12/01/07

Given that the European Union (EU) has been a major topic of discussion in our UK economy class, I found it very suiting to write a journal entry about a problem UK business leaders currently have with the EU. The Portuguese presidency of the EU is devising plans for a temporary and agency workers directive, which proposes that temporary workers, after just six weeks in a job, should be given the same pay and benefits as full-time staff, including pensions, sick pay and holiday entitlements. Worried that this will decrease the flexibility of the UK labor market as well as create obstacles to getting people back into work, British employers have called on Gordon Brown to stand firm against these attempts by the European Union. According to UK business leaders, temporary and agency workers should occupy the same job for at least six months and not six weeks before being given the same rights as their full-time colleagues.

Title: Employers attack EU workers’ rights plan
Date: 12/01/07
Source: Financial Times

Apparently, British employers are not alone in their disapproval of the proposed directive. David Frost, director-general of the British Chambers of Commerce, says: “It is quite clear that the economic position is likely to deteriorate in the coming months. So it would be crazy to do anything to make the UK a less competitive place.” The CBI, which also opposes the proposals, has estimated that up to 250,000 jobs could be jeopardized if employers were inhibited from using agency staff to fill temporary employment gaps and meet seasonal peaks in demand or one-off orders and contracts. John Hutton, business and enterprise secretary, told the TUC annual conference in September that ministers would not give in to demands on temporary workers’ rights if it damaged Britain’s flexible labor market.

Even though employers have plenty of support in their opposition of the directive, they still have legitimate fears. For instance, while the government seems to agree with employers and have resolved to stand firm against the proposal, employers are concerned that ultimately the government may be tempted to make concessions in return for an offer from the Portuguese presidency to secure permanent exemption for the UK from the EU working time directive limiting the length of the working week to 48 hours. Business leaders also fear that Mr. Hutton, who is expected to attend Wednesday's meeting of EU employment ministers, may be unable to gain sufficient support from other member states to block any “unwelcome” measures included in a temporary and agency workers directive. To add onto this, there are doubts about the continued support of both Poland and Germany for the British position. Until Wednesday after the conclusion of the meeting, business leaders will be on edge about this new workers' rights proposal.

I was interested in this article not only because the EU is a major topic of class discussion but also because of my involvement with workers' rights for my common course final project. After reading this article, I honestly don't see how this proposal would make the UK labor market less flexible, create obstacles to getting people back into work, or make the UK a less competitive place. If anything, it should make it more competitive and create less obstacles in getting people back into work because more people will want to join the labor force as temporary or agency workers to reap the benefits. Maybe this is just my ignorance in economics talking, but it seems to me like the main reason as to why business leaders are opposing this proposal is because they don't want to dish out any more money and/or benefits than they already have to.