Transcript Territorial Pacts: Which Kind of Concertation?

Temporary Agency Work: A
viable alternative to the
standard employment
relationship?
Ida Regalia
[email protected]
Abstract


General aim of the paper is to contribute to a
conceptual clarification of different logics
underlying ways of approaching the dilemma
between employment security and labour
flexibility
More specifically, after an introduction to the
different meanings of the term “security”,


having primarily in mind the Italian experience
the paper discusses the conditions under which
temporary agency work (TAW) can be a solution to
some of the limits for workers of flexible forms of
employment in a post-fordist economy
2
Introduction
The starting point is acknowledgement that
 in Europe, on the one side,the standard

employment contract is being eroded, but not
disappearing;
on the other, the insecurities connected with
the new forms of employment are
considerable;
high risk of dualism in the labor market.
Necessary to devise new solutions


3
Introduction-2
From the workers’ perspective these
insecurities and risks can be grouped into
three categories:
i.
ii.
iii.
risks connected with unemployment and job
insecurity;
risks of limited/inadequate development of
human capital;
risks of reductions in rights and deterioration
in employment conditions.
4
Introduction-3
NB. Added to these are other risks that derive to firms
and public authorities from large-scale recourse to
non-standard employment.

the unwanted economic and social consequences of the
use of non-standard forms of employment have also
implications for the performance of firms and the
programs and policies of governments (local and
central).
It is to deal with these new insecurities that new
standards are necessary.

New standards, not an unrealistic resumption of the old
ones
5
Different meanings of term “security”


Often, distinction between employment and job
security
But it is not the only useful distinction:
1.
2.
3.


it can mean employment security in a particular firm,
or security of being employed in a particular job and
developing one’s skills,
or security of permanence in the labor market
While standard employment contracts assure the first
(and therefore the third) meaning of the term, they do
not necessarily guarantee the second.
New, sustainable forms of employment may guarantee
the third type of security, combined as far as possible
with the second (not necessarily the first).
6
Different meanings of term “security” 2



These distinctions useful to distinguish
between different logics underlying different
initiatives intended to promote work security
And more precisely to distinguish between
different aims of programmes
In following table the initiatives are classified
according to whether they seek to promote
security founded on affiliation with
organized settings or permanence in the lm, and according to whether they seek also
to promote skills maintenance
development.
7
Different paths to “security”
8
Different paths to “security”
Combining those 3 dimensions we obtain the patterns identified in table 1.



The first quadrant comprises programmes intended to favour the gradual
hiring of workers into firms on standard contracts after periods on nonstandard ones. It is the approach often preferred by unions .
The aim of programmes in the third quadrant is to encourage hiring on stable
employment contracts, within organizational settings broader than those of
individual firm, in order to promote use by several firms of HR of which firms
have occasional need (because they possess specific skills and/or
experience).
The aim of the schemes in the other 2 quadrants is to support workers entering
and remaining in the labor market, by means of active employment policies
structured according to the needs of the local economy.


The second quadrant comprises programmes intended to stimulate
labour-market (re)entry of inactive/unemployed workers through the
provision of non-standard employment opportunities, accompanied by
incentives or services which increase their attractiveness
The fourth quadrant comprises the various initiatives intended to identify
appropriate forms of protection for workers who, because of their
qualifications and skills, and because of the characteristics of the local
economy, can accept and may prefer high labour-market mobility.
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TAW in Italy 1


For long in Italy, it was not permitted to use labour
furnished by a subject (formal employer) other than
the subject utilizing that labour (the user firm).
A law enacted in 1960 imposed an absolute ban on
labour subcontracting seen as a form of
unacceptable exploitation of labour

This was at the origin of both


prolonged hostility against any form of labour supply
by third parties
and the close protection for employees and workers
provided by the law which in 1997 finally legalized the
use of agency workers
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TAW and different logics of security
With reference to Table 1, agency work offers
for a diversified pool of workers opportunities
 -to enter/re-enter the labour market (Q2),
 -to receive support in labour-market
transitions within a framework of rights and
specific forms of protection (Q1, Q4),
 -to increase their employability and therefore
access to more stable positions in firms (Q1),
 -to find forms of stability within the system of
temporary work (Q3).
11
An anomalous experience? TAW in
Italy


In Italy TAW was introduced late, only in 1997,
by a centre-left government – which could give
guarantees that workers would be adequately
protected – following a tripartite pact between
government and the social partners on reform
of the labour market.
From the very beginning quite stringent
conditions were introduced to protect workers
against abuses
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TAW in Italy 2
Four main points are to be emphasised
As regards the actors,

only agencies formally authorized by the Ministry of Labour,
enrolled on a special register, and fulfilling specific stringent
requirements could furnish labour
As regards circumstances

TAW could only be used in temporary circumstances (indicated by
the law or to be specified by nation-wide collective agreements)

It was forbidden to replace workers on strike
As regards terms and conditions

The contract was to be in written form

It had to guarantee parity of treatment
In order to ensure suitable training

A fund for the training of temporary agency workers was
established. It was to be financed with obligatory deductions from
their gross wages
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TAW in Italy 3
the law was distinguished by its strong concern
to prevent abuses in the use of labour by both
agencies and user firms, as part of a more
general endeavour to foster the growth of
(regular) employment.
The general logic of the normative framework did
not substantially changed when some of these
requirements were removed or attenuated by
the provisions of a further law reforming the
labour market enacted in 2003 by the centreright Berlusconi government (‘Biagi’ law).

