Temporary agency work in Estonia

A recent study shows that temporary agency work is not widely used in Estonia. The issues of remuneration and holidays for temporary agency workers can be problematic. A lack of clarity is also evident regarding the division of standard employer responsibilities between the temporary work agency and the user company. The main economic sectors using temporary agency work are manufacturing, construction, and transport, storage and communications.

Study aims and methodology

In January 2007, the Research Centre Klaster (Uuringukeskus Klaster) and the University of Tartu (Tartu Ülikool) conducted a survey on temporary agency work in Estonia at the initiative of the Estonian Ministry of Social Affairs (Sotsiaalministeerium). The survey aimed to map the situation of temporary agency work and the level of regulation required, as no specific regulations on this form of employment yet exist in Estonia.

The data were gathered using an online questionnaire sent to the representatives of temporary work agencies. A total of 31 out of all 65 active agencies answered. The study also included more qualitative research which, however, should be treated with caution due to some methodological issues: not all of the interviews were conducted properly and examples are often derived from selected interviews. Moreover, the opinions of the researchers and the results of the study are not always clearly distinguished. Therefore, this article does not include this aspect of the research.

Profile of agencies and workers

The temporary work agencies questioned were relatively small and young companies: they had been in operation for three years on average and hired out an average of 42 temporary agency workers. The authors of the study estimate that there are about 2,400 active temporary agency workers in Estonia and another 480 workers who are currently inactive but have a valid contract with the temporary work agency.

Almost two thirds of the temporary work agencies hire out their employees to less than 10 companies. The main economic sectors of the user companies are manufacturing, construction, and transport, storage and communications. Some 82% of the agencies also send their workers abroad – to Finland, Sweden and Denmark. The most common length of employment contract at the user company is two to six months.

Figure 1 shows that most of the temporary work agencies, at 81%, hire out skilled workers.

Figure 1: Occupations hired out by temporary work agencies, 2007 (%)

Source: Research Centre Klaster and University of Tartu, 2007

Salary and working time

According to the temporary work agencies, in 60% of cases the salary of the hired out employee equals the wage level of the user company, and about one third of the agencies pay higher salaries than the user companies.

In 44% of cases, the user company determines working time for the temporary agency workers, while in 35% of cases the decision is made jointly by the temporary work agency and the user company. Although 73% of the temporary work agencies ensure a holiday for their employees, as stipulated in the Working and Rest Time Act (Töö- ja puhkeaja seadus), in practice the holiday may depend on the needs of the user company. Furthermore, the agencies that send employees to foreign countries have to take into account the individual country’s rules and regulations concerning working time.

Responsibility for the worker

On the basis of regular bilateral employment relations, current labour legislation places the responsibility for the worker with the employer. However, in the case of temporary agency work, the responsibilities are dispersed between the agency and user company.

For some issues, there is common understanding among the temporary work agencies in relation to the responsible parties. According to 74% of the agencies surveyed, negotiating salaries for the temporary agency workers is solely their duty. However, evaluation of the work results, on-the-job training and assigning job tasks to the employee are seen as responsibilities of the user company.

For other issues, the opinions on responsibilities are not as clear cut. For example, in relation to more general training, 24% of the respondents considered that the temporary work agency alone was responsible, while 48% believed that both the agencies and user companies were responsible in this regard. At the same time, 19% of those surveyed considered that neither the agency nor the user company was responsible for training. Similarly, the temporary work agencies believe that responsibility for most health and safety issues should be shared or lie with the user company (Figure 2).

Figure 2: Responsibility for health and safety of temporary agency workers, 2007 (%)

Note: Some of the data may add up to more or less than 100% due to rounding of values.

Source: Research Centre Klaster and University of Tartu, 2007

Commentary

The study concludes that, in terms of an ongoing labour shortage, temporary agency work is a way for the user company to hire suitable employees. The qualitative analysis indicated that the user company sometimes directly recruits the temporary agency worker after a trial period. However, the reasons for using temporary agency work – and also for then choosing to directly employ the worker – remain largely unknown. In studying the trends of this practice, comparisons should also be made to periods of economic downturn.

Reference

Renditöö uuring (in Estonian, 550Kb PDF) [Survey of temporary agency work], Research Centre Klaster and University of Tartu, Tartu, 2007.

Liis Roosaar and Kirsti Nurmela, PRAXIS Centre for Policy Studies