· 3 min read · Features

Temporary working arrangements: A more balanced view?

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In an ideal world, there would be permanent jobs for everyone and regular and generous pay rises.

We would only need one type of employment contract and there would rarely be issues because problems would be few and far between. Fair prices would be paid in the supply chain and everyone would be happy.

In the real world, of course, this does not happen. Factors exist which dictate how things happen and businesses fight for survival through competition.

Without businesses surviving, growing and succeeding, we all suffer. So there has to be an element of give and take in how businesses work things to ensure they can grow and then provide jobs.

Whether we like to hear it all not, it is all about money. The bottom line drives everything. Happy employees equal a productive and thriving business. No business actually wants to make their employees and workers unhappy. However, if the figures do not stack up, a business has to look at ways in which to make the business viable and that will often impact on employees - what they earn or how they earn it.

You may have seen the Dispatches programme last week on the rise of temporary workers in the labour market. The programme, predictably edited the coverage to leave viewers feeling outraged and appalled at some of the alleged practices, but it failed to provide a balanced view of why businesses use the arrangements that they do.

Of course, there will be some businesses that do not use the various legal methods of employing people in the most ethical manner. However, that does not apply to all businesses. Let's not tar everyone with the same brush.

In particular there has been a lot of negative reporting about agency workers and the fact that they may or may not be on less favourable terms than other people they work with who have permanent contracts.

So why do businesses use agency workers and why do they sometimes seek to use them on a long-term basis?

Flexibility and cost are the main drivers for use of agency workers. Their use allows a business to effectively switch labour on and off, as and when required. This is sometimes an essential component to managing a business that deals with seasonal peaks.

However, it is not all one-sided. Believe it or not, some people do not want a permanent contract. They like flexibility and variety. They also may want to experience working in a particular business before they decide to do it on a long-term basis.

It is true that the economic climate over the last few years has probably changed the way agency use has traditionally operated, but that should not detract from the fact that it can, if operated correctly, be a very effective two-way, symbiotic arrangement. Let's not also forget that if an agency worker joins a business and they are a good worker, a business may seek to retain that worker on a full-time basis.

The myriad of employment regulation has made it very difficult for businesses to hire and fire people without risk, consequence and cost. The use of temporary labour, to some extent, takes away this management issue and provides a little breathing space for a business to consider whether permanent employment is something they want to invest in. It can also provide certainty of cost.

The use of 'Swedish Derogation' contracts has created some controversy. Essentially a legal way of bypassing the impact of the Agency Worker regulations which in essence say, that after 12 weeks of working in one place, you are entitled to be paid and receive a number of similar benefits as your permanently employed colleagues doing the same job. The agency worker could attend one day a week for 12 weeks and this obligation for the employer would kick in. So Swedish Derogation essentially buys more time for a business to be flexible and if necessary control costs.

And what about the hype on zero-hours contracts? This is a contract where an employee has no set hours or guarantee of work and is paid only for the hours that they do. It also does not give an employee any continuous service, something that eventually allows an employee to get protection from unfair dismissal. However, employees on such contracts are expected to work when asked. No matter how infrequent this may be.

This type of contractual arrangement is found more often in industries such as hospitality and retail because of the seasonal nature of this type of work.

The truth is that no one size fits all and at a time when the economy is struggling and jobs are scarce the rise of temporary labour is inevitable. The need to control costs and make quick decisions has encouraged their use. What remains to be seen is whether as the economy grows and employment opportunities start to rise, such temporary working arrangements will start to reduce. Whatever the future holds, we should avoid being too quick to judge such flexible working arrangements.

Vanessa Di Cuffa (pictured) is an employment law partner at Shakespeares