European Union Temporary Agency Work Directive

19-12-11

The EU Directive on Temporary Agency Work came into effect on the 5th of December 2011 and the Irish government was obliged to have legislation in place by this date.  No such legislation has been published as yet. The Directive aims to give employment rights to agency workers that are equal to those of permanent employees from the first day of their employment with the third party hiring company. A Bill to transpose the Directive into Irish Legislation is due to be published before the end of December 2011.

Contrary to speculation the Directive will apply to both public and private sector employees from the 5th of December 2011. The doctrine of Direct Effect provides that if a member state does not transpose an EU Directive into national law before the deadline then the directive has “direct effect” from the specified date. Generally this doctrine is deemed only to apply to Public Sector workers, as emanations of the State. However in a notice issued by the Department of Jobs, Enterprise and Innovation on the 6th of December 2011 the Minister stated that the Directive would apply to all temporary agency workers from the 5th of December 2011.

Derogation

A derogation allows EU member states to delay the implementation of an element of a Directive into law or apply it differently in that particular member state. It is within the powers of the Social Partners at National Level in a member state to agree a derogation that would impose a qualifying period for temporary agency workers to receive the rights provided for in the directive. This means that temporary agency workers would only receive these rights after a certain period of time with the client employer.  Without an agreement between the Social Partners, temporary agency workers will be entitled to equal rights from day one of their employment, as per the Directive.

 The government does not have the power to include this in the legislation without an agreement from the Social Partners. The Social Partners (unions, employers and the Government) entered into talks on the 1st of December 2011 however no agreement was reached on a derogation. Following the talks Unions declared that no convincing case had been put forward to justify a derogation from equal rights from day one of employment with the client employer. Therefore, the Minister for Jobs, Enterprise and Innovation, Mr Richard Bruton TD, informed the Social Partners that the Directive will now be implemented from the 5th of December 2011 and will come into play from the agency workers first day of employment with the client employer.

The Irish Government’s Bill

The Bill that the Government plan to publish before Christmas 2011 will establish, for temporary agency workers, equal employment rights to those of permanent employees from their first day of employment. The Bill will define pay for the purposes of the legislation and set out that pay will include the following:

• Basic pay
• Shift premium
• Piece rates
• Overtime premium
• Unsocial hours premium
• Sunday premium

For the purposes of the legislation pay will not include:

• Occupational Pension schemes
• Financial participation schemes
• Sick pay schemes
• Benefit in kind
• Bonuses

The Bill will also cover areas such as working time, rest periods, night work, annual leave and public holidays. It will provide temporary agency workers with rights in terms of use of certain facilities, such as canteens and crèches, and notification about internal vacancies.

The Bill will cover all temporary agency workers who are on assignment at the moment and workers that are assigned on or after the 5th of December 2011. The Minister for Jobs, Enterprise and Innovation has advised that agencies and hiring companies should “ensure that the principles of equal treatment as indicated above are put in place from the 5th of December 2011, for all temporary agency workers”.

Agency Workers – What are they and who is their employer?

Agency workers are workers that are registered with an agency to work for third parties (client companies) on a temporary basis as and when assignments arise. Agency workers have historically had employment rights that are unequal to those of permanent employees who were directly recruited by the client company. The EU Directive is set to change this.

It is important that agency workers are aware ultimately who is their employer? There is no clear answer to this question. It very much depends on which particular employment rights and pieces of legislation an agency worker has an issue with. Under certain pieces of legislation the hiring company will be seen as the employer and for others the agency will be seen as the employer.

Hiring Company as the employer

• If an agency worker wants to take a claim under the Unfair Dismissals legislation then the hiring company will be seen as the employer.
• The hiring company will also be responsible for complying with health and safety requirements with respect to agency workers.

Agency as the employer

• For PRSI purposes the Social Welfare Act states that the person who pays the agency workers wages would be classed as the employer, therefore, the agency is the employer in this scenario.

In a notice released by the Department of Jobs, Enterprise and Innovation the 6th of December 2011 it was clarified that the responsibility of settling the agency worker’s terms and conditions ultimately lies with the employment agency. However, the hiring company will need to provide the correct information to the employment agency. This will minimise the risk of claims due to alleged unequal treatment. For this to happen, channels of communication and exchange of information between the employment agencies and hiring companies must be developed.

The notice also made it very clear that employment agencies and hiring companies should organise that equal rights are put in place from the 5th of December 2011 for all temporary agency workers.

We will keep you posted on any developments in relation to the Temporary Agency Work Bill.

For further information or assistance on the above points call HRP on 01 676 0006.

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