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Temporary Agency Work in light of EU experience Annemarie Muntz Eurociett President

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Temporary Agency Work in light of EU experience Annemarie Muntz Eurociett President

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    1. Temporary Agency Work in light of EU experience Annemarie Muntz Eurociett President

    2. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    3. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    4. 4 Eurociett at a glance Eurociett is the European organisation of Ciett, the International Confederation of Private Employment Agencies Is the only authoritative voice representing the interests of agency work businesses in Europe: Recognised as such by the European Institutions, key European stakeholders (e.g. ETUC, UNI-Europa, BusinessEurope) as well as national governments Brings together 25 national federations of private employment agencies and 6 of the largest European staffing companies: Adecco, Kelly Services, Manpower, Randstad, USG People, Vedior Eurociett Members gather private companies operating in the following HR activities: temporary agency work, recruitment, interim management, executive search, outplacement, training Eurociett Members gathers 30,000 branches, employ 210,000 internal staff and 3.2 million agency workers on a daily average (full time equivalent)

    5. 5 National Federation members

    6. 6 Corporate Members

    7. 7 Eurocietts long term objectives To protect and promote the interests of Private Employment Agencies in order to enhance their long term growth To create the most suitable legal environment for the industry to operate in To improve the image of the industry and strengthen its representativity To seek greater recognition for the contribution that private employment agencies make to labour markets, especially in relation with 3 key aspects: employment creation (provide work to job-seekers, stepping-stone to permanent employment, enhance workers employability, help to create jobs that wouldnt exist otherwise); access to and integration in the labour market of diversified categories of workers (disabled, first-time entrants, long-term unemployed); economic growth and public budget incomes

    8. 8 Main past achievements Liberalisation of the legislation: filing of complaint with the European Commission in 1992 against Italy, Spain and Germany after which these countries gradually liberalised their agency work regulations: (Spain 1994), (Italy 1997+ Biaggi amendment 2003), (Germany 1992-1997, 2004) And thereafter legal recognition Greece (1999), Finland (1993), Sweden (1993) Further deregulation achieved in The Netherlands (1998 and 2003), Belgium (1997 and 2003), France (2005) 2. Better visibility/recognition of the agency work sector: Developing research on the AW industry: strategic reports (McKinsey 2000 Bain 2007), review on regulation (Dublin Foundation 2006), data collecting ( Entering European social dialogue with Uni-Europa: 2 joint-declaration signed (AWD in 2001, Flexicurity in 2007) Recognition of the agency work sector as a contributor to the realisation of the Lisbon objectives in the 'Kok report Role of agency work in implementing Flexicurity policies has been recognised in the European Commissions Communication Towards Common Principles of Flexicurity

    9. 9 Activities and Organisation Efficient Political lobbying Most important function is to help its members conduct their businesses in a legal and regulatory environment that is positive and supportive Intelligence monitoring Public Affairs Report (monthly), monitoring the latest developments in terms of European policy issues Internal membership newsletter (quarterly), to inform about the life of the confederation and its members Website which includes a large Research Center Best practices sharing Regular meetings and dedicated seminars with the purpose to share Members best practices on topics relevant to the whole industry Annual conference Surveys and data collecting Gathering of key data on the Private Employment Agency industry, and development of surveys related to our industry A Board (9 members) meeting 4 times a year and a General Assembly (all members - highest ranking decision making body) meeting 3 times A permanent Secretariat staff Since 2005, Ciett and Eurociett have set up a combined permanent bureau, comprising 3 full time employees, in order to strengthen the professionalism and activities of the confederation

    10. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    11. 11 A triangular relationship

    12. 12 A very tightly regulated market A well-regulated industry at international, European and national levels International level: Legal framework provided by ILO Convention n181 and Recommendation n188 on PrEAs Self-regulation provided by Cietts Code of Conduct EU Level Posting of Workers Directive Health & Safety Directive Personal data protection Directive Information on employment contract Directive Draft Agency Work Directive Eurocietts Code of Conduct National level Industry mainly regulated by national labour law Legal framework strengthened by collective labour agreements in many countries PrEA trade organisations national Code of Conduct Sector growth leads to legislative revisions (better balance between flexibility and security and/or increased scope)

    13. 13 Legal Restrictions in Europe (EU 15) Waves of legislation in 70s, late 80s, late 90s Large range of legal restrictions and requirements Most countries have licensing and/or authorisation schemes Sectoral bans frequent (e.g. public sector, construction) Maximum length of assignment and limitation of contract renewals Equal treatment conditions are common Internal regulations through national Codes of Conduct Robust sector-level collective bargaining in most countries Sector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = Public services Sweden = HealthcareSector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = Public services Sweden = Healthcare

