Temporary work agencies: misfits in Nordic working life?

But do we know enough about the phenomenon that is temporary work agencies? Are the Nordic welfare societies ready for such a player on the labour market? 

In the following I wish to illustrate some challenges. These will be formulated as questions and hypotheses as there is little research in this field so far.

Even though there are some important differences between temporary work agencies, like Adecco, and external service providers, like ISS, both represent a challenge to the Nordic model. While external service providers employ workers and retain management responsibility when they sell services to a third party, temporary work agencies are companies which exist solely in order to buy and sell labour. They are, in other words, employment providers and not employers. Temporary work agencies are only a link between someone offering and someone seeking labour. Workers will therefore come under the management of the company commissioning the work, on the same terms as the company's permanent staff. 

This raises some questions when it comes to the Nordic model which is based on wide employee participation on a company level and tripartite cooperation on a national level. The Nordic idea has been that workers have more to bring to a company than pure manpower, and that they should therefore have a say in how things are run. This idea has played an important role in the struggle for better working conditions and in the improvement of innovation and organisation.

Temporary work agencies and external service providers will, however, not always fit into the usual company structure with a visibly present management and a permanent group of employees. Employees recruited from temporary work agencies and employees of external service providers will be working in the same workplace as directly employed workers, but will have a different and non-present employer. What could the consequences be?

Firstly, these employees will have different rights because their work contract is with a different employer, and because it is framed by a commercial contract between employer and commissioner (i.e. the employer of the company's 'normal' employees). They might also fall under a different collective agreement linked to the temporary work agencies or external service providers.

Secondly, workers who are recruited via temporary work agencies or employed by external service providers will face challenges by working in a workplace not controlled by their own employer, but rather by the company commissioning the work. This makes it very hard to take part in the decision-making process in the workplace. If the commissioning party initiates refurbishment which will impact on these workers' physical working environment, will they then be consulted?

In other words; the use of temporary work agencies and external service providers raise questions around participation in the decision-making process. Where should workers have input geographically? In the workplace or with their own management who are based somewhere else? Should this participation be limited by workplace or by employer? In case of the latter, what kind of participation are we talking about? And with whom does a worker have input? As a worker, what kind of things can you influence at the work place which commissioned your work? What can you do if your employer does not have a mandate to meet demands because of contractual limitations with the commissioning company?

An example: A hotel commissions an external service provider to provide a cleaning service, covered by a commercial contract which sets the price and which says the hotel may perform changes within their premises as long as this does not affect the service provided in a quantitative manner. If the hotel decides to refurnish the rooms or buy new furniture which could potentially make the cleaner's job more time consuming, the cleaners would have no input in the decision making process. The employer would hesitate to demand any adjustments with the commissioning party, because the latter could then demand a renegotiation of the contract, i.e. a cut in the price they pay for the service.    

Thirdly, the use of temporary work agencies and external service providers changes the prerequisites for participation in the decision-making process, for instance the demand for trust, predictability, long term stability, personal relations and mutual respect. If participation is meant to be institutionalised, it must happen in setting of permanent cooperation, i.e. in the shape of meetings, set routines and representation. In some cases, for instance at some hotels, very few employees remain. The hotel as a company will have a small administration comprising a hotel manager and his or her assistant, while most of those working in the hotel will be employed by one or more other employers (one for cleaning, one for the restaurant and one for the reception/booking).

Nationally the tripartite cooperation is being challenged by the fact that in examples like this you have four and maybe five parties with partly differing and partly overlapping interests. The state is less affected, but the two other parties will have difficulties appearing appearing as unitary agents. Trade unions face internal disagreements over the organisation of temporary and external workers. Should the before-mentioned cleaners belong to a union for hotel employees or for cleaners? Which collective agreement should cover them? And what about the employees recruited from temporary work agencies? Is there a need for a separate non-sector trade union with a non-sector collective agreement?

Similarly, employers' organisations could face an internal split when representing both service providers/temporary work agencies and companies commissioning their work. These two types of companies might not always have shared interests, however. It seems, at least, that all parties to a contract need to be present in a national cooperation, requiring a four-party cooperation between the state, trade unions, employer organisations representing the service providers/temporary work agencies and employer organisations representing the commissioning companies.

In my view there is a need to to establish both theoretically and practically what impact a liberalisation of private labour exchanges and service provisions will have on our society, especially with the aim of preventing social dumping. Within low pay trades is seems quite clear that commissioning companies must be made far more responsible than what they are today. One step in the right direction would be to include them as a separate party on all levels - including on a European level. Meanwhile trade unions need to find a strategy for recruiting these workers and they must find out who should be representing them.