Employers who engage agency workers to cover a short term need such as an upturn in business activity, sickness absence, maternity leave, etc. should be aware of the potentially far reaching consequences of the Temporary Agency Workers Directive. The Directive is due to be transposed into Irish domestic law before 5 December 2011.

The current statutory position on the rights of agency workers is confusing, in that the agency is responsible for an agency worker’s statutory rights under various statutes such as the Payment of Wages Act, 1991, Maternity Protection Acts, 1994-2004, Employment Equality Acts, 1998-2008, and the Redundancy Payments Acts, 1967-2007. However, the end user is deemed to be the employer in circumstances where an agency worker is dismissed and takes a claim under the provisions of the Unfair Dismissals Acts, 1997-2007.

As such, while agency workers currently have some statutory protection, it is on a piecemeal basis which falls far short of being treated equally with employees engaged directly by the end user. The first objective of the Directive is to ensure that temporary workers employed by employment agencies and placed in an end user organisation, are provided with equal basic terms and conditions when compared to direct employees of the end user, who carry out the same or similar work. The second objective of the Directive, (which is not dealt with in this article), is to recognise temporary work agencies as the ultimate employer of the agency worker.

The provisions of the Directive are ‘fall back’ ones which apply if the Government does not secure the agreement of the social partners to arrangements which would ensure the objective of the Directive is achieved.

It is open to the Government in Ireland to agree derogations to the equal treatment provisions of the Directive, once agency workers are still afforded an adequate level of protection. One example is that the Government could agree that an agency worker has to have a qualifying period of service before they can avail of the protections of the Directive, in default of which agency workers are entitled to the protection of the Directive from their first day of service. The UK, which has already passed legislation transposing the Directive, has agreed such a derogation to the effect that agency workers in the UK do not become entitled to the protection of the Directive until after 12 weeks service.

Because ‘pay’ is not defined in the Directive, there is considerable ambiguity as to whether an agency worker is entitled only to the same hourly rate as an employee of the end user or whether pay includes benefits such as sick pay, maternity pay, profit sharing schemes etc. which the end user provides to its employees. Again, the UK can give us some guidance on this point in that it defines pay as not just including the basic hourly rate but all pay for work done (such as bonus) but not extending to benefits such as pension and sick pay, which employees of the end user enjoy because of the permanency/longevity of their relationship with their employer.

The same concern arises in relation to working conditions. By way of example, currently an agency worker is only entitled to 20 days statutory holidays. However when the Directive is transposed, they may well become entitled to the contractual annual leave entitlement of a direct employee of the end user, if this is higher.

Another difficulty which employers may have with the Directive is in identifying the terms and conditions to which the agency worker is entitled. The Directive states that basic working conditions include those set out in statute, collective agreements, and/ or other binding general provisions in force in the end user. However, many employers have fluid rates of pay which are based on the rate at which they hired an employee increased by performance related increases. This leaves the end user with a dilemma as to what framework he/she can use to ensure that the agency worker is treated equally to one of his/her own employees. This dilemma is exacerbated if the agency worker has been engaged by the end user to carry out a unique task which no employee of the end user undertakes or has undertaken in the past.

The Directive also provides that agency workers cannot be prevented from taking up employment with the end user and must also be informed of any permanent employment opportunities that arise in the end user organisation. Further, agency workers must be given equal access to amenities such as workplace canteens, gyms, transport etc. together with vocational training, unless a difference in treatment can be justified by objective reasons.

The terms of the Directive could prove to be onerous on employers and serve to make the engagement of agency workers unattractive and logistically challenging unless the Government can agree the form in which the Directive will be transposed into Irish law in a way that ensures the objectives of the Directive are met, while at the same time, ensuring that the engagement of agency workers is not prohibitively expensive or logistically cumbersome to the end user. Given the central involvement of the Labour Party in our current Government, it will be interesting to see how the Directive is transposed into domestic law and we will continue to monitor this topic and report on it in our subsequent ezines.