Temporary agency work on the rise with economic recovery
Temporary agency work in Austria reached a peak of 80,000–90,000 workers in 2008. When the economic crisis hit, these workers were the first to be made redundant. With the recovery, temporary agency work is on the rise again, increasing from 54,000 to 80,000 workers between January and June 2010, though unequal pay remains an issue. The trade unions are demanding an upper limit of 10% of the workforce for temporary agency workers in a company, but organised business is against this.
Before the onset of the economic crisis, temporary agency work (TAW) had been booming in Austria with an all-time high of 80,000–90,000 temporary agency workers in 2008, accounting for about 2.4% of the dependently employed workforce. With the recovery in the economy, there was an increase in temporary agency workers from 54,000 to 80,000 between January and June 2010.
Companies in the manufacturing, commerce and construction industries make the most use of such workers. Those companies hiring temporary agency workers use them to cover about 9.4% of their workforce (Synthesis 2009 (in German, 25Kb PDF)).
After the economic and financial crisis had hit the country, temporary agency workers were the first ones to be made redundant. With the economic recovery, enterprises began to hire temporary workers again, often instead of re-employing workers laid off as a consequence of the economic downturn and who had received a pledge of re-employment from their employers. According to the Union of Salaried Employees, Graphical Workers and Journalists (GPA-djp), this concerns between 7,500 and 10,000 workers and is a popular practice in the manufacturing, automotive supply and food industries.
Even though the actual personnel costs are by and large the same for temporary workers and ‘standard’ employees, the hiring and firing terms are much more flexible for temporary workers as the employers need not adhere to the provisions laid down in the Labour Constitution Act (Arbeitsverfassungsgesetz) as they would when hiring ‘regular’ employees. In practice, this means that there is no need for the employer to give notice of termination to the employee or the Public Employment Service (AMS) and no need to inform the works council.
A study (in German) on the working situation of temporary agency workers conducted and published by L&R Social Research (L&R) in 2010 found that about 30% of temporary workers are continuously employed for not longer than one month and about 55% for not longer than three months. On average, only about one in five temporary workers is being taken on by the company as a standard employee.
About a quarter of temporary workers are dissatisfied with their income and some 47% report unequal treatment on pay compared with permanent staff.
White-collar temporary workers are covered by the general collective agreement of the ‘crafts and trade’ sector. A collective agreement for blue-collar temporary workers, which came into effect in 2002 (AT0202202N), states that such workers are entitled to a minimum wage even if the worker is not actually hired out. According to the principle of favourability, temporary workers’ pay must not be lower than that of comparable standard workers. So if the temporary workers’ collective agreement offers lower pay than the sectoral collective agreement, the latter applies. However, companies can bypass this by employing workers at a lower pay level in the respective collective agreements (for example, hiring a skilled worker as an unskilled worker).
Opinions of the social partners
- an upper limit on the share of temporary agency workers to be set at 10% of the overall workforce;
- less misuse of the termination of employment by mutual agreement, which appears to be widespread practice (confirmed by the L&R study).
Some 39% of the temporary workers surveyed for the L&R study stated that their employment relationship was mutually terminated at the request of their employers with a promise to re-hire them as soon as work becomes available again. For mutually agreed terminations, employers do not need to comply with the usual two-week notice period when they make a worker redundant, which helps to reduce personnel costs.
The unions also want works councils to have the right to receive more information, for example, on pay rates for standard and temporary workers within a company. Organised labour groups also demand that, after having worked for six months for the same company, agency workers should automatically be offered a standard job in the company if and when one becomes available.
The unions have pushed for similar demands in the past and, at a company level, some works agreements already provide for stricter regulations concerning TAW (see AT0807019Q), including:
- implementing an upper limit of 5%–10% of the total workforce for temporary agency workers,
- an obligation to take on temporary workers as permanent staff after one year;
- extending the information rights of the works council towards the use of TAW.
However, organised business sees no need to reform legislation or collective agreements on temporary agency work. The Federal Economic Chamber (WKÖ), Austria’s biggest employer association, is strictly against implementing a limit of 10% on the number of temporary workers in a company, arguing that:
- it would affect entrepreneurial responsibility and planning;
- the use of temporary agency workers provides employers with greater flexibility.
WKÖ believes that the working conditions of temporary workers are good if not better than those of regular employees, referring to the 2002 collective agreement which ensures equal treatment of temporary and regularly employed workers.
Bernadette Allinger, Working Life Research Centre (FORBA)