Temporary agency work causes friction in service sector

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In October 1999, the Finnish Hotel and Restaurant Workers' Union (HRHL) is involved in a controversy over the use of temporary agency work in the sector. There is no separate collective agreement for temporary work agencies, while the workers concerned are not covered by the collective agreements of the sectors in which they work, with the result that their pay and conditions are often worse than those of the user company's employees.

In October 1999, the Hotel and Restaurant Workers' Union (Hotelli- ja Ravintolahenkilökunnan Liitto, HRHL) is seeking to resolve a dispute concerning the use of temporary agency workers in the sector. The union has sought to negotiate with the Temporary Employment Agencies Employers' Association (Työvoimapalvelualan työnantajayhdistys) over improved conditions for the workers, concerning matters like higher hourly wages as compensation for working on public holidays which fall in mid-week, but has now stated that the negotiations have ended without any results. However, according to the Employers' Confederation of Service Industries (Palvelutyönantajat, PT), the union has been unwilling to proceed with the negotiations in a positive spirit and is playing for time, waiting for the findings of the tripartite committee which is currently examining a revision of the Employment Contracts Act (FI9810179F). One of the issues under consideration by the committee is that of the general validity of sectoral collective agreements - ie their application to all employers and employees, regardless of whether or not they are members of the signatory organisations - and the specific issue of relevance to the HRHL dispute is whether or not temporary agency workers should be covered by generally binding national-level collective agreements in the sectors in which they work. There is no specific agreement for the temporary agency work sector itself.

As well as HRHL, other service sector unions - the Union of Commercial Employees (Liikealan ammattiliitto), the Caretakers' Union (Kiinteistötyöntekijäin Liitto, KTTL) and the Technical and Special Trades' Union (Teknisten ja Erikoisammattien Liitto, TEKERI) - have proposed to their employer counterparts that the issue of temporary agency workers should be dealt with in their sectoral generally binding collective agreements. The proposal is that employers in each sector should see to it that an agency from which they hire labour complies with the generally binding collective agreement for that sector.

HRHL has compared the terms of temporary workers' employment relationships with the provisions of the collective agreement in the hotels and food sector and, in a press release, its chair, Jorma Kallio, states that this study shows the situation at workplaces to be unsound: "Cooks doing the same jobs at the same workplaces are subject to different conditions and benefits, because they work for different companies." According to the study, the temporary agency workers are not granted the minimum collectively agreed conditions relating to basic wages, various bonuses, holiday entitlement, maternity, paternity or parental leave, or protection against unilateral termination of their contract.

The disagreement over the position of agency workers in the hotels sector has given rise to a significant court case, in which a lower court took a view on the application of collective agreements to temporary workers. The case concerned a group of cleaners who had worked for a certain hotel, some of them for years. In 1993, the hotel company outsourced the work to an external cleaning company. After this, the work was further transferred to another cleaning company and in 1995 a temporary work agency took over as the cleaners' employer. However, the cleaners and their work tasks remained the same throughout the changes. The agency functioned as the formal employer and paid the wages. However, it considered itself obliged to follow the collective agreement for the hotel and food sector only with regard to wages. The lower court ruled that the provisions of collective agreements did not apply to temporary agency workers and therefore they were not entitled to the benefits of such agreements. Under these circumstances, the workers were left without holiday bonuses, sick pay, or paid leave for nursing a sick child. The dispute, which has now been referred to the Court of Appeal, is a test case and is likely to proceed to the Supreme Court, where a final juridical interpretation will be made as regards collective agreements and the use of temporary agency work.

Because there is no collective agreement covering the temporary agency work sector, and the court ruling states that the general validity of other sectors' agreements does not apply to agency workers, temporary agencies are thus bound by legislation only. In Finland, matters like basic wages, evening and night work bonuses, some holidays and holiday bonuses are provided for only in collective agreements, not by law.

Until now, the use of temporary agency work in Finland has been relatively marginal. According to the Temporary Employment Agencies Employers' Association, the agencies currently offer work for about 13,000 employees, and their total turnover in 1998 was about FIM 1,020 million, though the figures are rising. Temporary agency work is used mostly in restaurants - where, according to the employers' association, agency workers account for about 2.5% of the total hours worked.