New agreement signed for temporary employment agencies

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In April 2004, a new national collective agreement for temporary employment agencies was signed in Spain. As well as improving pay and conditions for the direct employees of the agencies themselves, the agreement contains a commitment by trade unions not to seek clauses in collective agreements in other sectors and companies that restrict the use of temporary agency work. A number of agreements currently contain such restrictive provisions.

Temporary employment agencies (Empresas de Trabajo Temporal, ETTs) were first authorised and regulated in Spain by law 14/1994 - previously some companies hired out workers, but without legal recognition. Since then, temporary agency work has been a matter of persistent controversy. The law was amended in July 1999 by law 29/1999 (ES9907140F), which provides that agency workers must receive the same pay as the employees of the user companies in which they work. The new law also prohibited the use of agency workers in certain situations:

• to replace striking workers;

• to carry out high-risk activities;

• to fill vacancies arising from unfair dismissal, redundancies on economic, organisation or production grounds, or unilateral termination of the contract by workers because of serious and culpable behaviour by the employer;

• to work in other temporary employment agencies;

• to fill posts occupied by agency workers for more than 13.5 months of the previous 18 months;

• to fill posts for which there is no occupational hazard assessment; or

• to work in the public administration.

Following the introduction of these new regulations, a number of temporary agencies disappeared from the market, apparently because the new conditions made them unprofitable.

Current situation

Temporary employment agencies have been accused of generating precarious employment, and agency work is clearly a particularly unstable form of employment. However, commentators state that the sector has undergone a crisis, partly caused by the limitations imposed on agencies' operations, and agency work is thus not comparable as a cause of unstable employment with the phenomena of subcontracting and outsourcing. It is estimated that only 0.8% of people in employment are employed through temporary agencies, compared with an EU average of 1.6%. However, some experts believe that the official statistics do not provide a clear picture of the situation. The National Institute of Statistics (Instituto Nacional de Estadística, INE) and the National Institute of Employment (Instituto Nacional de Empleo, INEM) record agency work contracts as temporary contracts. The statistics therefore fail to deal with temporary agency work specifically.

According to the Association of Large Temporary Employment Agencies (Asociación de Grandes Empresas de Trabajo Temporal, AGETT), there were 323 TEAs in Spain in 2003. They tend to place workers for average periods of three weeks, and 43% of their contracts are with workers under the age of 24. Of these contracts, 47% are in the service sector, particularly in the occupations of telephone operators, shop assistants, information technology workers and sales staff. Some 41% of the contracts were in industry, involving a high number of unskilled workers.

Figures on temporary agency work in Andalusia drawn up by the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) for 2003 indicate that: 58.4% of the workers involved were men; 41.6% of workers were aged 17-24 and 70.0% under 29; 37.2% of the contracts were for five days and only about 1.5% were for more than 60 days; and 39.2% of contracts were of indefinite duration.

Collective bargaining

In parallel to the law, collective bargaining has also partially regulated temporary agency work. On the one hand, specific national collective agreements for the sector have been concluded since the mid-1990s by the main associations of temporary work agencies and the main trade union confederations, CC.OO and the General Workers’ Confederation (Unión General de Trabajadores, UGT) (ES0009111F and ES9702103N). The latest was signed in April 2004 - see below.

On the other hand, collective bargaining in other sectors or in user companies has dealt with temporary agency work - often restricting its use - though in varying ways. Recent research from CC.OO (La negociación colectiva en España: una visión cualitativa, Mª Luisa de la Flor, CC.OO, 2004) finds that one main approach is for agreements to guarantee equal pay for agency workers with user company employees, along with equality in terms of some other employment conditions. Though they are rare, some particular 'good practices' have been noted in this area: for example, a number of agreements provide for equality in terms of non-wage items, such as compensation for termination of contract (eg in the case of the agreement for the ceramics industry in Castellón). Some agreements provide preference in recruitment for agency workers who have previously worked in the company (as at CC Valeo Iluminación SA).

Another approach is for collective agreements to lay down the circumstances or conditions under which companies may use temporary agency workers, in order to restrict or dissuade their use. For example, some agreements:

• limit the number of agency workers in the workforce, often restricting such contracts to a maximum proportion of the workforce (between 5% and 12%, according to the size of workforce);

• limit the duration of the employment relationship, after which agency workers are automatically taken on as employees of the user company on open-ended contracts;

• restrict the use of agency workers to certain situations, such as temporary production needs, or lay down specific circumstances for their use, such as to cover unforeseen absences, sickness due to temporary incapacity, unforeseen orders and overtime, sometimes adding that the use of agency work is 'always an exception'; and

• recommend other forms of direct recruitment.

Finally, some agreements provide for workers' representatives to exercise greater control over this form of recruitment. It should be noted that agency workers have representation rights in their temporary employment agency, and not in the companies in which they actually work.

New agreement for agency workers

The new national collective agreement for temporary employment agencies - the fourth such accord - was signed in April 2004 and covers 2003-5. It was concluded by CC.OO, UGT and the sectoral employers' associations - AGETT, the National Association of Temporary Employment Agencies (Asociación Estatal de ETTs, AETT), the Spanish Federation of Temporary Employment Agencies (Federación Española de ETTs, FEDETT) (which includes the Association of Temporary Employment Agencies of the South [Asociación de Empresas de Trabajo Temporal del Sur, ATTESUR]) and the Catalan Association of Temporary Employment Agencies (Asociación Catalana de ETTs, ACETT). The three-year agreement makes the following provisions for 'structural' staff employed directly by temporary employment agencies:

• pay rises of 3.5% in 2003 and of the forecast increase in the retail prices index (RPI) plus one point in both 2004 and 2005, with adaptation to the real increase in the RPI if this is higher than the forecast;

• a reduction in annual working time of eight hours in 2004 and four hours in 2005. Annul working time will stand at 1,762 hours in 2004;

• a 'nursery bonus' (Bono de Guardería) will be paid to women workers with children under the age of three. This is worth EUR 360 initially and will be updated annually (by the forecast RPI increase plus one point);

• 65% of the 'structural' staff of the agencies must have an open-ended employment contract, instead of the previous 50%; and

• during the first two months of absence due to industrial accidents or occupational illnesses, temporary agencies will pay structural staff the difference between the sickness benefit paid by the Mutual Accidents Fund (Mutua de Accidentes) and their full pay.

More widely, trade unions make a commitment in the agreement not to include in any collective agreements clauses that limit, hinder, prohibit or exclude the use of the services of a temporary employment agency. Furthermore, both parties accept that there is no need for extra social security contributions by temporary agencies, because this would involve discrimination in comparison with direct temporary recruitment.

Commentary

Temporary employment agencies are agencies or companies that provide services of selection, training, recruitment and placement of workers. The user companies pay agencies an extra amount for each employee which ensures that the agency workers earn the same wages as the workers on the regular staff of the user companies. Agencies cover the costs of social security (for training and unemployment), absence and dismissal, which represents a form of 'outsourcing' of the management of the workforce for the user companies.

The new agreement for temporary employment agencies puts an end to a cycle of regulation and limitation of the use and abuse of agency work as mechanisms of workforce management. It will lead to an increase in their use because it not only affects the 'structural' staff of agencies but also involves an agreement that the collective bargaining in other sectors and companies will not place limits on them.

Temporary agency work is not the main quantitative cause of precarious employment, but adds a qualitative aspect to its complexity. In practice, it is widely used for the selection of young workers with few qualifications, through a test period that involves no responsibility for the user companies. They are not generally associated with providing highly qualified workers on high pay. (Daniel Albarracín, CIREM Foundation)