TEMPORARY AGENCY WORK IN EUROPE DEGREE OF CONVERGENCE FOLLOWING DIRECTIVE 2008/104/EU Alessandra Sartori*
Abstract Eight years after the EU Directive on temporary agency work was enacted the author carries out a broad comparison to investigate the process of implementation and the impact on the relevant national legislations. In particular, the article focuses upon the two main axes underlying the directive and resulting from the compromise that allowed its adoption: the principle of equal treatment and the review of the restrictions and prohibitions laid down in the law of Member States. The research points out that for the time being the convergence brought about by the directive is still very limited, also owing to the several derogations from both the aforementioned principles permitted to EU Countries. So, the future degree of harmonisation of temporary agency work regulation appears to be in the hands of the European Court of Justice, called to strike the right balance between the two cornerstones of the directive and the scope for derogation left to Member States. Keywords: comparison between different Member States; Directive 2008/104/EU; implementation; temporary agency work
1.
METHODOLOGY AND SCOPE OF THE STUDY
The aim of the present study is to conduct an extensive comparative analysis2 in order to ascertain the degree of convergence between provisions regulating temporary
* 2
Lecturer of Labour Law, Catholic University of Milan, PhD in Labour Studies at the State University of Milan. For a further comparative analysis of temporary agency work in Europe, see S. Spattini, ‘Agency Work: a Comparative Analysis’, E-Journal of International and Comparative Labour Studies, 2012, 3–4, 169 ff. For an earlier study, see J. Arrowsmith, ‘Temporary agency work in an enlarged European Union’, European Foundation for the Improvement of Living and Working Conditions, 2006.
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work in Europe, within the framework of the implementation of Directive 2008/104/ EU.1 Given the very broad scope of the subject, we will focus on certain long-established systems (as is the case in France, Germany, Italy, the Netherlands, the United Kingdom, Spain, Sweden), but also take into account – when this is deemed useful for comparison purposes – other countries, including recent EU Member States. For the purpose of this study, countries are classified according to two models regulating the supply of manpower which have emerged from the comparative analysis: they will hereafter be referred to as ‘liberalised systems’ and ‘regulated systems’. The first model, which includes certain Nordic countries (Sweden, Denmark), as well as the United Kingdom and the Netherlands, is characterised by few regulatory measures whereas the second model, which includes some Mediterranean and Continental European countries (France, Italy, Germany and Spain), is characterised – albeit with significant differences – by a much more substantial regulatory framework. The analysis particularly regards the impact of the Directive on Member States’ legislation, and focuses on the two aspects which are the result of a delicate compromise and which constitute the cornerstones of this Directive: the principle of equal treatment (Article 5) and the review of restrictions or prohibitions (Article 4).
2.
FROM THE PROHIBITION TO SUPPLY MANPOWER TO EUROPEAN LEGISLATION ON TEMPORARY AGENCY WORK
In the first years following the Second World War, the hiring out of workers was widely prohibited in Western Europe.2 Following the ratification of ILO Convention No. 34 of 1933, the principle of the public monopoly of placement activities was introduced in most countries, effectively prohibiting private stakeholders from operating in the market: in this context, the prohibition of placement and exchange activities was wrongly extended to temporary agency work. There were, however, notable exceptions, not surprisingly in countries where the public monopoly of placement activities had not been established (United Kingdom, Denmark).
1
2
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On the implementation of the Directive, see specifically I. Schömann-C. Guedes, ‘Temporary agency work in the European Union. Implementation of Directive 2008/104/EC in the Member States’, ETUI, Report 125/2012. On the development of temporary agency work in various, including non-European, countries, see the detailed contributions contained in R. Blanpain (ed.), Private Employment Agencies, BCLR, 1999, esp. 179 ff.; in section Employment Agencies, in CLLPJ, 2001, 23, 1 ff.; R. Blanpain-R. Graham (eds.), Temporary Agency Work and the Information Society, BCLR, 2004, 50, esp. 47 ff.; K. Ahlberg et al., Transnational Labour Regulation. A Case Study of Temporary Agency Work, Peter Lang, 2008, esp. 37 ff.; R. Blanpain-F. Hendrickx (eds.), Temporary Agency Work in the European Union and in the United States, BCLR, 2013, esp. 51 ff.
