EC: Commission issues temporary work proposal
Some 10 months after the failure of negotiations on temporary agency work between the EU-level social partners, the European Commission has finally issued its proposal for a Directive to regulate this area. We examine the content of the Commission's proposal and reactions to this development.
Background
The issue of regulating atypical work has a long history in the European Union. Following a lack of progress on Directives first issued at the beginning of the 1980s (the exception was the adoption in June 1991 of Directive 91/383/EC on the health and safety of workers with a fixed-term or temporary employment relationship), the European Commission consulted the EU-level social partners - the ETUC for trade unions, UNICE for private sector employers and CEEP for public sector employers - on the general issue of regulating atypical work in September 1995, using the mechanisms newly provided by the Treaty establishing the European Community as amended by the Maastricht Treaty negotiations. These provisions were originally contained in a social Protocol and Agreement due to the UK's opposition, but were brought into the main body of the Treaty by the Amsterdam Treaty negotiations.
Negotiations between the EU-level social partners subsequently began on the regulation of part-time work, which resulted in the conclusion of an agreement in June 1997. This agreement forms the basis of EU Directive 97/81EC on part-time work, which was adopted on 15 December 1997.
The social partners then turned their attention to the issue of fixed-term work, opening negotiations on this theme in March 1998. An agreement was reached on 14 January 1999, forming the basis of EU Directive 1999/70/EC on fixed-term work, which was adopted on 28 June 1999.
The third subject covered by the Commission's original 1995 social partner consultation was that of temporary work through agencies. This was largely acknowledged to be the most difficult of the three subjects, notably due to the fact that the employment relationship is a triangular one, involving the employee, the agency and the user company. Nevertheless, negotiations between the social partners opened in May 2000. However, the talks were difficult and collapsed in March 2001. A brief attempt was made to resuscitate the talks the following month, but they collapsed definitively in May 2001.
The main stumbling block, as reported in EIRR interviews with those involved in the negotiations (The future of the European social dialogue), was the issue of a comparable employee for the purposes of equal treatment. Broadly speaking, trade unions wanted this to be an employee in the user company, while employers wanted the comparable employee to be a temporary agency employee. The talks were also hindered by the fact that practice in EU member states in this area varies widely - for an overview of key elements of the diversity of practice in EU member states, as identified by the Commission, see the box below.
Shortly after the breakdown of these talks, the EU-level social partners in the service sector negotiated, on 8 October 2001, a joint declaration on temporary work, which they hoped would serve as a blueprint for a proposal from the Commission. However, this accord also skirted the key issue of the comparable employee.
The proposal in detail
In accordance with the procedures set out in the Treaty establishing the European Community, the social partners may enter into negotiations on issues in the social policy field with a view to reaching an agreement, which can then form the basis of a statutory instrument. In the case of temporary work, the social partners tried and failed to reach an agreement. Following such a failure, the Commission may decide to issue a proposal for a statutory instrument.
A full 10 months after the failure of the social partner negotiations, the Commission issued, on 20 March 2002, its proposal for a Directive on working conditions for temporary workers. The Commission states that the proposal incorporates the points of consensus reached in the earlier social partner negotiations and attempts to formulate provisions to overcome the "remaining sticking points". The full text of the Directive is reproduced on pp.33-35.
Aim and scope
The proposal is based on article 137(2) of the Treaty. Article 1 states that the proposal applies to the contract of employment or the employment relationship between a temporary agency, "which is the employer", and the worker, who is posted to a user undertaking to work under its supervision. It applies to both public and private undertakings. However, it allows member states to exclude, after consulting the social partners, employment contracts or relationships concluded under a specific public or publicly supported "training, integration or vocational retraining programme".
Article 2 states that the proposal's aim is to:
- improve the quality of temporary work by ensuring that the principle of non-discrimination is applied to temporary workers; and
- establish a suitable framework for the use of temporary work to contribute to the smooth functioning of the labour market.
Definitions
Article 3 defines a worker as any person who is protected as a worker under national employment law. Crucially, it defines a comparable worker as a worker in the user undertaking who occupies an identical or similar post to that occupied by the worker posted by the temporary agency, taking into account issues such as seniority, qualifications and skills.
It defines basic working and employment conditions as follows:
- the duration of working time, rest periods, nightwork, paid holidays and public holidays;
- pay;
- work done by pregnant women and nursing mothers, children and young people; and
- action taken to combat discrimination on the grounds of sex, race or ethnic origin, religion or beliefs, disabilities, age or sexual orientation.
Article 3 also states that although the Directive is without prejudice to national law regarding the definition of the contract of employment and the employment relationship, member states cannot exclude from the scope of the Directive part-time workers, fixed-term contract workers and persons on a posting at a user undertaking.
The Commission states that this provision is intended to remove the legal uncertainty surrounding the interpretation of temporary workers' contracts in some member states. Nevertheless, it leaves unclear the key issue of pay as it does not define what this constitutes and, crucially, whether or not it covers elements such as pensions.
