In 2007, Unicef’s index of child well-being showed that children living in the UK were unhappier than their counterparts in other OECD2 countries. Today, they publish a study which attempts to uncover ‘why’?
The well-being of our children, it would seem, stems in part from the organisation of our working lives.
The UK has a well documented inequality problem. UNICEF’s research identifies cultural and attitudinal differences which colour understandings of social inequality among families in the UK, Spain and Sweden. While social attitudes undoubtedly both inform and draw on national culture, UNICEF identifies two quantitative, material, substantive explanations for the UK’s deficit in child well-being: low pay and long working hours.
Reassuringly, children across the study report having similar needs, wants and concerns. UNICEF’s claim however, is that the response children get from each society is quite different: ‘Children are more likely to thrive where the social context makes it possible for them to have time with family and friends, to get out and about without having to spend money, to feel secure about who they are rather, than what they own, and to be empowered to develop resilience to pressures to consume’.
Children’s happiness appears to depend on having parents who can offer security, give of their time and act as role models for resilience to market pressure.
In Spain and Sweden, family time was ‘woven into the fabric of everyday life’. In the UK, ‘the rules which governed family life’ were less clearly defined. These ‘rules’ must stem from many sources and include strong social norms which guide our behaviour and our personal understandings of what constitutes ‘good’ parenting. Yet the rules which govern family life are inevitably connected, indeed inseparable from, the formal laws which regulate employment relations between employers and workers.
UNICEF observes of the UK: ‘Where parents are paid at, or close to the minimum wage they often must work long hours or take several jobs in order to make ends meet and this can impact on their ability to spend quality time with their children. Other parents found it difficult to see their children due to long hours that were demanded by their particular jobs, rather than economic necessity.’
I wonder how secure parents feel at work? How much control they have over working time? How resilient they are to pressure at work?
National frameworks of employment law and traditions of industrial relations shape many of the resources available to nurture family life. A timely illustration of normative difference can be drawn from the various domestic laws regulating the treatment of agency workers in the UK, Spain and Sweden. All must meet the common European standards set out in the Agency Workers Directive 2008/104/EU. Since this Directive states that agency work meets ‘the need of employees to reconcile their working and private lives,’ the example is not only timely, but pertinent to the issues raised by UNICEF.
In Sweden, legally binding collective agreements between trade unions and employers give agency workers’ pay and conditions comparable to workers who are directly employed by the company hiring them (the end-user). In Spain, Law 29/1999 stipulates that agency workers must receive the same pay as employees of the hiring company. In addition, the use of agency workers is restricted to cover sickness and maternity leave, temporary work peaks and specialist work. In the UK, the sole legislative requirement in respect of agency workers’ pay is that the national minimum wage applies to the hours worked on an assignment.
Since 1999, Spanish legal provisions have been enhanced by five sectoral collective agreements that are nationally applied to agency workers. Unions and employers agree that 2.5% of the total wage bill of each employment agency be invested in training. Enhancing employment security was the priority objective in collective agreements and further legislation, introduced by Law 43/2006, aimed to reduce the use of temporary contracts. In the UK, there are no restrictions on the use of agency labour other than to prevent agency workers being used to break a strike.
TUC research in 2004 found that 14 out of 20 EU Member States studied already had equal pay protection in place for agency workers. The UK stood out as an exception, not only because of its lack of protection, but also because of its enormous numbers of agency workers. Drawing on figures from 2001-2003, the UK had 600,000, compared to 110,000 in Spain and 26,696 in Sweden.
To create a level playing field, the EU Directive on Temporary Agency Workers provided that across Europe, ‘the basic working and employment conditions applicable to temporary agency workers should be at least those which would apply to such workers if they were recruited by the user undertaking to occupy the same job.’ The deadline for implementation is December 2011 and these basic equality rights will begin to apply in the UK in two weeks time. As a result, London-based international Law firm Allen and Overy claims that one in three of the UK’s agency workers will be getting the sack just in time for Christmas this year. The total number of UK agency workers is now 1.5 million.
From 1st October 2011, UK agency workers are entitled to the same ‘basic working and employment conditions as [they] would be entitled to for doing the same job had [they] been recruited by the hirer.’ However, this parity is limited to pay, working time and holiday entitlement. Expressly excluded is sick pay, maternity pay, redundancy pay, pension, payments for time off for trade union duties and any payment for expenses. Nevertheless, employer representatives are still kicking and screaming about it. On many internet comment pages, readers engage with one another in a spirit of furious competition, as though rights for agency workers threaten the nation.
