Only appropriately regulation for the agency work industry can effectively drive job creation, growth and competitiveness

Transcription

1 Only appropriately regulation for the agency work industry can effectively drive job creation, growth and competitiveness The new European Commission needs to do more to ensure the full implementation of the Directive 2008/104/EU on temporary agency work 8 December 2014 Main messages: 1. An appropriately regulated agency work industry drives growth and job creation. 2. The EU Directive on temporary agency work has been transposed in an unbalanced way, which implies that the two-fold aim is not achieved. Equal treatment has been implemented into national law in accordance with the Directive in all Member States. However, too many unjustified restrictions remain in place, such as too limited reasons for use and too limited maximum length of assignments. On the more positive note, certain countries followed suit and have recently removed restrictions on temporary agency work, such as France (with regard to the opportunity to offer open-ended contracts) and Italy (removing reasons for use restrictions). 3. There is no evidence that restrictions on temporary agency work contribute to a better protection of temporary agency workers. 4. Eurociett calls upon the EU and Member States to fully implement the Directive on temporary agency work and to use the instruments mentioned in the Application Review Report, namely continuous discussions in the EU Committee of Experts, making use of infringement procedures and the Europe 2020 European Semester / country-specific recommendations. 1. The Directive in the light of the 2013/2014 review process: An unbalanced implementation 1.1. The Directive on temporary agency work has been adopted in 2008 with a view to better meet companies needs for flexibility but also the need of employees to reconcile working and private lives. 1 It aims at ensuring appropriate protection for temporary agency workers while at the same time establishing a suitable legal framework for temporary agency work During the implementation phase ( ) changes have been introduced to national regulation on temporary agency work in several EU Member States. The principle of equal treatment is applied in all EU countries, while allowing for the derogations as foreseen by 1 Directive 2008/104/EC on temporary agency work, recital 11. 1

2 the Directive. This has led to significant changes especially in the UK and Ireland. New and specific regulation on temporary agency work has been introduced in several central and eastern European countries. On the other hand, the review of restrictions as provided for under Article 4 of the Directive has to led to some, but overall rather limited changes in regulation. The arguments put forward by most Member States to classify restrictions in place as justified to protect temporary agency workers, claimed that they ensure the proper functioning of the labour market and the prevention of abuses. A further, evolution of concern is an increasing trend of introducing new restrictions to temporary agency work by collective labour agreements of the user/client companies, thus hampering the contribution of agency work to job creation, growth and competiveness. As provided for by Article 12 of the Directive, the European Commission conducted in 2013/2014 a review of the Directive in consultation with Member States and social partners at EU level. In its Application Review Report, published on 21 st March 2014, the Commission concluded that the Directive seems to have been correctly implemented and applied. However the analysis has also shown that the twofold goal of the Directive has not yet been fully fulfilled. 2 The Commission indicated that both the use of certain derogations from the principle of equal treatment should be monitored and that there are still significant restrictions applied to temporary agency work. The Commission raises concerns that the review of restrictions has not given an impetus to the rethinking of the role of agency work in modern, flexible labour markets Eurociett welcomes these main conclusions of the Report and calls upon the new European Commission to take decisive action to strive for more appropriate regulation on temporary agency work. All relevant instruments, such as infringement procedures, the European Semester process and the dialogue and discussion with EU Member States should be used in this context. 2. The need for a continuous review and lifting of unjustified restrictions on temporary agency work (Article 4) 2.1. Article 4, paragraph 1 focuses on the fact that member States are obliged to review restrictions on temporary agency work and to report to the Commission. It explicitly and clearly states that prohibitions and restrictions on temporary agency work are only allowed for clearly defined reasons, namely to protect agency workers, to ensure a proper functioning of the labour market and to prevent abusive practices. As also stated in the Commission Application Review Report, Article 4, paragraph 1 reduces the scope of justifications to which Member States may resort to restrict the use of temporary agency work The Commission also emphasises that Article 4, paragraph 1 is binding on all Member States. Eurociett believes that the most appropriate way to ensure the binding character of this provision is the direct implementation into national legislation. 2 Report from the Commission on the application by Member States of the Directive on temporary agency work, p COM Report (2014)p. 9 2