Article 4 states that member states must periodically review any restrictions or prohibitions on temporary work that apply to certain groups of workers or sectors.
Principle of non-discrimination
Article 5 states that temporary workers shall, during their posting, be treated at least as favourably as a comparable worker in the user enterprise in respect of basic working and employment conditions (as defined above), including seniority. Any differences in treatment must be justified by objective reasons. Where appropriate, the principle of pro rata temporis should apply.
However, article 5 also provides for exemptions. Member states may allow exceptions to this principle of non-discrimination in respect of temporary workers who have a permanent contract of employment with a temporary agency and who continue to be paid in the time between postings. Further, member states may give the social partners at the appropriate level the option of concluding collective agreements that derogate from this principle "as long as an adequate level of protection is provided for temporary workers".
Crucially, the proposal also stipulates that member states may provide that the principle of non-discrimination need not be applied where a temporary worker works on an assignment or series of assignments with the same user enterprise in a post which, by virtue of its duration or nature, can be accomplished in a period not exceeding six weeks. This essentially means that the principle of equal treatment need not be applied in the case of postings that last for six weeks or less.
In the case of there being no comparable worker, the collective agreement applicable in the user undertaking should be consulted. If there is no collective agreement, the comparison will be made by reference to the collective agreement that applies to the temporary work agency. If there is no collective agreement here, the basic working and employment conditions of temporary workers will be determined by "national legislation and practices".
Member states should implement the provisions contained in article 5 after consulting the social partners - they may also allow the social partners to define procedures for implementing this by means of a negotiated agreement.
Quality of work
In order to improve access to permanent good quality employment, article 6 states that temporary workers should be informed of any vacant posts arising in the user undertaking. This information will allow them the same opportunity as other workers in the user undertaking to find permanent employment. Article 6 also states that member states should remove any obstacles to temporary workers concluding a contract of employment with the user undertaking after the posting.
Temporary workers should not be charged any fee by the temporary agency for arranging for their recruitment by a user undertaking. Further, they should be given access to the social services of the user undertaking unless there are objective reasons against this.
In terms of training, the proposal provides that member states should make improvement to temporary workers' access to training in temporary agencies, even in the periods between postings, "in order to enhance their career development and employability", and should also improve temporary workers' access to the training available to workers in the user undertaking.
Representation of temporary workers
Article 7 states that temporary workers should count for the purposes of calculating the threshold above which bodies representing workers, provided for under both national and Community legislation, should be formed at the temporary agency. It leaves it to member states to extend this, if they wish, to the calculation of such thresholds at the user undertaking.
Information of workers' representatives
Article 8 states that the user undertaking must provide suitable information on the use of temporary workers when providing information on the employment situation to worker representative bodies.
Minimum requirements, penalties and implementation
Articles 9, 10 and 11 contain standard clauses relating to minimum requirements, penalties and implementation. Article 9 states that the Directive does not prejudice member states' right to apply more favourable provisions in this area, nor does it constitute sufficient grounds for justifying a reduction in the general level of protection for temporary workers.
Article 10 obliges member states to lay down sanctions that should apply in the event of infringements of national legislation implementing the Directive. The sanctions should be "effective, proportionate and dissuasive".
Article 11 states that member states should transpose the provisions of the Directive two years after its adoption.
Final provisions
Article 12 provides that the Commission will, five years after the adoption of the Directive, review its application, with a view to proposing, where appropriate, any necessary amendments. The Directive will enter into force on the 20th day after its publication in the Official Journal.
Reactions to the proposal
Trade unions enthusiastic
The new proposal has been welcomed by trade unions. The European Trade Union Confederation issued a statement as soon as the proposal was issued, praising the move: "The Commission has shouldered its political responsibilities under the Treaty and sent a clear signal to those who want to roll back social and employment rights under the guise of modernisation through deregulation." It added that it intends to monitor the forthcoming debates on the proposal in the Council and the European Parliament.
The UK Trades Union Congress (TUC) has also welcomed the proposal, with TUC general secretary John Monks stating that: "British business needs agency workers to provide short-term cover and some British workers need agencies to find them short-term work. Too many businesses are using the lack of protection for agency workers to keep permanent parts of their business going with agency workers on worse terms and conditions."
In Germany, the German trade union confederation Deutscher Gewerkschaftsbund (DGB) has emphasised its support for the proposal. Acting DGB head Ursula Engelen-Kefer stated that the establishment of the principle of equal treatment of temporary agency workers is a necessary tool in preventing the deterioration of terms and conditions for temporary workers, acknowledging that more could be done in Germany to improve employment conditions for temporary workers. Ms Engelen-Kefer added that she hoped that the proposal would not be watered down in the forthcoming debates in the Council and the European Parliament.
