7. TEMPORARY WORK
(24066)
15098/02
COM(02) 701
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Amended draft Directive on working conditions for temporary workers.
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| Legal base: | Article 137(2)EC; co-decision; qualified majority voting
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| Document originated: | 28 November 2002
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| Deposited in Parliament: | 6 December 2002
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| Department: | Trade and Industry
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| Basis of consideration: | EM of 6 January 2003
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| Previous Committee Report: | None; but see (23376) 7430/02: HC 152-xxviii (2001-02), paragraph 1 (8 May 2002)
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| To be discussed in Council: | Date not set
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| Committee's assessment: | Legally and politically important
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| Committee's decision: | Not cleared; further information requested
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Background
7.1 The first version of this draft Directive[28]
was brought forward by the Commission following the breakdown
of negotiations between the European social partners on the issue.
When we considered it last May, we recommended it for debate,
given that the subject-matter had already been the subject of
substantial, if unsuccessful, negotiation, and that the proposal
was clearly controversial, with costs and benefits which were
hard to assess objectively. The debate took place in Standing
Committee C on 10 July 2002.[29]
7.2 The draft Directive was discussed at the Employment,
Social Policy, Health and Consumer Affairs Council on 3 December,
where differences among Member States were aired. Amongst other
issues, the UK continued to argue( unsuccessfully) for a longer
derogation than the six weeks proposed in the document.
7.3 The European Parliament completed its first reading
of the proposal in November. In response, the Commission has issued
a revised draft Directive, taking account of a significant number
of the Parliament's amendments.
7.4 The Minister for Employment Relations and the Regions
(Mr Alan Johnson) has deposited the revised proposal, together
with an Explanatory Memorandum. In addition, he has sent us a
Regulatory Impact Assessment, updated in the light of the revised
proposal, and a summary of the views expressed during the UK public
consultation which was held from 1 July to 18 November 2002 (before
the publication of the revised proposal).
The amended draft Directive
7.5 The main changes from the original proposal include
two new aims: "to ensure the protection of temporary workers"
and "to contribute to creating jobs".
7.6 The method of comparison has been recast. Instead
of requiring that an agency worker should not be given less favourable
basic working and employment conditions than a comparable permanent
worker in the user company, the proposal now requires that agency
workers should not be given less favourable working and employment
conditions than would apply if they had been recruited directly
to do the same work by the user company. This requirement applies
to pay and working time rights and conditions derived from legislative
provisions, collective agreements and "other general provisions"
(Article 5.1).
7.7 The three derogations from this equal treatment principle
remain. That relating to the situation where temporary agency
workers are already covered by collective agreements (either at
the agency or at the user company) which provide an adequate level
of protection is virtually unchanged, but those that may be applied
where assignments last less than six weeks and where agency workers
are employed on permanent employment contracts have been narrowed
so that they apply only to pay.
7.8 The proposal requires Member States periodically
to review restrictions on the use of temporary agency workers
and take measures to make it easier for them to find permanent
jobs. In its amended version, the draft Directive now allows agencies
to receive "a reasonable level of recompense" from user
companies which recruit their agency workers.
The Government's view
7.9 The Minister comments:
"The Government believes that temporary agency workers deserve
adequate protection, which is why the national minimum wage and
working time legislation make specific provisions to cover them.
Agency work can provide a useful way in to the labour market for
workers. It can increase labour market flexibility in ways which
benefit both business and workers. It can also offer workers who
want to control or vary their patterns of work greater choice
than permanent work. The Government can support a directive which
would achieve these aims.
"However the Government remains concerned that the directive
risks decreasing the attractiveness of agency workers to user
companies, which might reduce the number of jobs available. It
is necessary that the directive is sufficiently flexible to accommodate
UK practices and to accommodate the diverse labour market practices
in the EU.
"The Commission's revised proposal has yet to be examined
in the working group. In particular the Government would like
to clarify how the new article 5 [the principle of non-discrimination]
would work in practice.