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The process of progressively legalising manpower supply activities began in the 1960s and 1970s, when several countries became aware of the difference between the supply of workers and the intermediation between the demand for and supply of workers, which was still prohibited. The first country to lead the way was the Netherlands (1965), followed by France and Germany (1972), and Belgium (1976); the United Kingdom introduced a bland authorisation procedure in 1973. A second wave of changes occurred in the 1980s and 1990s, alongside the dismantling of the public monopolies of placement activities (culminating with the ILO Convention No. 181/1997). In Sweden, where temporary work agencies (hiring out firms) had continued to operate despite the prohibition, the situation was regulated by means of legislative acts in 1991 and 1993; temporary work was introduced in Portugal in 1989, in Spain in 1994, and in Italy in 1997. In the first decade of the new millennium, Eastern European countries began to progressively penetrate the market, introducing legislation only when transposing the EU Directive (e.g. Bulgaria, Cyprus, Lithuania).3 The drafting of this Directive was finally completed, following a long and complicated process, in 2008.4 As already mentioned above, this was the most significant outcome of a long debate on flexicurity which had been launched by the Commission in the previous years.5 The compromise, which constitutes the cornerstone of the Directive and led to its approval, lies in the trade-off between the principle of equal treatment of both temporary agency and user undertaking workers and the removal of prohibitions and restrictions on temporary agency work.6 The Directive provides a positive view of temporary agency work which, with the necessary safeguards, adequately reflects the principles of flexicurity (see in particular Recital 11).7 3
4
5
6
7
For a timeline of legislative acts regarding temporary agency work see Table in E. Voss et al., ‘The Role of Temporary Agency Work and Labour Market Transition in Europe’, Final Report for the Joint Eurociett/UNI Europa Project, Hamburg, February 2013, 167 ff. On the various stages of this process, see L. Zappalà, ‘The Temporary Agency Workers’ Directive: An Impossible Political Agreement’, ILJ, 2003, 310 ff.; K. Ahlberg, ‘A Story of Failure – But Also of Success: The Social Dialogue on Temporary Agency Work and The Subsequent Negotiations between the Member States on the Draft Directive’, in K. Ahlberg et al., cit., 191 ff. On the fi nal text of the Directive see, among others, N. Contouris-R. Horton, ‘The Temporary Agency Work Directive: Another Broken Promise?’, ILJ, 2009, 329 ff., R. Eklund, ‘Who is afraid of the Temporary Agency Directive?’, in R. Eklund et. al., Skrifter till Anders Victorins minne, Iustus, 2009, 139 ff., C. Engels, ‘Regulating Temporary Work in the European Union: the Agency Directive’, in R. Blanpain-F. Hendrickx (eds.), cit., 1 ff. See S. Robin-Olivier, ‘A French reading of the directive 2008/104 on temporary agency work’, ELLJ, 2010, 398 ss., spec. 405. Cf. N. Contouris-R. Horton, cit., 329 ff., who, however, criticise this trade-off and, in particular, deplore the ‘minimalistic approach’ of Article 5 to the equal treatment principle, also because it provides for the possibility of ample derogations by Member States. Cf. P. Lambertucci, ‘La direttiva comunitaria n. 104/2008 relativa al lavoro tramite agenzia interinale’, in R. Foglia-R. Cosio (eds.), Il diritto del lavoro nell’Unione Europea, Giuff ré, 2011, 419. An excess of optimism with regard to this EU policy is noted by F. Pantano, ‘Il lavoro tramite agenzia interinale, in F. Carinci-A. Pizzoferrato (eds.), Diritto del lavoro dell’Unione europea, Utet,
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3.
IMPACT OF THE DIRECTIVE ON NATIONAL LEGISLATION
It is surprising that after the long road travelled by the Directive, marked by a stop and go approach for over three decades, its impact on national legislation has been rather limited, as the EU Commission itself recognises. In its first report on the implementation of the Directive in the Member States, the Commission – while expressing an altogether positive opinion – deplores the fact that, in some cases, the application of the principle of equal treatment did not lead to a real improvement in the employment conditions of temporary agency workers, as well as the fact that the review of prohibitions and restrictions did not lead to a rethinking of the role of temporary agencies in modern labour markets.8 However, we must not forget the role played by the Directive in countries that have recently joined the EU; very often (e.g. in Poland) the Directive influenced the work of national legislators even before its formal adoption because it served as the model for introducing temporary agency work in these countries’ legislations.9
3.1.
THE PRINCIPLE OF EQUAL TREATMENT BETWEEN AGENCY WORKERS AND WORKERS DIRECTLY EMPLOYED BY THE USER UNDERTAKING
The principle of equal treatment existed already in some form in various Member States before the implementation of the Directive. It was often accompanied by the possibility to derogate from certain conditions. It is therefore not surprising that, when transposing the Directive, 12 Member States availed themselves of the derogations provided for in Article 5. Within the framework of the Directive, this principle pertains to the ‘basic employment and working conditions’ which would apply if the temporary agency worker had been recruited directly by the user undertaking to occupy the same job. More specifically, they regard rules on pay and working hours, the protection of pregnant women, nursing mothers, children and young people as well as rules against discriminatory practices (Article 3(1) (f), and Article 5(1)). The Directive provides for three types of derogations: as regards pay, when temporary agency workers who have a permanent contract of employment with a temporary work agency continue to be paid in the periods between assignments (the so-called Swedish derogation) (Article 5(2)); as regards employment conditions generally, when
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9
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2010, 571. On the approach to flexicurity, with reference to the Draft Directive, see L. Zappalà, ‘La “flessibilità nella sicurezza” alla prova. Il caso del lavoro temporaneo fra soft law e hard law’, Giornale di Diritto del Lavoro e Relazioni Industriali, 2003, 69 ff. European Commission, ‘Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the application of Directive 2008/104/EC on temporary agency work’, COM (2014) 176 fi nal, 21 March 2014, 19. E. Voss et. al., cit., 7.
