Latvia: Temporary agency work and collective bargaining in the EU

  • Observatory: EurWORK
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  • Published on: 18 Diciembre 2008



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TAW services are not popular in Latvia. The sector is represented by three companies providing TAW services as a main business and several employment (recruiting) companies delivering TAW services. Specific legislation on TWA activities is not established. Regardless lack of specific regulations temporary work agencies try to provide equal treatment of agency workers vis-à-vis permanent staff employed by the user enterprise. Since there is no demand for interference, the position of social partners towards TAW issues is rather formal.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

Statutory definitions of temporary agency work, agency worker and user enterprise are not established in Latvia. It is likely that Latvia will adopt definitions used in the EU TAW Directive.

2) Is there a collectively agreed definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

Collectively agreed definitions of temporary agency work, agency worker and user enterprise are not established in Latvia. Existing TAW companies use internationally approved definitions.

3) In your country, would you describe TAW as a sector in its own right?

The TAW business is represented by some recognized companies: Next Job Ltd. (established by the Netherlands company Insight Management in 2006), and Temporary Work Agency (TWA) Ltd. (established in 2002), Manpower (positioned as a recruitment company, established in 2006), Working Day (positioned as recruitment and staffing company, established in 1998 as recruitment company). Since TAW is not considered as a specific kind of employment and is not regulated by specific law, any other company who is willing to fulfill TAW functions is eligible to do so. Several companies that are involved in employment (recruiting) services provide services of TAW, but these companies have not positioned themselves as providers exclusively TAW services.

In this way, TAW is not recognized as a sector on its own right, this activity is not monitored and its magnitude is not known. It is recognised by TAW employers, unions and policymakers as a supplier of services within other sectors.

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

a) Yesb) No

There are no changes in the law concerning TAW since 2004. There is no much discussion or progress in adoption of EU level proposals (based on draft Directive on TAW) in Latvia. One reason is that the Directive is not fully adopted in EU institutions. The other reason is that TAW is not considered as an important issue in Latvia, and employment through TAW is not considered as a specific form of employment.

2) How is TAW regulated in your country?

a) Is there a legal framework specifically for TAW; and/or is it covered by general labour law (including case law/ jurisprudence)?

A legal framework specifically for TAW does not exist. Legal status of TAW is not defined in Latvian legislation. TAW activities are regulated by commercial laws regulating its commercial activities and general Labour law and supplementing legislation regulating its operations in employment business. Labour law and other regulatory enactments regulating employment legal relationships are binding on all employers irrespective of their legal status.

b) What is the role, if any, of collective labour agreements and self-regulation?

The role of collective labour agreements is noteless, because establishing of trade unions or other employers representation organizations is not typical in existing TWA. Self-regulation is more important, howevert usually employer is initiator and uppermost in setting principles of self-regulation. Sector level collective agreement does not exist.

3) What is regulated in these provisions? In particular, does it cover:

a) use of agency work (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other)b) the form of the contract (e.g.project, fixed-term, special contract, open ended, etc.)c) social security and social benefitsd) conditions to open a TAW agency (e.g. license or authorisation schemes, supervision by public authorities, financial requirements, or others - please specify)e) business activities/services delivered by TW agencies (e.g. prohibition to provide other services than TAW)?f) third-national companies or temporary agency workers (e.g. activities of foreign agencies)?

As it was mentioned before, operation of TWA is regulated by Labour law and commercial laws. All labour regulation concerns those who are employed on the basis of working contract. Specific TWA activities are not regulated at all.

There are no specific regulations on use of agency work. The form of the contract must meet requirements of Section 39-42 of the Labour law. Social security and social benefits provision for persons who are employed on the basis of working contract must meet requirements of the Labour law. Conditions to open a TAW agency are regulated by legislation which is applied to any company which is involved in the employment activities. Such organizations should be registered and licensed by the State Employment Agency (Nodarbinātības Valsts aģentūra, NVA). Business activities/services delivered by TWA agencies are regulated by general business legislation. There is no any prohibition to provide other services than TAW, since TAW is not a specific kind of business. Third-national companies may operate in Latvia on the basis of organization which is established in Latvia. Their activities are regulated by legislation concerning foreign investment. The work of temporary agency workers from other countries is regulated by legislation concerning migration.