3 2.3. Commenting on the review process, the European Commission rightly states that although a few restrictions and prohibitions on the use of temporary agency work have been removed, the review has not so far led to major changes in the extent of restrictive measures applied by the Member States. 4 Some EU Member States have removed unjustified restrictions on temporary agency work in the past years, including the lifting of sectoral bans in France (public sector) and Spain (public sector and construction industry), or the abolishment of reasons for use restrictions and maximum lengths of assignment restrictions in Italy. In Spain, new opportunities were also provided to the private employment services industry by offering new opportunities of cooperation and partnerships between public and private employment services. In the Czech Republic, unjustified restrictions on the hiring of disabled people, which were introduced in 2011 have been abolished again. Finally, several countries (including France and Italy) offered new opportunities for the agency work industry based on apprenticeship contracts and schemes. However, progress on the removal of unjustified restrictions is still unevenly spread and consequently, the European Commission rightly underlines that the review of restrictions is still work in progress in several Member States. 5 Eurociett fully agrees with the fact that the review of restrictions has to be understood as a process and needs to be continued. Longer term economic data from Eurociett member countries 6 of the last four to five years shows that the number of persons employed by the agency work industry has been stable, with some variations linked to economic cycles. This data and underlying, external research shows that the main barrier to further growth and job creation remains to be inappropriate and outdated regulation on temporary agency work A legal CJEU case in Finland (Shell Aviation vs. Finnish transport workers union) focusing on reasons for use restrictions and maximum length of assignments, as well as a formal complaint of the Swedish Eurociett member Bemanningsföretagen to the European Commission are first indicators that illustrate the need to continuously assess and subsequently lift restrictions that are detrimental to a well-functioning labour market. The Advocate General of the Court of Justice has argued in the Finnish case that Article 4, paragraph 1 clearly prohibits maintaining or re-introducing unjustified restrictions on temporary agency work. The article is thus not to be understood as a one-off review obligation, but a permanent obligation to ensure appropriate regulation contributing to a well-functioning labour market. Such a continuous review of restrictions needs to be conducted on a case-by-case basis and should be focused on those restrictions that severely hamper the contribution of the agency work to growth and job creation and/or its ability to provide services in the internal market. 4 Examples of restrictions on temporary agency work which have been removed include the public sector ban in France (2011), the reasons for use restrictions and maximum length of assignments in Italy (2014) as well as the lifting of sectoral bans in Spain as well as opening up of the opportunity to develop cooperation between public and private employment services. Furthermore, the Spanish government has removed the exclusivity clause, which regulated that temporary work agencies were only allowed to offer temporary agency work and no other HR services. 5 COM Report (2014) p Ciett: Economic Report, 2014 Edition. 7 Eurociett/Boston Consulting Group: Adapting to Change. How private employment services facilitate adaptation to change, better labour markets and decent work. 3

4 2.5. Evidence presented by the OECD in the Employment Outlook of 2014, especially in its Chapter 4, shows that increasing restrictions on hiring regulations might adversely affect workers employed on flexible (fixed-term or temporary agency work) contracts by increasing their job insecurity. 8 Economic analysis and evidence from several Eurociett member federations proves the negative effect of specific restrictions imposed on temporary agency work: 9 a) In Belgium, a sectoral ban is applied for the use of agency work in the public sector. Taking a European, comparative perspective, such a legal ban is only applied in three countries (Greece and Belgium), preventing the public sector from reacting quickly to changing staff needs. Data from other European countries shows that the public administration accounts for about 7% of the agency work assignments. Applying a sectoral ban in the public sector is also not justifiable based on the limitative reasons for restrictions as provided by Article 4 of the Directive. The new, Belgian federal government has announced in its governmental programme that this public sector ban will be lifted. Eurociett would welcome such a reform to be implemented swiftly. b) In Germany, the main concern regarding inappropriate regulation covers less current rules, but specifically plans of the German government to tighten regulation on temporary agency work. Based on the coalition agreement signed between conservatives (CDU) and social democrats (SPD), a maximum length of assignments of 18 months and the obligation to apply equal pay after 9 months. These plans would infringe European law. Temporary agency work would be restricted in an unjustified way, hindering its job creation potential. Such law would revise reforms implemented by a predecessor government led by the Social Democratic Party in Based on these reforms, the German agency work industry reached a penetration rate comparable to other large European countries (penetration rate of 2.2% compared 2.0% in France, 2.7% in the Netherlands and 3.8% in the UK. Given the fact that the planned reforms would abolish most of the regulatory progress achieved in 2001, it is forecasted that the growth and job creation potential of the agency work industry would be reduced to a level comparable to the status prior to c) In the Netherlands, discussions on the review of restrictions in collective labour agreements need to be continued. In many collective labour agreements, there are restrictions on the use of temporary agency work which are detrimental to a wellfunctioning labour market and specifically the aim to increase labour market participation. More than one third of the agency workers in the Netherlands have been unemployed prior to engaging in agency work. At the same time research from the Dutch Ministry of Social Affairs shows that 12% of the collective labour agreements impose restrictions on the number of agency workers that can be assigned to user companies (quota rules) and/or on the duration of the agency work assignments, thus hindering the role of the agency work industry in offering jobs to unemployed and raising labour market participation. 8 OECD: Employment Outlook 2014, Chapter 4, page A comprehensive overview on the conditions and restrictions on temporary agency work is available at the Eurociett Secretariat upon request (michael.freytag@ciett.org), as well as in the Eurociett Position Paper (2013) 4

