The deadline for transposition of the EU Agency Workers Directive has been and gone (5th December 2011) and an agreement was not reached between the social partners, the Government, the Employers Unions and the Employee Unions, and no legislation is in place as yet, however following a meeting between Peninsula Business Services (Ireland) Ltd and the Department of Jobs, Enterprise and Innovation on 8th December, the Government have said they will have a Bill drafted on or before December 16th 2011, with enactment in early January 2012.
It has been two years since the Directive was passed at European Level, and the Government have been aware of the expected date it was to be transposed to Irish Legislation, however some large Economic issues have raised their heads over the past two years such as the EU/IMF bailout and the General Election and the Directive had been put on the back burner. Now we have reached a situation where the directive was due to be implemented and no agreement was reached on its transposition to Irish Legislation.
Equal Treatment
The EU proposes the initial Directive and it is up to the member states to work out the finer points and adapt it to their own legislative system. In the UK they have agreed that the equal treatment in regards to pay and conditions will not come into force until the Agency Worker has been employed for 12 weeks with the Company they are on assignment to. This “Derogation” was agreed between the Social Partners, and it is an agreement such as this that is the key issue in regards to the transposition to Irish Legislation. As it stands the Directive proposes equal treatment from Day One for Agency Workers. This equal treatment does not mean they can compare themselves to another person in the role (that person may have longer service or be employed on a higher wage when wages were higher at the entry level), however they must receive the same terms and conditions they would have received were they to be directly employed by the End User and had not come through an Agency. This means that any conditions in relation to Working Time, Overtime, Rest Periods, Night work, Annual Leave & Public Holidays, and Pay will need to be afforded to the Agency Worker upon commencement or, if there is a derogation established, after this qualifying period. Basically any terms and conditions that would normally be included in the Companies Contracts/Terms and Conditions of Employment by collective agreement or otherwise would need to be afforded to the Agency Worker.
Direct Effect
As it currently stands the European Commission has clarified what will be the position from the 5th December, were no agreement to be reached before then. If there is an agreement between the social partners before legislation is enacted then this agreement will stand, however in the interim the Directive will have the EU doctrine of “direct effect” until this time. The Directive in its current form (provision of equal treatment from day one) will be deemed to have been implemented into the member state using the current wording and directly applicable to any Agency Workers in the Public sector or companies emanating from the state. Ordinarily with the doctrine of direct effect Private sector companies would not fall under its remit, however, the Government (upon receiving advice from the Attorney General) have moved to include any private sector companies employing Agency Workers under the directive also. This will mean that all Agency workers will be entitled to equal treatment from day one, or companies will run the risk of being brought to tribunal by the workers.
It has been described as unprecedented that a Directive is considered to apply to the private sector where no national legislation has been introduced. It is difficult to see how an Agency Worker in the Private sector would be able to sue their employer for not implementing the Directive where there is no national legislation on the issue, however the Government have been clear on this and would see it as applicable to the Private sector from the 5th December and not the date of the new legislation. It is however open to constitutional challenge from employers, with a strong case for success were a case to be brought.
Negotiation for a Qualifying Period
On Wednesday 30th November, negotiations finally took place on the drafting of the legislation, a mere five days before the legislation was due to be implemented, however these negotiations broke down between the Government and the Unions with the derogation being the source of the breakdown. The General Secretary of the Irish Congress of Trade Unions, David Begg, said no persuasive case had been advanced to justify a derogation from the immediate equal treatment provision.
The Government has since publically stated that as the discussions between the social partners have not yielded a derogation, and that it is not open to the Government to legislate for such a qualifying period. Accordingly the Directive will be effective from day one with no lead in or derogation.
Understandably the Employers Unions and the Government stand to lose out by this, however Employee Unions could also lose out from failing to negotiate, despite being in favour of some sort of qualifying period. The length of the derogation requested by each side was apparently too far apart and no middle ground could be reached. There is also the possibility that by failing to agree on this could lose any goodwill previously afforded to the unions by Government. The media and general public are likely to criticise the social partners for allowing regulations that is projected to cause an estimated 9,400 job losses in the Agency Workers sector (a sector which does not boast a large union representation).
