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Limiting the impact on jobs Implementation of the Protection of Employees (Temporary Agency Work Bill) 2011 Introduction The National Recruitment Federation is the representative body of the recruitment agency industry in Ireland. The Recruitment sector is a significant demographic in the Irish economy, employing over 3,000 staff and approximately 40,000 temporary workers. The industry is worth €1billion per annum. The NRF has a dual customer base of both employers and employees. Its real constituency is thus employment. The NRF welcomes any measure that supports equal treatment of temporary agency workers and supports the principles and intent of the bill. Our concerns surround the implementation of the bill and the significant jobs losses, which are already manifest, that poor implementation of the bill may cause. Employment agencies will bear almost the entire responsibility of implementation of the bill. We are unique in our knowledge of how the temporary agency market operates. Jobs and the creation and protection of jobs are our lifeblood. It is therefore imperative that our unique insight into the mechanics of implementation be fully considered and incorporated into the enactment of the Bill. The industry has made representations to all parties over the past three years, emphasising the need for: 1) a timely and orderly implementation of the directive, 2) clarity on responsibilities and process and 3) a derogation period. All of the above were required to protect jobs, none have been delivered and jobs have already been lost. As the bill moves rapidly from draft to enactment, there is still time to make changes to the mechanics of the bill that may mitigate some job losses and the barrage of claims that poor implementation will encourage. This submission highlights the changes required and outlines solutions to the issues. Substantive Issues: 1. Retrospective Implementation –Section 1 Issue: The bill provides for retrospective implementation, but specifically excludes a hirer’s obligation to provide information to the employment agency retrospectively (Section 1 (2). The legitimacy of retrospective implementation of the bill is challenged. Employers have stated their refusal to pay increased costs, now or after the bill is enacted. Employment agencies will be unable to afford any substantive pay claims without redress from employers. . Employment agencies will be unable to afford retrospective liabilities without redress or indemnity. A logjam of claims and legal disputes will follow. Legitimate claims for increased pay will be withheld pending the outcome of a legal process. Solution: The bill to be effective as of its enactment. or Section 14 to be deemed to have come into operation on December 5th 2011 2. Comparator Worker – Section 6 Issue: The bill, in Section 6 (1) (a) gives precedence to an existing ‘flesh and blood’ comparator. “the basic working and employment conditions to which an agency worker is entitled shall be the same as the basic working and employment conditions to which – a comparable worker is entitled” This differs from the Directive which states (Chapter II Article 5, Clause I): “The basic working and employment conditions of temporary agency workers shall be….. at least those that would apply if they had been recruited directly by that undertaking to occupy the same job” The difference is substantive and is best illustrated by example: An administrative assistant of 25 years service has, over time and by virtue of experience and long service, been awarded salary increments to, say, a salary of €50,000. This assistant takes extended leave and is replaced by a temporary agency worker. The temporary agency worker has a minimum level of experience but is capable of performing the work on a temporary basis. This worker would usually expect a salary of €25,000. In this instance, the hirer and the employment agency would be compelled by the Bill to pay a salary of €50,000 pa. Following the Directive, the salary would be €25,000 pa. Further problems may arise whereby pay levels in a company have been reduced and yet the ‘comparable worker’ is on a previous, higher, pay grade. This may work to prohibit companies from hiring agency workers into particular positions or facilitate employers who wish to circumvent a new pay cap. Solution: The wording of the Directive be adopted and take precedence within Section 6 (1). Issue 2: The comparable worker is defined by five conditions in Section 2 (5) which include the provision for work of equal value to be a determinant of a comparable worker. This considerably broadens the scope of the bill and allows for a subjectivity that will be unhelpful and encourage tenuous claims. Solution: The hirer must be given precedence in determining the comparable worker. 3. Liability – Section 14 Issue: The bill provides (Section 14) it is the hirer’s duty to provide necessary information to the agency. It allows that the hirer shall indemnify the agency for its failure to do so. This will lead to an unworkable process in the event of any claim. Again, best illustrated by example. An employer hires an operative from an agency and stipulates that the correct rate is, say, €9.50 per hour. The agency pays in accordance with this. The worker determines that the correct rate should be considerably more and takes a claim. The agency will have to defend and settle a claim based on the (incorrect) information provided. The employer has no opportunity to defend their position as they are not joined to the action. The agency then seeks redress from the employer, their customer. Where such issues arise with a large number of workers and over a considerable period of time, the amounts involved may be substantial and prejudicial to the survival of the agency. There is established precedence that where the substantive issue lies entirely within the control of the hirer, then the liability also is with the hirer. This applies specifically to Health & Safety and Unfair Dismissals and must also apply to this bill. Solution: The Bill must stipulate, within Section 14, that where there is an established failure to provide the required information, then ownership of liability, redress and penalisation must stand with the hirer. 4. Redress – Section 22 Issue: Section 22 deals with the penalisation of workers who may take or consider taking a case under this Act. It provides safeguards for works and is a vital protection for agency workers. Definitions of penalisation include transfer of duties, change of location, and change in hours in addition to lay-off or dismissal However, the bill fails to take account of the nature of agency work. It is the very nature of much agency work that assignments may be of a short term nature and often of indeterminate length. The location of assignments will obviously vary as may the rate of pay and other conditions. The termination of an assignment is, in almost all cases, at the behest of the hirer, and due to the completion of the work in hand or the return to work of an absent direct employee. Under Section 22, any or all of the above would currently, of themselves, constitute penalisation of any worker invoking, or giving notice of intent to invoke, the Act and its provisions. It is clearly vital that a worker be protected from any penalisation by an agency or a hirer, but changes to and terminations of temporary assignments are very much in the nature of temporary work itself and should not, de facto, be considered penalisation. By way of example, an agency worker is hired to cover a direct employee on extended leave. Towards the end of this assignment the agency worker gives notice of intent to pursue a claim under the act. From this point, the agency may not, without being in breach of Section 22, either terminate or re-assign the temporary worker. It can be seen that this provision that has the intent to protect temporary workers may actually discourage the engagement of temporary workers altogether. The provision may also encourage tenuous claims. Solution: A clause must be inserted to allow for ‘natural’ termination or change of assignment, “termination of an assignment at the instruction of the hirer or assignation of a new engagement by the agency shall not of themselves constitute penalisation”. Other Issues Definition of Agency Workers Issue: The bill does not make specific exclusion of limited company contractors not employees of contractor companies. Clarity is sought. Definition of Pay Issue: The list of included or excluded items is not exhaustive. The assumption is that all other payments are excluded, confirmation of this, especially for bonus payments and additional maternity provision would be helpful ends.
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