The Freelancer and Contractor Services Association (FCSA) has submitted its response to the Government’s consultation on Make Work Pay: ending one-sided flexibility – reforms of zero-hours and similar contracts.
FCSA supports the Government’s ambition to improve workers’ experiences, strengthen employment rights and tackle genuinely one-sided flexibility. However, we believe the proposed reforms are not suitable for umbrella workers and the wider temporary labour market.
The nature of temporary work is fundamentally different from conventional zero-hours or low-hours employment. Many workers choose agency and umbrella work precisely because it offers flexibility around their personal and professional commitments. A regulatory framework designed around the assumption that flexibility is necessarily imposed on workers risks removing an important benefit of temporary work.
Our consultation response highlights a number of significant concerns.
Umbrella companies do not control the availability of work
An umbrella company employs and pays a worker, but it does not generally find or control the work that the worker undertakes. Assignments are typically sourced through a recruitment agency or other intermediary and ultimately determined by the end client.
This makes the proposed requirement to offer guaranteed hours particularly problematic. An umbrella cannot guarantee work that it does not control.
Applying a guaranteed-hours model based on a worker’s historic working pattern could therefore create obligations for an employer that has no ability to determine whether those hours will actually be available.
Flexibility is a feature, not necessarily a problem
For many temporary workers, the ability to accept work when it suits them is precisely why they choose this form of employment. We surveyed over a thousand umbrella workers to inform our consultation response and found that 57% enjoyed the flexibility of working through an umbrella, while 56% chose it because it offers greater earning potential.
The Government’s policy objective is to tackle one-sided flexibility. But flexibility in the temporary labour market is not necessarily one-sided. Workers value the ability to move between assignments, take breaks between contracts, work for different clients and choose assignments around other commitments.
Any new framework needs to distinguish between genuine insecurity and flexibility that workers actively choose.
High risk of unintended consequences for workers
The government will probably say, ‘if workers prefer to stay in flexible arrangement, they can choose to do so’ but that completely ignores that these proposals are likely to jeopardise the availability of flexible work arrangements. Rather than improving opportunities for temporary workers, the proposals could make businesses more reluctant to use agency and umbrella workers.
This could lead to fewer assignments being offered, changes in how workers are engaged and potentially greater pressure towards alternative engagement models. Ultimately, workers could lose access to the flexibility and opportunities that the temporary labour market currently provides.
The proposals could create significant administrative complexity
The temporary labour market involves multiple parties – workers, agencies, umbrella companies and end clients – each with different roles and responsibilities.
Introducing guaranteed-hours requirements, notice requirements and compensation for cancelled or changed shifts risks creating significant additional administration across this supply chain.
There is a particular concern that umbrella companies could be required to administer obligations relating to work that they neither source nor control.
A better approach to temporary work
FCSA believes the Government’s objective of improving worker fairness is the right one. But the solution must reflect how temporary work actually operates.
The Government is also considering wider reforms to the agency work regulatory framework. Its outcome has not yet been resolved, making it important that the Government considers how these different reforms will interact before imposing additional requirements on agency and umbrella arrangements.
FCSA will continue to engage constructively with Government to ensure that employment reforms protect workers without inadvertently reducing the availability of flexible work or placing unworkable obligations on compliant umbrella companies.
Our full consultation response sets out FCSA’s concerns and recommendations in more detail and can be found on our website.
