The deadline for the implementation of the Temporary Agency Workers Directive (2008/104/EC) (the “Directive”) was 5 December 2011. Therefore, from this time, it was directly effective. The Directive introduces important new protections for temporary agency workers and in so doing applies the principle of equal treatment between temporary agency workers and directly recruited employees in relation to basic working and employment conditions. The Protection of Employees (Temporary Agency Work) Bill 2011 (the “Bill”) which transposes the Directive into Irish law was published on 16 December 2011. When the Bill is enacted it will have retrospective effect from 5 December 2011.
It is possible that this retrospective effect could be challenged by employers who are not emanations of the State on constitutional grounds. EU law provides that direct effect will only apply to emanations of the State and then only where the Directive is clear, precise and unconditional. However, the Explanatory memorandum to the Bill states that the retrospective provisions will not apply to the provisions of the Bill that create offences.
Who does the Directive apply to?
The Directive applies to temporary agency workers who are employed by an employment agency under a contract of employment and are assigned to work temporarily for and under the direction and supervision of the hirer of the temporary agency worker (the “Hirer”). However, the following persons will be excluded from the scope of the legislation:- self employed persons, those employed under managed service contracts and in respect of pay only, agency workers who have a permanent contract of employment with the agency and are paid between assignments.
With effect from 5 December 2011, temporary agency workers are entitled to equal treatment in respect of basic working and employment conditions as if they were recruited directly by the Hirer to occupy the same job. The Bill provides for equality in respect of the following basic working and employment conditions:
- duration of working time, rest breaks, rest periods, night work, annual leave and public holidays; and
Pay is defined in the Bill as basic pay and any pay in excess of basic pay in respect of shift work, piece work, overtime, unsocial hours worked and hours worked on a Sunday. However, other pay components such as, occupational pension schemes, financial participation schemes, sick pay schemes, benefit in kind and bonuses are not included.
Temporary agency workers are entitled to equal access to collective facilities and amenities such as canteen or other similar facilities, child care facilities and access to transport services unless there are objective grounds that justify less favourable treatment.
Equal treatment applies from “day 1” of the temporary agency worker’s assignment. This means that there is no qualifying service period in Ireland for the Directive to be applicable to agency workers as in other jurisdictions like the UK (where agency workers must be employed by the Hirer for 12 weeks prior to being entitled to equal treatment) as the Government did not reach agreement with the social partners in this regard prior to 5 December 2011.
As employer, the employment agency has primary responsibility for ensuring that equal treatment is provided to agency workers. However, this is dependant on the employment agency being provided with sufficient up-to-date information by the Hirer. The Bill provides that there is an onus on the Hirer to provide the employment agency with all such information which the agency reasonably requires in order to comply with the equal treatment requirements of the Bill. The Bill provides that the Hirer will indemnify the employment agency in respect of any loss incurred by the agency that is attributable to the Hirer’s failure to comply with its obligations.
Temporary agency workers can seek redress against their employer by presenting a complaint to a Rights Commissioner and either party may appeal the decision to the Labour Court. The Rights Commissioner may order that a specific course of action is followed and/ or require the employer to pay compensation of up to 2 years remuneration.
In light of the developments set out above, it would be advisable for Hirers and employment agencies to take practical steps now to limit their liability. Hirers should, if they have not done so already:
- undertake an audit of the temporary agency workers engaged by them and their terms and conditions of engagement;
- consider every term and condition they offer their employees, identify whether its needs to be matched for temporary agency workers and quantify the potential cost;
- furnish such information as the employment agency reasonably requires in order to comply with the equal treatment requirements;
- review their contractual documentation with the employment agency and obtain legal assistance in drafting appropriate indemnities and warranties for insertion into new or revised contracts.
Employment agencies should:
- review their contractual documentation with Hirers and obtain legal assistance in drafting appropriate indemnities and warranties for insertion into new or revised contracts;
- include in contractual documentation with Hirers an obligation on Hirers to provide information about pay and basic working conditions of the Hirer’s comparable staff to the agency in order to ensure that equal treatment is maintained between agency workers and the Hirer’s staff.