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TAW in Italy 4
Regulation by initiative of social partners 1
The introduction of TAW in 1997 - preceded and
facilitated by a pact among trade unions, employers’
associations and the government – stimulated
initiatives by the social partners.
 Firstly, new organizations were created to represent
agency workers and the agencies themselves.
 Secondly, sectoral collective bargaining got under
way.
 Thirdly, new bilateral bodies were instituted to
furnish temporary agency workers with specific
forms of protection and welfare
15
TAW in Italy 5
Regulation by initiative of social partners 2
1. new organizations to represent TAW and agencies
 creation of unions specialized in the representation of workers on
non-standard contracts



NIdiL-Cgil, Alai-Cisl, Cpo-Uil
neither industrial or occupational trade unions. But unions of an
entirely new kind: their memberships are not defined by common
affiliation to a particular sector, or to a specific trade or occupation, but by
the type of employment contract.
The organizations of the agencies


Initially distinct organizations
Then merger into a single one: Assolavoro

 promote the development of TAW, and enhance its image among
public opinion,

establish a code of behaviour for associate agencies,

reach agreement with the trade unions on how TAW should be
regulated
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TAW in Italy 6
Regulation by initiative of social partners 3
2. Nation-wide collective agreements




1998
 It fixed maximum permissible duration of contracts with same user firm;
defined in detail how the equal pay principle was to be applied and what
pay conditions were to apply in case of illness, workplace accident, or
dismissal; established the trade-union rights of temporary workers (right of
assembly at the user firm, right to elect trade-union representatives)
2002
 It led to the creation of the sector’s two bilateral bodies
2008
 It took further steps towards the construction of a specific welfare system
for temporary workers
 It introduced a clause on the stabilization of workers completing a specified
period of service with same agency
2009
 Measures were introduced to cope with the sector’s crisis caused by the
international recession
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TAW in Italy 7
Regulation by initiative of social partners 4
3. The bilateral bodies

Formatemp devoted to the training of temporary workers



agencies set aside 4% of the gross wages paid to temporary
workers for the purposes of training
“in Italy concessions to the flexibility needs of firms have been ‘offset’ by measures to promote the skills and employability of
temporary agency workers, and to support their incomes in periods
of inactivity, or between one assignment and the next, through
training”
Ebitemp delivers welfare services

furnishes services to workers not fully eligible for protections and
benefits available to workers on permanent contracts. As its
director, former trade-unionist and currently vice-president of a
labour agency, said, Ebi.temp arose “from the need to reduce the
hardships due to the discontinuity of service in temporary work”
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TAW in Italy 8
The agencies
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TAW in Italy 9

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Compared with other European countries, the USA and Japan, the
Italian TAW sector is characterized by
 the small number of agencies,
 by their very large average size in terms of turnover, number of
branches, and employees per agency
This marked concentration is the outcome of
 strong barriers to entry (high financial guarantees, operation in
several regions)
 complex procedure to gain authorization established by law
It favoured the presence in this new market of mostly solid and
reliable operators, able to undertake investments and
commitments from a longer-term perspective.
Moreover presence of managers with connections to the world
of work
 one of the factors fostering the sector’s development has been
the positive relationship with sectoral trade unions
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TAW in Italy 10
21
TAW in Italy 11
In the 10 years since the introduction of TAW, there has been
 a considerable expansion in this form of employment from a
quantitative point of view
 an increasing diversification from a qualitative one.
 Starting from zero, the TAW sector has acquired a market share in
line with the European average, although the intensity of use (1.2
percent of dependent employment, and 12 percent of total
temporary employment, as shown in table 2) is lower than in
several other European countries, (particularly France, the
Netherlands, the UK)
 An increasingly wider range of jobs and workers – diversified
according to age and job tenure, gender and qualification, sector,
geographical origin and location – are involved in this form of
employment.

However, since the second half of 2008, the demand for TAW has
rapidly decreased, and the sector is consequently in crisis. As
surveys by the EbiTemp observatory report, the data for the first six
months of 2009 show that the market has shrunk by around one
quarter (-24%) because of a strong decrease in demand from the
manufacturing sectors most affected by the economic crisis
 Current indicators report however a recovery
22
To conclude


in light of the normative frame of reference
and initiatives by the social partners, TAW is
not simply a new form of employment
introduced with a view to greater flexibilization
of the labour market.
It is also an opportunity – albeit limited in
quantitative terms – which may contribute to
improving the fluidity and the adaptability of
the labour market, as well as the job security
of temporary workers.
23
TAW as an alternative to SFE?
Schmid (2010) lists the following conditions:
 a) minimum wages, guaranteed by law and/or
collective agreements;
 b) legal acknowledgement of collective agreements
through their extension on workers or employers not
covered by these (usual sectoral) agreements;
 c) provision of accumulating rights to transitions into
open-ended employment contracts within a limited
period of time;
 d) reflection of higher risks through higher security
provisions, for instance through higher contributions
to social security or mandatory funds for training or
employability provisions.
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TAW as an alternative to SFE?
Work for a TWA may be equally advantageous
for workers, provided that they are offered:
(i)
pay and working conditions equal to those
of analogous permanent employees,
(ii) guarantees of employment continuity,
(iii) protection against the risks of human
capital deterioration,
(iv) guarantees concerning social security and
welfare, as well as union rights
25