Ombudsman criticises conditions for temporary agency workers at Škoda Auto

Recent findings by the Czech Ombudsman on conditions for temporary agency workers at the leading Czech company Škoda Auto have lent support to the trade unions’ criticisms of such employment. According to the findings, Polish workers hired through an employment agency had, contrary to law, experienced inferior working and wage conditions than those of permanent employees. Moreover, the Ombudsman disapproved of the Labour Inspectorate’s approach to the matter.

Legal framework for temporary agency work

The use of temporary agency work is covered by the Czech Labour Code (Act No. 262/2006 Coll). Under current legislation, the employment agency (‘the employer’) – in accordance with a permit issued by the Czech Ministry of Labour and Social Affairs (Ministerstvo práce a sociálních věcí, MPSV) – may temporarily allocate its employee to work for another employer (‘the user company’), on the basis of a written agreement within the contract of employment. Under this agreement, the agency undertakes to offer its employee temporary work at the user company, while the employee agrees to do this work in line with the user company’s instructions. The Labour Code places an obligation on the employment agency and the user company to ensure that the pay and working conditions of temporary agency workers are not inferior to, but rather comparable to, those of permanent employees.

Background to case

In 2006, the Czech Labour Inspectorate received complaints from Polish temporary agency workers who were working at Škoda Auto a.s. about their working conditions. On the basis of these complaints, the inspectorate conducted an investigation at the beginning of 2007. It determined that the hourly wage rate set for these employees by the employment agency was lower than the lowest rate guaranteed to Škoda Auto employees in their collective agreement: the investigation found that the total gross monthly income of the Polish workers was in fact 15%–20% lower. In addition, the employment agency in question was in arrears in the payment of wages in almost half of the cases investigated. However, the inspectorate did not initiate legal proceedings against the agency, on the grounds that the agency had cooperated during the investigation and had undertaken remedial measures.

Findings of Ombudsman

Based on information presented by the Polish Commissioner for Human Rights, the Czech Ombudsman undertook an investigation into adherence to working conditions and the approach adopted by the Labour Inspectorate in this particular instance. The Ombudsman found the Labour Inspectorate’s approach to be inconsistent and unsound, and requested that it initiate a new investigation into wages at the employment agency. In particular, it criticised the inspectorate for not determining the actual value of the Polish workers’ wages during its initial investigation and for not comparing the actual wages paid with the value of the minimum wage guaranteed by the Škoda Auto collective agreement.

A subsequent check on the labour and wage regulations within the employment agency revealed a serious failure to adhere to the Labour Code. As a result, the Labour Inspectorate started legal proceedings, whereby a fine of up to CZK 2 million (€79,734 as at 11 March 2008) can be imposed for an offence regarding the remuneration of employees. The Ombudsman will continue to monitor the case and consider further steps at the end of the legal proceedings.

Employer’s response

Škoda Auto maintains that it is unaware of any breach of the Labour Code by the employment agency. However, in the event that an offence is proven, it promises to take the appropriate measures. According to the company’s spokesperson, Jaroslav Černý:

Personnel agencies that we work with in hiring employees must act in accordance with the Labour Code. Should it be shown that the agency has made a mistake, we will draw the appropriate conclusions.

Commentary

Škoda Auto employs 27,000 workers, 4,000 of whom are hired through employment agencies and many of whom are foreigners. Like many other firms, the company uses this approach to deal with the lack of available labour. In view of the low level of unemployment in the Czech Republic, it may be assumed that the employment of foreign workers through temporary work agencies will continue to increase. However, the trade unions have expressed reservations about such employment for some time (CZ0612059I, CZ0611049I). Among their criticisms, they point to frequent breaches and circumvention of the regulations governing employment through agencies. According to some legal opinions, the current legislation is not unambiguous and causes varying approaches to adherence to certain rules, while making it difficult to prove breaches of its provisions. This particular case at Škoda Auto, one of the most important employers in the country, could therefore set an important precedent for the future approach not only of employers, but also of the Labour Inspectorate.

Further information

An [overview of temporary agency work](/search/node/eiro OR thematicfeature14?oldIndex) in each of the EU27 countries and Norway can be found on the EIRO website.

, Research Institute for Labour and Social Affairs