Temporary agency work directive approved

On 22 October 2008, the European Parliament approved the proposal for a directive on temporary agency work. Plans for a directive had been in discussion for some time but previous attempts were rejected. The fact that the Parliament has been able to reach a settlement on the issue is therefore an important step for the more than six million temporary agency workers who will see their employment rights strengthened as a result.

Background

Proposals for a directive to regulate temporary agency work were first raised in 1982 but were blocked for more than a decade. In the meantime, the practice of temporary agency work was increasing in many EU Member States, as employers responded to a changing economic climate which encouraged ‘just in time’ techniques for all elements of production processes. Temporary agency workers, who could provide optimum levels of flexibility, were fundamental to this process in certain sectors and occupations.

In 1995, the European Commission launched a consultation on temporary agency work, in conjunction with the consultation on part-time work and on fixed-term work (EU9706131F, EU9901147F). The latter two issues progressed relatively quickly and led to Council Directive 97/81/EC concerning the framework agreement on part-time work and Council Directive 99/70/EC concerning the framework agreement on fixed-term work.

However, while the social partners found common agreement on fixed-term and part-time work, they remained divided in relation to temporary agency work and negotiations came to a halt (EU0204205F). Therefore, the European Commission adopted, on 20 March 2002, proposals for a directive providing the guarantee of a minimum level of protection for workers in temporary employment. The proposed directive was founded on the non-discrimination principle. It passed its first reading in the European Parliament, but then stalled (EU0212201N).

In 2007, the proposal was again renewed but Member State opposition halted its progress, with concerns over the plans to give equal treatment rights to temporary agency workers from the first day of employment in the user company. However, a social partner agreement was forthcoming. This resulted in the conclusion of a joint declaration on 20 May 2008 by the UK government and the UK social partners the Confederation of British Industry (CBI) and the Trades Union Congress (TUC); the UK had been one of the main opponents to the proposed directive (UK0806039I).

A second important development was a joint declaration on 28 May 2008 of the European partners for the temporary agency work sector – the European Confederation of Private Employment Agencies (Eurociett) and Union Network International-Europe ( UNI-Europa) – calling for a regulatory framework on temporary agency employment (EU0806029I). These two events sent a strong signal to the European Parliament that the time was right for agreement. Subsequently, on 9 June 2008, the EU employment ministers reached agreement on the text of the draft, paving its way to the European Parliament meeting of 22 October 2008.

Content of draft directive

The text of the Common position of the Council (31Kb PDF) on the adoption of a European Parliament and Council Directive on temporary agency work acknowledges that large disparities currently exist between Member States’ national laws on temporary agency work, with some cases of major inequalities being evident in pay and working conditions. The common position takes account of the need to establish a suitable framework for the use of temporary agency work, with a view to contributing effectively to job creation and the development of flexible forms of work.

The directive is thus guided by the following major objectives:

  • equal treatment for temporary agency workers as regards employment status and security from the first day of employment, unless a social partner derogation applies (Article 5);
  • the option for Member States, having consulted with the social partners, to conclude collective agreements which derogate within limits from the principle of equal treatment, either by collective agreement or, in specific circumstances, by agreement between the national social partners (Article 5);
  • respect for established social standards in user companies through equal treatment as regards pay and working conditions;
  • recognition of temporary agency work as a legitimate and professional economic activity, by removing unnecessary restrictions and permits or bans (Article 4).

This directive applies to workers – with a contract of employment or employment relationship with a temporary work agency – who are assigned to user undertakings to work temporarily under their supervision and direction. On the employer side, it applies to public and private undertakings that are temporary work agencies or user companies.

The promotion of the above objectives required that all temporary workers should have the right to basic protection from the first day of employment in the user enterprise, together with a right to benefit from labour law, equal pay and other statutory and social protection available to directly employed workers. Pay is specifically included (Article 3). The directive also provides a right to representation (Article 7).

Benefits of directive

The principal benefits which the directive will provide are as follows:

  • the right of temporary agency workers to be informed about permanent employment opportunities in the user undertaking (Article 6);
  • equal access to collective facilities in the user company;
  • improved access to training and childcare facilities in periods between assignments, in order to improve employability.