UK agency workers will be entitlement to this limited pay equality only once they have worked in the same role, with the same hirer, for 12 weeks (which is why Allen and Overy conclude so many will be sacked by mid-December). A hirer can satisfy these requirements by either dismissing agency workers before the 12 weeks expires, or by identifying a directly employed worker who is engaged in ‘broadly similar’ work for the same pay.  For the purposes of comparison, the regulations also permit regard be paid to whether the two workers ‘have a similar level of qualification and skills’; an additional step not required in equal pay comparisons between workers of either sex under the Equality Act 2010. On average, UK agency workers earn 32% less than comparable employees who are directly hired.
Most of the UK’s temporary agency workers would rather not be part of a flexible, supposedly happy-go-lucky, band of brothers and sisters who only want to work as and when they are chosen. In fact, 72% of them do not wish to be agency workers at all. UK agency workers are generally engaged under a ‘contract for services’ rather than a contract of employment. These agency workers do not have the legal status of ‘employee’ and are not entitled to many rights which UNICEF would probably consider important to establishing a social context in which children can thrive:
- Maternity or parental leave
- Time off (unpaid) for family emergencies
- Protection from unfair dismissal
- Paid notice of termination of employment
- Redundancy pay
- Protection of employment with business or service transfer (TUPE)
- Access to a stakeholder pension
- Right to be paid by an employer when undertaking health and safety training
Agency workers who are not employees only receive wages for the hours worked on an assignment. Particularly for those who have children to support, it must be difficult to restrict their working hours by turning down work when it is available. Since they have little employment protection, it must be tough to remain resilient in the face of pressure. If the structural purpose of agency work in the UK is to provide employers with a labour tap which can be turned on and off with ease, security must be in short supply.
The EU Agency Workers Directive, whilst requiring equal treatment, recognises that if an agency worker actually has a permanent contract with an agency, and from that position of protection is placed on temporary work assignments with various hirers, exemptions are permitted. The point made is that the insecurity, lack of rights and uncertainty associated with temporary work need not necessarily always be a feature of working for an agency. However, the use which has been made of this exemption in the corresponding UK regulations appears to be driven by a more cynical rationale. Although the EU Directive assumes that a permanent contract demonstrates commitment throughout periods of transition and change and involves more that one assignment under the duration of the contract, the UK legislation makes no such requirement.
The UK Agency Workers Regulations (2010) provides in Regulation 10 that the right to equal pay specifically, does not apply to agency workers engaged under a ‘permanent contract of employment’. The permanence of this contract is evidenced by the agency setting out the following:
- a minimum rate of pay (which must be either the National Minimum Wage or at least 50% of earnings in the highest earning week in the previous 3 months)
- the location or location(s) where the worker may be expected to work
- the expected hours of work (when an assignment exists)
- the maximum hours the worker may be required to work (when an assignment exists)
- a minimum guarantee of at least 1 hour of work each week
- the nature of the work
- that the worker acknowledges they lose all rights to equal pay
This ‘permanent’ contract cannot be terminated until the agency worker has been paid at the minimum rate during any period in which they are not hired out, for a maximum of 4 weeks during the lifetime of the contract.
In short, under a ‘permanent’ contract, an agency worker gains the cushion of 4 weeks on minimum pay, in exchange for giving up their right to equal pay. Since agency workers, on average, are paid two-thirds the rate of their directly employed counterparts, by the time they have spent 12 weeks on an assignment, their accumulated pay disadvantage equates to 4 weeks worth of pay in any event. Since an employer’s commitment to provide minimum pay during periods of worklessness does not increase with the duration of the contract, this arrangement appears to have little prospect of enhancing employment security for agency workers. It underwrites their pay losses during the first 12 weeks, in exchange for throwing away any prospect of pay equality thereafter. The rationale for the UK’s use of the permanent employee status exemption is to alleviate a cost burden on end-user-hirers of up to £3,722 per agency worker per year. In fact, 38% of hiring organisations have stated that after 1st October they will only take on those agency workers who agree to be bound by the exemption.
Since I have turned to a comparison of national attitudes towards agency workers’ pay in the context of UNICEF’s observations of cultural differences towards the ‘rules which govern family life’, it is interesting to note that the UK’s Regulation 10 opt-out is colloquially known as the ‘Swedish derogation model’. Allegedly, trading equal pay rights for a ‘permanent’ contract, draws on labour market practices in Sweden for inspiration.
However, as with all national responses to social inequality, the treatment of agency workers is informed by a background of social attitudes and cultural norms.
In Sweden, employment agencies adhere to minimum rates of pay which are reached, by sector, through negotiations between employers’ associations and trade unions and are based on the principles of the EU Agency Workers Directive. All employment with an agency is automatically assumed to be permanent unless otherwise specified. If stipulated as a temporary contract, it is subject to strict time limits. Swedish employment agencies have faced stiff competition from employment agencies established in lower wage EU economies such as Lithuania and Poland. Hence, Sweden has responded to agency worker competition from low wage EU member states by using the Agency Worker’s Directive to insist that minimum rates negotiated in sector specific collective agreements are adhered to.
