Same Job, Same Shift, Smaller Cheque: The Agency Loophole That Legalises a Two-Tier Workforce
Photo of Angela Rayner, via Wikimedia Commons
Two workers stand on the same production line, pack the same parcels, wash up in the same kitchen. One has a contract, sick pay and a payslip that matches the job. The other was hired through an agency, can be sent home when demand dips, and earns less for the identical work. This is not an anomaly of a rogue employer. It is a business model — and, in large part, it is lawful.
The Swindon Formula, Applied Everywhere
The most infamous case remains the 2011 dispute at the Dacia factory in Swindon, where agency workers were reportedly paid around 40 per cent less than directly employed staff doing the same jobs — a case that became the template for a decade of workplace strategy. Since then, agency labour has spread through social care, logistics, hospitality and the NHS itself, where trust spending on agency staff has run into the billions annually. The trade union Unison and others have documented how care providers routinely roster permanent staff and agency workers side by side, with the agency worker on lower hourly rates and zero guaranteed hours.
The economics are seductive for employers and corrosive for everyone else. Agency undercutting does not merely save money on the worker it touches; it disciplines the entire workforce. Why would an employer raise direct wages when a cheaper, disposable alternative is a phone call away? Fire-and-rehire tactics — famously deployed by British Airways in 2020 and P&O Ferries in 2022, when nearly 800 seafarers were sacked without notice and replaced with agency crew — are the same logic at speed.
The Bill on the Table
The government's Employment Rights Bill is the most significant package of workplace reform in a generation. It proposes banning exploitative zero-hours contracts by creating a right to guaranteed hours for those on regular schedules, ending fire-and-rehire abuses, and — crucially — repealing the 2015 Trade Union Act's harsher ballot thresholds while strengthening protections against dismissal for taking industrial action. The TUC has broadly welcomed the direction while warning that enforcement is everything: rights without inspectors are invitations.
Here is the honest critique from the left, and it deserves a fair hearing. Business groups argue that rigid protections will raise costs, discourage hiring, and push firms toward automation or offshore contracts. There is a genuine trade-off to manage, and pretending otherwise is dishonest. But the strongest version of that argument supports protecting workers from exploitation while offering transitional support to firms — not preserving a structure whose central function is to pay two rates for the same job. If a business model only works when one worker is paid less than the worker beside them for the same output, the model is the problem, not the regulation.
The People Behind the Pay Gap
The agency workforce is not a random cross-section. It is disproportionately composed of migrant workers, young people, women in care roles, and workers in the most deprived regions — precisely the groups with the least bargaining power. In social care, where roughly 1.5 million people work and turnover exceeds 20 per cent in some years, the two-tier model is not a corner-case abuse; it is the operating system. A care worker doing identical tasks to a colleague can be denied the pay, hours and dignity the colleague enjoys, and the difference is explained away as flexibility.
Flexibility is a fine thing when it flows both ways. It becomes a euphemism when it flows only downward — when the worker absorbs all the risk and the employer captures all the reward.
Which Way Britain Tips
The Bill is currently making its way through Parliament, and the amendments fought over now — particularly around zero-hours guarantees and collective bargaining in care — will determine whether this becomes genuine reform or a press release. The political stakes extend beyond the workplace: the collapse of security in work is one of the reliable feedstocks of political resentment, and the parties that ignore it will find the anger doesn't stay in the workplace. An honest government would close the agency loophole outright, mandate equal pay for equal work from day one, and fund the enforcement machinery to make it real.
No worker should be able to look at the person beside them, doing the same job on the same shift, and know the law values them less. The Employment Rights Bill gets Britain close. It must not be allowed to stop short.