5 d) In France, the waiting period between two assignments substantially hinders the transition function and job creation potential of the agency work industry. Especially with regard to agency workers employed on open-ended contracts. While the industry committed itself to offer open-ended contracts in three years. Such a commitment is hampered and more difficult to reach when a waiting period has to be applied, which prohibits the continuous assignment of the same agency worker to the same user company in cases of prolonged needs for flexible labour. e) In Austria, a fee of 110 has been introduced by the government for ending agency work contracts prior to the foreseen end date. This fee, combined with the other obligations linked to agency work hinders the use of agency work as adaptable and flexible form of labour by disproportionately increasing the costs of this flexible form of employment. Economic analysis of the Austrian Eurociett member VZa shows that the growth of the agency work industry has stopped after these regulatory changes These examples, as well as further unjustified restrictions applied in other European countries highlight that the incoming European Commission should use all available means to reach progress on lifting restrictions on temporary agency work. 3. The application of the principle of equal treatment (Article 5) 3.1. A second fundamental principle of the Directive is the principle of equal treatment of agency workers, which is included in Article 5 of the Directive. Derogations from this principle are only allowed for open-ended contracts, by collective labour agreements and agreements of social partners The Commission Application Review Report concludes that the principle of equal treatment, including equal pay, has been correctly transposed by the Member States. 10 At the same time, the Commission calls for monitoring the use and application of certain derogations from the equal treatment principle Eurociett endorses this Commission conclusion. Equal pay from day one by law and without any derogation is indeed applied 21 European countries In the Netherlands, Germany, the Nordic countries and Austria, collective labour agreements agreed by social partners cover regulation on equal pay, sometimes providing for derogations. The UK applies derogations based on a social partner agreement and Sweden and the UK use the derogation for open-ended contracts offering pay between assignments. These derogations are typically characterised by reaching a special, national balance of rights and benefits for agency workers, while ensuring an appropriate protection of the workers While Eurociett could agree with the need that the use of these derogations should be monitored, there is no reason or need to put any of the principle forms of derogations into question. Eurociett would like to underline that the monitoring of derogations is as such not provided for in the Directive, while Eurociett agrees that this could be useful to ensure an appropriate level of protection of agency workers. 10 COM Report (2014) Chapter 4, page 5. 5

6 The EU Expert Group on the temporary agency work would be the right level and body to discuss, where necessary, issues related to equal treatment and the application of Article 5 of the Directive. 4. Relationship with other EU Directives 4.1. A relatively short section of the Commission Application Review Report focuses on the relationship with other EU legislation, focusing on the Directives on fixed-term contacts and on the Posting of Workers Eurociett welcomes the conclusion, which has also been confirmed by the European Union Court of Justice, that the Directive on fixed-term contracts does not apply to agency workers, even if they are employed on fixed-term contracts At the same time, Eurociett would welcome more legal analysis and transparency with regard to the inter-relation between the Directive on temporary agency work and the Directive on the posting of workers, specifically with regard to the options Member States have chosen with regard to temporary agency work when transposing the Posting of Workers Directive Eurociett calls for monitoring the correct application of the Directive 2014/67 on the enforcement of the posting of workers. The implementation of this Directive should not lead to new restrictions on the posting of temporary agency workers or work mobility in general. Eurociett welcomes that EU Social Partners have been invited to contribute to the EU Expert Group supervising the transposition of the Directive and will contribute to these discussions. 5. No need to revise the Directive on temporary agency work at this stage 5.1. Article 12 on the review of the Directive also provides for the opportunity to propose amendments or a revision of the text of the Directive. The European Commission Application Review Report concludes that at this stage, there is no need to amend or revise the directive. The Commission also states that a review of the text of the Directive might be done in the light of jurisprudence of the European Union Court of Justice Eurociett agrees with the fact that more time is needed to assess the impact of the Directive and specially to test the application and enforcement of Article 4. Also the current activities in the area of litigation should be monitored, including the case in Finland on the interpretation of Article 4, paragraph 1. The complaint launched to the European Commission by the Swedish Eurociett member Bemanningsföretagen should be followed up. Based on these experiences, the Directive needs for a revision should be re-assessed at a later stage. About Eurociett: As the European Confederation of Private Employment Services, Eurociett is the authoritative voice representing the common interests of the agency work industry in Europe. Eurociett gathers 30 national federations from European countries, and 7 of the largest international staffing companies as corporate members. Its main objectives are twofold: to seek greater recognition for the positive role private employment services play in better functioning labour markets; to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive. Private employment services offer a Way to Work find out more online. 6