Steve Peers
Workers with non-traditional employment arrangements, such as those lacking full-time permanent contracts, frequently face precarious positions in the labor market, making them susceptible to exploitation. Additionally, the utilization of such employment models may negatively impact other workers. Conversely, there are instances where such employment benefits both workers and employers, acting as a significant source of job creation. In balancing these concerns, the EU has implemented measures regulating three specific non-traditional employment categories: agency workers, part-time workers, and fixed-term workers.
A 2008 Directive, which Member States were required to implement by December 2011, outlines the rules pertaining to agency workers. The Commission recently published its report analyzing the implementation of this Directive. The critical question is to what degree the Directive successfully achieves its dual objectives of safeguarding agency workers while simultaneously promoting job growth.
Basic issues
Initially, it’s important to note that the Directive does not apply to employers outside ’economic activities’, interpreted by the Commission as those not offering services for payment. Additionally, Member States can exempt workers under specific job creation initiatives from the Directive’s scope. According to the Commission’s report, the majority of Member States do not utilize these exceptions, and those that do have applied them appropriately.
Regarding the Directive’s definitions, only one Member State has explicitly designated the temporary work agency as the employer. This clarification, while unfortunate that more Member States haven’t adopted it, represents the accurate interpretation of the Directive.
Worker protection
The cornerstone of employee protection within the Directive is the principle of equal treatment concerning working conditions. The Commission expresses concerns about certain Member States’ rules demanding a ‘comparable employee’, while the Directive refers to the ‘same job’. However, this method of transposition is acceptable as long as employers, and courts if necessary, acknowledge that an individual performing the same role within the user undertaking always constitutes a comparable employee.
However, certain exceptions to this equal treatment principle exist. Firstly, agency workers might not be entitled to equal pay if they receive payment from the agency between assignments and have a permanent contract with the agency. Only five Member States have adopted this exception. In numerous instances, workers only receive half their previous pay, with the national minimum wage serving as the lower limit. The Commission, though raising concerns about this practice, has only indicated further discussions on this matter.
Secondly, agency workers can benefit from equal treatment through a collective agreement if it “respect[s] the overall protection” afforded to them. Ten Member States utilize this rule, and the Commission doesn’t perceive any issues with its implementation. While it’s generally presumed that unions advocate for workers’ rights, there’s a possibility that in some situations, they prioritize permanent workers’ interests or, due to a weak bargaining position, accept terms that don’t adequately safeguard agency workers.
Thirdly, in nations where collective agreements lack general applicability, an exception to the equal treatment principle can be made if “the overall protection” of agency workers is upheld. This could involve a qualifying period and may stipulate that employer-provided pensions are excluded from the equal treatment rule. Only the UK and Malta implement this rule. The UK enforces a 12-week waiting period, while Malta withholds equal treatment for the initial 4 weeks for assignments exceeding 14 weeks. Both nations exclude employer pensions from the equal treatment rule.
These exceptions are contingent upon national measures preventing their “misuse,” specifically preventing consecutive assignments aimed at circumventing them. This risk is especially significant when a qualifying period for equal treatment exists, as the Commission highlights. While the EU’s fixed-term work Directive limits successive fixed-term contracts, the CJEU, in the Della Rocca case, ruled that it doesn’t apply to agency workers. Consequently, defining “misuse” needs a fresh approach. It’s unfortunate that the agency work Directive’s drafters didn’t simply adopt the fixed-term work Directive’s rules to provide legal clarity. The Commission refrains from further commentary on the rules against misuse or Member States’ use of the third exception.
Job creation
The Directive mandates that Member States review existing barriers to agency work and asserts that such restrictions are justifiable only in the general interest, particularly concerning health and safety, preventing abuse, worker protection, and labor market functionality. The Commission reports that while Member States reviewed national legislation, few enacted changes, justifying existing restrictions based on Directive stipulations.
However, one might argue that worker protection and preventing abuse are already addressed within the Directive. Separate legislation (mentioned in the report) tackles health and safety, empowering Member States to prohibit agency workers from certain roles on those grounds. Some Member States have banned using agency workers as replacements for striking workers, a measure explicitly permitted by the Directive’s preamble.
Other issues
The Commission finds no issues with how Member States apply rules on worker representation and access to employment, dismissing industry claims about excessive cost burdens imposed by the Directive.
In conclusion, the Commission sees no need to revise the Directive, opting instead for further dialogue on its accurate interpretation. Notably, one case concerning this Directive, the AKT case, is pending before the CJEU, questioning the justification for specific national barriers to agency work. Furthermore, in its Michaeler ruling, the CJEU determined that national regulations restricting part-time work violated the EU’s part-time workers Directive and should be disregarded by the national court. This judgment holds potential relevance by analogy.
Comments
It’s evident that the Commission, by refraining from proposing amendments or even addressing implementation concerns, aims to avoid conflict. It swiftly dismisses criticisms, highlighting a situation where a comprehensive “impact assessment” is crucial, not before proposing legislation (as is customary) but to gauge the actual impact. Key questions remain unanswered: How much have workers benefited from this Directive, and at what cost to employers? Has it resulted in job creation or loss?
Furthermore, the Commission could enhance clarity by outlining its interpretation of the Directive, perhaps through a guidance document. Currently, discerning their stance is challenging beyond recognizing their reluctance to disagree. As previously mentioned, there are valid reasons to believe that certain national restrictions on agency work might be vulnerable to legal challenges and that some Member States fail to adequately meet the minimum standards for agency worker protection. Unfortunately, the Commission’s approach to the Directive in its report does little to illuminate these issues.
[Update: the CJEU gave its ruling in the AKT case on agency workers in 2015. See analysis here.]
[See also: my analysis of the issue of equal treatment of atypical workers, in an article published in the Yearbook of European Law.]
Barnard & Peers, chapter 20