The directive will also require that Member States review and justify, on the grounds of general interest only, any existing restrictions or prohibitions on the use of temporary agency work. The Member State must also report on what position it has adopted to the European Commission, which will be able to take action where the review or justifications are not in accord with the directive.

Timeframe

Having been adopted by the European Parliament, the directive is likely to come into law in the spring of 2009, after which time Member States will have three years to implement its provisions into national law. During this time, they will also have to remove or justify any unequal treatment and will have to open their markets to temporary agency work.

Workers affected

The European Commission has estimated that at least three million workers will immediately benefit from the new directive, gaining rights to equal treatment. Indeed, over the course of a year, as many as six million people, who are employed as temporary agency workers for at least some of the year, will be protected. Although some temporary agency work is undertaken by highly skilled and well-rewarded workers, the majority are low-paid and/or low-skilled workers working under inferior terms and conditions – particularly in relation to pay, holiday rights, training and career development. More than 20,000 temporary work agencies, accounting for between 1% and 2% of the labour force in the 15 Member States before EU enlargement in 2004 (EU15), employ these workers.

Characteristics of temporary agency work

The European Foundation for Living and Working Conditions (Eurofound), in a new study on Temporary agency work and collective bargaining in the EU, provides a detailed analysis of temporary agency work today (TN0807019S). It finds that, in most Member States, temporary agency work has been experiencing strong growth and that, in particular, this practice has increased in the new Member States (NMS) following accession to the EU in 2004. However, the report found that the extent to which this form of employment is regulated differs between Member States. In some of the EU15, temporary agency work is highly regulated, either through legislation or collective agreements. However, in many of the NMS little regulation exists in this regard.

Temporary agency work was found to be the route into employment for individuals who had not been otherwise able to get into the labour market. In terms of gender, the data are similar between men and women, although occupational segregation means that in some sectors one gender is dominant. The study also found that the duration of the temporary employment contract was relatively short.

Temporary agency work may be offered within the employment agency’s own Member State or also apply in another Member State, with temporary work agencies operating across national borders. The sectors in which temporary agency workers are employed vary between countries, with a particular concentration in the manufacturing and/or in the services sectors. In most Member States, the majority of temporary agency workers are men; however, temporary agency work is also a route into work for women returning to the labour market after maternity leave. Migrant labour, including mobility within the 27 EU Member States, is overrepresented in temporary agency work.

Responses of social partners

The EU Commissioner for Employment, Social Affairs and Equal Opportunities, Vladimír Špidla, speaking on 22 October 2008 (press release), described the vote of the European Parliament as

a major step forward for Social Europe …[showing] that a Europe of 27 Member States can take decisions and deliver tangible benefits for all its citizens. And it demonstrates that when social partners find ways forward together, real benefits for both workers and businesses are possible.

Initial reactions from the social partners were more mixed. While Euroceitt had called for an early adoption of the draft directive, the employer organisation Business Europe assessed the June 2008 deal on temporary agency work as ‘a step backwards’ (Press release, 11 June 2008 (28Kb PDF)) and issued no formal statement after the 22 October vote. However, the European Trade Union Confederation (ETUC) welcomed the vote of the European Parliament, adding that it was ‘particularly satisfied with the way the Council solved the issue of equal treatment between agency workers and workers in the user enterprise’ (Press release, 22 October 2008).

Commentary

It is difficult to overstate the importance of this new directive, not just for its content but as a sign that the European Parliament will continue to legislate on issues towards the development of a social Europe. At the same time, it is clear that the directive is introduced in the context of increased labour mobility within the EU where temporary agency work plays an important role. It is also part of the European Commission’s strategy on flexicurity – seeking to balance employment flexibility and security – with the aim of supporting temporary agency work in order to allow more flexible forms of labour.

The number of temporary agency workers, which in many Member States is still a relatively insignificant proportion of the labour force, will undoubtedly increase over the coming years, as barriers to the use of such work are removed. It should also be noted that the directive’s requirement for equal treatment from day one can be bypassed through a social partner agreement – as is the case in the UK, where the agreement permits that a temporary agency worker can be employed in the user enterprise for up to 12 weeks before gaining the right to equal treatment.

Sonia McKay, Working Lives Research Institute

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