Select Committee on European Scrutiny Twentieth Report


4 Temporary Work

(24066)

15098/02

COM(02)701

Amended draft Directive on working conditions for temporary workers.

Legal baseArticle 137(2)EC; co-decision; qualified majority voting
DepartmentTrade and Industry
Basis of considerationMinister's letters of 16 April and 6 May
Previous Committee ReportsHC 63-vii (2002-03), paragraph 7 (15 January 2003) and HC 63-xii (2002-03), paragraph 3 (12 February 2003).
To be discussed in Council3 June 2003
Committee's assessmentLegally and politically important
Committee's decisionNot cleared; further information requested

Background

4.1 When we last considered this document (in February), we decided to keep it under scrutiny until we knew the outcome of the discussion at the March meeting of the Employment, Social Policy, Health and Consumer Affairs Council. We also asked the Minister of State for Employment Relations, Industry and the Regions (Mr Alan Johnson) for further clarification of his concern about the possible impact of the revised draft Directive on Community anti-discrimination legislation.

The Minister's letter of 16 April

4.2 In his letter of 16 April, the Minister reports on the Council meeting and other developments as follows:

"At the Council of Ministers on 6 March, the Presidency concluded that there was the political will to reach agreement in June, but that the dossier was not yet ready for political agreement. The Presidency concluded that, in reaching agreement, the three key outstanding issues should be treated as a package. These issues are: the length of the 'qualifying period' or 'derogation period' after which equal treatment must apply, in Article 5.4 of the Directive; Article 4, requiring a review of restrictions on the use of agency workers; and Article 1.3, which allows limited exclusions from the Directive for retraining and reintegration programmes.

"Since the Commission issued its revised proposal in November 2002, the Council has agreed a number of technical changes to the wording. COREPER[5] has agreed on a specific exclusion from the scope of the Directive for occupational social security schemes, including occupational sick pay schemes and occupational pension schemes, and financial participation schemes. This has yet to be discussed by the Council of Ministers."

4.3 In response to our request for clarification, the Minister says:

"As I set out in my letter of 14 February, the proposal requires that, in applying equal treatment to agency workers in respect of pay and working time, the rules in force in the user undertaking on the protection of pregnant women, equality between men and women and action taken to prevent discrimination on the grounds of race, religion, disability, sexual orientation and age must be applied. The UK has been questioning the impact of this requirement, in particular whether it would allow agency workers to compare themselves to permanent employees for the purposes of legislation preventing discrimination on the grounds of sex, race, disability, religion or belief, age or sexual orientation in respect of pay and working time. The directive requires that an agency worker must be paid the salary and have the holidays and working hours that he/she would have been paid, had he/she been employed directly by the user undertaking. . If these terms were discriminatory on any of the grounds listed above, the effect of the Directive may be that an agency worker could challenge them. Employers are already required by law not to discriminate against their workers on the grounds of sex, race or disability and my Department is introducing legislation that will outlaw discrimination in employment on the grounds of religion and sexual orientation later this year and legislation outlawing discrimination on the grounds of age in 2006.

"We have been seeking assurances that the provision described above is not intended to have the effect of extending European legislation preventing discrimination. The Commission and the Council Legal Service have expressed their view that the Directive will not extend the application of EU legislation under articles 141 and 13, which prevents the categories of discrimination listed. I am considering the merits of a minute statement,[6] reiterating this interpretation."

4.4 The Minister further tells us:

"The UK continues to support a directive in principle, but as I explained to the Committee on 10 July last year, we take the view that further flexibilities are needed in order to ensure that the Directive will work in practice in the UK and elsewhere. The best solution, as I outlined to the Committee, would be to extend the period after which equal treatment must apply to agency workers; this is currently six weeks. The UK continues to seek a longer period, although I am now satisfied that our objectives of achieving the correct balance between worker protection and labour market flexibility could be met by a derogation period of less than 12 months."

The Minister's letter of 6 May

4.5 The Minister has now written again. He explains that the Greek Presidency has renewed its push for agreement on the proposal, and it is very possible that it will be voted on at the Employment, Social Policy, Health and Consumer Affairs Council on 3 June. He tells us:

"I would therefore want to be in a position to vote in favour of a proposal which achieved the UK aims of a directive that struck an appropriate balance between worker protection and flexibility."

He offers to meet the Committee, if that would be helpful.

4.6 The Minister continues:

"It is difficult to anticipate at this point exactly what will be on the table by the June Council. The Presidency has produced a compromise package based on a longer derogation period, which would be subject to a review after a certain period of time, This compromise package would also remove the obligation on member states to inform the Commission of their review of restrictions on the use of agency workers and the explicit obligation to remove unjustified restrictions. It would allow Member States to provide that the Directive did not apply to agency workers whose employment was part of a specific public or publicly supported vocational training, reintegration or retraining programme, including programmes provided for by legislative measures. This package will be discussed by COREPER on 7 May."

4.7 The Minister then reports:

"In Council Working Group negotiations, the Government has successfully secured an exclusion for occupational pensions and occupational sick pay, which significantly reduces the burdens the proposal would impose. This change is of course subject to agreement at the Council of Ministers level.

"I explained in the Explanatory Memorandum [of 6 January ][7] that we take the view that further flexibilities are needed in order to ensure that the Directive will work in practice in the UK and elsewhere. The exclusion for occupational pensions mentioned above is an extremely important flexibility in this respect. However, it will also be important to avoid regulatory burdens in making the comparison between the wages and other conditions of agency workers and permanent workers which may deter the use of agency workers. As I outlined to the Committee, the best way to achieve this would be to extend the period after which equal treatment must apply to agency workers; the current Commission proposal is six weeks. The UK continues to seek a significantly longer period, in order to achieve the correct balance between worker protection and labour market flexibility."

4.8 The Minister reminds us that in his January Explanatory Memorandum he reported that the UK had raised the question of whether a Directive with a treaty base of 137(6) could cover pay. He continues:

"Since the Nice Treaty came into force earlier this year, Article 137(6) has become Article 137(5) The Council Legal Service has advised that Article 137(5) of the treaty would not preclude Directives agreed under Article 137 from covering pay in the context of preventing less favourable treatment of one type of worker as compared to another. This is the aim of the proposed Directive on temporary agency workers. However, their advice is that a Directive agreed in accordance with article 137 could not set wage levels, due to the effect of article 137(5). My officials are considering this advice."

Conclusion

4.9 We thank the Minister for his letters. As a result of the first, we now have a better understanding of his concern about the possible extension of European anti-discrimination legislation, and note that he is considering the merits of a minute statement[8] on this issue.

4.10 With regard to the second, we appreciate that the Minister is doing his best to keep us informed of the progress of negotiations, and to explain the UK's stance. It appears that, from the UK's perspective, the key issues are the exclusion for occupational pensions and the length of the derogation period after which equal treatment must apply. We note that the Government is now prepared to accept a derogation period of less than twelve months, although it still considers six weeks to be too short.

4.11 Despite the Minister's helpfulness, we do not feel able to clear the proposal while so many uncertainties remain. We ask him to write after the 7 May COREPER meeting with further information. If the Presidency's "compromise package" becomes an unofficial text, we ask to receive an Explanatory Memorandum on it as soon as possible.


5   Committee of Permanent Representatives. Back

6   A statement in the Minutes of the Council at which political agreement is reached. Back

7   See HC 63-vii (2002-03), paragraph 7 (15 January 2003). Back

8   A statement in the Minutes of the Council at which political agreement is reached. Back


 
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