Intersentia
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different arrangements are provided for in collective agreements (Article 5(3)) or when such arrangements are established by the Member States, after consulting the social partners, and provide, in particular, a qualifying period for equal treatment (Article 5(4)). In its last provision, Article 5(5) calls upon Member States to take appropriate measures so as to prevent the misuse of derogations as well as any attempt to circumvent the provisions of the Directive. Among Member States with a greater experience in these issues, the equal treatment principle was already considered in its broader sense, in other words it was applied to pay and other employment conditions, in France (Articles L. 1251–18 and 1251–19, CT) and in Italy (Article 35(1), Legislative Decree No. 81/2015), hence legislation was in full conformity with the Directive. In France, the Accord national interprofessionnel of July 10th, 2013 introduced, for the first time, a permanent contract for temporary agency workers. Before that, such workers could only be recruited through a fi xedterm contract which corresponded to the duration of their assignment. In the 2013 agreement the social partners deemed it necessary to underline that this category of workers is equivalent to that of workers with a fi xed-term contract as regards their treatment by the user undertaking (Article 3(2)), and, in particular, that their pay should be equal to that of the user undertaking’s employees during assignments, with no derogation provisions (Article 4(1)). The same objective is also pursued by Article 56(4), Law No. 2015–994, which generalised, albeit experimentally (until 2018), the introduction of the permanent agency work contract in French legislation. It must also be noted that neither country made use of the derogations contained in Article 5. In Italy, the Fornero Law (Law No. 92/2012) eliminated the only possibility to derogate from the right to equal treatment, for agencies hiring on the basis of Article 13, Legislative Decree No. 276/2003 disadvantaged workers in view of their reintegration into working life (Article 1(10) (c), Law No. 92/2012). In Germany, the principle of equal treatment was unknown for a long time. Indeed, German law favoured the conclusion of permanent contracts between agencies and workers both by limiting the duration of assignments and not allowing them to coincide with fi xed-term contracts (Syncronisationsverbot), and by guaranteeing workers’ pay also in the period between assignments. In this context, the absence of the said principle allowed agencies to have an adequate income by using largely independent wage schemes which were usually lower than those of user undertakings. This situation changed, however, with the Hartz reform: the equal treatment principle was introduced (2003) in exchange for the significant deregulation of commercial contracts (elimination of Syncronisationsverbot and movement towards permanent contracts for temporary agency workers). The Hartz Law also introduced the possibility for collective agreements to derogate from this principle;10 consequently, 10
Around the middle of the same decade, however, the system came under pressure due to the proliferation of collective agreements signed by marginal trade unions, which undercut conditions contained in standard collective agreements. Th is development was the result of the very low union membership of temporary agency workers and of the possibility of applying derogating collective
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this provision was not modified by the transposition law of 2011 as it was already in conformity with the Directive (par. 3(1), No. 3, AÜG). Nevertheless, the transposition law on one hand eliminated agencies’ ability to pay recruited unemployed workers less during the first six months and, on the other, reinforced the principle by applying it, without derogation, to temporary agency workers recruited by agencies and sent on assignment to their previous employers within six months from the termination of their employment contracts (par. 3(1), No. 3, last sentence, AÜG).11 Finally, it must be said that, since 2011, the drafting of collective agreements has intensified in various sectors of the economy with a view to applying the equal treatment principle. In particular, collective agreements were concluded between DGB-member Federations (particularly those of metalworkers and chemists) and associations representing agencies, with the aim of gradually bringing the remuneration of temporary agency workers closer to that of the employees of user undertaking as the assignment progresses.12 In Spain the principle of equal treatment did not exist in the original version of the LETT: it was introduced in 1999 – but even then only in a ‘lighter’ version regarding equal pay (Article 11(1), LETT) – following strong protests against the exploitation of temporary agency workers.13 During the transposition process, the principle was extended to the other employment conditions in conformity with the Directive. Moreover, Spain did not make use of any of the derogation possibilities provided by European legislation.14 In the Netherlands, the principle of equal treatment, in its more limited form pertaining to equal pay (Article 8(1), WAADI), was already longestablished in legislation. An equally long-established provision was the possibility for collective agreements to derogate from it (Article 8(2)-(3), WAADI). This was the source of inspiration for the legislators who drafted the Hartz reform and the European Directive.15 The implementation of the latter only added some finishing touches by extending equal treatment to employment conditions other than pay. In line with the provisions already existing in the country, the Netherlands continued to allow
agreements by means of reference clauses included in individual agreements. Th is practice of veritable social dumping was stopped by a ruling of the German Federal Labour Court (15 December 2010), that declared null and void all national collective agreements concluded by the German Christian Trade Union, deeming that it lacked ‘collective contracting ability’ (Tariffähigkeit), i.e. that it was not adequately representative. Cfr. B. Waas, ‘A Quid Pro Quo in Temporary Agency Work: Abolishing Restrictions and Establishing Equal Treatment – Lessons to be Learned from European and German Law?’, CLLPJ, 2012, 58; A. Seifert, ‘Les travailleurs pauvres: nouveau défi pour le droit social allemand’, in P. Auvergnon (ed.), Droit social et travailleurs pauvres, Bruylant, 2013, 180; M. Weiss, ‘Regulating Temporary Work in Germany’, in R. Blanpain-F. Hendrickx (eds.), cit., 119. 11 12 13 14 15
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M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 120–121. E. Voss et al., cit., 60. M. Rodriguez Piñero Rojo, ‘Spain’, in R. Blanpain-R. Graham (eds.), cit., 177. A. Guamán, ‘Temporary Agency Work Directive and its Transposition in Spain’, ELLJ, 2010, 417. D. Visser et al., ‘The Netherlands’, in R. Blanpain-R. Graham (eds.), cit., 229; M. Houwerzijl, ‘Regulating Temporary Work in the Netherlands’, in R. Blanpain-F. Hendrickx (eds.), cit., 132 and 135.
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derogations from the principle of equal treatment in collective agreements, provided that appropriate measures were taken to prevent abuses (Article 8(3), WAADI).16 Prior to the transposition of Directive 2008/104/EC the principle of equal treatment between temporary agency workers and workers employed by user undertakings did not exist in either the United Kingdom or Sweden. Furthermore, where a permanent contract had been concluded with the agency, there existed no obligation to pay the worker in the period between assignments.17 In Sweden, however, collective agreements, that actually cover all temporary agency workers, oblige agencies to pay workers even between assignments and, as regards blue-collar workers, provide for some type of equal treatment in terms of pay.18 The application of the principle through the transposition of the Directive has led to important changes in the legislation of both countries, even if its actual impact is not fully apparent, given that both Sweden and the UK have made ample use of the possibilities for derogation provided by European legislation. In Sweden, equal treatment is applied from the first day of employment (par. 6, Law No. 854/2012), but not to wages, if the temporary agency worker has a permanent contract and is paid in the periods between assignments (par. 8, Law No. 854/2012: the so-called Swedish derogation).19 Moreover, Sweden allows social partners, provided they are national, to derogate completely from the principle of equal treatment and allows for the agencies bound by the collective agreement to also apply it to workers who are not members of the signatory trade unions (par. 3–4).20
16 17
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M. Houwerzijl, cit., 132. G. Morris, ‘England’, in R. Blanpain-R. Graham, (eds.), cit., 103; B. Nyström, ‘Regulating Temporary Work in Sweden’, in R. Blanpain-F. Hendrickx (eds.), cit., 163 ff., esp. 164. The collective agreement for white-collar workers has its own wage system which is completely independent from that of the user undertaking; on the contrary, the collective agreement for bluecollar workers is based on the principle of equality. The salient characteristic of both agreements is that the payment of wages is continued in the time between assignments: for white-collar workers, the amount of the allowance increases in proportion to the length of service, and after 18 months reaches 100% of pay during assignments; on the contrary, for blue-collar workers, the allowance has been fi xed since 2012 (about 13 euro per hour for specialised workers, 12 euro per hour for unskilled workers). On collective agreements for temporary agency workers in Sweden see amplius R. Eklund, ‘Who is afraid of the Temporary Agency Directive?’, cit., 149 ff.; B. Nyström, ‘Regulating Temporary Work in Sweden’, cit., 167–169. The possibility to derogate from the equal treatment principle when workers are paid in the time between assignments seems perfectly reasonable and, after being expressly requested by the Swedish government, was included in Article 5(2) (the so-called Swedish derogation, as defi ned in Anglo-Saxon Law). Cf. A. Neal, ‘Regulating Temporary Work in the United Kingdom’, in R. Blanpain-F. Hendrickx (eds.), cit., footnote 73. Moreover, during the negotiations that were held at the beginning of the 21st century, Germany also had attempted to introduce a similar provision (called at the time the German exemption), which was even stricter and covered employees with fi xed-term contracts: cf. K. Ahlberg, ‘A Story of Failure’, cit., 228. Furthermore an all-encompassing derogation is provided in favour of the employment of disadvantaged and disabled workers: cf. B. Nyström, ‘Regulating Temporary Work in Sweden’, 170–171.
