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The Prime Minister's (PM) office has secretly commissioned its own legal advice on the Agency Workers Regulations (AWR), according to information obtained by The Daily Telegraph newspaper.
It is alleged that Downing Street has been told by lawyers that the Business Secretary's department has "gold-plated" the legislation with additional rules that need not have been included, despite a pledge by the Coalition not to introduce unnecessary regulation that undermines business.
Mr Cameron's advisers are weighing up whether to strip out some of these provisions. The Daily Telegraph suggest that one option suggested is the 'Armageddon' tactic of simply refusing to introduce the new laws, a move that could result in multi-million pound European Union (EU) fines for the government.
Ann Swain, Chief Executive of the Association of Professional Staffing Companies (APSCo) commented: “Indications coming out of No. 10 that there will be a review of how limited company contractors are excluded from the Agency Workers Directive are to be welcomed. APSCo have provided Government with a methodology that will clear up the lack of clarity that remains and we hope that this will now be adopted.”
“If the Government is to undertake a wider ranging review of the Directive, however, the issue that is in most need of review is around liability where there is a breach to an agency worker’s rights to equal treatment. The Government should seek to halt the trend of client organisations including indemnities within their contracts, which pass liability for any breach under the AWR to the recruitment firm. Liability should be apportioned according to responsibility for a breach, in line with the spirit of the Directive.”
Kevin Green, the Recruitment & Employment Confederation's (REC) Chief Executive, commented "we welcome the fact the Prime Minister is reportedly taking a direct interest in their impact."
"If the government was to go head to head with the EU in simply refusing to introduce the new laws, there would be legitimate questions as to why this option was not pursued before as agencies have already invested substantial time and money in preparing for implementation on 1 October 2011."
"In most sectors, the impact will be limited and recruiters are already working with their clients to make new equal treatment measures work. However, any measures to streamline the way that the regulations are applied would of course be welcomed."
"One realistic way forward would be for the government to agree on an early 'one-year' review of the Regulations."
Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC), said "the BCC first wrote to Coalition ministers in June 2010 to warn them that the AWD regulations were gold-plated and needed to be re-written."
"We have since made clear proposals to the government for simple changes to the regulations around pay, holidays and job comparisons that would save companies hundreds of millions of pounds without undermining the spirit of the directive, which currently stands to cost business 1.6 billion Pounds each year to implement."
"With one in five businesses (21%) who currently use agency workers telling the BCC that they would hire fewer after the implementation of the directive, the implications for the economy and jobs are significant. The government must urgently clarify whether it intends to delay implementation of the directive to spare businesses even greater uncertainty and potential costs."
Kevin Barrow, Partner at law firm Osborne Clarke, said "this story seems 'political' and may all be a bit of spin. Is it a ploy allowing the government to say it looked at the problem but it could not in fact change anything because of 'the EU' or because of 'Gordon Brown's mistake' in allowing the AWD through in 2009?"
"It is very late to do anything. Hirers and staffing companies have spent millions on planning for implementation, and need to know very soon if the government is serious about the reported proposals."
"The PM's policy adviser has previously been reported as wanting to scrap maternity rights, close job centres and introduce technology to make Britain sunnier. None of these plans have been implemented as yet, and it seems that often it is then denied that he has made the proposals as reported."