Tougher rules on temporary work agencies

On 27 November 2013 the Slovenian Parliament adopted a number of amendments to the Labour Market Regulation Act to regulate the recruitment and supply of temporary labour, especially among foreign workers. In recent years there has been a surge in complaints about workers being paid below the minimum wage and the failure of employers to follow labour regulations, particularly in the construction sector.

Background

On 27 November 2013 the Parliament of Slovakia adopted a number of amendments to the country’s Labour Market Regulation Act. The majority of amendments tightened regulations covering temporary work and the operation of temporary work agencies (TWAs) (SI0207101F).

The amendments aim to prevent violations of the rights of workers – especially foreign workers – hired by TWAs. It’s hoped the rules will limit precarious forms of work and improve the quality of TWA services.

The new rules have been welcomed by social partners on both sides. These include the Association of Free Unions of Slovenia (ZSSS) and other trade union confederations on the workers’ side, and on the employers’ side by the Chamber of Commerce in Industry of Slovenia (GZS) and a number of other employer organisations. Opposition parties, including the Slovenian Democratic Party (SDS) and New Slovenia (N.Si), also welcomed the changes.

Criticism of temporary work agencies

ZSSS insists that abuses connected with the way TWAs operate are most frequent in the construction sector. It says the abuses are a particular issue on the biggest construction projects, which are often public procurement projects. ZSSS points to a number of projects, including the HSE Group and its Thermoelectric Power Plant Šoštanj 6 project, and Ljubljana’s Sport Center Stožice.

The most acute problems are found in subcontractor production chains. In lower parts of these chains there are companies which have limited financial means, according to ZSSS. It says owners transfer workers from company to company and are violating their rights under the European Parliament resolution of 26 March 2009 on the social responsibility of subcontracting undertakings in the production chain.

The union says temporary workers are not placed into the proper tariff classes of relevant collective agreements. As a rule they get only the statutory minimum wage or are paid well below it. They are deprived of other rights such as compensation for meals, transport to work, annual leave bonus, productivity bonuses, the 13th month wage and Christmas bonus (SI1401011I). They also have less annual leave.

If they take sick leave they are often ‘punished’ by employers, who end their employment or don’t renew their contracts. The TWAs have also been accused of disregarding the ban on so-called ‘chain conclusion’ of employment contracts.

Warnings from the Labour Inspectorate

The Labour Inspectorate of the Republic of Slovenia (LIRS) says many agencies are functioning illegally. It says they are not included in the registry of Slovenian residents or in the registry of foreign legal and physical persons that provides work placement services or are functioning without the licensing agreement. It adds that workers are often employed illegally, under the guise of different contracts for business cooperation. LIRS agrees with ZSSS’s assessment that violations are most common in the construction sector, and are most difficult to prove because of the sector’s large number of contractors and subcontractors.

Redefining the role of agencies

The new regulations redefine what TWAs do. The term ‘performance of the mediation of temporary work’ – recruiting and supplying temporary workers – is clearly differentiated from the performance of services on the basis of civil law employment contracts. Consequently all participants in a triangular employment relationship – the worker, the TWA, and the company seeking temporary labour – have been redefined by the new amendments.

New conditions for providing temporary work have been added. A TWA can begin to function if:

  • it has not been fined in the last two years for violating regulations which regulate the: labour relationships, employment and work of aliens, safety and health at work, undeclared work and the labour market;
  • during the last two years it has not paid wages in arrears;
  • during the last two years it has not appears on the list of taxable persons with forfeited tax liabilities and on the list of the taxable persons which did not submit a statement of account, and on the day it submitted the application has no overdue unpaid tax liabilities;
  • it fulfils staff, organisational, office space and other conditions determined by the minister responsible for labour;
  • it has registered the activity of ‘mediating temporary work’ as its main activity;
  • it submits a bank guarantee in the amount of at least €30,000.

A TWA can begin to function when it is included in the registry of Slovenian residents or in the registry of foreign legal and physical persons which perform the mediation of the temporary work.

As a precondition to be entered into the registry, the amendments to the Labour Market Regulation Act stipulate that TWAs must now be licenced, and that the licence can be withdrawn and the TWA erased from the registry if regulations are breached.

Reaction of social partners

On 13 September 2013, the Economic and Social Council of Slovenia (ESSS), the country’s main body for tripartite cooperation, discussed the draft amendments of the act. Both social partners endorsed the amendments.

ZSSS said that the amendments took into account the way TWAs work in practice.

Igor Antauer, Secretary General of the Employer Association of Craft and Entrepreneurs of Slovenia (ZDOPS), said he felt the amendments would help keep the work of TWAs in order. He pointed out that Slovenia had 192 employment agencies and neighbouring Austria only eight or nine.

Miro Smrekar, President of the Association of Employment Agencies (ZAZ), said the new rules would help employment agencies become more transparent.

Anja Kopač Mrak, the Minister for Labour, said after the ESSS session that the most important improvement was that TWAs and recruitment agencies would have recruitment as their principal activity. This would prevent ‘every bakery or driving school being allowed to dabble in temporary work’.

Štefan Skledar, UMAR

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