– Restrictions to temporary work are blocking jobs
growth across Europe
New research published by Eurociett, the European Confederation
of Private Employment Agencies, says that lifting restrictions
on temporary work across the European Union could create
some 2.1m new jobs and boost the European economy by Euros
12.5bn in the next five years.
The research* has been undertaken by Bain and Company,
management consultants, in six European countries –
the UK, France, Belgium, Germany, Spain and the Netherlands
– that together accounted for 85 per cent of the Euros90bn
market for private agency workers in 2006.
Labour market reforms in countries such as Germany, Italy
and France have created significant growth in the European
market for temporary agency workers in the past few years.
The number of agency workers in the EU more than doubled
between 1996 and 2006, from 1.6m to 3.3m full-time equivalent
But growth could have been stronger still, suggests the
report, had there been a greater willingness of some European
countries to go further in lifting restrictions on temporary
Restrictions have been retained in the French, Belgian
and Spanish public sectors and in the German and Spanish
Additionally some countries, such as France, impose maximum
time limits for temporary assignments and limit the scope
for contract renewals. Tightly drawn labour laws in France,
Belgium and Spain, insist that employers seeking to enter
agreements with temporary worker agencies must outline “reasons
of use” to justify the contracts.
Trade unions must be notified of some of these arrangements
and in a number of countries - Belgium for example –
unions have the power to intervene if they object to specified
reasons of use.
National variations in labour laws have hampered past attempts
to create greater harmonisation of European labour laws.
Italy, for example, operates a quota system limiting the
percentage of agency workers that can be allocated to any
Attempts to introduce an EU Agency Workers Directive were
shelved some years ago when the UK, Ireland and Denmark,
supported by Germany and Poland, objected to a central proposition
that temporary workers should have the same pay and conditions
as those doing the same work full time.
The directive was back on the agenda at the European Council
this week but the UK’s Recruitment and Employment
Confederation is still arguing that in its existing form,
the directive would result in more rather than less regulatory
“There simply isn’t the abuse on the ground
to support the need for this directive. It is not in the
interests of recruitment agencies to treat agency workers
badly, as without them they would not have a business,”
says Helen Reynolds, the REC’s acting chief executive.
Whatever the status of the directive, the Eurociett report
seems to be placing greater faith on national bodies and
governments to introduce specific reforms. “The message
in the report is quite simple. If you lift certain restrictions
there will be a substantial positive effect in the growth
of jobs,” says Annemarie Muntz, president of Eurociett
and head of public affairs at Vedior, the staffing services
and recruitment group.
The Eurociett report welcomed industry initiatives aimed
at securing better co-operation with trade unions. Industry
bodies have also committed themselves to cleaning up the
agency business that has been undermined by sharp practice,
including the illegal use of temporary labour by unscrupulous
Beyond such abuses, however, the industry must also overcome
a persistent suspicion of temporary working underpinned
by historic trade union opposition to the use of casual
It goes against the grain for trade unions to give ground
on temporary working when they have struggled in the past
to establish better pay and conditions for full-time workers.
The full-time job remains the ideal for many within the
But organised labour has been faced with seismic structural
change across industry in the past 20 years with the decline
or uprooting of entire industries, the emergence of cheaper
labour markets, and the globalisation of product and labour
Companies today are balancing their need for skilled labour
against the regulatory framework that can restrict employment
flexibility. The provision of flexible labour using agencies,
says the report, is sometimes crucial to investment decisions.
Such arrangements, it points out, can help to protect the
jobs of permanent workers since the work allocated to agencies
can be expanded or contracted depending on cyclical or seasonal
“Staffing jobs are a terrific bridge into employment,
as agencies are able to match supply and demand in a very
efficient way. Our sense is that Europe needs to move boldly
on introducing much greater flexibility into labour markets,”
says Peter Siderman, managing director of the Adecco Institute,
a research organisation established by Adecco, the staffing
He points to a flexible arrangement created by a number
of big European employers, including Airbus Industries that
has 11,000 permanent and 4,500 temporary workers (30 per
cent of them engineers) in Germany.
BMW’s futuristic car factory in Leipzig has 2,500
permanent and 1,000 temps in addition to having special
production lines focused on employing workers over forty
years of age.
Trade union intransigence can be an obstacle to such arrangements
that are led by competitive demands. Another issue for labour
markets is the way that robust job protection can make it
difficult for “outsiders” to get jobs.
Yet temporary work, when used as a conduit in to the labour
market through the so-called “temp to perm”
route, creates greater opportunities for the long-term unemployed.
Not all agency work, however, should be seen as a route
to full-time working. The Eurociett report points out that
temporary work can prove attractive for disabled workers,
older workers and those among ethnic minorities. Full-time
working for some of these people may be impractical or undesirable,
so the promise of an organised, protected, full-time job
can prove unintentionally discriminatory.
The rolling back of labour restrictions across Europe has
been a slow, often piecemeal and occasionally turbulent
process. Today, with an expanded European Union, including
former communist regimes, the labour markets of individual
states are at different stages of maturity.
While the European Council continues to debate broader
reform, Eurociett has shown that action in just two specific
areas could make a substantial economic difference.
Removal of sector bans and broadening the “reasons
of use” restrictions, says the report, would be sufficient
to create an extra 2.1m full-time equivalent jobs both directly
and through structural growth of the agency industry over
five years. “The jobs created by lifting restrictions
in sectors that have been walled-off to temporary work,
would tend to be overwhelmingly new, and not in replacement
of permanent employees, simply because these sectors also
need the flexibility to react to needs as they arise,”
says Mr Siderman.
The accompanying Euros12.5 bn boost to the European economy,
says the report, would be achieved through the generation
of stronger economic activity supplemented by greater tax
income and savings in unemployment benefit.
That seems powerful evidence to support Eurociett’s
argument that the private agency sector has established
itself as an “engine for job creation” within
*More Work Opportunities for More people, unlocking the
private agency industry’s contribution to a better
functioning labour market, is available the Eurociett website:
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