Registration requirement for temporary agencies, the Netherlands

About

Country: 
Netherlands
Sectors: 
All
Target Groups: 
employers/purchasers

 

On 1 January 2012, several labour laws came into effect aimed at combating illegal employment and labour exploitation. The legislation marks a new area in which government (and the national Labour Inspectorate) intends to play a more active supervisory role. In particular, the law re-introduced the requirement for temporary employment agencies to be registered. Agencies that are not registered with the trade register held by the Chamber of Commerce will be fined, as will companies that hire staff from such agencies.

 

Background

In 1998 a requirement demanding that temporary employment agencies should hold an operating permit was abolished. Since then the number of temporary employment agencies has multiplied, significantly those that are involved with illegal workers. Since 2007 5,000 up to 6,000 temporary employment agencies have emerged aimed at helping to find jobs for immigrants. Of the estimated 200,000 immigrants arriving in the Netherlands since then, around 100,000 have tried to find a job via temp agencies (Research Committee of the Dutch House of Representatives, 2011). Employee as well as employer representatives have been calling for stricter supervision and heavier sanctions for illegal practices. Successive governments started to accept the need for more control.

Effective from 1 January 2012, a registration requirement has been re-introduced for temporary employment agencies. Agencies that are not registered with the trade register held by the Netherlands Chamber of Commerce will be fined, as will companies that hire staff from such agencies. Additionally, the tax authorities and labour inspectorate are now obliged to pass on the details of all agencies they encounter to the institutes responsible for certifying temporary employment agencies.

With effect from 1 January 2010, subcontractors had already become jointly liable with any temporary employment agency they used for the hire of labour for ensuring that the statutory minimum wage is paid to all workers.

To ensure the implementation of EU temporary agency directive 2008/104/EC, the standard of equal treatment for temporary employees has been expanded and works councils have been awarded more extensive rights to gather information about engaging the services of temporary staff within their respective companies.

Objectives

Combatting labour exploitation and protecting temporary agency workers.

Specific measures

A registration requirement has been introduced for temporary employment agencies (1 January 2012 onwards). Agencies that are not registered with the trade register held by the Netherlands Chamber of Commerce will be fined, as will companies that hire staff from such agencies.

In combating fraud and exploitation, extra attention is to be paid to the middle men that form crucial links between the legal and illegal sphere, such as money launderers, front-men and fixers helping illegal immigrants gain entry to the Netherlands. Checks to combat illegal employment are to be intensified, especially in sectors that traditionally use large numbers of temporary employees such as hotels and restaurants, agriculture and cleaning. Companies breaking the law may be shut down and the maximum fines for knowingly hiring illegal workers have been raised.

In conclusion, legislation, in combination with control, fines, supervision and enforcement will be the methods and measures to combat illegal employment through temporary agencies.

Actors involved

Legislator (wetgever); Labour Inspectorate (Arbeidsinspectie); tax authorities (Belastingsdienst); work councils (Ondernemingaraden); social partners, in particular the employer organisation of temp agencies, ABU (Algemene Bond van Uitzendorganisaties).

Outcome of evaluations: lessons and conclusions

Since the ruling became effective, 1 January 2012, no evaluations have taken place. Essential seems to be legislation in combination with effective enforcement and control. In addition, of importance is the willing compliance of employers (organisations), in this case the ABU, whose members face false competition and whose image is being damaged.

Achievement of objectives

Since the ruling is effective from 1 January 2012, six month later, in June 2012, it is too early to draw conclusions (compare the other factsheets; it seems that legislation in combination with factual control has a ruling effect).

Obstacles and problems

Because the primary goal of the illegal worker is to remain in the immigration country, and work for a better standard of living, it is very hard to prove underpayment and abuse, since the workers involved are extremely dependent on the employer (agency) for their living. As there have been cases in which the employer also offered poor housing, a bed for the night, it is important that the labour inspectorate also looks into housing conditions.

Lessons learned

It is too early to draw lessons, but as mentioned above it seems to be crucial that legislation is combined with effective enforcing and control. Also of importance is the willing compliance of employers (organisations), in this case the ABU, whose members face false competition and whose image is being damaged.

Impact indicators

It is estimated that since 2007 around 200,000 immigrants have arrived in the Netherlands, of whom 100,000 have tried to find a job via temp agencies. Since 2007 5,000 to 6,000 temporary employment agencies were to set up, helping to find jobs for immigrants (Research Committee of the Dutch House of Representatives, 2011).

Transferability

The transferability is hard to assess since it is a combination of measures: legislation, fines, supervision and control, and support of employer organisations, seems to be typical for societies with established institutions and organisations.

The system is transferable within the Dutch legal system. The system of administrative fines was already included in the law on foreign employees (Wet arbeid vreemdelingen), the law on working conditions (Arbeidsomstandighedenwet) and the law on working time (Arbeidstijdenwet).

Contacts

Bibliography

Research Committee of the Dutch House of Representatives (2011), Labour migration on track, The Hague (in Dutch).

Marianne Grunell, University of Amsterdam, AIAS/HSI

 

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