The EU Temporary and Agency Workers Directive (2008/104/EC) is an EU Directive agreed in November 2008 which seeks to guarantee those working through employment agencies equal pay and conditions with employees in the same business who do the same work. It is the third piece of legislation in the European Union's employment law package to protect atypical working (the others being for part-time workers and fixed-term workers). Though it was proposed in 2002, the British, German, Danish and Irish governments blocked its enactment until 2008.
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The core of the directive is equal rights on "basic working and employment conditions". Under Art.3(1)(f) These conditions are pay, and
However, Art. 5 (4) allows for Member States to derogate from the principle of equal treatment, provided an 'adequate level of protection is provided'. This could be in the form of a qualifying period, before which agency workers would not be entitled to equal treatment. The directive made changes to national law in any further employment rights since Article 2 now designates employment agencies as the employer. This is unproblematic for most countries, which guarantee substantive rights to all people at work.
As with all EU Directives, the purpose of the Agency Worker Directive is to harmonise the law across the common market. The economic function this serves is to prevent unfair competition between different member states. Sometimes called social dumping, the idea is that, for example, if Finland has loose employment protection and Ireland has strong employment protection, companies will shift their operations to the Finland - not because Finland is a more efficient country to do business and Ireland is inefficient - just because they can pay less. Harmonised laws prevent a "race to the bottom" where every country tries to deregulate to attract business, and, theoretically, all end up losing. The social function is to ensure a higher standard of living and quality of life, consistent with the aims of the Treaty of the European Union.[1]
The original proposal for a directive was made in 2002, but was itself shelved, because of the UK government's consistent opposition to agency regulation, in the interests of labour market flexibility. According to newspaper reports,[2] the UK got the backing of Germany to torpedo the draft Directive in return for the UK to help sink the Takeover Directive (Germany has comprehensive agency work regulation under its Arbeitnehmerüberlassungsgesetz and its Civil Code, esp §622, and the UK has strong Takeover Regulation, especially Rule 21 of the City Code).[3]