Precarious employment and EU measures to handle it - Comparative labour law

OUTSIDERS INSIDERS

- short-term employment relationships - Permanent employment

- low skilled jobs - more skilled jobs

- little or no prospect of internal promotion - access to career path

- low returns to education or experience - access vocational training

- determination of wages primarily - minimum wage granted

by market forces (no minimum wage) directive 99/70/EC

EU LAW - Framework agreement ( )

How the EU handle the temporary employment?

It exists a directive (99/70) about fixed term contracts. It has been the result of a framework agreement

(= which is a collective bargaining at the EU level).

The directive recognized that:

- is and will be the

open-term contract general form of employment relationship between

a perfect world we should have only open ended contracts)

employers and workers (in

Indeed, open term contract is the most desirable prospective for both the worker and the

country. For the worker because it recognizes more rights and less uncertainty, for the country

because having means having workers.

outsiders low skilled

- fixed-term employment contracts respond, in certain circumstances, to the needs

However,

of both employers and workers (i.e. seasonal working, work in entertainment industry, etc…)

The compromise:

The use of fixed term contracts has to be on a “basis acceptable”.

According to the aims of the directive, acceptable basis means:

- improving the quality of fixed term contracts, which implies granting the principle of no

discrimination.

- establishing a framework to arising from the use of

prevent abuse successive fixed-term

or relationships. Where the abuse describes a situation in which a

employment contracts

permanent position is filled by a fixed term worker.

Principle of no discrimination

In respect of employment conditions, fixed-term workers shall not be treated in a less

- than comparable permanent workers (=that is the permanent worker, in

favourable manner

the same establishment, engaged in the same or similar work/occupation, with the same

qualifications/skills); unless different treatment is justified on objective grounds.

An example of objective grounds can be: if I have sign a fixed term contract, holidays or other

particular benefits will be only a fraction of the one recognized to a permanent worker.

- Where appropriate, the pro rata temporis means

pro rata temporis

principle of shall apply.(

a wage proportional to the working time)

Abuse prevention

To prevent abuses arising from the use of successive fixed-term employment contracts (in

Member States shall introduce of the

relation with a permanent position), one or more

following measures:

1. justifying the of such contracts or relationships

objective reasons renewal

I want to hire someone again to do this I need to prove that there is an objective

justification, that I really him.

need

2. the of successive fixed-term employment contracts or

maximum total duration

relationships.

Some countries say you can hire someone by a fixed term contract for no more than 1 or

2 years or whatever. This is not exactly a protection of workers, it seems unfair from a

worker point of view. (the company may say I really want to hire you again but the

maximum total duration does not allow me to do so. But if this is true, why did you not

hire me with an open ended contract?)

3. the of such contracts or relationships.

number of renewals

A govern can say to companies you can hire workers through a fixed term contracts for

a certain number of times.

Note that the justification is related only to the renewal.

i.e. The first time I hire you by a fixed term contract. Starting from the second one, I should

provide a justification. However, some countries want it also for the first contract.

Some examples.

FRANCE

1. objective justification(also for the first renewal), like

Renewal:

- absents substitution,

- Temporary increase of activity

- Seasonal works

- Other temporary enterprise's needs

In practice, it is easy to find a justification

2. max. 18 months (including extensions and renewals) (exceptionally 24 months)

Duration:

3. only 1

Renewal:

ITALY

- 2001 – Restricted to objective technical, organisational, replacement reasons ( a justification

was required also for the first contract)

- 2012 - Free access to the first fixed-term contract for up to (following contracts

twelve months

should be based on objective company’s needs)

- 2014 – Free access to fixed-term contracts for up to (including extensions and

36 months

renewals (max. 5)). Even longer, if admitted by Collective Agreements.

This happens in order to avoid possible fights against workers, who often complaint about the

no-existence of the company justification.

DENMARK (flexible country)

- Related to objective reasons

- No max number of renewals (or extension). No max duration. However, they should be based

on objective reasons.

- In practice, Courts tend to limit FTC to max. 2 years.

Temporary agency work (Directive n. 2008/104/CE).

:

Scheme

- the Employee and paid by the Agency (with a fixed-term contract or an indefinite-

is hired

time contract)

- the Employee of the User-undertaking and he works temporarily

is placed at the disposal

(rarely, for an indefinite-time - staff leasing) under the User supervision and direction

- the User the agency for the service (labour supply)

pays

According to these scheme the user undertaking will pay to the agency, let’s say 1100 per month:

- 1000: the worker wage

- 100: the agency fees

This means that the user has to pay more than the case of direct employment. So, why the user use

it? Flexibility: if the employees does not fill my expectations, I can just say to the agency to take him

back.

