Agency worker law

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Agency worker law refers to a body of law which regulates the conduct of employment agencies and the labour law rights of people who get jobs through them. The typical situation involves the person going to an employment agency and then the employment agency sending the person to an actual employer for proper work.

Contents

Such arrangements are referred to by different terminology across jurisdictions. Some examples of terms used are labour hire, labour brokering, labor contracting, permatemping, or 'agency worker' arrangements.

History

The International Labour Organization called for the establishment of public employment agencies in their place. To prevent the abusive practices of private agencies, they were to be fully abolished or at least tightly regulated. In most countries, they are legal but regulated.

Probably inspired by the dissenting judgments in a United States Supreme Court case called Adams v. Tanner , the International Labour Organization's first ever Recommendation was targeted at fee-charging agencies. The Unemployment Recommendation, 1919 (No.1), Art. 1 called for each member to

"take measures to prohibit the establishment of employment agencies which charge fees or which carry on their business for profit. Where such agencies already exist, it is further recommended that they be permitted to operate only under government licenses, and that all practicable measures be taken to abolish such agencies as soon as possible."

The Unemployment Convention, 1919, Art. 2 required instead the alternative of

"a system of free public employment agencies under the control of a central authority. Committees, which shall include representatives of employers and workers, shall be appointed to advise on matters concerning the carrying on of these agencies."

In 1933, the Fee-Charging Employment Agencies Convention (No.34) formally called for abolition. The exception was if the agencies were licensed and a fee scale was agreed in advance. In 1949, a new revised Convention (No.96) was produced. That kept the same scheme but secured an ‘opt out’ (Art. 2) for members that did not wish to sign up. Agencies were an increasingly entrenched part of the labor market. The United States did not sign up to the Conventions. The latest Convention, the Private Employment Agencies Convention, 1997 (No.181) takes a much softer stance and calls merely for regulation.

Particular jurisdictions

Australia

Enterprise bargaining agreements (EBAs) applicable to a workplace do not legally cover labour hire employees and their employers, unless there is a clause written into the agreement expressing that to be the case. Instead, EBAs are formed between employees of the labour hire company, and the labour hire company itself. This can result in a pay difference between actual employees of a worksite, and those working there through labour hire; a aspect that has been criticized by the Australian Labor Party.

European Union

The problem related to the Temporary agency work in Europe has formally achieved its maturity through the implementation of the Council Directive 2008/104/ECafter nearly three decades of debate. In this way, the directive as being the third part of the European Union's employment law package to protect atypical working ( which includes part-time workers and fixed-term workers), aims both to establish a suitable framework for the use of temporary agency work and to develop a flexible form of working.

Germany

In Germany the Arbeitnehmerüberlassungsgesetz (Employee Hiring Law of 1972) regulates the agency relationship. It Following the provisions in the Burgerliches Gesetzbuch (Civil Code) on the law of leasing goods or finance, the agency relationship is seen as a triangular arrangement, with different obligations on each side. The worker is an employee of the agency only. The contract between the agency and the end-employer is termed as a hire of labour. Between the worker and the end-employer there is no contract. There is only a statutory obligation to give equal treatment in terms and conditions of work.

Licensing Requirements (AÜG License) Temporary employment agencies must obtain an Arbeitnehmerüberlassungserlaubnis (employee leasing permit) from the Federal Employment Agency (Bundesagentur für Arbeit). The licensing process involves:

Financial reliability checks - Agencies must demonstrate sufficient capital and financial stability Personal suitability assessments - Key personnel must meet strict character and competency requirements Compliance monitoring - Regular audits ensure adherence to labour standards and equal treatment provisions License renewal - Permits must be renewed periodically, typically every five years

The Triangular Legal Relationship Drawing from civil law principles in the Bürgerliches Gesetzbuch (BGB), the system creates three distinct legal relationships:

Agency-Worker Employment Contract - The temporary worker is exclusively employed by the agency, which bears full employer responsibilities including wages, social insurance, and workplace safety Agency-Client Service Agreement - This commercial contract governs the terms of worker provision, fees, and liability allocation Worker-Client Statutory Relationship - While no direct employment contract exists, the client company has specific obligations regarding workplace integration, safety supervision, and equal treatment

United Kingdom

The UK's main piece of legislation falls under the Employment Agencies Act 1973, which required licensing until 1994. There is an exception, for employment agencies working in the agricultural, shellfishing and food packing sectors, under the Gangmasters (Licensing) Act 2004.

United States

See also

Notes

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