Temporary agency work and collective bargaining in the EU
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Conclusions
Temporary agency work is an important and growing industry in the EU, and is a sector at the heart of the ‘flexicurity’ debate. User companies increasingly use TAW for reasons of competitiveness as well as for the more traditional reason of replacing absent staff. This has raised trade union concerns over the treatment of agency workers, as well potential implications for permanent workers in the user enterprise, notwithstanding the need for reputable agency firms to attract good quality, reliable labour and ensure there is a floor under ‘unfair’ competition in the sector. Almost all countries have been active in seeking ways to reconcile employment protection with employment flexibility through TAW, whether by law, collective bargaining or some combination of both.
The growth of TAW is driven by a combination of demand-side and supply-side factors. In addition to its traditional use of covering for employees who are sick or otherwise absent from the workforce, increased competition and market uncertainty encourages user companies to make recourse to TAW for reasons of cost and flexibility. At the same time, it offers groups such as students, migrant workers, women returning from childcare breaks, and disabled and unemployed people access to the labour market. In principle, TAW can help workers develop their work skills and experience, thereby offering pathways into more secure employment. A common feature of TAW in the EU are that it often relies heavily on particular labour market groups, especially young workers, and particularly for jobs without high training costs. Given that this is an under-researched area, Eurociett and Uni-Europa launched their own joint research project on vocational training for temporary agency workers in 2008, which aims to identify and disseminate best practice.
There are clear differences between countries in the structure of the sector and patterns of TAW use. First, there is disparity at national level in the balance between large and small agency firms. Some countries have a highly concentrated market for TAW, dominated by the large multinational firms. These include France, the Netherlands, Spain and Belgium, and countries new to TAW such as Romania. In contrast, the UK has a very fragmented market for TAW services with small firms playing an important role, though the growth of the sector is also providing greater opportunities for smaller agency firms in other countries. Second, there is some variation between countries in the sector and occupational patterns of demand for TAW, which has implications for the gender distribution of agency workers. In Germany and Austria, for example, TAW is most often used for blue-collar work in metalworking and manufacturing; in Sweden, banking and finance is the biggest user of TAW.
A third differentiating feature refers to the duration of TAW. French workers have the shortest assignments, with an average of 1.9 weeks. In Belgium, only a quarter of assignments last for longer than six months. However a second, smaller group of countries has a more significant incidence of longer-term assignments. In the UK, for example, nearly one in five agency workers have been on an assignment for 18 months or more. There are also differences in how long workers remain in the TAW sector, though data is limited here. This ranges from an average of between three and fourth months in Norway, Hungary and Luxembourg; in Slovakia, three in five workers depart the sector within six months. In contrast, in Belgium, a significant proportion of agency workers are likely to take successive contracts: three quarters have been engaged in agency work for over a year, and one in three for more than five years. How far such patterns are a function of choice or opportunities is not clear.
The most obvious difference between countries however concerns the form and substance of regulation. On the whole, TAW is a largely highly regulated industry involving a mix of legislation, collective labour agreements and instruments of self-regulation at national level. However, agency work is also heterogeneously regulated across Europe. Different Member States have different traditions of labour market regulation, and different policy preferences concerning the balance between employment flexibility and security. There are differences in what is regulated – for example, whether or not this embraces reasons for using TAW, prohibited sectors, maximum assignment length, or stipulations concerning the employment contract, training and representation rights. There are also important differences concerning how this regulation is developed and implemented, most notably the role played by social dialogue and collective bargaining.
As the review of regulatory outcomes shows, in most cases it is the law that has primacy in the regulation and enforcement of the key terms and conditions of TAW. However, collective bargaining is an important regulatory mechanism in the ‘old’ Member States. Most of the EU15 have sector-level bargaining for TAW, with the UK constituting the exceptional case from the largest economies or users of TAW. Furthermore, sectoral-level bargaining may also be complemented at macro-level by institutions for intersectoral social dialogue and tripartite negotiation on the one hand, and by collective bargaining at company level or at through sector agreements that apply at the user firm on the other. In Denmark, collective bargaining operates at several levels (the sector, agency and user company) as an effective substitute for regulation by law. In Germany and the Netherlands, sectoral-level agreements provide a robust framework for the regulation of the sector whilst permitting deviation by agreement from some legal requirements, notably equal treatment with comparable permanent employees. In other countries, such as Austria, Belgium, and Sweden, sectoral-level collective bargaining acts as an important additional mechanism to what is already a strong framework of law – for example, by acting to extend the principle of equal treatment concerning pay between assignments and addressing issues such as training, working conditions and employee consultation.
In contrast, the NMS have virtually no arrangements for collective bargaining in the regulation of TAW, though most have introduced relatively strong legal frameworks in recent years. In these countries, TAW regulation has emerged with the growth of the industry, and there is sometimes a role for social dialogue in the development of the law. Only the handful of countries without any TAW is currently without a legal framework, and in most of these cases the social partners have been closely involved in policy discussions. The EU-level social partners, Eurociett and Uni-Europa, which have achieved significant success in developing meaningful social dialogue at European level, have also been actively committed to introducing national-level social dialogue on TAW. In particular, a series of Round Tables have been set up with the help of the European Commission to further develop sector-level bargaining and social partner organisation. (Round table events gathering sectoral social partners, government officials and industry representatives have been organised so far in Poland (2006) and Hungary (2007). The organisation of further Round Tables is included in the 2008/2009 Sectoral Social Dialogue Work Programme).
However, at present, the TAW industry faces a lack of representative trade union organisation in the NMS. A key problem in the regulation of the sector by the social partners is not just the weak tradition of sectoral-level bargaining, but a lack of trade union organisation for agency workers. Agency workers are fairly well organised in some countries, notably Belgium, Denmark, Finland and Sweden, but in most a combination of high employment turnover and low union membership means they face a double representation gap in both the employing agency and the user firm. Research also suggests that agency workers may have limited knowledge of their rights or the means to apply them. This makes the mechanisms of regulatory enforcement – which most countries pursue through sector-specific licensing arrangements plus monitoring by labour inspection agencies – all the more important.
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