    14. 14 Legal Restrictions in Europe (EU 15) Sector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = 15 sectors (Public services, construction) Sweden = HealthcareSector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = 15 sectors (Public services, construction) Sweden = Healthcare

    15. 15 Legal Restrictions in Europe (EU 12 new MS) Most EU new Member States have a licensing or authorisation system Otherwise half have little or no statutory framework Laws introduced recently (ILO relevant) Based on a triangular relationship where TWA is the direct employer Sectoral restrictions limited to dangerous work; however, other restrictions apply None MS have sector-level bargaining for the time being Sector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = Public services Sweden = HealthcareSector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = Public services Sweden = Healthcare

    16. 16 Legal Restrictions in Europe (EU 12 new MS) Sector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = Public services Sweden = HealthcareSector prohibition for Temporary Work Austria = healthcare Belgium = public services + removal + harbour based entreprises France = only Work Doctors by law (but also Public Services by habit & trade unions) Netherlands = shipping Spain = Public services Sweden = Healthcare

    17. 17 Equal treatment for Temporary Agency Workers Sector prohibition Austria = health care Belgium = public services + removal +batellerieSector prohibition Austria = health care Belgium = public services + removal +batellerie

    18. 18 Yasal engellerin kaldirilmasi ynnde bir egilim Main Changes in Regulation Japan: opening to new new sector (manufacturing) Greece: Legal recognition of the industry (2001) Germany: In 2004, the German law changed with the interdictions of equal pay right many restrictions were removed (eg sector ban in Construction). Detachment, re-employment and fixed term employment allowed once per employee Spain: Following the legal recognition of the industry in 1994, the regulatory framework was tightened in 1999, with the requirement that agency workers be paid equal wages to non- agency workers in user companies. However, over the whole period 1989 to 1999, the aggregate Spanish regulatory environment has become less prohibitive. Italy: Legal recognition of the industry (1998) + opening to HR services (1993 Biagi reforms) Denmark: liberal because no specific law, however industry organised through Collective Labour Agreements Portugal: Legal recognition of the industry (1989) Belgium: Extension maximum length of assignment (1997) + opening to new sectors (Horeca, construction, agriculture) Norway: Lifting of restrictions (1999-2000) Finland: Legal recognition of the industry (1994) Sweden: Legal recognition of the industry (1993) + liberal because no specific law, however industry organised through Collective Labour Agreements Netherlands: Lifting time limits and sector restrictions (98) Source: Deloitte & Touche Bakkenist; ETUI; Morgan Stanley Dean Witter Research; McKinsey & Company Analysis, Euro-CIETT Main Changes in Regulation Japan: opening to new new sector (manufacturing) Greece: Legal recognition of the industry (2001) Germany: In 2004, the German law changed with the interdictions of equal pay right many restrictions were removed (eg sector ban in Construction). Detachment, re-employment and fixed term employment allowed once per employee Spain: Following the legal recognition of the industry in 1994, the regulatory framework was tightened in 1999, with the requirement that agency workers be paid equal wages to non- agency workers in user companies. However, over the whole period 1989 to 1999, the aggregate Spanish regulatory environment has become less prohibitive. Italy: Legal recognition of the industry (1998) + opening to HR services (1993 Biagi reforms) Denmark: liberal because no specific law, however industry organised through Collective Labour Agreements Portugal: Legal recognition of the industry (1989) Belgium: Extension maximum length of assignment (1997) + opening to new sectors (Horeca, construction, agriculture) Norway: Lifting of restrictions (1999-2000) Finland: Legal recognition of the industry (1994) Sweden: Legal recognition of the industry (1993) + liberal because no specific law, however industry organised through Collective Labour Agreements Netherlands: Lifting time limits and sector restrictions (98) Source: Deloitte & Touche Bakkenist; ETUI; Morgan Stanley Dean Witter Research; McKinsey & Company Analysis, Euro-CIETT

    19. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    20. 20 The Agency Work market in Europe Rather small but significant sector On EU average, accounts for 1.7% of total national labour force Total number of Agency Workers = 3.2 million daily FTE (2006) Around 30,000 branches from 20,000 different firms Annual turnover of at least 85 billion New markets are emerging: countries from Central and Eastern Europe (new EU Member States) Sectoral distribution differs between countries 1/3 directed towards industry/manufacturing (AT, FR, NL, PT) 1/3 services (EL, ES, NO, SE, UK) and the remainder (BE, DK, FI, IT) more mixed minority (DK, NL, NO, UK) have significant public sector usage Profile of average agency worker: Mainly low-skilled work, but moving upwards to higher skilled jobs Male and young workers prominent Meets companies requirement for more labour flexibility while protecting working conditions (best balance between flexibility and employment security)

