Temporary agency workers should receive the same pay as permanent staff

Temporary agency workers should receive the same remuneration as employees doing the same work in the user company to which they have been assigned, according to a ground-breaking arbitration award issued in September 2003 a case involving the Union of Danish Electricians and the Tekniq employers’ organisation.

Temporary agency workers can no longer be employed at lower wages than paid to employees of the user company at the same workplace for the same work. This is the implication of an arbitration award issued on 1 September 2003 in a case involving the Union of Danish Electricians (Dansk El-Forbund) and Tekniq, the employers' organisation for heating and plumbing engineering and electrical installation, which found that temporary agency workers should work under the same contractual terms as apply to user company employees who perform the same work, including the same wages. The building workers' section of the General Workers’ Union in Denmark (Specialarbejderforbundet i Danmark, SiD) has described this award as a 'U-turn' in terms of the legal status of temporary agency workers.

The arbitrator in the case – a former Supreme Court judge – ruled that temporary agency workers are covered by the collective agreement applying to the user company because they are clearly working under the management and instructions of the employer of the permanent staff. The arbitrator argued that 'the collective agreement applying to electricians is a sector agreement which, as a starting point, covers all work performed for a member enterprise within the occupational field covered by the collective agreement'. The arbitrator found that it was irrelevant whether the temporary work agency which formally employed the temporary workers was covered by a collective agreement or not.

There are numerous sectoral agreements applying in the building industry and for this reason this award will have far-reaching consequences involving matters of principle within the entire industry, according to SiD.

In recent years, there has been a continuing growth in the use of temporary agency workers in the building industry. The trade unions have cited several examples of agency workers being employed on less favourable terms than their colleagues employed directly by the building enterprise to which they are assigned. According to previous case law, it has been the terms of the collective agreement covering the temporary work agency concerned (or its other pay terms) which have applied to agency workers in the building industry, irrespective of the work they perform. This has made it very difficult to introduce safeguards against temporary agency workers being employed as cheap labour.

In this connection, SiD takes note in particular of the fact that the recent arbitrator's award distinguishes between temporary agency workers and workers posted by a subcontractor who are subject to the latter's managerial prerogatives. The arbitrator also ruled that it was irrelevant whether or not there was a genuine employment relationship between the temporary agency workers and the electrical firm for which they were actually performing work.

SiD and the building trade unions' cartel (Bygge-, Anlægs- og Trækartellet, BAT-kartellet) had considered raising the question of temporary agency workers in the next collective bargaining round in 2004. However, the new arbitration award may make this unnecessary.