Newspaper article The Evening Standard (London, England)

Expect a Racket as 'Protection' Looms; Information & Communications Technology: Even with the Best of Intentions, a European Union Draft Directive May Prove to Be a Double-Edged Sword for IT Contractors. Danny Bradbury Reports

Newspaper article The Evening Standard (London, England)

Expect a Racket as 'Protection' Looms; Information & Communications Technology: Even with the Best of Intentions, a European Union Draft Directive May Prove to Be a Double-Edged Sword for IT Contractors. Danny Bradbury Reports

Article excerpt

Byline: DANNY BRADBURY

THE contractor community has not been happy of late. As IR 35 threatens to reduce their income in tax charges, temporary computer staff are convinced that another anti-"knowledge-worker" scheme will further restrict their earnings.

The latest piece of threatening legislation - although far from ratification - could be viewed as a blessing or a curse. Recently the Financial Times ran an article about a leaked draft of a new EU directive, specifically targeting agency work across Europe. Under the draft directive, temporary workers would be given the same rights and benefits as their fulltime counterparts. This includes everything from holiday pay to sickness benefit and dismissal regulations.

It sounds like heaven for IT contractors, who already earn hefty salaries far above those of their fulltime counterparts. Diane Sinclair, employee relations adviser at the Chartered Institute of Personnel Development, is not so sure.

"Because of the bureaucracy involved, employers will ask why they should hire temps," she says.

Why, indeed? One of the main drivers for contract work is that employers want to be flexible in budget terms, taking on temporary workers to fulfil specific tasks before letting them go again. This enables companies to tighten their belts during slow economic times, while bringing in skilled staff at short notice during expansionist periods.

Kevin Barrow, head of IT personnel at solicitor Tarlo Lyons, agrees that it may well indirectly affect IT contractors. "The UK economy has a competitive advantage because it can roll projects out quickly thanks to its base of highly-skilled, flexible workers," he explains. "I am concerned that the EU will introduce a directive that will be too vaguely worded, and as a result will encompass contract workers who supply their services through a personal service company. …

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