temporary employment agencies - DOC by localh


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Eva Soumeli

Temporary agency work in Cyprus
This article attempts to make an initial presentation of the existing situation on the question of
temporary agency work in Cyprus, as it has developed up to June 2005.

Extent of temporary employment
In Cyprus, ordinary (permanent, full-time) employment is the main form of paid employment. Of
the flexible forms of employment, which are as a whole a new phenomenon, the most common
are part-time and temporary employment. However, compared to 2002, in 2003 there was a
substantial increase both in part-time and in temporary employment. As regards temporary
employment only, in Cyprus as a rule it includes people in paid employment with fixed-term or
works contracts, and people employed on a seasonal basis, mainly as paid employees in specific
sectors of economic activity, especially in tourism and the agricultural sector (farming and animal
husbandry). According to official data from the Statistical Service of Cyprus, derived from the
Labour Force Survey for the reference year of 2003 (data for 2004 are in the process of being
published), temporary employment has increased by 3.4% over 2002, from 9.1% to 12.5% of
total employment. At the same time a clear gap has been recorded: on the one hand it is based on
gender, with women significantly in the lead, and on the other it is based on ethnic origin, i.e.
foreigners compared to Cypriot workers.

Temporary agency work: definitions and regulatory framework
The practices of finding and assigning temporary work by special temporary employment
agencies are not implemented in Cyprus, at least not within a clearly defined institutional
framework. In other words, no provision is made for the term temporary agency work as a
separate type of employment relationship either by the law or by collective labour agreement.
According to the Ministry of Labour, the placement of temporary employees in companies by
means of specialized agencies is practically non-existent.
However, since 1997 the law has allowed the establishment of Private Employment Agencies
(IGEEs), whose main activity is to find, on behalf of an employer, jobs for Cypriot and foreign
workers. More specifically, the establishment and operation of IGEEs is regulated by the laws on
Private Employment Agencies passed between 1997 and 2002: basic Law 8(I) 1997, amended by
Laws 195(I)/2002 and 211(I)/2002. The main provisions of the current legislation refer to the
 A IGEE is any legal or natural person who acts as a mediator for employment of people
  available to work or who provides employers with such people.
 The operation of a IGEE is prohibited unless it has previously obtained an operating licence
   issued by the Ministry of Labour and Social Insurance.
 Before a IGEE comes into operation an application for the issuance of an operating licence
   must be submitted on the designated form.
 For a private employment agency to be granted an operating licence, the following conditions
   must apply:
1. When a natural person operates a IGEE, that person must be a citizen of the Republic of
   Cyprus or a EU member state.
2. When a IGEE is operated by a partnership, then the majority of partners must be citizens of
   the Republic or a EU member state.
3. When a company operates the Agency, the majority of shares have to be held by citizens of
   the Republic or a EU member state.
4. The person responsible for the operation or management of a IGEE must not have been
    sentenced for an offence involving immoral character.
5. The person responsible for the operation of the IGEE must hold at least a secondary education
    certificate or other equivalent qualifications and have relevant experience. However, this
    condition is not required of persons who on 14 February 1997 were occupied as artistic
    agents after receiving a licence from the competent authorities.
 An operating licence for a private employment agency is issued on the designated form and is
  effective for two years from its date of issuance. The licence may be renewed, provided that
  the conditions of the Law continue to be met.
 A private employment agency is not allowed to engage in the following activities:
6. Promote job applicants without instructions in good faith from the employer.
7. Falsify or knowingly provide wrong information concerning the applicant’s qualifications.
8. Promote an applicant to perform work in a workplace where the IGEE has knowledge that a
    strike or lockout is in progress, without informing the applicant of the situation.
9. Urge applicants it has placed in work to take up employment with another employer without
   the consent of the current employer.
10. Promote the employment of children or young people under 18 years of age.
 The employee must not be charged by an employer or any private employment agency in the
   form of direct or indirect payment for the purpose of job search, placement or maintenance of
 The application for the issuance of a licence to operate a private employment agency is
   submitted on the designated form to the local District Employment Agencies, and must be
   accompanied by the appropriate certificates and documentary evidence.

Despite the lack of a specialized institutional framework regarding temporary agency work, the

legislation on IGEEs has established a precedent for the creation of an institutional framework for

companies hiring out labour. In this framework, also of decisive importance is the manner in

which the existing IGEEs operate in practice. According to the Department of Labour of the
Ministry of Labour and Social Insurance, a large number of workers, almost all of them foreign

workers, have registered complaints about a range of irregularities on the part of the IGEEs, most

commonly involving charges levied on job applicants and false information regarding the nature,

terms and conditions of employment. For their part, many IGEEs report repeated violations of or

total failure to implement the relevant legislation, the unrestricted issuance of licences to new

agencies, and the large number of illegal IGEEs, which in some towns are more numerous than

the licensed IGEEs. As regards the illegal IGEEs in particular, although no relevant study has

been conducted, there are indications that an employment relationship exists between the

mediating company and the employees. In other words, the role of the IGEEs may extend to the

engagement of staff for the purpose of hiring out.

Public dialogue
The question of temporary agency work has not yet been the subject of dialogue on any level. For
that reason, neither the employer organisations nor the trade unions have formed a framework of
positions and proposals in relation to this question. However, in the context of the resumption of
the dialogue on the European level by the Dutch Presidency on 1 September 2004, the Ministry of
Labour and Social Insurance took a position on the impact the draft Directive would have on the
labour market in Cyprus. The Ministry of Labour’s most important position concerned the time
limits within which the right to be excluded from the principle of non-discrimination will be
granted in relation to the pay of temporary employees, and in particular the assurance that those
time limits will remain as short as possible. Otherwise, and especially if UK’ s recommendations
are accepted (exemption period of at least six months), there will be a serious danger that Cypriot
companies will seek to meet permanent needs using temporary employees (mainly EU nationals)
with poorer terms and conditions of employment than those provided for in the collective
agreements, or those applying to permanent staff (Cypriots and EU nationals). Such a
development would have a negative impact on the (full-time) employment of Cypriots, with a
possible increase in unemployment, whereas since the use of the maximum period of exemption
would be regulated on the national level after consultation with the social partners, companies in
UK that already make extensive use of temporary agency work would have a competitive
advantage over other companies operating in other member states.

In the framework of market liberalisation, and given that the institution of temporary employment
is considered by the authorities responsible for employment and industrial relations matters to be
useful for the development of labour market flexibility for the purpose of boosting employment, it
is imperative to lay down a framework for the operation of temporary agency work. However, as
in the case of the IGEEs, full, strict implementation of the legislation will be of decisive
importance in order to avoid generalization of the phenomenon of exploitation of workers.
(Eva Soumeli, INEK/PEO)

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