Employers express reservations
Employers' representatives have not been so effusive. While stressing that it was not opposed to a Directive that would offer legal protection against discrimination for temporary agency workers, the European-level private sector employers' organisation UNICE issued a statement condemning the proposal as "ill-conceived". UNICE particularly objects to the fact that the proposal uses workers in the user undertaking as comparators, allowing comparison with agency workers only if no user undertaking worker or collective agreement in the user undertaking is available for comparison. Stating that this method is "unjustified and unnecessarily complicated", UNICE proposes that the two possibilities - using an agency worker or a worker in the user undertaking as a comparable worker - should be put on an equal footing in the Directive and that member states should be allowed to choose which comparison to make. UNICE president Georges Jacobs stated that: "What the Commission proposes is a bad compromise which could lead to unnecessary bureaucracy and legal uncertainty, and hamper job creation. We launch an appeal to the Council and the European Parliament to find a simpler and more balanced solution."
The UK business and employers' body, the Confederation of British Industry (CBI), described the Directive as "unworkable for companies and for workers". While stressing that the CBI fully supported the principle of equal treatment, John Cridland, CBI deputy director-general, said: "This proposal claims to be about employment protection for agency staff. But in reality it will undermine opportunities for people who want to do temporary work. We fully support the principle of equal treatment but European law must not damage our labour market. Requiring firms to match the terms and conditions of temps with permanent staff would actually reduce temping opportunities." He also expressed the CBI's disappointment with the Directive's provision allowing temporary assignments of less than six weeks to be exempted from the principle of equal treatment with user undertaking workers: "A six-week qualifying period before equal treatment rights apply is a wholly inadequate response because most temp assignments last longer than this. It would only help firms covering holidays and would remove flexibility for employers covering for vacancies and maternity leave, for example."
The next steps
The proposal will now begin its journey through the EU decision-making machinery. As it is subject, under article 137(2) of the Treaty, to co-determination, it has many hurdles to clear before final adoption (see EU social policy state of play for an overview of the main elements of the co-determination procedure). Essentially, this is a joint Council and European Parliament Directive, so if no consensus on the wording of the text can be agreed between the two, the text will be passed to a conciliation committee made up of Council and European Parliament members. As the content of this proposal is somewhat controversial, this is a likely scenario and one that has certainly been the case in respect of many recent proposals in the social policy field. The most recent examples of this are the proposal establishing a general framework for informing and consulting workers in the EU and the proposal extending some of the protection afforded by the working time Directive to mobile workers in the road transport sector, both of which were finally adopted in February 2002.
It is clear that the Council and the European Parliament will be lobbied hard in the months to come by those with an interest in the content of the new proposal. Trade unions will be concerned to ensure that it is not watered down in any way, while employers will aim to change the basis for choosing a comparator for applying the principle of equal treatment, in addition to trying to lengthen the maximum period of a temporary contract - currently six weeks - during which equal treatment need not apply. It is also likely that discussions will centre around matters such as the definition of what "pay" as cited by the proposal actually means.
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The incidence of temporary working in the European Union is increasing, according to a new study carried out by the European Foundation for the Improvement of Living and Working Conditions1. However, although temporary working is estimated to have increased by 10% a year between 1991 and 1998, its overall share of employment in the EU was 1.4% of total employment in 1998. The incidence of temporary work is spread unevenly across the EU member states, with 80% of the total number of temporary workers employed in four member states: the Netherlands, France, Germany and the UK. The share of national employment also varies, ranging from 4% in the Netherlands to 0.2% in Italy (see table below). Temporary workers are employed in a range of sectors. For example, 80% of temporary agency activity in the UK is in the service and public sectors, whereas in France, 75% of activity is in manufacturing, construction and public works. Differences between member states Temporary work is characterised by a three-way relationship between the user undertaking, the employee and the agency in all member states. However, there is a range of practice concerning the legal situation. In the UK, Ireland, Denmark and Finland, regulation of temporary work is very light and flexible. In countries such as Germany, Austria, Spain, Luxembourg, the Netherlands and Sweden, regulation covers the relationship between the temporary agency, the user undertaking and the worker. In countries such as Belgium, France, Italy and Greece, regulation is tighter, governing not only the relationship between the agency, the user undertaking and the worker, but also the status of the temporary worker. Common features of regulation in this area are identified as follows
1"Temporary agency work in the European Union", European Foundation for the Improvement of Living and Working Conditions, Dublin 2002. |
Incidence of temporary work in individual EU member states (1998)
|
Country |
Temporary workers (% of workforce) |
|
Austria |
0.7% |
|
Belgium |
1.6% |
|
Denmark |
0.7% |
|
Finland |
0.6% |
|
France |
2.7% |
|
Germany |
0.7% |
|
Ireland |
0.6% |
|
Italy |
0.2% |
|
Luxembourg |
3.5% |
|
Netherlands |
4.0% |
|
Portugal |
1.0% |
|
Spain |
0.8% |
|
Sweden |
0.8% |
|
United Kingdom |
2.1% |
|
Source: "Temporary agency work in the European Union", European Foundation for the Improvement of Living and Working Conditions, Dublin 2002. |
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