22/08/2002

ACCA warn EU directive could lead to unemployment spiral

The Association of Chartered Certified Accountants (ACCA) has warned that an new EU directive – the Agency Workers Directive (AWD) – could result in increased unemployment if it is adopted in the UK.

The AWD is intended to give temporary staff the same pay and benefits as permanent employees if they stay more than six weeks with an organisation. However, the ACCA is concerned that the directive could cost employment agencies and employers millions of pounds a year and deter organisations from hiring either permanent or temporary staff.

John Davies, Head of Business Law at ACCA, said: “It is possible that the Directive could have unintentional adverse consequences. In order to cut costs, firms may start employing workers on a temporary basis only. This could lead to a situation where either everyone will be on temporary contracts or there are no temporary workers at all.

He added: "This would not be good news for flexibility in the labour market. It is important that all employees’ rights are protected, but, in its current form, the proposed Directive does not achieve that.”

(KmcA)

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