Temporary agency work regulated

Legislation introducing and regulating temporary agency work will come in force in Slovenia on 1 January 2003. The new regulations seek to both increase the flexibility of the Slovene labour market and provide adequate protection for temporary agency workers.

On 26 April 2002, the Slovene parliament passed a Law on Labour Relations (SI0206101N) governing individual employment relationships, which will come in force on 1 January 2003. Among other measures, the law introduces and regulates temporary agency work. The aim is on the one hand to increase the flexibility of the Slovene labour market, and on the other to provide adequate protection for temporary agency workers.

Temporary agency work, which is a novelty in Slovenia, is a type of employment relationship involving three parties: the worker, the temporary work agency and the user company. The worker has an employment contract with the agency but works temporarily in other companies in accordance with a contract between the agency (the employer) and these user companies.

Background

The Law on Labour Relations currently in force provides no legal basis for temporary agency work and does not contain a proper legal status in employment and social terms for temporary agency workers. The present law regulates only temporary and periodic work carried out on the basis of a 'contract of work' (not a contract of employment), which is concluded directly between the worker and the user company, under which workers have almost no protection. The law also regulates temporary and periodic work by secondary-school and university students. They may obtain such work through a student or youth organisation (a student 'service' or job agency) on the basis of a referral from this organisation, without signing a contract of work.

In Slovenia, employment services were a state monopoly before the transition to a non-socialist economy. The exception was intermediation in temporary work for students, with the authorisation of the state (see above). Private employment services were introduced on a very restrictive basis by law in 1991. However, private employment services may have existed even earlier: research found that in 1990 some 14.2% of unemployed people seeking a job turned to private services (see 'Poti zaposlovanja', M Trbanc, in Zaposlovanje. Perspektive, moznosti, tveganja, B Prezelj et al, ZPS, Ljubljana 1992). This was a fairly high percentage compared with a European Union average of 11.8% in 1989. However, the 1991 regulations did not yet allow temporary work agencies. Because no legal basis existed for concluding temporary employment contracts (enabling the 'leasing' of workers), this prevented temporary agency work activity .

Current situation

Temporary work agencies were allowed to operate by amendments to the Law on Employment and Unemployment Insurance made in 1998. Through a 'licence agreement', the ministry responsible for labour may authorise a temporary work agency which meets personnel, organisational and other criteria to provide labour (lease workers). The conditions for issuing such licences were defined in the 1999 Rules Regulating the Operation of Employment Agencies. A licence agreement may be concluded for a fixed term (which may be extended for one year), or for an open-ended period if the agency has operated on the basis of fixed-term licences for at least five years and recorded no violations of the rules. The agency may operate only with workers employed by itself. Professional staff in temporary work agencies must have higher education and at least two years of relevant experience, and must pass a professional examination. The other criteria used for granting a licence include the number of people registered as unemployed with the relevant regional public employment services and the number of agencies already holding a licence in a given area. The licence may be withdrawn without notice in cases of violation of regulations.

The adoption of the new Law on Labour Relations, and thus of regulations on the contract of employment for temporary agency workers, was subject to delay. This resulted in a legal gap, because no legal basis for such employment contracts and no adequate protection of temporary agency workers existed. Therefore certain temporary work agencies, including the Slovene branch of one multinational agency, followed the rules regulating fixed-term employment contracts and the draft regulations on temporary agency work when concluding contracts of employment (these workers are not yet protected in line with the 1999 EU Directive (1999/70/EC) on fixed-term work, but will be under the new law).

New law

The new Law on Labour Relations ensures that the temporary agency workers will enjoy labour and social rights in line with the International Labour Ogranisation (ILO) Convention No. 181 on private employment agencies, reflecting the practice of most EU Member States.

According to the new law, a temporary work agency holding a licence may conclude a contract of employment for an indefinite or fixed term with a worker whom it assigns to other organisations. The agency must not assign any workers: to replace workers on strike; when the user company has dismissed a large number of workers in the preceding 12-month period; when jobs are dangerous (as defined by EU Directives); and in other cases which may be defined in the sectoral (branch) collective agreements. A contract of employment cannot be terminated before the assignment period has expired, even if the user company no longer needs the worker. The agency may not assign the same worker to a user company continuously - or with a breaks of up to one month - for a period longer than one year for the same type of work.

The temporary work agency and the worker must state in the contract of employment that the latter's pay and allowances depend on the actual hours worked, taking into account the collective agreements and general acts applying to the user company. They must also agree on pay compensation during any early cessation of work for the user company, or during any period when the employer does not assign the worker to a user company. The pay compensation must not be below 70% of minimum pay. The worker may take holidays in accordance with the provisions of the agreement between the employer and the user company. The user company and the worker must take into account the provisions of the new law, of collective agreements binding the user company, and of the general acts covering the user company regarding those rights and duties directly linked to the execution of work.

Commentary

It seems that the barriers to businesses entering the temporary agency work market are relatively strong in Slovenia, at least in comparison with those EU Member States without any requirements for the establishment of an agency. Temporary work agencies in Slovenia must fulfil numerous conditions in areas such as the qualifications of their personnel. The reason for such restrictions is probably the fact that this sector is young, undeveloped and has little tradition in Slovenia. Therefore temporary work agencies are being introduced gradually. Regarding the rights of the temporary agency workers, the principle of equal treatment with comparable workers in the user company (the client) is being applied in order to prevent temporary agency work eroding collective agreements and other employment standards. (Stefan Skledar, on behalf of the Institute for Labour Law, University of Ljublana)

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