Agency workers - what we need to do now

As one Labour-supporting blogger has it, Tuesday’s announcement in relation to the rights of agency workers is “more work in progress than job done”

UNISON’s response was positively gushing, and the GMB were nearly as enthusiastic.

Before getting carried away, it is worth reflecting a little on the nature and origins of the disadvantage experienced by agency workers, and on the work which the trade unions now need to do to address this.

The underlying (and not incorrect) assumption of the trade unions’ approach to agency workers is that agency workers are generally relatively disadvantaged. Agency workers are seen as being paid a lower rate, under cutting the negotiated rate for the job and enabling the employers to play “divide and rule” to weaken the trade unions. Certainly the employers and their advisors generally see the use of agency workers in terms of cost-cutting.

The theoretical underpinning for this assumption is the theory of “labour market segmentation” or the “dual labour market theory” which I found explained online here as follows;

“Labour Market Segmentation (LMS) theory assumes that the labour market is not a homogeneous entity, but, instead, composed of two or more segments. The underlying mechanisms and structures at work with regard to payment, promotion, job security, etc. differ fundamentally among segments. In its original form, LMS distinguished two segments: a secondary and a primary sector. This is the well-known dual labour market theory. The secondary sector is characterised by low-wage jobs, no returns to human capital, and a high degree of job insecurity. The primary sector, on the other hand, is characterised by high-wage jobs, returns to human capital, large firms, and job security. Furthermore, mobility between the sectors is severely restricted, and jobs in the primary sector are rationed (due to high wages).”

In plain(er) English, the theory holds that one group of workers get job security and higher wages at the expense of another group who provide the flexibility the employers require without those benefits.

The classic application of the dual labour market theory is to large private sector organisations which employ a “core” workforce of direct employees with relative security, pensions etc. while also using a “peripheral” workforce which is insecure and far less well-rewarded. Across the economy as a whole there is evidence of agency workers providing this less well-rewarded secondary sector. Recent research (available in full online here) has found that, compared to both other temporary and permanent workers, agency workers are less satisfied in their job, have less variety and discretion over their work, are less likely to learn new things at work and are more likely to be underutilising their skills. They are also less likely to have a say in decision-making at work and are less likely to be promoted. Crucially on average, agency workers are paid £7.80 per hour compared to £11.47 for permanent workers, a difference of 32 per cent.

In recent years the growth of agency employment in London local government (which was highlighted for UNISON activists in the London Weighting strike action a few years ago) has however been driven as much by recruitment difficulties in some areas of the labour market as by the employers’ desire for a cheaper and flexible “hire and fire” section of the workforce.

The position in relation to agency workers in health and local government is therefore more complicated than the classic dual labour market theory suggests. Although certainly operating in a segmented labour market, recruited in different ways from the directly employed workforce, not receiving job security or various other conditions of service (notably pensions), agency workers are sometimes in receipt of a higher hourly rate than the directly employed workers they are working alongside. (The academic research to which I linked above finds that the highest paid agency workers are relatively less disadvantaged in terms of pay – and that is consistent with our rank and file experience of the use of agency workers in professional roles in local government).

Therefore, whilst welcoming the announcement that agency workers can look forward to “at least the basic working and employment conditions that would apply to the workers concerned if they had been recruited directly by that undertaking to occupy the same job,” many activists may feel that this could be slightly at a tangent to our concerns in the workplace.

The most important disadvantage experienced by agency workers in many of the areas in which UNISON organises is not so much direct material disadvantage of the sort which clearly arises in much of the economy as the relative insecurity highlighted by the Court of Appeal in the James case.

This insecurity, was described in the following terms by the Appeal Court; “a significant move in the direction of the casualisation of labour and the growth of a two tier workforce, one tier enjoying significant statutory protection, the other tier in a legal no man's land being neither employed nor self employed, vulnerable, but enjoying little or no protection, may create social injustice and a festering sense of grievance which would not be satisfactory in the interests of an efficient workforce, a competitive economy, a healthy society or anything else.”

The most important step we should be taking in response to the Government’s welcome announcement is to set out to recruit and organise agency workers with renewed vigour – and in organising these workers press for equality for all our members and all workers. Agency workers need trade unions. Trade unions equally need agency workers, as anyone who has stood on a picket line recently will be aware.

If the legislation now in prospect gives agency workers the statutory protections which apply to employees (particularly the right to bring a complaint of unfair dismissal) that will be the change that will be most helpful in recruiting and organising agency workers, and in securing equality within the workforce. However the critical factor will be the organising work of the trade unions ourselves.

Should we get to discuss Motion 62 at UNISON National Delegate Conference (proposed by the Greenwich branch who have a track record of sticking up for agency workers on their turf) we’ll have a chance to discuss this further.