Dara Calleary (Mayo, Fianna Fail)

I thank the Members of the House for the invitation to address them on the EU directive on temporary agency work. This coincides with the recent initiation by my Department of a public consultation on the transposition of the EU directive into Irish law. Ireland, along with all other member states of the European Union, is required to transpose the directive into domestic law and bring it into effect by 5 December 2011. The directive will require the enactment of primary legislation.

It is important, in the first place, to recognise the legitimate and valuable role that agency working plays in the economy. On the one hand, it can assist employers to respond to shifts in demand, to cover for short-term absences and to meet short-term skill needs. It can also be the option of choice of some people who can benefit from the flexibility, personal freedom and income it provides. It can assist persons entering employment for the first time, help unemployed persons to return to employment or help retain persons in employment at times in their careers when they might be otherwise unemployed. It can also act as a stepping stone to finding permanent employment. It must also be acknowledged that agency work does not suit everyone's circumstances and that the very flexibility it offers can, in fact, be used in a less positive way by unscrupulous businesses.

When launching the proposal for a directive in 2002, the European Commission presented the stated objective of the directive as being twofold: first, to improve the quality of temporary agency work by applying the principle of non-discrimination and, second, to establish a suitable framework for the use of temporary agency work to contribute to the smooth functioning of the labour market. The Commission proposal stemmed from concerns that the temporary agency work sector in the EU included workers who are vulnerable in that agency workers typically have fewer benefits in basic working and employment conditions in terms of pay and working time compared with persons with open-ended employment with enterprises that directly hire them. Moreover, they may be treated differently in other ways, such as not having access to collective facilities that are available to directly recruited employees in user undertakings.

Temporary agency work is a unique, triangular form of employment, involving a temporary employment relationship subsisting between a temporary work agency - the employer - and a worker, who is assigned to work for, and under the control of, an undertaking. It is the undertaking that avails of the employment of the agency worker that is often referred to as the user or hirer undertaking. The consultation which my Department has embarked on is therefore in respect of a directive that establishes legal entitlements and obligations impacting on three parties: the agency worker, the employment agency and the user-hirer undertaking. This contrasts with the standard binary relationship that exists between employer and employee and which is a more characteristic feature of our existing suite of employment rights legislation, which affords protection to employees ranging from those in what might be termed standard employment relationships, including those with open-ended contracts, to persons involved in atypical employment relationships such as fixed-term work. Uniquely, temporary agency working involves a contract of employment between the temporary work agency and the agency worker, on top of which sits a commercial contract regarding the supply of labour between the agency and the user-hirer undertaking. There is no intention, as has been clearly articulated in the public consultation, in forthcoming legislation to transpose the directive to formally change the nature of this so-called triangular relationship. Neither will it interfere with the employment status of agency workers or their entitlements to existing employment rights.

Before delving into some of the core elements of the temporary agency work directive, I wish to avail of this opportunity to stress that, contrary to perception, agency workers are afforded protection under our existing suite of employment rights legislation. Thus, agency workers, regardless of nationality, as well as agency workers posted by their employer from overseas to work temporarily in Ireland with a contract of employment to work in the State, are afforded the same rights as Irish employees. This employment protection framework provides for transparent and easily accessible routes for remedial action and redress in cases where there has been a breakdown in the employment relationship.

Article 5(1) of the directive sets out the core principle of equal treatment that should apply to agency workers during their period of temporary assignment to work at a user undertaking. It provides that the basic working and employment conditions of agency workers for the duration of their assignment at a user undertaking should be at least those that would apply if they had been recruited to that undertaking to occupy the same job. Article 3 defines the essence of what constitutes basic working and employment conditions to include hours of work, overtime, breaks, rest periods, night work, holidays and public holidays and pay.

In the context of the consultation, I am seeking the views of interested parties, in particular, on issues concerned with defining, for purposes of inclusion in implementing legislation, the constituent elements of pay that will be consistent with meeting the equal treatment requirement of article 5. Thus, for example, stakeholder comments and input to the consultation will help inform the legislative context in identifying the constituent elements of pay beyond basic pay to include, for example, overtime, shift work allowances and so forth that may be deemed appropriate for inclusion in the contractual entitlements of temporary agency workers to reflect their contribution for work done.

Key elements of the debate in this regard concern the extent to which there are elements of remuneration such as incentives and rewards which reflect the specific and different quality of the relationship between the employer and permanent employee. Views are being sought on the extent to which there may be exclusions from the scope of pay in respect of, for example, occupational pensions and financial participation schemes which reflect the long-standing nature of the relationship of directly recruited employees with their employer that would not normally apply to temporary agency workers temporarily assigned to work for a user undertaking. Such elements of remuneration and rewards may be seen as not coming within the scope of pay and may be excluded from the equal treatment principle enshrined in article 5.

