Made redundant & replaced with same staff as agency workers

aa0020

Our employer is looking in to transferring his whole workforce on to the "books" of a UK recruitment agency to "administer" so as to save on admin costs and the overall wage bill.

What worries me is that the agency's website advises zero HR legislation compliance issues as one fo the advantages for the employer.

Could anyone advise how does an employer end a contract of employment in circumstances like this? I presume they may intend to make us redundant (because any other closure would surely be illegal) but this isnt really a redundancy situation.

I also cant understand how the agency can claim a saving for the employer and still make money themselves unless the intention is to reduce the employee's wage. That cant be legal, even in this awful time of unemployment and cost saving exercises?

And once the employee is on an Agency's contract, do they still have all of the same rights? Is it viewed as one uninterrupted contract or is the length of service not accumulative?

The internet searches refer to temporary agency workers as though Permanent Full Time agency workers is a concept that doesnt exist.

Is our employer trying to take advantage of a loophole/s? Any info is genuinely appreciated as we're very worried. Thank you

seamus

aa0020 wrote: »

Our employer is looking in to transferring his whole workforce on to the "books" of a UK recruitment agency to "administer" so as to save on admin costs and the overall wage bill.

What worries me is that the agency's website advises zero HR legislation compliance issues as one fo the advantages for the employer.

Could anyone advise how does an employer end a contract of employment in circumstances like this? I presume they may intend to make us redundant (because any other closure would surely be illegal) but this isnt really a redundancy situation.

I also cant understand how the agency can claim a saving for the employer and still make money themselves unless the intention is to reduce the employee's wage. That cant be legal, even in this awful time of unemployment and cost saving exercises?

And once the employee is on an Agency's contract, do they still have all of the same rights? Is it viewed as one uninterrupted contract or is the length of service not accumulative?

The internet searches refer to temporary agency workers as though Permanent Full Time agency workers is a concept that doesnt exist.

Is our employer trying to take advantage of a loophole/s? Any info is genuinely appreciated as we're very worried. Thank you

Put simply an employer is entitled to offer redundancy if he can show that your position is no longer required and there is no similar suitable position to move you to.

If a company hires an agency to perform a certain function, then yes, the company's current staff in that function are now redundant (their position is no longer required) and can be sent on their way.

I have never heard of a company outsourcing *all* of their staff, but it's theoretically possible.

The key here though is that your employer *cannot* transfer you to another employer. They *must* make you redundant and then the other company can hire you to perform the same job. However, the kicker is that the other company don't have to hire anyone. They could choose to use external staff or take on less staff than have been let go.

However, you can be made an offer by your current company to switch to the new employer. If you agree to the offer, the company does not have to make you redundant.

In either case, it's a new contract, a new employer and you can be fired without reason within 12 months and are not entitled to redundancy for 24 months.

The agency probably make their money in a number of ways without significanlty cutting staff wages. They could, for example offer to reduce your boss's wage bill by 10%, and in turn they will only hire 80% of the staff that have been made redundant. You will probably also have much less favourable contracts - you'll get the bare minimum of your legal requirements, with little or no benefits, no overtime, etc etc.

I would contact NERA asap. There has to be some sort of case you can take to prevent a company outsourcing its entire payroll to an agency.

aa0020

Thanks Seamus. I appreciate your response. That's useful stuff although I genuinely cant imagine the successful completion of Tenders with a reduction in staff. We're over extended as it is.

Have you ever heard the expression "Umbrella Company". I think that's what this type of agency is called?

donkey balls

if the company transfer you to the agency you would be covered under TUPE which means your current salary T&C's stay the same and your service continues.
as for the recruitment agency being based in the uk they have to go by irish law so your entitled to holidays etc.

EskimoJack

if the staff are working through an umbrella company they are working through a limited company and are seen as directors therefore they are not paying any taxes while the employer is also not paying prsi contribution. Check with the recruitment federation to see if they have an irish recruitment and employment licence if they do not as i suspect they can and should be closed immediately.

Dempo1

Firstly don't waste your time checking anything with the recruitment federation, most reputable agencies don't even bother to register with this shower.

Redundancy is a very specific tool and can only be offered if the Position is no longer tenable or available. By inference this would in fact mean your company can not legally avail of redundancy legislation and then replace you with agency staff. Redundancy deals with the Position (Role) not the person and any staff member offered or made redundant can not be replaced for a period of up to two years (May need to verify time length). If an employer (who can claim back 60% of the cost of redundancy) fills the position within the subscribed period, they are in fact in breach of legislation and would be not be able to claim the costs of same back, they would also leave themselves open to unfair dismissal claims.

In the case of your employment being taken over by a contracting company (happens quite allot with catering companies being brought in through out sourcing), all staff affected are entitled to either redundancy or there jobs with absolutely no change to their terms and conditions, lenght of service also applies. I do know of examples where the main company out sourcing to a catering company have also offered employees payments in lieu of accepting changed circumstances.

aa0020

Thank you all very much for your advice. I'll keep you informed but am still welcoming any other information on agency workers and umbrella companies if anyone else would like to contribute. Thanks again.

Nody

Well what is worth keeping in mind is that Umbrella company usually means that you run your own company and hire out as consultant in some form. If this will be the case you need to take into account all the taxes and the charges from the Umbrella company on any new contract (i.e. even if they offer you 20% more you'd most likely make a lot less in practice compared to now at that money).

Mrs OBumble

I doubt that this is an umbrella-company situation: sounds more like a straight outsourcing. This is really, really common with services (eg catering, cleaning) and also some IT work eg what HP do with Multiflex/CPL. I'd be very surprised if there's any sort of case that can be taken to stop it happening.

I'm no expert, but I'd say that the old companies options are to offer to redundancy or a transfer to a new company on all existing T&Cs. But that there's no way the agency will take you on under those T&C's (unless they've got a particularly good deal with your old-employer).

In many ways, being an agency worker is the worst of both worlds: all the crap treatment of being a temp, bare minimum employment rights, and none of the benefits of being a permie. And in the current market, crap pay to go with it.