While employment figures have steadily recovered since the end of the recession, factors such as underemployment and low pay remain problematic for the workers of the UK.
This, Labour leader Ed Miliband believes, is in part due to the large influx of low skilled foreign workers entering the country who are willing to accept lower pay for the jobs they take, which has created an aura of “chronic dependency” within the UK labour market.
Mr Miliband has vowed to close a loophole in the law which allows firms to pay agency workers less than permanent staff members should he win the next election. He hopes that, by doing this, firms will be forced to take on higher numbers of permanent staff on a fair wage and lessen reliance on temporary low skilled workers.
In an article written for the Independent, Mr Miliband claims that the practice of bypassing minimum wage laws is preventing the average household from profiting from the upturn in the economy.
He says; “We have to change our country’s chronic dependency on low skill, low wage labour – a dependency that is getting worse, not better.
“What chance of rising living standards for all when unscrupulous firms can exploit workers from abroad to get around the minimum wage?
“What chance of giving everyone a fair shot when recruitment agencies are allowed to recruit only from overseas, excluding those in the area from even hearing about jobs?”
At present, the EU’s Agency Workers Directive forces firms to allow temporary staff the same basic pay and working conditions as staff members taken on in permanent roles. However, according to Mr Miliband, a loophole in the law allows agencies to offer those on their books permanent contracts under an opt out clause, thus allowing firms access to cheaper labour under the terms of such contracts.
Employers organisation the CBI has responded negatively to Mr Miliband’s comments, claiming that by ending this “perfectly legal” practice the Labour Party would put jobs at risk and potentially cause a downswing in business confidence, perhaps even triggering a further employment crisis.
Katja Hall, the body’s chief policy director, says; “The flexible labour market in this country has saved jobs and kept our economy going during tough times.
“Undermining this flexibility would put the very system which has kept unemployment down at risk – the agency directive was not welcomed by business, and further gold plating of EU rules can only cost jobs.
“This [practice] is perfectly legal, was supported by trade unions at the time and also gives employees security of income between jobs.”
Do you think the loophole should be closed or should agencies instead be forced to include local workers in their recruitment programmes to level the playing field?
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