Impact of Flexibility and Security Act on temporary work sector

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From 1 July 1999, Dutch employers must comply with obligations stemming from the Flexibility and Security Act. Following three consecutive contracts, temporary agency workers must be offered a permanent contract. However, in anticipation, temporary work agencies began dismissing staff in June. The FNV union confederation has condemned the mass dismissals.

The Dutch Flexibility and Security Act came into effect on 1 January 1999 (NL9901117F), and from 1 July temporary work agencies must offer their employees a permanent contract following three consecutive contracts (NL9902125N). Over the course of June 1999, however, many temporary agency workers received a letter of dismissal, to the alarm of the FNV trade union confederation, which protested against this "anti-social" behaviour on the part of the employers.

Employers affiliated to the Association of Temporary Employment Agencies (Algemene Bond Uitzendondernemingen, ABU) argue that they are not "handing out permanent contracts to all and sundry", because they have to consider the commercial implications. Employees unlikely to be placed in the future would not be eligible for such contracts. Another consideration is that temporary agency workers in some sectors are governed by the user company's collective agreement, not the collective agreement covering the temporary work agency. If a temporary employee switches sectors, a pay cut may result. The agencies do not wish to cover the shortfall.

FNV believes that the Flexibility and Security Act has indeed succeeded in making temporary employment agencies into fully-fledged employers, and that this means that they now have obligations of "trust" and "good employment" principles. It is claimed that employees who now find themselves out of work have little hope of finding a job via other temporary agencies because of the cumulative social security rights future employers would have to uphold. As a result, many employees dismissed now face claiming benefits for an unknown length of time under the terms of the Unemployment Insurance Act (WW) - unless, that is, they manage to find a position with a "normal" company familiar with these legal obligations. The issue is the cause for all the more concern in the light of the recently published Occupational Disability Insurance Act (WAO) figures for 1997: the number of temporary employees receiving disability benefits exceeds the national average. Although temporary employees comprise one-seventh of the workforce, they represent one-fifth of all disability benefit recipients.

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