Before a Swedish based hiring organisation takes on an agency worker, the law requires that this Swedish company must consult with their employers’ association to ensure that the terms of the relevant collective agreement will be observed.
Employment agencies are members of the Swedish Staffing Agencies Association which signs negotiated agreements with the Swedish trade unions. Membership provides the agencies with authorised status and obliges them to follow a collective agreement. In the event of a collective agreement being broken, the agency can lose its authorisation to operate.
Collective agreements for skilled agency workers guarantee monthly pay based on 133 hours, rising to 150 hours after 18 months employment. They also cover compensation for overtime, displaced working time, on-call duties, travelling time compensation, holiday and sick pay. The agreements for unskilled agency workers provide for a guaranteed wage for the times they are not hired out to a client based on 90% of their average income during the prior three months. The agreement also covers issues such as working time, travelling time compensation, leave of absence, sick pay, holiday, the working environment, vocational and educational training. There are also minimum pay rates that apply while these workers undergo this training.
In Sweden, it is these sector collective agreements that regulate the employment contract, not a blanket minimum wage as in the UK. Whilst Sweden is using an assumption of a permanent contract to take advantage of the exemption available under the EU Agency Workers Directive, it would appear that this is a genuine attempt to increase the level of employment security offered to agency workers. Although Swedish agency workers with a permanent status may not have a guarantee of equal pay, they have the opportunity to both participate and be represented in a strong, government supported system of joint negotiation between unions and employers in which their voices are heard. The legal duty on Swedish companies to report their use of agency workers and ensure that collective agreements are adhered to, demonstrates the level of commitment that companies operating in Sweden are expected to show to their national employment standards.
UNICEF has highlighted the importance of pay and conditions of work to the well-being of our children. Comparisons between families in Spain, Sweden and the UK identify that children’s happiness depends on having parents who can offer security, give of their time and act as role models for resilience to market pressure. The above discussion of the variation in approach to the rights of agency workers across the three comparator countries has highlighted that social attitudes and national cultures towards inequality at work vary considerably. The formal laws that regulate employment relations between employers and workers are indeed inseparable from the unwritten social rules, identified by UNICEF, that govern family life.
Clearly, UNICEF’s findings add further weight, if it were needed, to the case for a living wage in the UK. A more general point to draw would be that the attitude of tolerance to poor working conditions reflected in our UK domestic employment laws, does not enhance the well-being of our children. The social attitudes underpinning in the domestic laws of Spain, Sweden and the UK regarding equality for agency workers suggests that UK workers are not expected to be resilient to market pressure, but rather to bend it.
Is it any wonder then that UNICEF concludes: ‘families in the UK appear to face greater pressures on their time and money (yet) parents found it very hard to challenge the commercial pressures around them and their children’?
If UK workers are exposed to market pressures which strip them of the resources and control they need to spend quality time with their children, accommodating (rather than challenging) commercial pressure would seem to be a trait which is in high national demand.
 Directive 2008/104/EC at 11
 Conduct of Employment Agencies and Employment Businesses Regulations (2003), s.7
 Directive 2008/104/EC at 14
 UK Agency Workers Regulations (2010), Regulation 5
 UK Agency Workers Regulations (2010), Regulation 6(1)
 UK Agency Workers Regulations (2010), Regulation 6(3)
 UK Agency Workers Regulations (2010), Regulation 7(2)
 UK Agency Workers Regulations (2010), Regulation 5(4)(a)(ii)
 NIENHÜSER, W and MATIASKE, W, ‘Effects of the ‘principle of non-discrimination’ on temporary agency work: compensation and working conditions of temporary agency workers in 15 European countries’ (2006) [Blackwell Publishing Ltd.] 37 Industrial Relations Journal 64 at 66
 Directive 2008/104/EC, para 15-17
 UK Agency Workers Regulations (2010), Regulation 10
 UK Agency Workers Regulations (2010), Regulation 10(1)
 Ahlberg K (2011) Agency Workers should have Equal Rights, Nordic Labour Journal
 Temporary Agency Work and Collective Bargaining in the EU, (European Foundation for the Improvement of Living and Working Conditions, 2009) at 39
 Ahlberg K (2011) Agency Workers should have Equal Rights, Nordic Labour Journal
 Temporary Agency Work and Collective Bargaining in the EU, (European Foundation for the Improvement of Living and Working Conditions, 2009) at 31
 Ibid at36
 Ibid at49
Ibid at 26