    21. 21 TAW penetration rate widely varies across countries

    22. 22 Number of branches

    23. 23 Number of Private Employment Agencies

    24. 24 Number of Agency Workers

    25. 25 AWB worldwide turnover evolution

    26. 26 AWB worldwide turnover split up (2005)

    27. 27 Level of industry consolidation differs by country

    28. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    29. 29 An increasingly recognised industry European Union European Commission Communication Flexicurity Public-private partnership of all stakeholders (public authorities at all levels, educaiton and training providers, social partners, companies, NGOs, private employment agencies) could contribute to effectiveness of active labour market policies. Kok Report for Commission (Jobs, Jobs, Jobs - 2003): Temporary work agencies should have their place in a modern labour market as new intermediaries that can support flexibility and mobility of firms and workers, while offering security for workers.[] Removing obstacles to temporary agency work could significantly support job opportunities and job matching. European Trade Union Confederation (ETUC) Temporary work agencies play a useful role in increasingly complex labour markets in Services Directive brochure - 2005 International Labour Organisation: Convention 181 (1997) Being aware of the importance of flexibility in the functioning of labour markets, and () recognizing the role which private employment agencies may play in a well-functioning labour market, one purpose of this Convention is to allow the operation of private employment agencies as well as the protection of the workers using their services, within the framework of its provisions.

    30. 30 PrEAs contribution to labour markets Provide work to job-seekers and contribute to reducing unemployment (both frictional and long-term) employ 3.2 million agency workers in the EU 27 on a daily basis (FTE) and 210,000 internal staff employees Help to create jobs that would not exist otherwise TAW has created 350K jobs over 03-05 in 6 European countries only (UK, Germany, France, Belgium, Netherlands and Spain), accounting for 24% of total new job creation) 80% of them are additional ones, not substituting to permanent ones. Furthermore, the PrEA industry itself has created 15,000 jobs over 03-05 (internal staff working in TAW branches) Act as a stepping-stone to permanent employment 41% of agency workers are in longer-term employment within one year from their agency work assignment Improve labour market fluidity match labour force to companies production needs virtually immediately, through their network of 30,000 branches across Europe meet a genuine demand for flexible work: 33% of agency workers have a real preference for agency work

    31. 31 PrEAs contribution to labour markets (2) Enhance workers employability By keeping workers providing training and by multiplying experience in very specific working environment Play a key role in Active Labour Market Policies by being reliable partners of public employment services in governmental programmes, by putting more people at work and by cooperating with Public Employment Services Help disadvantaged publics to enter the labour market and increase diversity of workforce 40% of the workers employed through PrEAs belong to the category defined by the OECD as outsiders to the labour market (i.e. long-term unemployed, first-time entrants to the labour market, women returning to the labour market, elderly people, etc.) Contribute to economic growth and tax revenues By putting millions of people at work, PrEAs reduce the unemployment allowances paid by Member States while increasing public incomes through the social contributions paid by these agency workers PrEA services also contribute to reduce undeclared work in some of the Western European countries, the industrys tax and fiscal revenues (income tax, social charges, VAT) can account for up to 1% of national income

    32. 32 TAW plays an active role in different kinds of transitions in the labour market

    33. 33 A large part of TAWorkers were previously student or unemployed

    34. 34 TAW is an effective driver against long-term unemployment

    35. 35 And undeclared work

    36. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    37. 37 Main reasons to work through a PrEA

    38. 38 PrEAs supply companies with skills and workforce flexibility

    39. 39 PrEAs provide added value HR services PrEAs are expanding their basic service offering and are assuming a more important role in wider human resource-related services, such as recruiting, training and the management of human resource-intensive processes. This is occurring particularly in European countries with higher PrEA penetration rates. Our survey of user companies suggests that there is a strong demand for these services, although in some European countries, PrEAs are prohibited from offering them. PrEAs provide recruiting services. In countries where this is permitted, PrEAs not only help companies recruit agency workers, but they also use their recruiting, assessment and matching skills to find permanent workers for the company (Case 7). In the company survey, 41 per cent of respondents indicated that they would probably use this service in the future (Exhibit 12). PrEAs are expanding their basic service offering and are assuming a more important role in wider human resource-related services, such as recruiting, training and the management of human resource-intensive processes. This is occurring particularly in European countries with higher PrEA penetration rates. Our survey of user companies suggests that there is a strong demand for these services, although in some European countries, PrEAs are prohibited from offering them. PrEAs provide recruiting services. In countries where this is permitted, PrEAs not only help companies recruit agency workers, but they also use their recruiting, assessment and matching skills to find permanent workers for the company (Case 7). In the company survey, 41 per cent of respondents indicated that they would probably use this service in the future (Exhibit 12).

