EurWORK European Observatory of Working Life

Agreement on temporary agency work and working time directives shelved

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The Portuguese EU Presidency had planned to reach an agreement on a directive regulating temporary agency work and on a revised version of the working time directive at the December meeting of the Employment, Social Policy, Health and Consumer Affairs Council of Ministers. However, an agreement was not reached, mainly because of resistance on the part of the UK government. The French EU Presidency later in 2008 offers the next likely chance of a result.

Hopes for agreement dashed yet again

In the European Union, there is a long history of failure to agree on a directive on temporary agency work and on a necessary reform of the working time directive. Traditionally, the UK government took the role as the ‘leader of the opposition’ against such initiatives. However, in the summer of 2007, the UK government seemed to soften its position, particularly on certain issues concerning a possible temporary agency work directive. The UK Minister of State for Employment Relations and Postal Affairs, Pat McFadden, appearing in front of the European Scrutiny Committee within the UK parliament, made a comment that – under certain circumstances – he ‘would be very optimistic’ that an agreement could be reached under the Portuguese EU Presidency in the second half of 2007.

Nevertheless, this optimism did not materialise in new agreements; on the contrary, the UK government – with the support of a few other countries such as Germany, Ireland and Malta – again blocked an agreement on both issues at the December meeting of the EU Member States’ social affairs ministers (see, for example, the newspaper article by the Financial Times from 6 December 2007). Without mentioning specific governments, the official press release (227Kb PDF) after the December meeting simply stated:

Bearing in mind (…) the sensitive nature of these directives for some Member States and the importance of exploring all attempts to reach as broad an agreement as possible before the final decision was taken, the Council agreed that the best option at this moment was to postpone a decision, in order to further pursue the dialogue.

Temporary agency work

The attempt to regulate temporary agency work on a European level can be traced back to the 1980s (see EIRO thematic feature). As early as 1982, the European Commission submitted a first draft directive that was never adopted. Moreover, the European Parliament and even the Council of the European Union adopted resolutions in favour of action to protect temporary agency workers more than 20 years ago. Between then and now, several initiatives have attempted to set binding rules for non-discrimination against temporary agency workers and to agree on minimum EU-wide standards.

In the early 1990s, the European Commission aimed to create a minimum level of consistency between different types of employment contracts, and proposed legislation in three areas: part-time, fixed-term and temporary agency work. The improvement of living and working conditions for employees affected by these forms of employment was originally highlighted in the 1989 European Social Charter and in the ensuing Social Charter Action Programme. Under the European social dialogue via Articles 138-139 of the EC Treaty, agreements were reached on parental leave (TN9801201S), part-time work (EU9706131F) and fixed-term work (EU9903162N), these being eventually formalised as EU directives in 1996, 1997 and 1999 respectively.

However, the talks on temporary agency work proved difficult. In 2001, it became obvious that the employers were not going to accept that temporary agency workers’ employment conditions should be on an equal footing with staff in the user company, and the consultation ended without a positive result (EU0106215N). The European Foundation for the Improvement of Living and Working Conditions has since prepared a number of studies examining this form of work, including ‘Temporary agency work in the European Union’ and a EWCO topic report (TN0408TR01).

Commission’s 2002 proposal

In the absence of an agreement between the social partners, in 2002 the European Commission put forward its own proposal for a temporary agency work directive (EU0204205F). It states that temporary agency workers may not be treated less favourably in terms of basic working conditions than a permanent member of staff doing a ‘comparable’ job in the same company. However, in order to accommodate national law and practices, the proposal also allows exceptions to be made where workers have a permanent employment contract with an agency, or where collective agreements provide adequate protection.

Since then, despite efforts to find a compromise, the opposition of a minority of Member States –with the UK being the most prominent (for example, UK0203101N) – has prevented the Council from reaching a common position. Attempts to break the deadlock by different EU presidencies have proven unsuccessful (for example, EU0306206F, EU0410204F).

The main argument of governments opposed to the directive is that it conflicts with national strategies to increase flexibility in the labour market. Equal treatment between permanent and temporary employees is viewed as making this instrument less useful, leading to job losses in the long run (UK0712029I).

Nevertheless, the European Commission seems intent on continuing its efforts to regulate temporary agency work. In its 2006 Green Paper on ‘Modernising labour law to meet the challenges of the 21st century’ (77Kb PDF) the Commission again emphasised its willingness ‘to ensure that agency workers are treated no less favourably than the “regular” workers in a “user enterprise”’. As a large majority of Member States supported the Portuguese EU Presidency compromise at the December 2007 meeting, it might even be possible that the directive will be put to a qualified majority vote in 2008.

Working time directive

The situation is different in relation to the pending reform of Council Directive 93/104/EC concerning certain aspects of the organisation of working time. In this case, the directive has been in place since 1993. The European Commission, though, is legally obliged to re-examine some parts of the directive within seven years of the directive’s implementation. Furthermore, there is a need to clarify some issues following several European Court of Justice (ECJ) rulings.

The obligation to re-examine the directive focuses on two derogations incorporated in the original directive – mainly at the behest of the UK government – allowing for a considerable extension of working hours:

  • the ‘opt-out’ clause, permitting Member States not to apply the maximum 48-hour weekly working limit, if individual workers voluntarily agree;
  • a four-month reference period for calculating average working time, which can be extended to one year on the basis of collective bargaining.

Besides this, the working time directive has been the focus of a number of ECJ rulings in the last five years. The most notable of these have been the ‘Simap’ judgement in 2000 and the ‘Jaeger’ judgement in 2003 (EU0310202N) – both referring to working time arrangements in the health sector, in the context of so-called ‘on-call time’. The essence of the rulings is that the entire time that an employee is required to be present at work has to count as actual working hours, even if the employees are allowed to sleep during their shift. Several Member States criticised these judgements as leading to an unaffordable cost increase, particularly in the health sector. Therefore, the ECJ rulings resulted in a widespread application of the opt-out clause, and reduced the willingness of Member States to agree on a phasing out of the opt-out clause included in the original directive.

No progress on European amendments

In December 2003, the European Commission published a Communication (107Kb PDF) launching a consultation on the revision of the working time directive. Some nine months later, in September 2004, the Commission put forward its initial proposal (155Kb PDF) in this regard, which addressed three major issues (EU0410205F):

  • keeping in place the individual opt-out;
  • defining so-called inactive parts of on-call duty as not being working time, even when the worker has to be available in the workplace;
  • extending the reference period for counting the average maximum working week of 48 hours from four to 12 months.

In May 2005, the European Parliament voted in favour of substantial amendments to the Commission’s original proposals. The Parliament decided that the opt-out clause should be phased out within three years, and that on-call time should be recognised as working time (EU0505205F). At the Employment Social Policy, Health and Consumer Affairs Council (EPSCO) meeting in June 2005, the Commission did not manage to produce a satisfactory proposal, and a minority of governments – led again by the UK – blocked any further progress on the issue (EU0506204F). The EPSCO meeting in December 2005 also ended without any results on the topic (EU0512205F). Likewise, all subsequent presidencies which have put the reform of the working time directive on their agenda have failed in this regard (for example, EU0612019I).

Commentary

Both issues – the proposed directive on temporary agency work and the reform of the working time directive – will probably be placed on the agenda once again in 2008, most likely under the French EU Presidency in the second half of the year. France has repeatedly spoken out in favour of a level playing field on working time across Europe and equal rights for temporary agency workers. It will be interesting to see whether the impending use of majority voting, as part of the new Treaty of Lisbon, will finally lead to a compromise.

Rainer Trinczek, Technical University Munich

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