Labour hire

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Labour hire is a form of employment in which an employer directs their de jure employees ("labour hire employees", or "agency workers") to perform work at an external workplace, belonging to a client of the legal employer. [1] [2]

Contents

A labour-hire agency employs workers who are then "on-hired" to perform labour for a second party organisation. The Labour hire agency is responsible for payment and other employee entitlements. The second party organisation directs the worker tasks. [3]

Labour hire is distinct from the more general practices of temporary staffing, or outsourcing; as those concepts aren't predicated on an employee not having a legal contract of employment with their workplace. It is also distinct from the concept of Independent contracting; as a contract of employment exists.

Labour hire industry

Labour hire is often used by employers who want to engage staff temporarily, or have seasonal or other temporal factors reducing the need for direct administrative relationships with employees. [4] Industries that commonly use labour hire include construction, landscaping, mining, event management, fruit picking, cleaning, civil (i.e. traffic control, labourers), and security. [5] The hiring of workers from Labour hire companies provides businesses with extreme flexibility in sourcing labour, and they can alter their workforce rapidly with minimal legal constraints, as the legal employment relationship resides with another employer (i.e. a "no-strings-attached" style). [6]

Major labour hire company logos

Public information on the size of the international labour hire industry is not available. Additionally, many of the major players in the labour hire industry such as Hays do not separately account for fees generated through labour hire, from other recruitment fees within their annual reports. [7] However, annual reports disclosed by the labour hire industry indicate that industry revenue is in excess of hundreds of billions of dollars. [7]

Major players in the international labour hire industry include Hays, Persol Holdings, Recruit, ManpowerGroup, Adecco, Randstad NV, and Serco.

Regulatory approaches

The regulatory approach to labour hire varies greatly by jurisdiction. In the European Union, the Temporary Agency Work Directive 2008 guarantees that all people working through employment agencies must have equal pay and conditions with employees in the same business, performing the same work. [8] In the United Kingdom, a parallel law was enacted to implement that directive. Labour hire is similarly regulated in South Africa and Namibia.

In Australia, Labour hire is not specifically regulated at the federal level, although a number of licensing regimes exist to regulate the conduct of labour hire firms across the States and territories.

In Japan, contract workers must be paid same allowances as salaried staff but need not be given same pensions and bonuses. [9]

Terminology

The concept has varying English language names, depending on jurisdiction. While referred to as "labour hire" in Australia and Namibia, it is referred to as labor contracting or permatemping in the United States, [10] and as Labour brokering in South Africa. [11] Labour hire employees are often referred to as 'agency workers' in the UK and the European Union.

The term for labour hire provider also varies. Alternative terms include Employment agency (UK), professional employer organization (USA), among others.

See also

By country

Related Research Articles

Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.

Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more unions, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.

<span class="mw-page-title-main">Employment</span> Relationship between employee and employer

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work. Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, and disability insurance. Employment is typically governed by employment laws, organization or legal contracts.

<span class="mw-page-title-main">United Kingdom labour law</span>

United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK have a minimum set of employment rights, from Acts of Parliament, Regulations, common law and equity. This includes the right to a minimum wage of £11.44 for over-23-year-olds from April 2023 under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempt to limit long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995. Workers must be able to vote for trustees of their occupational pensions under the Pensions Act 2004. In some enterprises, such as universities or NHS foundation trusts, staff can vote for the directors of the organisation. In enterprises with over 50 staff, workers must be negotiated with, with a view to agreement on any contract or workplace organisation changes, major economic developments or difficulties. The UK Corporate Governance Code recommends worker involvement in voting for a listed company's board of directors but does not yet follow international standards in protecting the right to vote in law. Collective bargaining, between democratically organised trade unions and the enterprise's management, has been seen as a "single channel" for individual workers to counteract the employer's abuse of power when it dismisses staff or fix the terms of work. Collective agreements are ultimately backed up by a trade union's right to strike: a fundamental requirement of democratic society in international law. Under the Trade Union and Labour Relations (Consolidation) Act 1992 strike action is protected when it is "in contemplation or furtherance of a trade dispute".

<span class="mw-page-title-main">Temporary work</span> Type of employment

Temporary work or temporary employment refers to an employment situation where the working arrangement is limited to a certain period of time-based on the needs of the employing organization. Temporary employees are sometimes called "contractual", "seasonal", "interim", "casual staff", "outsourcing", and "freelance"; or the words may be shortened to "temps". In some instances, temporary, highly skilled professionals refer to themselves as consultants. Increasingly, executive-level positions are also filled with interim executives or fractional executives.

A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees for business reasons, such as personnel management or downsizing an organization. Originally, layoff referred exclusively to a temporary interruption in work, or employment but this has evolved to a permanent elimination of a position in both British and US English, requiring the addition of "temporary" to specify the original meaning of the word. A layoff is not to be confused with wrongful termination.

