TUC Briefing

EU agreement on agency work

EU Social Affairs Council June 2008

EU agreement on agency work

At its meeting on 9 June 2008, the EU Social Affairs Council (SAC) which includes Department for Business, Enterprise and Regulatory Reform (BERR) Secretary of State John Hutton, agreed a text for the EU Temporary Agency Workers Directive (TAWD). This is a major step forward as the draft TAWD had not made progress since 2002 due to a failure to reach agreement in the Council of Ministers. The UK had led a blocking minority of member states but recent negotiations in the UK context and the agreement reached last month between the TUC and the CBI has paved the way for progress

Agreement was reached on the basis of the Slovenian presidency compromise proposals. Equal treatment remains the core principle of the Directive; however, the text also makes it possible for member states to agree exemptions via collective agreements, or agreement between the social partners. The key provisions and amendments to the Directive are set out in more detail below.

Progress at last ......but not the end of the story yet

The outcome of the 9 June Council of Ministers is not the final decision. Both the texts on the TAWD and on working time as agreed by the Employment and Social Affairs Council will go to the European Parliament (EP), which will seek to amend the texts at its second reading. Since a link has been firmly established between the two Directives, it is likely that both texts will follow the same schedule at second reading. This will have to be completed within three months (plus one due to the summer recess)

The EP second reading opinion will then be considered by a further meeting of the Employment and Social Affairs Council in the Autumn. As it is unlikely that the EP and the Council will completely agree on the same amendments (especially on the Working Time Directive text), this could be followed by a conciliation procedure, which would seek to settle the differences. A conciliation procedure must conclude within 6 weeks.

This could take us into 2009. Even when agreed, member states will have three years to implement the provisions of the TAWD in national law and this could take until 2012. However, during the UK Social Partner negotiations on the terms of the Directive the Government indicated that they intended to move as quickly as possible on implementation of the TAWD in the UK. They anticipated an announcement in the Queen's speech in November 2008 with implementing legislation going through Parliament during 2009. It is possible that UK legislation could be on the statute book by spring 2010.

What was agreed

The key features of the agreed text are set out below. The agreement is based on the Slovenian Presidency compromise text of 4 June 2008. The only significant changes in the agreed text occur under Article 5 on equal treatment. In particular Article 5.4 contains the exemption written to accommodate the UK agreement between the TUC and CBI. This now provides that in those member states where there is no legal or practical system in place to extend collective agreements either universally or to all similar undertakings in a certain sector or geographical area, member states may after consulting the social partners at national level and on the basis of agreement by the social partners, derogate from the equal treatment principle. Such derogation may include agreement on a qualifying period.

Article 1: Scope of the Directive

This states that the Directive applies to workers with a contract of employment or employment relationship with a temporary agency and who are assigned to user undertakings to work temporarily under their supervision and direction.

Article 2: Aim of the Directive

Sets out the aim of the Directive which 'Is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the principle of equal treatment as set out in Article 5 is applied to agency workers, while taking into account the need for establishing a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.'

Article 3: sets out various definitions of terms contained in the Directive. It provides that a 'worker' is to be defined at member state level in line with national law.

Article 3 also includes a definition of 'basic working and employment conditions' as follows:

'working and employment conditions laid down by legislation, regulations, administrative provisions, collective agreements and / or other binding general provisions in force in the user undertaking relating to:

i) the duration of working time, overtime, breaks, rest periods, nightwork, holidays and public holidays;

ii) pay

Article 3.2 states that it is for the member states to define legally what constitutes pay, contract of employment, employment relationship or worker.

Article 4: Review of restrictions or prohibitions on agency work. Article 4 provides that such restrictions or prohibitions are justified only on grounds of general interest relating in particular to the protection of temporary agency workers, health and safety at work requirements, or the need to ensure that the labour market functions properly and abuses are prevented It requires member states after consulting the social partners, to review restrictions on the use of temporary agency work to see if they are justified and to do so within two years of adoption of the Directive. The obligation to discontinue unjustified restrictions that was contained in the previous draft directive has been deleted and has facilitated progress on the Directive.