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment rights for agency workers with permanent workers in the user enterprise concerning:

a) payb) trainingc) other terms or conditions of employment?

Any discrimination, whatever would be its reason, is prohibited by the Labour law regarding workers who work on the basis of working contract. However, existing regulations do not claim specifically equal treatment rights for agency workers with permanent workers in the user enterprise concerning pay, training and other terms or conditions of employment. It was said before, that specific law on TWA does not exist, and collective bargaining also does not exist in the TAW sector.

5) Do TAW workers have the right to information, consultation and representation?

TAW workers have the right to information, consultation and representation as far as they are employed on the basis of working contract.

6) Is there a control/enforcement mechanism regarding any TAW regulation?

If yes,

a) is there a special labour inspectorate or a bi-partite body governing TAW?b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)?

There is not a special labour inspectorate or a bi-partite body governing TAW. The State Labour Inspectorate (Valsts Darba Inspekcija, VDI) is responsible for all employment.

Since there is not specific legislation regarding TAW, there are also no any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements). Sanctions stemming from the labour legislation may be applied to TWA so far as it is employer, but this concern general employment issues.

7) Are there any procedures governing use of TAW and strike breaking?

Procedures governing use of TAW and strike breaking, in particular, prohibition to replace workers on strike by agency workers is not regulated by law or collective agreement.

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

Employers’ associations for TAW firms do not exist in Latvia.

2) Is there any union(s) specifically for agency workers?

If no, have any unions or confederations targeted the recruitment of agency workers? launched any campaigns around agency workers’ rights?

Trade unions specifically for agency workers do not exist. However TAW workers may join any existing trade union organization (corresponding to her or his occupation or other). There are no registered cases when any union or confederation targeted the recruitment of agency workers or launched any campaigns around agency workers’ rights.

3) Collective bargaining levels

Is TAW governed by collective bargaining at:

a) intersectoral/ national level?b) the sectoral level for TAW?c) company (ie. temporary agency firm) level?

TAW is not governed by collective bargaining at any of levels.

4) Collective bargaining outcomes

Please provide examples and details of any recent/ significant collective agreements governing TAW at the levels referred to in question 3.

Examples and details of any recent/ significant collective agreements governing TAW at the levels referred to in question 3 are not known.

5) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

Examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain are not known.

6) Please provide any data concerning:

a) trade union density for agency workers b) the coverage of collective bargaining within the sector.

Statistical data concerning trade union density for agency workers and the coverage of collective bargaining within the sector is not available. During interviews with representatives of existing TAW we know that trade unions or other employees’ representation organisations are not established.

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

a) longevity of TAW employment, i.e. how long workers remain employed

- in the sector?

- with a particular agency?

b) duration of TAW placements, i.e. i.e. the length of assignment in a user company.

Statistical data on TAW employment regarding longevity of TAW employment and duration of TAW placements is not available. We can not establish any sectoral or occupational differences on the basis of official statistics.

From interviews we do know that TWA applies very different employment models, depending on their specialisation. All of them employ workers on the basis of working contract for the time when workers are placed in “user company” (hired). In majority of cases TWA conclude contract with employee when the “user company” and worker have agreed on work. One company hire its permanent staff, but also employ some workers for short term period on the case by case basis.

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

There is no research or results of monitoring of TAW. Therefore we can not provide any evidence from official, academic and social partner sources concerning the reasons for companies’ using TAW and reasons for workers participation in the sector. We also can not highlight any changes in the above since the development of TAW in our country.

3) In practice, which rules and procedures may apply to temporary-agency workers in contrast to other workers in the user company?

In order to establish which rules and procedures may apply to temporary agency workers in contrast to other workers in the user company, we interviewed representatives of existing TWA and social partners.

From these interviews we did not see facts when undertakings specifically apply differential treatment to TAW workers in the user enterprises. On the contrary, we found that TWA use several methods to provide equal treatment. One TWA has implemented special rules as an appendix to ordinary service contract, which defines general conditions of employment of temporary agency workers in user enterprise. Other TWA hire workers in groups, and appoints a supervisor who follows that good working conditions are provided. Such position of TAW is understandable in conditions when demand for their services is not large. TWA try to attract clients (employers and job-seekers) by offering high quality service and guarantees.

