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The government is to delay key elements of its employment protection legislation until after the election in an attempt to keep the labour market flexible and slow the increase in unemployment, the Guardian reports.
Lord Mandelson is today expected to announce that the European Union's agency workers directive will not be implemented until October or December 2011 — the last possible commencement date under EU law.
The government is also expected to announce that laws giving workers rights to take time off to carry out civic duties are to be scrapped. In addition, small businesses (any firm employing fewer than 250 employees) will have a year's exemption from forthcoming legislation enshrining employees' right to time off for training.
The decision is likely to be controversial with the trade unions that have campaigned hard for the government to implement the agency workers' directive as a way of protecting part-time workers and preventing full-time staff being undercut by cheap agency staff. Brendan Barber, General Secretary of the TUC reacted by stating that "Agency workers are even more in need of protection during a recession. Vulnerable workers are always the first to suffer when times are hard."
For the UK staffing industry and business leaders, however, the delay will come as a relief especially given current labour market conditions. Katja Hall, CBI director of employment policy, said delaying the agency workers directive would help companies and job seekers, but â€œwhen it is introduced, clear, easy-to-follow rules for employers are essential. In particular the regulations must set out that equal treatment is to be established against real-life employees in the workplace, not the fictional characters called for by the trade unions.â€? Miles Templeman, Director-General of the Institute of Directors, described the delay as â€œexcellent newsâ€?
The announcement does not renege on the commitment to implement the directive, but does give business the maximum time possible to adjust to the regulations. Ministers also hope that by 2011 there will be less pressure on the labour market.
The delay means that implementation of the directive will come after the next General Election (due on or before 3 June 2010) so the final details of the legislation will likely not be decided until next Summer at the earliest.
Shadow business minister Jonathan Djanogly said at the Conservative conference last week that his party would delay the implementation of the directive because it would cost British businesses £40bn over the next 10 years.
Kevin Green, chief executive of the Recruitment and Employment Confederation, welcomed the Tory proposal, saying: "We have been calling on the government to delay implementing this directive until the last possible moment in 2011. It is vital that the labour market recovers before the regulations are implemented. This is a complex issue and by waiting until December 2011 we can ensure that we minimise the adverse effect this legislation may have on jobs."