Agency and temporary workers win rights deal

Gordon Brown yesterday signalled the end of a six-year battle to give 1.4 million temporary and agency workers equal rights with Britain's full-time permanent workforce. Brown's spokesman said a compromise struck yesterday between the CBI and the TUC, reflected "the right balance between fairness and flexibility".

The TUC general secretary, Brendan Barber, claimed the joint declaration marked a big change in the labour market with 70% of agency workers now being offered equal treatment for the first time.

The CBI struck the deal fearing that if it continued to press the UK to block the temporary workers directive at the EU, Britain might have lost its cherished opt-out from the EU working time directive.

The British agreement follows nearly six years of talks at EU level and means that temporary and agency workers will be given the legal protections of permanent workers once they have been employed for 12 weeks.

Brown had been closely involved in the deal-making last Friday in an agreement of totemic importance to the unions who believe agency workers have been undermining the pay and conditions of the full-time workforce, as casual labour has increased.

The deal will also ease Brown's problems with the union movement and boost his popularity with backbenchers, many of whom had been backing a private member's bill protecting agency workers being sponsored by Andrew Miller, MP for Ellesmere Port, which will be withdrawn.

Some business organisations reacted angrily to the deal, but the Department for Business pointed out that the agreement would allow companies to negotiate different deals so long as they "respect the overall protection of agency workers". The phrase has the potential to become a loophole, but the TUC seemed confident that it need not undermine the deal.

Britain hopes to persuade EU employment ministers meeting next month to recognise the British deal as compatible with the EU directive.

Britain, along with Germany, has been blocking the EU directive, but there was a danger that the UK could have been forced to implement an even tougher version. If the EU sanctions the new UK agreement, Brown will introduce primary legislation in the autumn at Westminster.

Yesterday's agreement ensures pay overtime rates and holidays will be comparable on a pro-rata basis with full-time staff. Occupational pensions and occupational sick pay will not be included, but new pensions laws will require employers to provide statutory sick pay and pension contributions. Unions also won a commitment to a clause to prevent employers sacking staff immediately ahead of the three-month deadline, and then re-employing them.

John Cridland, CBI deputy director-general, said: "There has been a major risk of damaging legislation coming from Brussels, and the CBI has judged that the government's proposals represent the least worst outcome available for British business."

David Frost, chairman of the British Chambers of Commerce, said: "This is a bad deal for the country and a bad deal for business. The success of the UK economy over recent years has been down to our flexible labour market. When the economy is weakening, this is not the time to further reduce flexibility."