    40. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

    41. 41 Eurociett Public Affairs Priorities for 2007 Flexicurity (see details below) Blocked Agency Work Directive (see details below) Debate on the modernisation of Labour Law (see details below) Workers mobility and Posting of Workers Positioning agency work as facilitator for the mobility of workers Monitoring political developments concerning a better implementation of the Posting of Workers Directive (enforcement and information of cross-border agency workers)

    42. 42 The Flexicurity debate A communication from the Commission on Flexicurity was launched last June, aiming at defining European common guiding principles to implement flexicurity Commission has identified 4 components to Flexicurity Flexible and secure contractual arrangements Effective Active Labour Market Policies Reliable and responsive Life-long learning systems Modern Social Security systems + crucial role of social partners and social dialogue 4 challenges to be faced by EU member States Two-tier labour markets with a large share of outsiders and strict regulation on open-ended contracts (FR/IT/SP/GR/PT) Little dynamic labour markets with a large share of workers with high job security but few opportunities to find new employment if fired (AT/GER/BE) Dynamic labour markets but with skills gaps (UK, NL, IRL) Labour markets offering lack of opportunities to outsiders due to benefit dependence or informal work (new EU MS) Eurociett uses the debate as an essential tool to shape a better understanding of the positive role the AW plays in the labour market

    43. 43 Flexicurity: a concept that balances the interests of both workers and employers

    44. 44 Eurociett recommendations on Flexicurity The TAW contribution to a better functioning labour market should be recognised, especially regarding its contribution to active labour market policies Temporary work agencies contribute to active labour market policies by offering job opportunities, by using their networking experience in matching demand and supply and by improving the employability of workers The temporary work industry has signed cooperation agreements with public employment services in many European countries, focusing on the information exchange, on enhancing the employability of workers and on supporting specific target groups (like first-time entrants, long-term unemployment) Unjustified obstacles and restrictions to temporary agency work services, which are still widespread, should be reviewed and lifted particularly sectoral bans, maximum length of assignments or limitations of renewals The TAW industry should be included in the 2008 revised Lisbon Employment Guidelines to ensure that temporary agency work is included as an important element in national labour market policies

    45. 45 The Agency Work Directive At end of 1990s, European Commission wanted to regulate atypical work Part-time work: Directive adopted in 1997 Fixed-term contract: Directive adopted in 1999 Temporary Agency Work (TAW): no agreement between social partners nor EU Member States ? Commission drafted a Directive Since 2002, draft TAW Directive has been blocked in Council UK, Ireland, Denmark and Germany = blocking minority Stalemate on Equal Treatment provision (same working conditions between agency workers and permanent workers) and on lifting restrictions Eurociett Position Current draft Directive outdated Eurociett not opposed as such to a European regulatory framework for the agency work industry New draft should allow for a better development of the agency work industry, based on the following regulatory principles: Freedom to provide services & freedom of establishment Freedom to choose for agency workers, agencies and user companies Protection of workers rights Regulatory compliance and controls

    46. 46 Modernising Labour Law (Green Paper) European Commission (DG Employment) launched a public consultation in November 2006 on how to modernise labour law A Green Paper was published calling for input from all EU stakeholders Particular focus on workers in vulnerable positions and atypical forms of employment Main messages of the Eurociett submission: Temporary agency work is a well-regulated, established form of flexible employment. Need to lift restrictions faced by temporary work agencies in order to create a level-playing field. Flexicurity concept is to be put forward as an approach for a meaningful labour market reform. There is no need to clarify the employment status of agency workers, as it is clearly defined by national labour law. The rights and working conditions of temporary agency workers are clearly defined by national law. A follow-up Communication on Labour Law expected in November

    47. 47 Why using the services of a PrEA? To manage external flexibility needs To absorb fluctuations (seasonal or unexpected peaks of output, economic cycle) To create a shift dedicated to the launch of a new product/service To supplement internal workforce To handle sick and leave situations To source and test future employees To perform work that requires skills not available in-house To have access to a full range of value added HR services e.g. training, recruitment, outplacement, interim management To manage HR related administration and red tape To increase companies productivity by allowing them to focus on core business

    48. Content of presentation Eurociett structure & profile Regulation on Agency Work The Agency Work market in Europe Private Employment Agencies contribution to the labour market Agency work benefits for workers and businesses EU Policy priorities for Eurociett Open discussion

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