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Europe – Failure to implement AWD hurting the unemployed

04 February 2014

Failure by many EU member states to implement the 2008 Agency Work Directive not only flouts EU regulation but is failing Europe’s unemployed, who stand to benefit from the opening up of labour markets, according to Denis Pennel the Managing Director of Eurociett.

In an article for europolitics.info, Mr Pennel wrote: “As the Commission prepares to release its review of the application of the directive by member states, it needs to take a strong stand on the need for all markets to transpose all elements of the regulation”.

“When policy makers rubber-stamped the directive, there was general consensus that its implementation would take a balanced approach by stimulating job creation while providing adequate protection for agency workers. However, transposition has been patchy and unbalanced, and unjustified restrictions on temporary agency work still exist in many markets.”

“The directive aims to ensure that agency workers receive equal pay to permanent workers. The good news is that all member states have transposed this element or agreed terms for derogation with social partners in order to balance the interests of employers and workers.”

“However, the legislation also requires the review and removal of unjustified restrictions, which stifle temporary work agencies and prevent them from creating jobs. Countries with unjustified restrictions, either in laws or collective labour agreements still in place, include Belgium, France, Luxembourg, the Netherlands, Italy, Portugal, Spain and Sweden. Examples include sectoral bans, quotas on the maximum number of workers, too short maximum length of assignments, or restrictions on the kinds of labour contracts that can be offered. The Commission must give more concrete guidance on assessing restrictions and prohibitions and its own EU expert group has provided some good starting points for clearer direction to member states. We need a level EU playing field for temporary agency work: the current situation creates legal insecurity for companies and hampers job creation.”

“We have raised the issue with policy makers on many occasions, and our Swedish member, Bemanningsföretagen, has launched complaints to the Commission to challenge its government’s interpretation of the directive as unjustified restrictions remain. Further complaints and/or legal cases are likely to follow and the Commission should reinforce the point on penalties and sanctions in cases of non-compliance.”

“Today, well-functioning labour markets operate with many different forms of employment contract. France and Belgium have over 30, reflecting workers' growing demand for flexibility and work-life balance and the needs of business to access flexible labour solutions.”

“Last year, the OECD 'Employment outlook 2013' began to include an employment protection legislation index. This confirmed that fixed-term contracts are subject to fewer restrictions than temporary agency work, with the result that they have exploded in recent decades, while temporary agency work, which can actually provide workers with a stepping stone to permanent work, lags behind due to stricter regulation. This exacerbates the segmented labour markets we see in countries like Spain, where some workers enjoy highly secure contracts at the expense of others, who have no security at all. These findings are also borne out in the European Commission's employment package, which acknowledges that efficient labour markets actually drive growth.”

“There are 26 million people looking for work in the EU today, 5.5 million of them are under 25 years old. But there are also over two million unfilled vacancies and in order to match supply with demand in the workplace we need intermediaries with the expertise to find the right fit for job seekers and organisations. Agency work has a role to play and a clear advantage over fixed-term contracts.”

“If governments want to stimulate growth and create jobs they must rebalance their regulation and fully transpose the Agency Work Directive. Failure to do so is denying work to Europe’s unemployed and stalling the opportunity for more competitive and efficient European labour markets,” Mr Pennel concluded. 

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