Investigation into Amazon’s use of agency workers raises important questions

Centre for Employment Relations, Innovation and Change

Chris Forde is Professor of Employment Studies and Co-Director of the Centre of Employment Relations, Innovation and Change. His research interests look at the changing nature of work, and the implications of these changes for workers. Gary Slater is an Associate Professor in economics. His research focuses on labour economics, macroeconomic policy and political economy.

Boxes on a conveyor belt in a factory

Agency workers being used by Amazon face huge levels of uncertainty over their hours of work. A recent report by The Bureau of Investigative Journalism, conducted with ITV News and the Daily Mirror, has highlighted how agency workers being used by Amazon are in a precarious position and are being employed on zero-hours contracts, in breach of Amazon’s stated employment policies.

The investigation has placed the spotlight again on agency working arrangements in the UK, in which temporary staff are hired out by agencies to client firms. These ‘temps’ often experience high levels of employment insecurity and have fewer employment rights than employees.

Contracts between agencies and firms, particularly in industrial sectors such as warehousing, hospitality and social care, often involve the supply of many hundreds of temporary workers on a long-term basis even if the hours for an individual worker are uncertain and variable. So, why have these big, long-term contracts between agencies and firms emerged, and what are the implications for workers?  

Dr Gary Slater and I have charted the growth in numbers in agency working and have looked at how contracting arrangements between agencies and client firms have evolved over the last 10 years. Around 1% of the workforce in the UK (300,000 workers) are currently agency temps, a figure which has remained relatively stable over the last decade, but which is quite pro-cyclical. The numbers in agency working fell during the first half of 2020 as the pandemic hit but rose again quite sharply in the last quarter of 2020, reflecting seasonal increases in demand for workers in some sectors.

Whilst these headline numbers may seem relatively small, they mask a heavy concentration of agency temps within particular sectors and firms. This trend towards using agency workers in large volumes, in core roles, can be seen in a number of areas, such as warehousing and logistics. In the Bureau of Investigative Journalism report, for example, all 9,000 job adverts posted for work at Amazon in the UK in the three months leading up to Christmas were through just two employment agencies.

The result of this is highly co-dependent relationships between agencies and firms.  With agency temps being used in such large volumes, firms require a high degree of continuity in the temporary workers that are supplied from agencies. These contracts could not operate effectively if a different 500 workers turned up at a warehouse or logistics centre every day.

Firms are using agencies to give them the flexibility to change the numbers of workers that they require, upwards or downwards, at very short notice, and to benefit from cost savings that come from not having the obligations of being the employer of the temporary staff they use. Yet, at the same time, they are seeking some of the benefits that come from having an ongoing relationship with workers, who receive training, and pick up valuable firm-specific knowledge that is costly to replace.

Agencies, keen to maintain and fulfil these lucrative contracts with client firms, will try, as much as possible to supply the same workers to firms day after day. They also seek to maintain an oversupply of temps on their books, to ensure they can respond to any requests for increases in numbers of temps from clients. As the Bureau of Investigative Journalism’s report reveals, agencies place a lot of emphasis on flexibility and constant availability from their temps, yet, the experience for individual agency workers is often highly uncertain and precarious, with no guarantee of hours, and very variable work schedules.

The transfer of risks away from firms and agencies towards workers in these ‘triangular’ working arrangements is nothing new. The Agency Workers Regulations, in place for a decade now, have sought to ensure a basic level of employment rights for temporary agency workers in the UK, yet there remain important gaps in their rights compared to regularly employed staff, even with the amendments to the regulations in 2020.  

The growth of these large contracts between agencies and firms, and the quasi-permanent nature of many agency jobs remain a cause for concern. In some localities in the UK, a high proportion of all job opportunities appear to be through a temporary agency. There is a danger that workers will get stuck in agency working, with little opportunity to progress into more direct employment relationships with firms.

Amazon may have committed to not using zero-hours contracts, but the ‘minimum hours contract’ uncovered in the Bureau of Investigative Journalism’s investigation appears to be little different in practice. Agency workers on such contracts have no guarantee of hours in any particular week or month but need to demonstrate loyalty, commitment and availability to individual agencies in order to ensure they get a regular (if variable) supply of work. The result is a high degree of insecurity for workers, and often limited alternative options for work.

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The views expressed in this article are those of the author and may not reflect the views of Leeds University Business School or the University of Leeds.