"The UK has raised the question of whether a directive with
a treaty base of Article 137(6) can cover pay. The Commission
and several other Member States are of the view that it can because
it only addresses pay in terms of non-discrimination and does
not set absolute pay levels. In the revised proposal, the Commission
is proposing that Member States can define pay in accordance with
their national law (Article 5.5). The Government has continued
to reserve its position on the inclusion of pay under Article
137 pending further clarification of the definition of pay.
"The UK has also raised the question of the potential effect
the revised draft directive could have on Community legislation
preventing discrimination on the grounds of sex, race, disability,
sexual orientation, religion and age."
7.10 The Minister tells us that, as with the original
proposal, implementing legislation would be required to provide
for equal treatment between agency workers and permanent workers,
and some amendments to existing measures might be necessary.
7.11 The Minister reports that the Council working group
will continue negotiations under the Greek Presidency, which is
aiming to reach a common position at the Council in March or June.
The Regulatory Impact Assessment (RIA)
7.12 The Government's revised RIA estimates the costs
and benefits of the amended proposal published on 28 November
2002. Following the UK consultation exercise, the methodology
used to calculate the impact of equal pay for agency workers has
been improved. The revised RIA also calculates the costs and benefits
of increased annual leave for agency workers likely to result
from the Directive.
7.13 The revised RIA estimates that about 600,000 people
are working as temporary workers in the UK at any particular time
(the original estimate was 700,000). Both the quantifiable costs
and benefits are higher in the revised RIA than in the first version;
the report emphasises that there may be more costs and benefits
which are difficult to quantify. It is still not possible to predict
the overall effect on the labour market for agency workers. The
RIA points out that the revised draft Directive is likely to be
better for small user companies, since it requires that equal
treatment is applied to agency workers only where there is a pay
scale, collective agreement or legal provision on pay levels.
Many small businesses do not have such arrangements.
The consultation exercise
7.14 Ninety-eight responses were received: a majority
from user companies and agencies and just under a quarter from
Trade Unions. With regard to the impact of the proposals on the
UK labour market as a whole, business representatives considered
that the draft Directive could remove the incentive for companies
to use agency workers, thereby removing employment opportunities
and restricting labour market flexibility. Union responses rejected
this scenario, citing the rise in employment since the introduction
of the National Minimum Wage and the Working Time Regulations.
This pattern of response is consistent: business representatives
were generally opposed to the proposals; Trade Union representatives
were in favour. Trade Union representatives cited a number of
problems with the current UK situation, arguing that employers
were using "flexibility" as an excuse to dismiss agency
workers at will and to pay the lowest wages they could. User companies
and agencies were generally satisfied with the situation.
7.15 With regard to the proposed qualifying period of
six weeks, most user companies and agencies argued for an extension
— with suggestions ranging from twelve weeks to eighteen
months. Trade Unions were strongly opposed to a qualifying period,
considering that the principle of non-discrimination should apply
from the day of starting work.
Conclusion
7.16 On the basis of the UK consultation exercise,
it is easy to see why the social partners failed to negotiate
this measure. Nor is it proving easy for the Commission to develop
a proposal which finds favour with the individual Member States
and with the European Parliament. The revised draft Directive
certainly does not address the Government's key concerns,
such as the issue of pay, and the qualifying period; indeed, it
may represent a backward step as far as the UK is concerned, although
the restrained tone of the Minister's Explanatory Memorandum does
not explicitly say so.
7.17 We ask to be kept informed on the progress of
negotiations on this important issue, in case we consider that
it merits a further debate. Meanwhile, we ask the Minister why
he considers the revised draft Directive could have an effect
on Community anti-discrimination legislation. We also ask what
the current position in the UK is in relation to grievance and
disciplinary procedures for agency workers and whether this would
change if the current proposals were adopted.
7.18 We will keep the document under scrutiny until
we have the Minister's response.
28 (23376)
7430/02:see headnote to this paragraph. Back
29
Official Report, European Standing Committee C, 10 July
2002. Back
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