CWS 3.0: May 31, 2011 - Vol.3.13

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Behind the News: Agency Workers Directive: D-Day

D-Day approaches for European staffing legislation

There is a lot of publicity surrounding the EU Agency Workers Directive, most of which focuses on the perceived negative impact it will have on the UK staffing market, such as higher temporary wages and additional administrative burden on staffing firms and users of contingent labor. What is frequently overlooked, however, is the positive impact it should have elsewhere in continental Europe. 

The Agency Workers Directive compels national governments within the European Union to review restrictions or prohibitions that may have been imposed on temporary agency work — and either remove or justify them. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:327:0009:0014:EN:PDF Undoubtedly, there are still some onerous restrictions in place in a number of important European staffing markets. To comply with the Directive, governments must act before Dec. 5, 2011, which means the coming months should see some interesting developments.

Restrictions

So what legislation might fall into the "unnecessary" restrictions category? Sector prohibitions are one obvious area — normally relating to the public sector or so-called dangerous occupations like construction or working in docks. Sector prohibitions still exist in Belgium, France, the Netherlands, Spain and Sweden, although the French government did take action to open up the public sector for the first time a year ago.

Then there are restrictions on the length of assignments temporary agency workers can work, which exist in Belgium, France, Germany, Italy, Spain and Sweden. Austria, Germany, Ireland, Spain and Sweden impose limits on the percentage of a workforce that can be agency workers.

Spanish staffing companies, meanwhile,  face the wholly unique requirement of having to employ a certain ratio of internal staff, depending on how many temporary workers they have out on assignment.

Some countries have legislation that doesn’t actually prohibit the use of temporary staff, but does place an additional administrative burden on staffing companies (and therefore an additional cost on the supply of temporary personnel) and which does not exist in more liberal staffing markets. Examples of this type of legislation would be the requirement to justify every single temporary assignment (Belgium, France, Italy and Spain) or the necessity of having the temporary and client sign a contract for every single assignment (Belgium and France).

More optimistic observers are hoping to see these types of restrictions fall away over the summer and autumn. At its annual conference held in Rotterdam May 18-20, CIETT (which represents the interests of national staffing associations around the world) made one final plea to get governments onside. In a media release issued on May 20, CIETT called for the lifting of existing unjustified restrictions and effectively implementing the agency work directive in the EU “in order for private employment agencies to contribute to the growth of national labour markets.” http://www.staffingindustry.com/eng/content/view/full/45190

Justified Concerns

However, there are two potential concerns about this process. The first hinges on how governments decide whether existing prohibitions are necessary or not. Is legislation deemed unnecessary when the majority of governments do not impose it on the staffing industry, or will each government be allowed to arrive at its own independent view? A good example of this is what has happened recently in Spain, where the construction sector was liberalized, only to be banned again a few months later following union pressure .

http://www.staffingindustry.com/eng/Research-Publications/Daily-News/Spain-High-risk-construction-closed-again-for-temporary-agencies Spain is in a clear minority in thinking that temporary workers need some sort of special protection not afforded to full-time construction workers, and beyond that afforded by normal health and safety regulation. At year-end, will the European Union allow Spain to justify this restriction or not? 

The Directive does give some guidance in this respect. Namely, that restrictions “may be justified only on grounds of the general interest regarding, in particular, the protection of workers, the requirements of safety and health at work and the need to ensure that the labour market functions properly and that abuses are prevented”. The “grounds of general interest” seems like one of those vague phrases through which any competent lawyer could drive an 18-wheeler.

The second concern relates to lack of compliance once we get into 2012. It is unclear what will happen if a government fails to review their legislation or if the European Union takes a different view and disagrees with the justification they are given. Unfortunately, the directive itself is rather vague on this issue — the only specified requirement is that “Member States shall inform the Commission of the results of the review”.

Will governments be penalised in some way if they don’t? If so, how? A fine perhaps, or maybe sending in a peace-keeping force? With no obvious penalties expressed for non-compliance within the Agency Workers Directive itself (other than penalties on staffing companies and employers for failing to meet the equality provisions of the Directive), more pessimistic observers suspect that the grand liberation of the European staffing industry on D-Day (Directive Day) may well end up stranded on the beach.

Belgium is a particular worry. Given how long the Belgian temporary staffing industry has been established, it has a surprisingly wide range of restrictions in place. In this respect, it is, perhaps, the market with the most room for improvement. Unfortunately, Belgium does not have a government in place at the moment — and, in fact, hasn’t had one for the past six months. Whether the caretaker administration can be bothered to address the Agency Workers Directive remains to be seen but, of course, an absence of government is quite a good excuse for failure to comply.

Really, we need to wait and see before the picture becomes clearer. Certainly it will be a major disappointment if we reach 2012 without some improvement in the European legislative environment, but don’t be too surprised if the Agency Workers Directive doesn’t immediately deliver all that it appears to promise. Beyond that, there is still some hope that further actions might compel governments to comply with the Directive. The European Commission has promised that, by Dec. 5, 2013, it will propose necessary amendments to the Directive following consultation with member states and social partners in the community..

 

 

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