Some data

TA Workers are almost of total EU Workforce

2%

(United Kingdom 3.6% - the Netherlands 2.9% - France 1.7% Germany 1.6% Norway and Finland

0.8% - Italy, 0.7 % -Denmark, Slovakia 0.6% - Poland 0.4% - Slovenia and Romania 0.3% - Greece

0.1% )

Duration

Italy 66% of contracts < 1 month; 12% > 3 months ( just for short replacements)

France 45% < 1month; 30% > 3 months

Germany only 7% < 1 month; 64% > 3 months.

Directive 2008/14 It was difficult to find an agreement because some countries used to

It takes more than ten years.

have a very strict regulation of temporary agency work. (like Germany, while in Italy it was forbidden

until 1997).

AIMS:

- of temporary agency workers and of TAW

ensuring the protection improving the quality

- But at the same time, the use of temporary agency work (to create new jobs and to the

boost

development of flexible forms of working)

EU wants a large use of temporary agency workers, because it allows the creation of employment.

Consequently, member states had to on the use of temporary

review any prohibitions or restrictions

agency work by December 2011.

Some restrictions are admitted only if they regard:

- the (especially health and safety at work)

protection of temporary agency workers

- the need to ensure the preventing the abuses

sound functioning of the labour market,

Principle of equal treatment

The of temporary agency workers shall be, for the duration of their

basic working conditions

assignment at a user undertaking, at least those that would apply if they had been recruited

directly by that undertaking to occupy the same job.

Where basic working conditions are working conditions laid down by the national law, in force in the

user undertaking, relating to:

- the duration of working time, overtime, breaks, rest periods, night work, holidays

- pay

- protection of pregnant women and nursing mothers

- protection of children and young people after consulting the social partners.

The Member States may DEROGATE the principle,

I.e. qualifying period for equal treatment (UK 12 weeks for the first 12 weeks I cannot respect the

equal treatment by paying less the worker, Hungary 187 days).

The presence of this derogation makes the directive very weak.

Other rights for temporary agency workers

- Temporary-work agencies in exchange for recruitment

shall not charge workers any fees

- temporary agency workers in

shall be given access to the amenities or collective facilities

the user undertaking (i.e. canteen, child-care facilities and transport services)

- improve in the periods between their assignments and during their

access to training

assignment

Restrictions provided by all the member states (more or less)

- agencies are subject to authorisation, based on a control on financial

Licensing system:

guarantees, expertise in the field, good repute of owners and/or managers

- Bans: Connected to health and safety:

- Construction sector (Germany), Maritime sector (Belgium, Portugal) Transport sector

(Belgium), particularly dangerous jobs (Belgium, France, Poland, Portugal, Slovenia,

Spain),

Related to public order or to the protection of workers:

- shortly after dismissals for economic reasons (Belgium, France, Greece, Italy,

Luxembourg, Poland, Portugal , Slovenia, Spain, Sweden) if a company has fired

a lot of employees, then it cannot hire immediately someone else by a temporary

agency contract.

- adoption of short-time working schemes (reduction of working-time because of crisis)

(France, Italy). cassa integrazione e guadagni in Italy. If I suspend someone because

of a poor workload, then I cannot hire someone else by a temporary agency contract.

- Replacement of workers on strike cannot take place (all countries apart from Ireland,

Cyprus, Estonia, Malta)

The outcome of temporary contracts ( both the first and the second category)

The graphs (slide 15) shows that especially young workers, women and migrants trapped into

temporary employment.

Effects:

- Uncertainty

- Low salaries

- Low employability

- Low productivity

Precarious employment and the great recession

Outcome of the great recession: (slide 17)

Between 2008-2014, in almost all the EU Countries:

- Unemployment increased (including long-term)

- Share of fixed-term contracts in total employment increased

- poverty and people at-risk-of-poverty increased

The young generations paid the highest price:

- youth unemployment rate rose dramatically

- temporary contracts have increased more for young people

- job losses for workers in temporary work were almost four times higher than for those in

permanent employment

- transition from temporary to permanent employment decreased almost everywhere

Unemployment has also risen sharply among the migrant population

- women (particularly with children) and migrant workers are disproportionately represented

in temporary employment

The reaction of national labour law

This is the Flexicurity matrix:

The crisis has generally produced

the worst effects on Countries f