EU Directive on agency work - bypasses by companies
In some countries (namely in the UK and Ireland) the transposition of the EU Directive has a negative impact. The recent cases with DHL and Tesco (and some other big employers in other sectors, like food manufacturing) showed that the loopholes in the legislation are used to avoid equal treatment principle and to exploit employees.
The Directive (Article 5.1) allows for a qualifying period before the equal treatment is applicable, on the basis of an agreement between social partners at national level. It also allows for other derogations and flexibilities such as for agency workers on permanent contracts of employment who are paid between assignments.
Derogations (called the “Swedish Derogation”) from equal treatment principle, which should not be allowed to lower the level of protection, are used to limit the scope of the Directive. Temp agencies have started employing workers on permanent contracts thus making them permanent employees of the agency and exempt from the (equal treatment) requirements of the Directive.
For now, big agencies in the UK are busy transferring their temp workers to permanent contracts. Staffline (the UK staffing company) plans to move 8,000 of its 25,000 temps on to permanent contracts. Adecco said clients employing a few hundred of the 15,000 temps in its general staffing business had so far opted for the derogation. Agencies say their big clients are considering using derogations.
A spokesperson for the Morissons supermarket chain told "The recruitment agencies we work with have been considering how they will comply with this legislation for some time. They have proactively considered using this model or are already employing their workers. Through our network of agency suppliers, Morrisons will be offered temporary workers who may be employed by the recruitment agencies with contracts of employment referred to as Swedish Derogation."
Employers claim that “the model is of benefit to agency workers as it gives greater employment rights and job security as well as maintaining the benefits of having temporary staff, who otherwise would become too costly to use.”
British union representatives say: "The irony is that the regulation on agency work that we all looked forward to as a vehicle for improving the lot of precarious workers has in fact entrenched low pay and minimum conditions."