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In the United Kingdom, the transposition of this principle by means of Regulations 2010/93 proved to be particularly problematic and fraught with difficulty, as was duly pointed out by both jurists and the trade unions. First of all, in accordance with the trilateral agreement of May 2008 between the government, the Trade Union Congress (TUC) and the Confederation of British Industry (CBI), a worker is entitled to equal treatment only after 12 consecutive weeks with the same hirer in the same role (qualifying period) (Reg. 7(2)).21 Consequently, according to this law, if the worker’s tasks change significantly or if he is assigned to a different user, or if the time between assignments is longer than six weeks, the clock is turned back. Despite various conditions included in the Regulations and, in particular, an antifraud provision linked to the implementation of Article 5(5) of the Directive (Reg. 9), British scholars were not satisfied as there still exist various loopholes that make it possible to circumvent the principle of equal treatment.22 Apart from the derogation provided in Article 5(4) of the Directive, the United Kingdom also made use of the socalled Swedish derogation (Reg. 10). However, while collective agreements in Sweden guarantee a generous remuneration for agency workers with permanent contracts (see above), notwithstanding derogations, the implementation of Article 5(2) of the Directive in the United Kingdom immediately led to a wave of remonstrations and industrial action,23 as between assignments agencies are required to pay only 50% of the highest wage earned by the worker in the 12 preceding weeks (always taking account of the minimum legal wage and of the fact that it is forbidden to withdraw from the contract for at least four weeks) (Regs. 10–11). In more general terms, jurists bring to light two other issues that hinder the Directive’s desired objective. Firstly, the United Kingdom chose a compromise solution as regards the definition of the comparable employee enjoying the right to equal treatment. The possibility afforded to the hirer to use as a reference a concrete employee, and particularly one described in very broad terms (Reg. 5), does not seem to fulfi ll the requirements of the Directive, which on the contrary provides for more abstract terms of comparison.24 Secondly, the definition of temporary agency worker contained in the Regulations only covers employees and workers, but not self21
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The rule is applied to basic conditions (relevant terms and conditions), as outlined in Regulation 6 (pay, working time, night shifts, rest periods and breaks, holidays). There exist, however, certain rights that can be exercised ab initio (the so-called Day 1 rights): in other words, the right to benefit from services available to the user undertaking’s employees (such as canteen and childcare facilities) and the right to be informed of any relevant vacant posts. (Regs. 12 e 13). A. Davies, ‘The Implementation of the Directive on Temporary Agency Work in the UK’, ELLJ, 2010, 314 ff., esp. 317. The contracts that make use of the Swedish derogation have become very popular among agencies in the United Kingdom, to the extent that the TUC, bemoaning the growth of temporary and underpaid jobs, sent a formal complaint to the Commission, in which it claimed that the Directive had been incorrectly transposed into British Law: cf. S. Gamwell, ‘Trade in tussle over agency work directive’, 15 October 2013, EIROnline. See also A. Neal, cit., esp. 201–202, which calls this derogation ‘the fi rst major battle-ground of the post-Directive regime’. A. Davies, cit., 319 ff.
Intersentia
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employed persons;25 in this way agencies, by changing the wording of contracts, are able to leave a great number of temporary agency workers (i.e. the self-employed ones) outside the protective framework of the Directive.26
3.2.
ELIMINATION OF PROHIBITIONS AND RESTRICTIONS ON THE USE OF TEMPORARY AGENCY WORK
We go now on to the second element of the trade-off upon which the Directive is based. Article 4 provides that prohibitions and restrictions on the use of temporary agency work can be justified only ‘on grounds of general interest’, relating in particular to the protection of temporary agency workers, the requirements of health and safety at work, the proper functioning of the labour market and the protection against abuses (par. 1). The same Article calls upon Member States to review, by 5 December 2011, the restrictions and prohibitions, after consulting the social partners, in order to verify whether they are justified according to the terms of paragraph 1. When these restrictions and prohibitions are included in collective agreements, the review may be carried out by the social partners. The outcome of this process is multifaceted and, in any case, does not move towards a liberalisation of temporary agency work.27 To begin with, most Member States who were aware of the existence of prohibitions and restrictions did not take steps to remove them. On the other hand, certain countries took advantage of the Directive’s provisions and eliminated a few (e.g. in Belgium, Spain, Sweden). In some cases, the transposition of the Directive was even used to introduce conditions of use and other limitations which did not exist before (e.g. in Bulgaria).28 This situation, which at first glance seems paradoxical, can be explained mainly by the different interpretations of what constitutes a prohibition/restriction, as well as a justification on the grounds of general interest. Many Member States (Luxembourg is an apt example) perceive the former in much less inclusive terms compared to the Commission, while almost all countries consider that their own provisions limiting temporary agency work are justified, in one way or another, without however providing the explanations required by the Commission.
