EU temporary agency work directive boosts union bargaining position

Recent agreement at European level on an EU directive for temporary agency workers has strengthened the bargaining position of Irish trade unions on this issue in the latest national social partnership negotiations. Employers were looking for concessions in this area, while trade unions were likely to seek a trade-off in exchange for any derogations from the terms of the directive. In the end, however, the social partnership talks collapsed, primarily over pay issues.

Equal treatment for agency workers key to new EU directive

After seven years of negotiations, the EU Member States finally reached agreement on a temporary agency work directive on 10 June 2008 (press release (81Kb PDF), EU0806029I). The default position of the new EU directive is that equal treatment rights for temporary agency workers in comparison with their permanent counterparts will apply from the first day on the job. In other words, an employee indirectly recruited by an employer through an employment agency on a contract of temporary duration will have to be granted the same pay and employment conditions as permanent or directly employed staff. However, it will be a number of years before the directive is transposed into Irish law.

Article 5 of the directive provides national governments – in countries like Ireland where no legal mechanisms exist for extending collective agreements – with scope for derogation as long as certain protections are built into collective agreements.

Advantage for trade union side

Individual Member States cannot unilaterally impose derogations from the default principle of equal treatment from day one. Rather, deviations can only be implemented through the agreement of the social partners at national level. If a social partner agreement is not possible, then the default principle must apply.

Trade unions in Ireland have been seeking equal treatment rights for agency workers as a matter of urgency (IE0801019I). Clearly, the directive – particularly the default principle – provided the trade unions with a significant advantage at the bargaining table in the social partnership talks which took place in Ireland during the summer of 2008 (IE0804029I). Nonetheless, the situation was dependent on how the unions played their hand. The directive was like a gift handed by Europe to the Irish trade unions, as they know that any negotiations on the issue would imply a disimprovement on the default provision in the directive. This meant that the trade unions could use the directive as a bargaining chip in the short to medium term to try to force concessions on other union priorities – particularly collective bargaining rights.

Employer position

On the employer side, the Irish Business and Employers Confederation (IBEC) has consistently argued that ‘the EU must recognise the wide divergence of approaches adopted by Member States on this issue’. It was IBEC’s position that:

Under the Irish social partnership model, an agreement can now be concluded at national level to take account of the circumstances in Ireland. This is necessary so that employers can retain the current flexibility to avail of temporary agency work as an instrument of staffing and competitiveness, while balancing this with an approach to ‘equal treatment’ as may be defined, appropriate to Irish circumstances.

However, while the national social partnership negotiations were underway, it was not possible to foresee what approach employers might take with regard to the specific details of the legislation, and any derogation they might pursue. IBEC insisted that it would not trade anything else in the social partnership talks in exchange for flexibilities on agency worker rights. In other words, the employer side was maintaining that the agency workers issue must stand alone and could not be traded in exchange for collective bargaining rights for trade unions, for instance.

Trade unions prepared to bargain

On the trade union side, with the knowledge that it has the EU directive in its back pocket, the Irish Congress of Trade Unions (ICTU) could resist any deviations from the default principle. Nevertheless, ICTU had indicated that it might be ready to consider possible sectoral and company-level derogations, although it would defend the default position of equal treatment from day one as it applies generally across the Irish economy. ICTU claimed that IBEC had not articulated to it the specific economic sectors or areas where problems might exist from an employer perspective.

ICTU would not view any possible derogations as an exemption and would insist that any agreement reached on concessions must still ensure adequate employment protection, as stipulated in the directive. Moreover, ICTU would insist on ‘bargained trade-offs’ in exchange for any derogations sought by employers. In short, by conceding in one area, trade unions and workers would expect something in return. At company level, this might, for instance, entail an employee bonus at the end of an employment contract period or a promise of permanent employment for temporary agency staff. More generally, as noted above, trade unions may want to trade-off on the agency directive in return for concessions by employers on collective bargaining rights.

Negotiations collapse

It is difficult to see how the Irish trade unions could agree to accept less at national level than that provided for in the EU directive on temporary agency work, without anything in return. Nonetheless, this does not mean that there cannot be ‘negotiated flexibility’ at sectoral or company level. In the end, however, the social partnership negotiations collapsed on 2 August 2008. Pay pressures caused by Ireland’s economic downturn and increasing inflation proved to be the main stumbling block. The parties also failed to reach agreement on non-pay issues such as collective bargaining rights and the treatment of agency workers. For the first time in 20 years, it seems that Ireland must now move forward without a national social partnership agreement (IE0802049I).

Tony Dobbins, IRN Publishing