Written submission from Unitemps Warwick (ERB0099)

 

Monday 9th December 2024

Dear Mr Western MP,

Following your recent visit to the University of Warwick as part of a visit by the House of Commons Business and Trade Committee I am writing to you to highlight some of the potential challenges that we face at Unitemps in responding to legislation brought forward by the new Government.

Unitemps is a temporary recruitment agency owned by the University of Warwick. Last year the Warwick branch provided work to approximately 10,000 people in the local area with a combined total of £12 million in pay. We also have franchises at 18 other universities across the UK. Our objective is to support student employability and help students to earn money while studying which is particularly important currently due to the cost-of-living crisis. This includes finding roles for students both on campus and with local businesses. By managing the internal roles at the university instead of using 3rd party suppliers the university can also save on costs allowing re-investment back into teaching and protect the workers as we can make sure our recruitment processes and treatment of staff align with the ethical aims of the university.

We are very concerned about some of the provisions of the proposed Employment Rights Bill as, in its current form, our business will no longer be financially viable. The particular area of concern is around the proposed requirement to offer employment contracts to agency workers for roles with regular hours over 12 weeks. For the agency workers, as the end hirer rarely has secure funding for our roles, we would expect the vast majority of jobs to permanently end rather than be transferred to other employment contracts.

There are several concerns we want to highlight.

Firstly, our business model is primarily aimed at working with university students, the majority of whom live in Leamington or Coventry. They use their work through Unitemps to support them during their studies. However, it is not their top priority, and the two-sided flexibility of temporary work is much more appropriate for this situation. This view is supported by the government’s own “Make Work Pay” document but is not reflected in the proposed legislation. This work and the pay they can earn from it is important for students. At the University of Warwick 48% of students take on some form of paid work alongside their studies. Student Visa holders should also be considered. Unitemps specialises in their recruitment and managing the complex requirements of their visa on behalf of our end hirers. Many clients are not properly equipped to offer Student Visa holders work so this group would be seriously impacted. This could also impact on the already decreasing international student figures when the sector needs them to be increasing – if international students are unable to work to support their studies and gain experience it could discourage them from applying to study in the UK. This would further impact university finances and decrease international collaboration in academia.

Secondly, our view is that 12 weeks is much too short a period. Genuinely temporary work can often exceed this. Many of our roles are seasonal or where funding is not secure so are not suitable for fixed term contracts. An understanding of the need for temporary roles over 12 weeks is reflected in the legislation itself with various pay protections coming into effect after 12 weeks under the Agency Worker Regulations. Unlike zero-hour contracts, agency work is heavily regulated with protections under both the Conduct of Employment Agencies and Employment Businesses Regulations and the Agency Worker Regulations which ensure that workers are treated fairly. Under the proposed 12 week limit we estimate that approximately half of our roles would no longer be viable.

Thirdly, the impact on students and temporary workers would be extremely negative with many work opportunities no longer being offered in any form. In almost all cases clients are using a temporary route as they do not have secure funding for the role (especially in the current financial climate) or future work levels are unpredictable. Most clients will simply not hire anyone (relying on AI or digital solutions instead), outsource overseas or use self-employed staff (these roles are largely unregulated and would not offer appropriate support for student workers). Alternatively, some hirers may only use very short-term roles providing less security to temporary workers. The Unitemps network currently provides approximately £40 million/ year in pay to university students across the country for working in temporary roles, but the vast majority of these opportunities will be lost if the 12-week predictable terms rule is introduced in its proposed form. For our students, losing these options of temporary work will cause further financial hardship and could deprive them of beneficial work experience.

Fourthly, the requirement to automatically assess and offer new contracts without waiting for a request is a significant operational burden on employment businesses. The volume of temps working would require multiple staff working full time to carry out these assessments.

Lastly, the proposed ending of transfer fees over 12 weeks would have a devastating effect on both our business model and the wider recruitment sector. For Employment Businesses the cost of search and selection of candidates is covered by either the fee on the hourly rate or the transfer fee. If the end hirer were to take the worker on directly after 12 weeks, we would lose the hourly rate fee and (under this proposal) the transfer fee. This would make it very difficult to remain profitable. The impact of this change would also be felt more widely by Employment Agencies. End hirers could bypass them entirely by using the much cheaper option of a 12 week temp role with a temp agency. In both cases the impact of removing transfer fees would be the closure of recruitment businesses and agencies leading to poorer candidate selection for businesses and reductions in overall recruitment.

While we are supportive of the aims of the legislation, we feel the changes as proposed are so extreme that it will cause the closure of businesses, such as ours, and significantly reduce employment opportunities for workers. We also do not feel that the differences between agency workers and zero-hour contracts have been fully recognised. Zero-hour contracts are largely unregulated, but agency workers already have numerous legal protections to ensure flexibility works both way and to stop exploitation, particularly with making sure pay is fair.

We have several suggestions that we feel would help reduce the impact on business and maintain the ability of companies to be flexible but still deliver on the aims of the legislation. We would request that:

 

Yours sincerely

A close-up of a signature Description automatically generated

Lorna Bytheway

Director, Unitemps Warwick