A union security agreement is a contractual agreement, usually part of a union collective bargaining agreement, in which an employer and a trade or labor union agree on the extent to which the union may compel employees to join the union, and/or whether the employer will collect dues, fees, and assessments on behalf of the union.

<span class="mw-page-title-main">Hiring hall</span> Labor organization

In organized labor, a hiring hall is an organization, usually under the auspices of a labor union, which has the responsibility of furnishing new recruits for employers who have a collective bargaining agreement with the union. It may also refer to a physical union hall, the office from which the union may conduct its activities.

An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old master-servant law, used before the 20th century. Employment contracts relies on the concept of authority, in which the employee agrees to accept the authority of the employer and in exchange, the employer agrees to pay the employee a stated wage.

Contingent work, casual work, gig work or contract work, is an employment relationship with limited job security, payment on a piece work basis, typically part-time that is considered non-permanent. Although there is less job security, freelancers often report incomes higher than their former traditional jobs.

<span class="mw-page-title-main">Employment agency</span> Organization which matches employers to employees

An employment agency is an organization which matches employers to employees. In developed countries, there are multiple private businesses which act as employment agencies and a publicly funded employment agency.

In Australia, labour hire is referred to by the legal term of art labour hire arrangement, and it refers to the employment practice of an employer supplying its employees to another workplace, for profit.

United Kingdom agency worker law refers to the law which regulates people's work through employment agencies in the United Kingdom. Though statistics are disputed, there are currently between half a million and one and a half million agency workers in the UK, and probably over 17,000 agencies. As a result of judge made law and absence of statutory protection, agency workers have more flexible pay and working conditions than permanent staff covered under the Employment Rights Act 1996.

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.

European labour law regulates basic transnational standards of employment and partnership at work in the European Union and countries adhering to the European Convention on Human Rights. In setting regulatory floors to competition for job-creating investment within the Union, and in promoting a degree of employee consultation in the workplace, European labour law is viewed as a pillar of the "European social model". Despite wide variation in employment protection and related welfare provision between member states, a contrast is typically drawn with conditions in the United States.

Labour brokering is a South African term for a form outsourcing practiced in which companies contract labour brokers to provide them with casual labour.

Haken is the Japanese term for temporary employees dispatched to companies by staffing agencies.

In Namibia, the issue of labour hire remains a controversy among the government, unions and labour brokering companies. The ILO categorizes two forms of subcontracting, namely job contracting and labour-only contracting. Most of Namibia's labour hire companies fall into the second category as they merely supply labour to their clients.

Dispatched labor refers to an atypical employment relationship. Dispatch work agencies receive requests from businesses to have them hire and manage labor on the business' behalf. This type of labor is known as "dispatched labor". There is in fact no direct contract between dispatched laborers and the enterprise which uses the agency's services, so in this way, dispatched employment follows a triangle structure. As dispatch agencies are often highly adept in hiring and managing workforces, businesses are more than happy to use an agency to manage part of their workforce as it saves time, money, and in case of foreign enterprise, the hassle of quickly understanding the legal workings of a local labor force.

<span class="mw-page-title-main">Fair Work Act 2009</span> Australian industrial relations law

The Fair Work Act 2009(Cth) is an Act of the Parliament of Australia, passed by the Rudd government to reform the industrial relations system of Australia. Replacing the Howard government's WorkChoices legislation, the Act established Fair Work Australia, later renamed the Fair Work Commission.

References

  1. "Welcome to the Fair Work Ombudsman website". Fair Work Ombudsman. Retrieved 2020-07-24.
  2. Irving, Mark (2019). "3 - 'Employment Arrangements Involving Three Parties'". The Contract of Employment. LexisNexis Butterworths. ISBN   9780409351088.
  3. "Contractors and labour hire". Safework NSW. 29 September 2021.
  4. "How does a Labour Hire Company Work?". Canberra Labour Hire. 17 May 2021.
  5. "How does a Labour Hire Company Work?". Canberra Labour Hire. 17 May 2021.
  6. "Temporary Labour Hire Recruitment Brisbane". Rednax Recruitment. 26 September 2022.
  7. 1 2 "Annual Report 2019". www.haysplc.com. Retrieved 2020-07-24.
  8. Full name: Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work, 2008/104/EC
  9. Harding, Robin (2020-10-15). "Japan's labour market faces shake-up after Supreme Court rulings". Financial Times. Retrieved 2020-10-20.
  10. LeRoy, Michael H. (1998). "Farm Labor Contractors and Agricultural Producers as Joint Employers under the Migrant and Seasonal Agricultural Worker Protection Act: An Empirical Public Policy Analysis". Berkeley Journal of Employment and Labor Law. 19 (2): 175–228. ISSN   1067-7666. JSTOR   24050749.
  11. "Definition of a Labour Broker | Dryk Financial Services | Cape Town". www.dryk-financial-services.com. Retrieved 2020-07-24.