25
26 27
28
Contrary to what happens in other countries, where temporary agency workers are included without particular problems in the category of employees, in the United Kingdom common law only rarely provides that such workers can be defi ned as employees (see G. Morris, cit., 110; A. Neal, cit., 192 ff.; A. Davies, cit., 310–311). A. Davies, cit., 312 ff., esp. 312–314 and 330. See European Commission, ‘Report’, cit., 8–13; Id., ‘Commission staff working document. Technical annexes. Accompanying the document Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the application of Directive 2008/104/EC on temporary agency work’, SWD (2014) 108 fi nal, 21st March 2014, esp. 18 ff. I. Schömann-C. Guedes, cit., 33 ff.
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The above situation is also echoed in the findings of this analysis. In liberalised countries, the measures that were taken were – at best – marginal. Neither the UK nor the Netherlands removed any prohibition/restriction; on the contrary, Sweden removed the prohibition on sending on assignment workers who had been employed by the user undertaking in the preceding six months (see below). In fact, in the countries considered, employment contracts between agencies and user undertakings are classified under the general category of civil/commercial law, without any special provisions. Consequently, limitations as to their conclusion, although not totally lacking, have always been rather few. In the UK and the Netherlands it is not possible to resort to temporary agency work as a remedy for industrial disputes, i.e. in order to replace a striking worker (The Conduct of Employment Agencies and Employment Business Regulations 2003, SI 2003/3319, Reg. 7; Article 10, WAADI),29 while such a prohibition does not exist in Swedish Law.30 In the Netherlands, the Law of 1998 (WAADI) removed all remaining sectoral restrictions on the use of temporary agency work.31 In Sweden there still remained a prohibition on sending a worker on assignment to his former hirer when the employment contract between the two had ended in the six preceding months. This provision was eliminated in 2013 when the Directive was transposed.32 Here, recourse to temporary agency work falls under the co-decision rights the law recognises in respect of trade unions (par. 38–39, MBL), in particular, the trade union that concludes a collective agreement with the user undertaking has the right to negotiate at a local level. On the other hand, the national trade union can at any time veto the use of temporary agency work when it goes against the law or the collective agreement or the usual practice in the relevant contractual sector.33 However, also as a result of the great deregulation in the field of manpower supply, this provision is rarely applied today.34 In regulated countries, prohibitions on the use of temporary agency work have always played an important role and are applied at both a sectoral and general level. The
29
A. Neal, cit., 191, deploring the limited efficacy of the prohibition in the UK; M. Houwerzijl, op. cit., 132.
30
In Sweden a similar restriction is included in the collective agreement for temporary agency bluecollar workers and in the Agency Code of Conduct (cf. R. Eklund, ‘Who is afraid of the Temporary Agency Directive?’, cit., 155). A. Jacobs, ‘The Netherlands’, in R. Blanpain (ed.), cit., 307. Actually, two marginal restrictions regarding the use of temporary agency work continue to exist in special laws: a temporary restriction regards bus drivers; another restriction, which also provides for exceptions, regards certain professions linked to public assistance for minors. Cf. European Commission, ‘Commission staff working document’, cit., 52. B. Nyström, ‘Regulating Temporary Work in Sweden’, cit., 164. B. Nyström, ‘Sweden’, in R. Blanpain (ed.), cit., 341–342; M. Corti, La partecipazione dei lavoratori. La cornice europea e l’esperienza comparata, Vita e Pensiero, 2012, 253–254. M. Rönnmar, ‘The regulation of temporary work in Sweden and the impact of the (2008/104/EC) directive’, ELLJ, 2010, 426.
31
32 33
34
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first ones had been significantly revised even before the transposition of the Directive. In Italy, the prohibition on the use of temporary work in the agriculture and building sectors35 had already been eliminated by Legislative Decree No. 276/2003, while it is still in force, albeit watered-down, in the construction sector in Germany.36 In Spain, the prohibition on the use of temporary agency work in the public sector was removed as a result of the transposition of the Directive (see below).37 In Italy, Spain and France, the definition of dangerous activities, which cannot be undertaken by temporary agency workers, had initially been assigned to Regulations. However, this approach has survived only in France (Article L. 1251–10, No. 2, CT). In Italy, Legislative Decree No. 276/2003 had already removed the prohibition on the use of temporary agency work for activities that were under special medical supervision or particularly dangerous.38 In Spain, following the transposition of the Directive, the definition of prohibited tasks within an expressly compiled list of sectors was delegated to the collective agreement, with the exception of activities involving exposure to radiation or other particularly harmful substances (see below). In Mediterranean countries, prohibitions of a general nature are largely similar: thus it is not possible to use temporary agency workers to replace striking workers (in France, Italy and Spain); when during the six (in France and Italy) or twelve (in Spain) preceding months the user undertaking has dismissed for economic reasons (collective, in Italy) workers which performed the same tasks; when the user undertaking has not performed a risk assessment (Italy and Spain); where there is an ongoing process of termination of employment or suspension of working time which involves the CIG (in Italy) and; when workers are assigned to another agency (in Spain).39 In Germany no such prohibitions exist, not even that regarding the replacement of striking workers, which is applied even in liberalised countries. However, in cases where the user undertaking is facing an industrial dispute (strike or shutdown), the agency has to inform the temporary agency worker who has the right to refuse the assignment without negative consequences to his own employment contract (par. 11(5),
35
36
37
38
39
It should be noted, however, that Italian legislation allowed for derogations by collective agreements (Article 1(3), Law No. 196/1997). Nowadays, temporary agency work is possible between companies in the building sector when they are bound by the same collective agreement; or between building companies and other companies, where this is provided for in collective agreements erga omnes applied to the latter for at least three years (par. 1b, AÜG). Cf. also M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 114 and 120. Jurists are divided on this point because of the ambiguous wording of Law 35/2010, which dismisses all further restrictions to temporary agency work that are not justified on the grounds of public interest (see also below in the text): cf. amplius on this subject A. Guamán, cit., 419, also in the footnotes. Previously, Article 1(4)(F)), Law No. 196/1997 provided that work activities subject to special medical supervision or dangerous activities for which it was not possible to resort to temporary agency work, would be decided by a Ministry of Labour decree. Cf. Articles L. 1251–9 and 1251–10, CT (France); Articles 8 and 12(3), LETT (Spagna); Article 32, Legislative Decree No. 81/2015 (Italy).
