Employment agencies are at the heart of the UK’s biggest companies, from Amazon to the NHS.
The number of agencies has grown from 8,000 in the 1990s to 31,000 in 2019. In warehouses, agency workers make up nearly 10% of the workforce. But as the sector has grown, regulation has often fallen short, leaving workers with few places to turn when problems arise.
There are several reasons why agency work has grown over the years. “Organisations in this sector are subject to quite short changes in demand,” said Keith Rosser, chair of Safer Jobs, a charity that assists flexible economy workers. “Agency staff provide an ideal way for organisations to flex the resource appropriately.”
The Bureau’s investigation showed that two agencies – PMP Recruitment and Adecco – sit at the heart of Amazon’s seasonal warehouse recruitment. The nearly 9,000 agency positions they advertised for Amazon before Christmas accounted for more than half of all warehouse vacancies in the UK. The Bureau heard from a number of agency workers who had missed out on wages they were owed and struggled to reclaim them.
PMP told the Bureau it had “robust procedures in place to ensure that if pay queries do occur they are resolved swiftly”.
“It’s easy for employers to hire agency workers because you don’t have the fixed costs of a directly employed workforce and it’s much easier to fire an agency worker,” said Matt Creagh, employment rights policy officer at the Trade Union Congress (TUC). “You just ring up the agency and say, ‘We don’t want them coming back in.’
“If you have an agency workforce, they’re more likely to be on the statutory basic terms and conditions – minimum holiday, minimum wage, minimum rest breaks. Whereas if you’ve got a permanent staff, they’re more likely to have higher rates of pay, more holiday, more rest breaks.”
Agency workers usually have fewer rights than permanent employees, meaning they cannot claim some employment benefits or unfair dismissal. They should receive the same rights as permanent staff after 12 weeks of work. The Bureau’s investigation found many who say they were treated poorly.
Adecco told the Bureau it communicated regularly with its staff “to ensure they have a clear understanding of their work assignments”.
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“Because the work is transient, so they’re often moving from place to place, workers might be afraid to raise issues because they know they could lose their job,” Creagh said. “Many agency workers might be migrant workers so they’re less aware of their rights and also less aware of who to turn to if there is a problem.”
Before workers rights in the UK were affected by Brexit, more than 40% of EU migrants working in warehouses were agency staff.
“The minnow against the whale”
Due to the sector’s vulnerability, employment agencies have their own regulator, the Employment Agencies Standards Inspectorate (EAS), which has powers to inspect workplaces, ban people from running agencies and even prosecute.
However, with only 18 frontline enforcement officers it “is dwarfed by the size of the sector it is meant to regulate,” according to Matthew Taylor, a former director of labour market enforcement who oversaw the inspectorate. The TUC is calling for an extra 1,200 officers to meet international standards.
EAS investigated 141 cases among “industrial” agencies – which would include warehouse work – in 2018/19, the highest of any sector. Yet there were only five prosecution cases across all sectors and no applications to stop people from running agencies.
“It’s a long-standing issue that the EAS doesn’t really have enough resources,” Creagh said. “It’s a tiny number of people to make sure the relevant laws are being upheld and policies and agencies are being inspected.”
The EAS told the Bureau: “The Employment Agency Standards Inspectorate has a budget of over £1.5 million this year – a threefold increase in funding over four years. We’ve also doubled the number of frontline staff and resourcing is reviewed on a regular basis to meet operational needs.”
Employment tribunals should offer underpaid workers another route to justice, but there is a record backlog of more than 45,000 cases, some of which could take up to three years to be heard. The average case lasts 39 weeks.
There have been 55 tribunal cases brought against PMP Recruitment and Adecco. Five succeeded but most were withdrawn, meaning the case was either discontinued or settled.
Tribunals aim to be an easy route to justice where employees can represent themselves. While this is manageable in simple cases, those without lawyers can struggle in complex claims. There is no legal aid available, unless the claim is for discrimination. A third of claimants last year had no representation, up 10% from the year before.
“A lot of tribunal cases become this terrible money pit,” Neil Emery, an employment lawyer at Bindmans, explained. “The cost of it is usually far greater than any benefit that any claimants would ever get.
“One of the problems with particularly big employers has been they can afford to behave very badly,” he added. “It’s essentially the minnow against the whale.”
A spokesperson from the Ministry of Justice said that tribunals “offer an accessible, effective and economic appeal route”, adding: “tribunal users often appear without legal representation so the judges and members generally explain the proceedings.”
“Amazon should be legally accountable”
The government has responded to calls for better state enforcement by planning to merge all employment regulators, including the EAS, into a single body to provide better access to justice for vulnerable workers across all sectors. The Conservative manifesto promised this body would “crack down on any employer abusing employment law” but the timeline for the merger is unclear.
Alternative resources are being created to help protect workers. In April, Safer Jobs will launch “Jobs Aware”, an online platform where flexible workers can report problems and receive free advice. “Some people won’t report to the government so we want it to be somewhere that anybody feels safe to report to,” Rosser said.
Yet ultimately campaigners believe that companies like Amazon need to take more responsibility for their agency staff. TUC are calling for “joint liability” so the agencies and Amazon would both have a legal obligation to protect all their workers.
“Say, for example, an agency worker is working at Amazon and the agency didn’t pay them the correct amount of money,” Creagh said. “We think Amazon should be legally accountable to provide a remedy for workers.”
Rosser, who is also director of group risk at Reed, said the Bureau’s investigation showed the treatment of these workers was an urgent concern. He said: “If more of the UK labour market is going to end up in these sorts of jobs then the need for change is even greater.
“Flexible work could become one of, if not the most, important worker category. Therefore we need to think now about how we best serve those people in the future.”
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Reporter: Victoria Noble
Desk editor: Megan Lucero
Investigations editor: Meirion Jones
Production editor: Frankie Goodway
Fact checker: Alice Milliken
Our reporting on jobs is part of our Bureau Local project, which has many funders. None of our funders have any influence over the Bureau’s editorial decisions or output.
Header image: An Amazon warehouse worker in Swansea, Wales. Credit: Matthew Horwood/Getty Images