Complete wage equality achieved for temporary agency workers

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A new national collective agreement for Spanish temporary work agencies, signed in July 2000, has resolved differences over the interpretation of the legal requirement that temporary agency workers should receive equal wages with employees of user companies. As the trade unions demanded, temporary agency workers will receive exactly the same wages as the user companies' employees because the wages laid down in both statutory collective agreements and company agreements will be taken into account.

A new national collective agreement for temporary work agencies (empresas de trabajo temporal, ETT s) was signed on 28 July 2000 - the third such agreement (ES9702103N). The three-year agreement (2000-2) was signed: by the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) and the General Workers' Confederation (Unión General de Trabajadores, UGT); and the sector's four employers' associations - the Association of Large Temporary Employment Agencies (Asociación de Grandes Empresas de Trabajo Temporal, AGETT), the Spanish Association of Temporary Employment Agencies (Asociación Española de Empresas de Trabajo Temporal, AETT), the Catalan Association of Temporary Employment Agencies (Asociación Catalana de Empresas de Trabajo Temporal, ACETT) and the Spanish Federation of Temporary Employment Agencies (Federaciñn Española de Empresas de Trabajo Temporal, FEDETT). The agreement was preceded by several months of intense negotiations and is of special significance because it establishes that the temporary agency workers will receive exactly the same wages as the workers of the user companies, thus resolving differences over the interpretation of this point in the current legal rules on temporary agency work. However this is not the only significant development: the agreement also offers major improvements for these companies' own direct employees and establishes new forms of worker representation in the administration of the agreement.

Complete wage equality

The new collective agreement for temporary work agencies marks a definitive end to the dispute in the sector over the interpretation of the principle of wage equality laid down in Law 29/1999 on temporary agency work, which came into effect in mid-1999 (ES9907140F).

This law states that workers of temporary agency workers should receive the wages laid down in the agreement applying to the user company. Since the regulations came into force, workers hired by temporary agencies to provide services in user companies have been entitled to receive, during the period of service, at least the total wages per unit of time established for the job performed in the user company, according to the collective agreement applicable to that company.

The problems of interpretation lay in the legal concept of the "applicable collective agreement", which is open to wider or narrower interpretation. In principle, the distinction between a collective agreement and any other type of agreement is clear. The collective agreement (convenio colectivo) is regulated in the Workers' Statute: it is an agreement that fulfils many requirements (related to the legitimacy of the bargaining parties, the bargaining procedure, its content and its validity) and by virtue of this it has a general regulatory effect. Traditionally, it has been considered that a collective agreement that does not meet these requirements - an extra-statutory agreement (acuerdo extraestatutario) - has only the effect of a normal contract and is governed by the civil contract law. However, for some years the situation has been far more complex and the boundaries between collective agreements and extra-statutory agreements are less clear. The main reason for this is that a great deal of bargaining is now carried out at company level, which is reflected in "collective pacts" that seek only to regulate certain matters by modifying or supplementing the applicable collective agreement: although they do not meet the requirements to be considered as collective agreements in the strict sense, these agreements have or can have a general regulatory effect based on labour legislation or on collective bargaining.

Collective pacts on wages without the status of collective agreements are a very common practice in companies. This is why the problem of interpretation arising from Law 29/1999 was a serious question. One of the main criticisms that trade unions made of the new law on temporary agency work was the ambiguity with which the principle of wage equality was expressed: the unions considered that in order to be real and effective, the reference wage should be that actually paid by the user company, regardless of the regulations on which it is based. The employers, however, tended to make a far more restrictive interpretation of the regulations.

The new collective agreement for temporary work agencies supports the trade union view on this question, which has been one of the main causes of dispute and litigation in the sector since the new law came into force. The new agreement guarantees wage equality between workers provided by agencies and those hired directly by user companies, taking as a reference the wages for the job, whatever regulation they are based on. Therefore, the wages laid down in statutory and extra-statutory collective agreements, as well as in any collective pacts or agreements that are generally applicable in the user company, must be taken into account. Only individual agreements and personal supplements that are not linked to the job are excluded. This agreement will come into force on 1 January 2001.

The agreement on wage equality led the employers' organisations and unions, in the final clause of the agreement, to make an express request to the government to stop penalising recruitment through temporary agencies by applying a higher social security contribution to the employees involved.

Other provisions

Although wage equality for temporary agency workers was one of the main points of the negotiations, significant new provisions were also agreed in other areas.

First, a collective accident insurance scheme has been set up for all temporary agency workers, which is of particular importance due to the high industrial accident rate among such workers (ES0009106N).

Second, the agreement provides for a major improvement in the employment conditions of temporary agencies' own direct employees - ie those recruited by agencies to provide their services directly to the agency rather than to user companies ("structural workers"). The main points are as follows:

• a significant wage increase of 4.5% in 2000, and the increase in the retail prices index plus one point in 2001 and 2002, with a wage revision clause (allowing for adjustments if inflation exceeds forecasts) for the three years of the agreement;

• annual working time is reduced by 15 hours, through one extra paid day off in 2001 and two in 2002;

• 50% of the agencies' staff must be on permanent employment contracts. Companies that do not fulfil this commitment will not be eligible for the extension from six to 12 months in the duration of temporary contracts regulated by the agreement; and

• a system of occupational classification that is in accordance with the reality of the sector has been established.

Finally, the agreement introduces a new form of worker representation for the administration of the agreement by creating the position of "territorial union delegate". The joint commission which administers the agreement is empowered to determine the number of territorial delegates and their duties. The funding of these new posts will be provided from the general funding for the activities of the joint commission.

Commentary

It seems that this agreement has finally put an end to the dispute over the wages of temporary agency workers. Despite their serious initial reservations, all the sector's employers' organisations have finally given their support to wage equality by accepting an interpretation of the new law that removes ambiguities and is favourable to temporary agency workers. For employers, the agreement clearly promotes a new model for temporary agency work in which these companies are no longer used to lower wage costs. Industrial relations in the sector are thus entering a new phase. Although the agreement still has to be developed, the creation of the territorial delegate shows that there is a consensus on the need to improve the application of the agreement and to increase the participation of the workers' representatives by seeking new types of representation, meeting the specific needs of the sector (María Caprile, CIREM Foundation).