposed to 40 hours and have a propensity to heart attacks. We are introducing measures designed to reduce the long hours culture. That is partly about covering hours by using agency workers, rather than overtime. When companies were asked about alternatives to using agency workers if that became prohibitively expensive or bureaucratic, 17 per cent. said that they would not do the work, and 38 per cent. said that they would cover the work through overtime. That unhappy situation is not in line with our approach and our long-term goals.

We are also considering the Better Regulation Task Force recommendations, and whether we can solve problems other than through regulation that may damage the industry. There are important concerns.

Mr. Hammond: I am listening to what the Minister is saying and I do not disagree with much of it, but will he be clear about what problems need to be addressed? We have talked in fairly woolly terms about the rights of agency workers, but what is the Government's evidence of abuse that needs to be addressed?

Alan Johnson: Our evidence of abuse applies mainly to what we are introducing in domestic legislation. It does not apply to what we are discussing. It applies, for instance, to young girls who want to be models or actresses and the way in which some model agencies take them on and insist that, as part of the deal, they have a particular photographer, who charges an exorbitant amount. The pay arrangements may also be unsatisfactory. All that relates to the regulations that have gone out to laborious consultation.

As I said in my opening statement, our major concern in this debate focuses on the fact that, if an agency worker is placed for less than six weeks, there is a derogation. That would cause particular problems in this country. The one thing on which we agree entirely is that companies should not use agency workers as a substitute for permanent employment, and we have suggested a period of a year to 18 months in that regard.

There is a way to get round the problem. Under the Employment Act, we are increasing statutory maternity leave and introducing paternity leave. That is not particularly relevant, because it is only two weeks, but there will also be adoption leave for the first time. There are all kinds of reasons why workers will be absent for longer, and one of the best ways to cover them is through agency staff. We are focusing on that area.

The hon. Member for Runnymede and Weybridge mentioned a couple of points. We think that the comparator is interesting. The Union of Industrial and Employer's Confederations of Europe has argued that the comparator should be someone in a similar position and that they should be an employment agency worker rather than a worker in the company

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with which they are placed. We shall consider that interesting proposition.

The hon. Gentleman also mentioned derogation for collective agreements. Although I understand his point, that is not an issue in the proposed directive. He mentioned Germany's position and, like many people, unfairly commented on how it has huge unemployment. Germany has gone through reunification, which was a tremendously difficult process. Also, if he compares Germany with the UK during the past 20 years—never mind the past 30 or 40 years—he will find that unemployment has been on average much lower. Furthermore, Germany is not governed by a lot of collective agreements on agency workers. Indeed, recent legislation ensured that temporary workers would get equal treatment on pay and conditions once they had been placed with the company for 12 months.

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