It was very much in the Government interest to hold negotiations and agree such a qualifying period as the Government is one of the largest users of Agency Workers in the State. As a result of the public Sector recruitment freeze, Agency workers have been heavily utilised in the H.S.E and under the directive come into effect senior Economist Jim Power estimates it could potentially add as much as an additional €100 million per year to the running of the Health Service. There is also the likelihood of infringement proceedings against the state from Europe, resulting in potential fines running into the thousands daily.
Collective Bargaining
The Employee Unions were positioning themselves to use the leverage they have in the Agency worker negotiations as a bargaining chip in other pieces of legislation and by all accounts the outstanding issue of “Collective Bargaining” seems to have been foremost on the agenda. Other issues such as the new Joint Labour Committee Legislation seemed to also be on the table with SIPTU vice president Patricia King stating publically in recent weeks that the Union would not agree to any derogation until they were satisfied on the position in relation to the future of the JLC/ERO structures. It is however the “Collective Bargaining” issue that seems to have been the prize for unions, and getting the Government to deliver on their commitment of their promises for this, and Patricia King had also alluded to this by seeking specific assurances that the right to Collective Bargaining which is set out the Programme for Government was delivered “as promised” sooner rather than later. It is the 100 year anniversary of the 1913 lock out next year and the Employee Unions (ICTU) would have liked to see some manner of collective bargaining introduced in time for this centenary celebration. However it appears the Government had no appetite for this level of negotiation and so talks broke down, resulting in a scenario now where there is no derogation or qualifying period.
Pay
The Government has clarified one important aspect of the derogation, and defined what “pay” is under the legislation. The directive states “[t]he basic working and employment conditions applicable to temporary agency workers should be at least those which would apply to such workers if they were recruited by the user undertaking to occupy the same job.” This equal treatment does not mean they can compare themselves to another person in the role (that person may have longer service or be employed on a higher wage when wages were higher at the entry level), however they must receive the same terms and conditions they would have received were they to be directly employed by the End User and had not come through an Agency. These terms and conditions relate to any conditions in relation to Working Time, Rest Periods, Night work, Annual Leave & Public Holidays, and Pay and will need to be afforded to the Agency Worker upon commencement.
The government has stated that in the legislation Pay will be defined as Basic Pay, Shift Premiums, Piece Rates, Overtime Premiums, Unsocial Hours Premiums, and a Sunday Premium. They (Government) have also gone as far as to state what will be an exhaustive list for items excluded for the purposes of pay, examples being Occupational Pension Schemes, Financial Participation Schemes, Sick Pay Schemes, Benefit in Kind, and Bonus Payments will not fall under the definition of pay for the purposes of equal treatment.
Ambiguity
There is uncertainty over whether the directive will apply for existing employees or those taken on in the future. The Government statements say measures should be put in place from the 5th December whereas other reports indicate it will only apply to existing workers, calling into question the retrospective nature of the legislation.
One thing is clear and that is that without a derogation there is not only potential job losses (8,400 agency workers and a further 1000 from the recruitment industry) but also a loss of competitiveness by comparison to UK counterparts which have a 12 week derogation established. It may also see some large multi nationals, who would be prolific users of Agency Workers, jumping ship and heading for countries which provide them with a more economically viable legislative framework. In any economy job losses are detrimental and this directive could potentially wipe out the effectiveness of the Agency worker and lead to a contraction of the recruitment industry.
There were widespread calls on the social partners to behave responsibly and have the interests of the economy in mind when striking a deal, and judging by the comments of the Government these calls have gone unheard.
If your business employs Agency Workers and you are unsure of your potential liability please contact the Peninsula Business Services Advice Line on 01 855 5050 and speak to one of our advisors.