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AÜG).40 In Germany the Works Council can veto the use of a temporary work agency, nevertheless, its discretionary power is rather limited, as it can cast its veto only when the hiring out of temporary agency workers is not in conformity with the law, collective agreements or agreements signed by Works Councils (betriebsvereinbarungen).41 In the case of regulated countries, France, deeming that its legislation is in conformity with the Directive, did not transpose it and did not modify existing restrictions. During the transposition process, Italy began to introduce fi xed-term temporary agency work contracts, not based on specific grounds (i.e. not justified), for certain categories of disadvantaged and severely disadvantaged workers, and for workers receiving social benefits for over six months (Article 20(5ter), Legislative Decree No. 276/2003, introduced by Article 4(1)(c), Legislative Decree No. 24/2012). The process was accelerated with the Fornero Law (first assignment for a maximum of 12 months could be not justified) and was completed with the definitive elimination of the justification system by Law Decree 34/2014, which became Law 78/2014, and recently by Legislative Decree No. 81/2015. Nevertheless, Italy removed neither the prohibition to conclude temporary agency work contracts in accordance with the provisions of Article 32, Legislative Decree No. 81/2015 (see above), nor the possibility to introduce quotas in collective agreements (Article 31(2), Legislative Decree No. 81/2015).42 Spain is certainly the country with the most decisive approach as regards the removal of restrictions to the use of temporary agency work. As already mentioned above, the legislation emerging from the transposition of the Directive limited prohibitions for reasons of health, passing on to collective agreements the possibility of including other prohibitions, provided they were duly and explicitly justified.43 Furthermore, a general provision contained in the LETT eliminates any prohibition or restriction included in other laws not justified on the grounds of general interest (and, hence, this would seem to eliminate the prohibition to resort to temporary agency work by the public sector). Lastly, in Germany, despite the transposition of the Directive, resorting to temporary agency work in the building sector is still prohibited, albeit in milder terms (justified because of the abuses that had occurred in the past),44 while a temporal requirement for temporary agency work – which had been removed under the Hartz Law – was reintroduced (see below).
40 41
42
43
44
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M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 117. M. Weiss, ‘Germany’, in R. Blanpain-R. Graham (eds.), cit., 139–140; M. Corti, cit., 138, also footnote 53. M. C. Cataudella, The Regulation of the Labour Market, in F. Carinci-E. Menegatti (eds.), Labour Law and Industrial Relations in Italy, Wolters Kluwer, 2015, 47. Indeed, collective agreements seem to have taken up the challenge through the introduction of moderately liberal provisions in the legislation transposing the Directive: I. Schömann-C. Guedes, cit., 36. Jurists actually doubt the legitimacy of this restriction in the light of the binding provisions in Article 4 of the Directive: cf. M. Waas, ‘A Quid Pro Quo’, cit., 51.
Intersentia
Temporary Agency Work in Europe
Restrictions on the use of temporary agency work, which are often even stricter than those contained in national legislations, are included in the national collective agreements of various economic sectors. The review process which Member States delegated to the social partners is still ongoing and, for the time being, does not seem to have resulted in massive cancellations. Indeed, in some countries we are witnessing the opposite phenomenon, caused by the fear that temporary agency work can lead to the replacement of core workers. In Germany, sectoral collective agreements have, in recent years, introduced more and more obstacles to the use of temporary agency work such as, for example, percentage limits, justifications and maximum periods of use, the obligation for user undertakings to permanently hire a worker after a certain period on assignment has elapsed, and so on.45 A similar trend can also be seen in other countries. In Sweden, an increasing number of provisions has been introduced, starting in 2010, in sectoral collective agreements with a view to prohibiting user undertakings from resorting to temporary agency work following lay-offs for economic reasons, thus circumventing the reemployment rights of dismissed workers as provided by the Law.46 Various restrictions are also present in sectoral collective agreements in Italy (maximum percentage of use, expressly mentioned in Article 31(2), Legislative Decree No. 81/2015), as well as in France, the Netherlands and in Spain. Whether or not these provisions are in conformity with Article 4 of the Directive is an issue open to debate and not easily resolved. Within the framework of the Directive, the temporary nature of the cause that makes a user undertaking resort to temporary agency work plays an ambiguous role. On one hand, this could be seen as a restriction in the sense of Article 4, and consequently fall under the review procedure provided in the same Article; on the other hand, it could be considered inherent to temporary agency work, insofar as Article 1(1) states that the 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’.47 However, in the European countries examined, the issue of the temporary nature of the assignment was discussed during the transposition of the Directive only in Germany (see below). We begin our analysis with liberalised countries. It must be noted that in the Netherlands, the law of 1998 (WAADI) repealed the provision which stated that the cause behind the demand of the user undertaking should be temporary and which, in any case, limited the duration of assignments to six months.48 A similar development occurred in Sweden between 1991 and 1993. In this case also Law No. 440 of 1993 completely changed the original provisions regarding the temporary character of causes 45 46 47 48
M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 122–123. M. Rönnmar, cit., 427–428; B. Nyström, ‘Regulating Temporary Work in Sweden’, cit., 176. The adverb ‘temporarily’ is very widely used in the defi nitions contained in Article 3. A. Jacobs, ‘The Netherlands’, cit., 307.