The role that collective agreements or other workplace agreements or pay norms can play in the implementation of equal treatment rights for temporary agency workers is also a core issue. This may be the case if pay norms in place in user undertakings go beyond those that arise under legislation, regulations or administrative agreements. Currently, pay norms embraced under these institutional arrangements include the national minimum wage and conditions agreed under universally binding collective agreements, such as in registered employment agreements. According to the terms of the directive, the principle of equal treatment for temporary agency workers in respect of basic working and employment conditions applies to the extent as would apply to directly recruited workers established under agreements that are deemed to be binding and general provisions in force in a user undertaking. The views of stakeholders are being sought, therefore, on whether pay norms, which are incremental to those provided by legislative and other regulatory means, might also embrace, for example, pay scales or other contractual arrangements in place in the user undertaking. Comment is also being invited on the pay norms that should come within the scope envisaged within the meaning of article 3 of the directive and which are, accordingly, deemed to be binding and generally in force in user undertakings.

Aside from establishing a general principle of non-discrimination between temporary agency workers and comparable employees directly recruited to an end-user undertaking in respect of basic pay and working conditions, the directive also embraces a number of additional aspects to ensure existing restrictions and prohibitions on temporary agency work will be reviewed periodically in order to verify whether the specific conditions underlying them still obtain - there are no such restrictions in Ireland; temporary agency workers will be informed of any vacant posts in the user undertaking and will not be prevented from forming a contract with the user undertaking after their temporary assignment; temporary agency workers will be given access, as are directly recruited workers, to what are termed collective facilities such as staff canteen, child care and transport services; dialogue between the social partners will be promoted to improve temporary agency workers' access to training in temporary agencies and user undertakings; temporary agency workers will count for the purposes of calculating the threshold above which bodies representing workers are formed at either the temporary work agency or the user undertaking; and the user undertaking will provide suitable information on the use of temporary agency workers for the workers' representatives.

The directive also provides that individuals may seek remedial action for an infringement of their employment rights through an appropriate dispute settlement body. The consultation invites views on how an agency worker might pursue a claim in such situations, as well as on the most appropriate means of pursuing such claims and the appropriate body for progressing such claims. This should have regard to the substantial dispute resolution processes already in place under employment rights legislation. Furthermore, member states are required to lay down rules on penalties applicable in the event of infringements which are to be vigorously enforced. Such penalties must be effective, proportionate and dissuasive.

The directive provides for a number of derogations from the principle of equal treatment under certain conditions. Article 5.4, for example, affords the social partners at national level the opportunity to negotiate and conclude an appropriate framework agreement which can derogate from the principle of equal treatment, provided there is an adequate level of protection for temporary agency workers. This could relate, for instance, to the operation of a qualifying period before agency workers would enjoy equal treatment. This option presents an opportunity to achieve a balanced outcome to meet the needs of employers for flexible labour supply, as well as achieving the objective of protecting agency workers. I am in the process of facilitating discussions with the social partners to this end.

The ability to conclude a framework agreement has implications for Ireland's labour market competitiveness. In the United Kingdom, for instance, Ireland's closest market, agreement has been reached between the unions and employers for a 12-week qualifying period before the application of equal treatment, in terms of basic working conditions, to agency workers. It is my sincere hope an agreement can be reached by the social partners reflecting the particular circumstances of the Irish labour market and the de facto position in other EU member states. As the negotiation and conclusion of a framework agreement under the terms of the directive are within the gift of the social partners, the issue of a derogation from the directive's principle of equal treatment to include, for example, a qualifying period, does not form part of the public consultation.

As is the norm in the enactment of primary legislation, my Department will, following the completion of the consultation process, undertake an impact analysis of the provisions to be included in implementing legislation transposing the directive. This will have to take account of the fact that for many of the measures in the directive, it may not be possible to quantify costs and benefits as the statistical information available on the sector may be relatively limited. Official data for the temporary agency sector are extremely limited. In general, it is estimated that when we speak of the size of the temporary agency worker sector in Ireland, we are speaking about agency workers representing approximately 2% of total employment. On that assumption, the legislation to transpose the terms of the directive will potentially impact on approximately 40,000 agency workers. In terms of absolute numbers, however, there is likely to have been a decline in the number of agency workers, given the severe reversal in the economic situation. On the basis of the limited information available, it may be possible to carry out a qualitative and partially quantitative analysis of the potential impact of the directive. It is intended that this work will be completed prior to the enactment of the implementing legislation.

The House will be familiar with the possibility for member states, within the principles set out in the directive, to adapt the rules and definitions as laid out in it to their own specific circumstances, provided they afford a higher level of protection to agency workers. The views provided by interested parties in response to this consultation will help fully inform this process. With regard to the consultation, I am inviting views from a wide spectrum, in particular, from agency workers or their representatives, temporary work agencies or their trade organisations and user or hirer undertakings and employers generally and their representatives. These views will assist in the preparation of the necessary implementing legislation which I look forward to bringing to the House for enactment in due course.