However, one should take into account that the employment through TWA services per se is specific. Both parties use TWA services in order to get short term work: employee because of family circumstances, temporary unemployment etc. and employer because of seeking for the short term employment - seasonal, for active holiday period, project based, case based or other. This provides automatically differential treatment in terms of statistics, even if parity with permanent workers in the user enterprise is provided in general terms. Besides, user’s companies normally do not establish work relations with temporary workers – they are employees of the TWA, and they receive salaries from the TWA. Consequently, it is difficult to distinguish (and to report in statistics), what amount user’s company pay as a work remuneration for TAW, and what amount TWA pay as work remuneration for worker. Representatives of TAW told us, that they prescribe pay and working time issues in the appendix to the service contract, providing general conditions for employment. Last but not least, it must be taken into account that corresponding to the demand from employers, TWA workers are employed mostly in simple works that normally are low paid.

Regarding particular issues such as over pay, working hours, pensions, fringe benefits, consultation and representation, training, social and health care, access to housing, access to credits/loans, there may be two aspects. In TWA (as an employer) all these issues must be treated in a normal way - according with the Labour law regarding persons that are hired by TWA for placing in user undertakings. TWA is normal employer towards its own workers and temporary workers who are employed by TWA while they are placed in user enterprise. In user undertakings TWA are seen as temporary workers. It is understandable, that user undertakings take less responsibility towards temporary workers regarding specific social benefits, such as pensions, fringe benefits, consultation and representation, training, social and health care, access to housing, and access to credits/loans. From the legal point of view it would be rather difficult to implement fully equal treatment for workers who are provided by the TWA in cases when they are employed by TWA. In cases if they are employed by user company, the service is more likely to ordinary recruitment service. Even in this case, it is difficult to provide equal guaranties and benefits for temporary and permanent workers.

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers b) total revenues of the TAW sector

Data for 2004 and 2007 on the number of agency workers and total revenues of the TAW sector is not available.

2) What proportion of the TAW workforce is currently

a) male/ female?b) full/part time?c) young (<c. 25) or older (>c. 50) workers?

Statistical data regarding proportion of the TAW workforce in divisions is not available.

3) Has there been any changes to the TAW sector in terms of

a) concentration, i.e. proportion of employees or turnover accounted for by the largest firms?b) internationalisation, i.e. number/significance of multinational TAW firms?

The sector was not monitored for longer time therefore we can not establish changes to the TAW sector on the basis of reliable statistical data.

From our interviews we know that decentralisation rather than concentration has occurred in Latvia: (1) new TAW companies, mostly foreign based, have been established; (2) recruiting companies have incorporated TAW services within their businesses; and (3) existing TAW companies plan to expand their businesses to other employment services due to poor demand for TAW services.

Internationalisation is also characteristic for recent developments, but the scale is small. Three multinational TAW firms have opened their subsidiaries in Latvia. There are no cases when multinational TAW companies would wish to place their employees for work in companies in Latvia.

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

In terms of statistical reports TAW is an undertaking working under specific form of entrepreneurship (usually a limited liability company). Employment data is reported in normal way- hired workers are employees of TWA.

Operation of TAW is not specifically monitored, and statistical data is not available.

Commentary by the NC

TAW is at the outset of its development. It is not important in Latvia as a type of employment, and its scale is noteless. Representatives of existing TAW admit that the demand for temporary agency workers is not large, and entrepreneurs do not understand preferences of this kind of employment. In order to improve situation, TAW companies develop advertisement promoting their services.

The rudimentary status of TAW explains why there is no information about the scale and other features of TAW.

Since there is no demand for intervention, social partners are neutral to TAW issues. The government has taken fence-sitting position. In December 2007 the State Secretary of the Ministry of Welfare Ingus Alliks informed Latvian government that process of adoption of TWA Directive is not clear, and that this work may continue under the next European Parliament.

National level employers’ organization Latvian Employers’ Confederation (Latvijas Darba Devēju konfederācija, LDDK) has expressed its position regarding the terms when the equal treatment of agency workers vis-a-vis permanent staff employed should be applied by the user enterprise.

Trade unions support equal treatment position, but they also admit that the problem per se is not important.

Raita Karnite, Institute of Economics, LAS

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