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Temporary Agency Work Directive – Derogations Sought

The Minister for Jobs, Enterprise and Innovation has opened discussions between the social partners about the need to agree a Framework Agreement which will secure derogations for Ireland in relation to the Temporary Agency Work Directive.  The Directive is due to be implemented by Irish legislation before 5th December 2011.  If the social partners conclude a Framework Agreement, then the implementing legislation may include certain derogations from some of the obligations in the Directive. The main derogation envisaged is one which would provide for a “qualification period”.  This would require an agency worker to work in a hirer company for a certain period of time before being entitled to the same rate of pay as a comparable direct recruit to that hirer company.  

If the social partners do not agree to implement a qualification period, then the Oireachtas does not have any discretion to establish one.  In that case, a temporary agency worker would be entitled - from the first day of his or her assignment with a hirer company - to the same pay as a comparable direct recruit.  This would mean that agency work would become substantially more expensive than direct recruitment, having regard to agency fees and the administrative burden imposed on hirers and agencies.  This increase in labour costs will reduce the number of agency workers hired without increasing the number of direct recruits in hirer companies.

The SFA has consistently argued for the urgent need to secure a Framework Agreement which provides for derogations, including an appropriate qualification period.  The SFA believes that a very large number of jobs will be under threat in the event that appropriate derogations are not secured.  If Ireland identifies itself as a country which does not allow employers flexibility to use agencies to provide temporary agency work at times of peak production, then Ireland will be excluded from certain categories of future investment from overseas-owned companies.  One of the suite of incentives which has attracted foreign direct investment to Ireland has been relative flexibility in the labour market.  That flexibility includes the availability of agency work.  If that flexibility is lost Ireland will lose out on future investment opportunities.

The SFA is continuing to engage in order to facilitate a Framework Agreement.  There is a substantial difference between the social partners and it is not clear that any agreement can be reached.  In particular, it is not clear that the trade union side will agree to any qualification period.  The SFA will keep members informed of future developments and outcomes of this.