EU directive on temporary agency work could reduce social dumping

Trade unions are frustrated over businesses' rapidly increasing use of temporary staff from low-cost countries, so the upcoming EU directive on temporary agency work is being welcomed as a protection against social dumping. Right now the details for how the directive should be implemented are being put in place.   

In recent years many trades have been using labour from staffing agencies in countries with lower wages and lesser working conditions. In Denmark there are no firm numbers for this kind of temporary labour, but trades like the building industry, vegetable production and hotel cleaning have all been using temporary workers from countries like Poland to an increasing degree in recent years. 

Trade unions say this means a considerably increased risk of social dumping. If a company can hire temporary workers who are cheaper than their own staff there is the danger that staffing agencies will take over the work in the long run, and permanent staff will loose their jobs. 

That's why trade unions are very happy with the 2008 EU directive on temporary agency work, and with the fact that member countries must implement the directive by 5 December this year, says Ane Kristine Lorentzen, a lawyer with Denmark's Confederation of Trade Unions (LO) who's in charge of LO's work with the directive's implementation.

"There is no doubt that foreign staffing agencies are a major problem. 

This has spread to many trades and created a labour market B team which again leads to a serious risk of social dumping. So the new EU regulations are a great step forward, especially if the implementation secures equal treatment of foreign temporary staff and  Danish employees," says Ane Kristine Lorentzen.

Principle of equal treatment

Central to the the directive on temporary agency work is the principle of equal treatment. That means temporary staff shall enjoy the same employment and working conditions as if they were directly hired by a company to perform the same tasks. The directive on temporary agency work is also a so-called minimum directive, which means it will be possible to enter into collective agreements which are even more beneficial to the worker.

Yet the directive does not especially focus on situations where temporary workers are hired from an agency in another EU country, a fact which trade unions say carries a huge risk of social dumping. The Ministry has given trade unions a promise in writing that it will stop social dumping by including another directive when Denmark implements the directive on temporary agency work - namely the posting of workers directive. It secures foreign temporary workers the same salary and employment rights as others working in a Danish company.

As a result Denmark will have an efficient protection against social dumping, concludes LO in its recent 143 pages long report on social dumbing and the challenges related to the use of foreign staffing agencies. Still the trade unions aren't beside themselves with excitement. They point out two possible loopholes in the directive. One is the fact that EU countries can disregard the principle of equal treatment in cases where the temporary worker is a full-time salaried employee with the staffing agency. According to Denmark's LO this represents a major loophole. Because if both the agency and temporary worker say there is permanent employment the temporary worker no longer has to enjoy the same rights as the company's permanent staff.

More atypical employment

The other possible loophole in the directive on temporary agency work, according to trade unions, is the fact that EU countries can allow the social partners to enter into collective agreements which bypass the principle of equal treatment, as long as a reasonable level of protection is maintained for temporary workers. 

"A collective agreement in some cases means better protection, but we're worried foreign staffing agencies will enter with salary demands on individual companies, so we do not welcome that possibility," says Lars Lyngse, international advisor at 3F, Denmark's largest trade union. 

Right now the Danish government is negotiating with the social partners on how to integrate the directive into Danish legislation, and how to approach the disputed areas. Danish trade unions are very clear in their advise to the government: don't allow any loopholes which allow employers to disregard the principle of equal treatment. 3F is worried over a tendency in Europe where businesses are increasingly making use of atypical employment, including temporary staff.

"This is a worrying tendency all over Europe, and it is strongest in countries that lack our strong traditions for negotiated solutions. Atypical employment pushes aside traditional full-time jobs and puts pressure on salary and employment conditions," says Lars Lyngse.

Advantages with temps

"Temporary work is not exclusively a bad thing, however," underlines Lars Lyngse.

He points to the fact that many nurses quit their permanent jobs during the latest boom years and went for jobs with staffing agencies which paid better. This forced employers to increase general level of nurses' pay. 

A recent study shows temporary work is often a stepping stone to permanent employment, and according to the union representing Danish temp agencies four in five jobs offered by agencies are 'new' jobs which would not exist if they weren't temporary jobs. That means temporary workers don't necessarily take jobs away from others.

"80 percent of all temporary jobs solve tasks which would have been solved by outsourcing, overtime or not solved at all, so it is a myth that temporary workers steal other people's jobs," says Jakob Tietge who represents staffing agencies at the Danish Chamber of Commerce. 

The agency trade itself says it has one of the highest trade union membership rates in Denmark. It also argues temporary work through Denmark's staffing agencies make up less than one percent of the Danish workforce. A study from the Nordic management consultancy Capacent shows one in six Danes have worked through a staffing agency.

The Danish staffing agency trade has developed a system of certification for agencies, but trade unions wish to see a proper authorisation system with regular and thorough independent controls to weed out the less than serious players.

Minister of Employment Inger Støjberg declined a request to comment on the implementation of the temporary workers directive as negotiations with the social partners begin on 12 April.