According to a new bill, all temporary workers must have equal treatment so that the rights to the same pay and working conditions as permanent staff.

So far the legal position of temporary workers has not been governed separately in Danish law. The general legislation applicable to wage earners also covers temporary workers. However, the courts have held that the Danish Salaried Employees Act does not apply to temporary workers. The bill is thus the first separate codification of temporary workers' employment conditions in Denmark. The bill is based on EU's Temporary Agency Work Directive.

Applies only to temporary agency workers

The new rules are to apply only to temporary workers who have agreements with agencies to work for user companies. Temporary work is in particular characterised by a tripartite arrangement involving the temporary employment agency, the user company and the temporary worker. Both the agency and the user company exercise employer powers over the temporary worker. Consequently, the Act is not to apply to temporary vacancies during maternity leave and similar positions where the temporary worker is employed directly by a company.

The principle of equal treatment is central

The main purpose of the bill is to secure temporary agency workers certain working conditions and employment terms. Also, the temporary employment agencies are to be recognized as the temporary workers' employers. The principle of equal treatment is the fundamental right in the Temporary Agency Work Directive.

The principle means that the temporary workers are to be treated as if they were employed directly by the user company in a comparable position with respect to working conditions and employment terms covered by the principle of equal treatment. This also applies to rights following from the collective agreement covering the user company.

The temporary worker may also assert rights which are established by custom or which follow from the company's general practice.

The principle of equal treatment does not secure temporary workers the same rights as salaried employees under the Danish Salaried Employees Act regardless that they perform the same work for the user company as salaried employees. However, the principle of equal treatment implies that the temporary worker is entitled to the pay and employment terms which follow from the principle of equal treatment. In such a situation, temporary workers will be entitled to e.g. pay during absence due to sickness as pay is covered by the principle of equal treatment.

Possible to derogate from the Act by collective agreement

The principle of equal treatment can only be derogated from when the temporary employment agency is covered by a collective agreement governing pay and employment terms subject to the principle of equal treatment. This is subject to the condition that the temporary worker is remunerated by the temporary employment agency between assignments.

The Act cannot be derogated from unless the collective agreement is made between "the most" representative social partners in Denmark. To determine whether a collective agreement meets this condition it will be necessary to look at the merits of each case. The motive behind the Act is to secure temporary workers employment terms when they cannot rely on the principle of equal treatment.

The condition means partly that collective agreements between minor social partners cannot be used to derogate from the principle of equal treatment, partly that foreign temporary employment agencies cannot derogate from the principle of equal treatment through collective agreements from the country of origin. The latter consequence of the Act is expected to counteract social dumping of temporary workers.

No obstacle to permanent employment

The Act makes it easier for the temporary worker to become permanently employed by the user company. The reason is that the user company is obliged to give notice of vacant positions in the company. This means that the temporary employment agency and the temporary worker cannot lawfully enter into agreements implying that the temporary worker de facto cannot be permanently employed by the user company.

In practice, the user company are sometimes required to compensate the agency disproportionately in cases where the user company employs a temporary worker on a permanent basis. Such clauses which actually prohibit or prevent permanent employment are invalid. An appropriate remuneration will not be deemed to be a real obstacle provided that the compensation is to be paid by the user company and not by the temporary worker him-/herself.

IUNO's opinion

Temporary employment agencies and user companies should both be aware that the temporary employment agency is liable as the employer of the temporary worker - also in case of termination by notice. In the agreement between the two companies, the parties should, however, still govern who is liable for what in their mutual relationship. IUNO therefore recommends both temporary employment agencies and user companies to review their agreements on this area.

Also, both temporary employment agencies and user companies should look at the procedures they use to secure that temporary workers get the rights given to them by the Act.

It is a draft bill which will be submitted for consultation allowing time to respond until 2 April 2013. This may mean that the bill will be amended before it is tabled in the Danish Parliament. IUNO will follow up on the case.

[The Act implements Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work]