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and the 4-month maximum duration of assignments.49 Given that also in the UK there are no limits as regards the temporary nature of assignments, we can conclude that in these three countries temporary agency work can be both fi xed-term and permanent. As regards regulated countries, the situation is very different. The temporary demand that causes a user undertaking resort to temporary agency work has traditionally been one of the requirements for the conclusion of labour supply contracts. In France, the Code du travail, after establishing that neither the aim nor the result of the assignment can be to satisfy a permanent demand of the user undertaking (Article L.1251–5, CT), provides an exhaustive list of all the situations where temporary agency work can be used (such as, in particular, the replacement of absent workers, a temporary increase of the undertaking’s activities, seasonal work; Article L. 1251–6, CT). For the same reasons employers are allowed to conclude fi xed-term contracts.50 In Spain also, the hiring of workers must satisfy a temporary demand of the user undertaking. In fact, with regard to the grounds for concluding temporary agency work contracts, Law No. 14/1994 refers to those provided for in the Estatuto de los trabajadores for fixed-term contracts (Article 15(1), ET: carrying out a specific job or service; special market needs; replacement of a worker who is entitled to keep his job) (Article 6(2), LETT).51 Moreover, the Royal Law Decree No. 16/2013 added two further reasons, on the basis of Article 11, ET. Consequently, the user undertaking can resort to temporary agency work in order to hire workers with contracts that combine work and training (contrato en prácticas e contrato para la formación y aprendizaje) (Article 6(2), LETT, as modified by the above-mentioned Legislative Decree). Therefore, as the temporary character of the assignment is key to its justification, neither country allows permanent temporary agency work. Furthermore, the duration of the fixed-term contract concluded with the worker must coincide with that of the temporary agency work contract.52 In Italy and Germany, the requirement that assignments be temporary has been downsized over time, albeit in different ways. In Italy, the preferred solution was to water-down and then cancel this requirement. At first, Article 1(1), Law No. 196/1997 expressly provided that temporary agency work could be used to ‘satisfy demands of a temporary nature’ (replacement of absent workers and temporary hiring of workers with skills that are not normally required by the user undertaking), while further needs could be identified in collective agreements (Article 1(2)). Subsequently, Legislative Decree No. 276/2003 broadened the scope of application by providing that the conclusion of a temporary agency work contract would be subject to the existence of ‘technical, production, organizational or replacement reasons’ linked also to the ‘user undertaking’s normal activities’ (Article 20(4)). Moreover, this so-called Biagi 49 50 51
52
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B. Nyström, ‘Sweden’, cit., 340. G. Auzero-E. Dockès, Droit du travail, Dalloz, 28 éd., 2014, 326, footnote 4. F. Durán López-F. Martínez Rodríguez, ‘Spain’, in R. Blanpain (ed.), cit., 327; M. C. PalomequeLópez-M. Álvarez de la Rosa, Derecho del trabajo, Editorial Universitaria Ramón Areces, 2014, 525. S. Smith-Vidal, ‘France’, in R. Blanpain (ed.), cit., 251; A. Martín Valverde et al., Derecho del trabajo, Tecnos, 2010, 467.
Intersentia
Temporary Agency Work in Europe
decree legalised permanent temporary agency work providing for a certain number of situations that could be expanded by collective agreements (Article 20(3)).53 With the implementation of the Directive (Legislative Decree No. 24/2012) and the Fornero Law (Article 1(9)(b), Law No. 92/2012) the process of eliminating the issue of grounds for concluding fi xed-term contracts was accelerated, culminating in Decree Law No. 34/2014, which became Law No. 78/2014, and was finally repealed by Legislative Decree No. 81/2015, which in substance reiterates that it is not necessary to provide any grounds for resorting to temporary agency work (Article 31(2), Legislative Decree No. 81/2015), which, on the other hand, is no longer subject to time constraints. Legislative Decree No. 81/2015 extends the principle of absence of grounds to fi xedterm agency work contracts, but introduces a maximum percentage in proportion to the user’s direct employees (more specifically 20% (Article 31(1)). In Germany the temporary nature of agency work was a constant requirement until the Hartz laws. However, this requirement was not fulfilled through the establishment of relevant grounds but on the basis of a time limit for assignments (progressively increased to 24 months from the three that had originally been planned), combined with the so-called Synchronisationsverbot, which provided that the period covered by the employment contract must be longer than that of the assignment.54 As a result of Law Hartz I, on January 1 2003 both restrictions were lifted and employment contracts were liberalised.55 From this moment onwards permanent temporary agency work contracts became possible in Germany. As was the case with other aspects of the Hartz law, the review of temporary agency work gave rise to a heated debate, particularly in trade union and left-wing circles, where accusations were made of it favouring the replacement of core workers by temporary agency workers.56 Following the adoption of the Directive, the debate was relaunched by academics on the grounds that it was not compatible with German law.57 Indeed, as already mentioned, on many occasions (scope, definitions) the Directive makes reference to the temporary character of the assignment. For this reason, the transposition of European legislation, with the law of 28 April 2011, reintroduced a time limit for assignments, which must be vorübergehend (i.e. of a transitory, temporary nature). However, the amendment provided in par. 1(1), AÜG, fuelled further discussions due to its lack of specific provisions (no maximum time limit is indicated) and to the fact that no penalty is attached to its infringement.58 53
T. Treu, Labour Law and Industrial Relations in Italy, Kluwer Law International, 2007, 41–42.
54
M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 116. On these developments see B. Waas, ‘Temporary Agency Work in Germany: Reflections on Recent Developments’, IJCLLIR, 2003, esp. 392 ff.; M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 117; P. Rémy, ‘Organiser le future de l’Allemagne. Quelques points emblématiques du programme du gouvernment de “grande coalition” en droit du travail’, Revue de Droit du Travail, 2014, 290. M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 120. Cf. P. Rémy-A.Feuerborn, ‘Le droit allemand et la directive 2008/104: histoire d’une libéralisation apparente du travail intérimaire sous l’influence européenne’, Revue de Droit du Travail, 2010, 57. Among legal scholars there seems to be a certain consensus on the fact that the duration of the assignment must be inferior to that of the employment relationship with the agency. As has
55
56 57
58
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4.