Article 5: sets out the principle of equal treatment. It provides that for the duration of their assignment at a user undertaking, the basic working and employment conditions of temporary agency workers shall be 'at least those that would apply if they had been recruited directly by that undertaking to occupy the same job'.

When temporary agency workers have a permanent contract of employment with a temporary agency and continue to be paid in the time between assignments, then Art.5.2 provides that an exemption can be made from the equal treatment principle on pay only. Such an exemption can only be made following consultation with the social partners.

Art. 5.3 sets out provision for member states to consult the social partners and enable them to conclude collective agreements that may establish arrangements concerning the working and employment conditions of temporary agency workers that may differ from those set out in Article 5.1 (while respecting the overall protection of agency workers).

Art. 5.4 is new and allows for derogation from the equal treatment principle set out in Art 5.1 where the social partners have been consulted at national level and reached an agreement to derogate. Article 5.4 was inserted to accommodate the agreement between the TUC and the CBI. This derogation may include a qualifying period (such as the 12 weeks agreed in the UK). It is for Member states to determine and specify whether occupational social security schemes including pension, sick pay or financial participation schemes are included in the basic working and employment conditions in Article 5.1. (The UK agreement specifically excludes this).

Article 5.4 only applies in member states where there is either no system in law for declaring collective agreements universally applicable or no such system in law or practice for extending their provisions to all similar undertakings in a certain sector or geographical area.

Although the text now contains a reference to 'local agreements' in the context of derogations under Article 5.4, these agreements cannot be any less favourable than what is agreed at national social partner level. (So in the UK context, local or regional agreements cannot undermine what the TUC and CBI have agreed nationally).

Article 5.4 states that arrangements for derogation:

Shall be in accordance with Community legislation

Shall be sufficiently precise and accessible to allow the sector and firms concerned to identify and comply with their obligations

shall be without prejudice to local, sectoral, regional or national agreements that are no less favourable to workers.

Must still provide an adequate level of protection for temporary agency workers.

Article 5.5 requires member states to take appropriate measures in accordance with national law or practice to prevent misuse of the power to derogate, and in particular to prevent the use of successive assignments designed to circumvent the provisions of the Directive.

Article 6 covers access to employment, collective facilities and vocational training. It provides that temporary agency workers shall be informed of any vacant posts in the user undertaking to give them the same opportunity as other workers in that undertaking to find permanent jobs. The information can be provided by a general announcement in a suitable place in the undertaking.

Any clauses prohibiting or having the effect of preventing an agency worker and the end user forming a direct employment relationship after the temporary assignment has ended are null and void or may be declared so and member states shall take any necessary action required to ensure this is the case. This however, is without prejudice to provisions under which temporary agencies receive a reasonable level of recompense for services to user undertakings for assignment, recruitment and training of agency workers.

Article 6 provides that temporary agency workers shall be given access to the amenities or collective facilities in the user undertaking mentioning specifically canteen, childcare facilities and transport services under the same conditions as workers employed directly by the undertaking (unless the difference in treatment is justified by objective reasons.

Article 7 and Article 8 cover the representation of temporary agency workers and information on the use of temporary agency workers to workers' representatives in accordance with national and Community legislation.

Article 9 recognises Member State's right to apply or introduce measures (by legislation or collective agreement between the social partners) that are more favourable to workers and states that the implementation of the Directive will in no way justify a reduction in the general level of protection of workers on those matters covered by the Directive.

Article 10 covers penalties and states that Member States shall ensure that adequate administrative or judicial procedures are in place to enforce the obligations under the Directive.

Article 11 allows member states a maximum three years to implement the provisions of the Directive following its adoption.

Next Steps

The TUC welcomes the progress now being made on the draft TAWD as a result of the TUC - CBI agreement last month and the Council of Ministers decision on 9 May. The TUC will now concentrate its efforts on representations and briefings to the ETUC and the European Parliament as the draft Directive enters the next stage of the EU legislative process. The Andrew Miller private member's bill has now been withdrawn in the light of the progress being made at EU level, but further negotiations have still to take place on the detail and implementation of the UK social partner agreement.

Briefing document (1,900 words) issued 24 Jun 2008