A STILL UNEVEN PICTURE
After having analysed the most significant developments regarding temporary agency work in European countries, also in the light of the transposition of the Directive, we will now try to put everything together and (if possible) provide an answer to the vexata quaestio: has European legislation been able to reach the long-aspired objective of harmonisation? And if yes, in which directions? The hard way of deregulation or the more balanced way of flexicurity? Or has this objective been undermined by the compromises the Directive had to reach in order to be implemented which, according to an apt description given by an authoritative scholar, make it seem like a ‘a chunk of Swiss cheese, where a different labour market solutions tailored for individual member countries can be found the separate hollows of the cheese flesh’?59 As far as the general direction is concerned, Article 2, which defines the scope of the Directive, has already been greatly watered-down compared to the original 2002 version. According to some jurists, the double objective that was initially pursued (the protection of workers versus a more flexible market in view of creating jobs) is now leaning more towards the former, albeit taking the concept of flexibility into serious consideration.60 Moreover, as we have seen in paragraph 2 above, not all opinions concur on this matter, as many consider this Directive as one of the most successful attempts at establishing a system of flexicurity. Therefore, we can say that the debate is far from over. As already mentioned in the preceding paragraph, the impact, in terms of legislative changes, has been minimal, particularly as regards the removal of restrictions; furthermore, the broad possibilities of derogation from the principle of equal treatment, largely exploited by certain Member States, could also weaken, if not jeopardise, the principle itself in the various contexts (see, for example, the United Kingdom). Therefore, from a legal point of view, it would seem that the Directive has only led to a marginal convergence of legislations. This fact is recognised, apart from the Commission (see par. 3 above), by the legal scholars who worked on the interpretation of the legislation in the various countries.61 However, considering the most complex perspective described above (deregulation versus flexicurity) it would be more prudent to express a less categorical judgement. It is still too early to accurately assess the Directive’s impact, also taking account of the fact that many Member States implemented it after the prescribed deadline (for example, in Sweden it was not implemented until 2013). On the other hand, it is reasonable to expect that future harmonisation will greatly depend on the interpretation provided
59 60 61
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been justly observed, this would imply a ‘resurgence of the prohibition of synchronization’, and consequently a return, albeit partial, to the pre-Hartz regime (cf. M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 120). R. Eklund, ‘Who is afraid’, cit., 156 e 166. K. Ahlberg, ‘A Story of Failure’, cit., 241; R. Eklund, ‘Who is afraid’, cit., 147. See, for example, S. Robin-Olivier, cit., 398; M. Houwerzijl, cit., 125; B. Nyström, ‘Regulating Temporary Work in Sweden’, cit., 170; M. Weiss, ‘Regulating Temporary Work in Germany’, cit., 119.
Intersentia
Temporary Agency Work in Europe
by the Commission and the Court of Justice, particularly with regard to the two cornerstones of the legislation: the weight of the principle of equal treatment and the discretionary power accorded to Member States as regards the protraction of the limits in the use of temporary agency work.62 To conclude this article it would be useful to pass from the legal to the factual level and examine certain data on the use of temporary agency work or, more specifically, its share of the total labour market. Given the plurality number of relevant laws it is not surprising that the use of temporary agency work in Europe presents significant differences. What is more surprising is the fact that these differences are only in part due to the combination of liberalised/regulated regimes as it would be reasonable to expect. According to CIETT data,63 the European average in 2013 was around 1.7% of the workforce, with the highest percentage in the UK (3.9%) and the lowest in Greece (0.2%); temporary agency work is also well represented in the Netherlands (2.5%); the percentages in Germany (2.1%) and France (2.0%) are above the average, while Spain (0.5%), Italy (1.2%) and Sweden (1.5%) they are below the European average. However, it is interesting to note that Sweden, following a timid start (despite its soft regulations) is the country where temporary agency work has increased the most in the last 15 years, while the quota remained stable in both the Netherlands and Spain. This is probably due to the fact that in the Netherlands this type of work has to face competition from other, less expensive types of employment, and in Spain from a broad range of fi xed-term contracts.64 Consequently, the expansion of temporary agency work appears to depend not only on the degree of liberalisation and regulation but also on the interaction with and the competition from other types of flexible agency work and, in general, with other types of employment contracts. Abbreviations of the acts: AÜG: Arbeitnehmerüberlassungsgesetz BGB: Bürgerliches Gesetzbuch CT: Code du travail ET: Estatudo de los trabajadores LETT: Ley de empresas de trabajo temporal MBL: Medbestämmandelag WAADI: Wet allocatie arbeidskrachten door intermediairs 62
63 64
In its judgment of 17 March 2015, C-533/13 (case AKT), the Court of Justice adopted a very cautious approach. The object of the preliminary ruling was to assess the compatibility of restrictions imposed by Finnish collective agreements on temporary agency work. However, the ECJ did not rule on the substance of the question but merely concluded that the Directive assigns the task of reviewing prohibitions and restrictions to national legislators and social partners in conjunction with the Commission, and therefore it is not up to the Court to forbid the application of national provisions on this subject. The question is still open as to what discretionary powers are given to the Member States and the trade unions in this case. V. CIETT, Economic Report, 2015 ed., 29. G. van Liemt, ‘Private employment agencies in the Netherlands, Spain and Sweden’, ILO, WP No. 290, 2013, 27.
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