Considerations in drafting legislation

Historically, there have been three main approaches to the regulation of PrEA: fi rst, strict prohibition of any placement or other services off ered by private agencies;

second, strict regulation of PrEA that were allowed to operate alongside PES; and, third, minimum regulation of PrEA that were accepted as private players in the labour market.1 Whereas the fi rst policy option has been abandoned by most ILO Member States, diff erences, as regards the scope and density of regulation, are sig-nifi cant. Th e starting point for all regulation is the determination of the legal status and conditions governing the operation of PrEA. As set out in Article 3 of ILO Con-vention No. 181, the PrEA legal status shall be determined according to national law and practice and its operation, according to a system of licensing or certifi ca-tion. However, such licensing or certifi cation system should be properly enforced, be objective, transparent and able to assist agencies in delivering their services appropri-ately and adequappropri-ately. As options to licensing, registration and certifi cation systems can also be implemented. As in the licensing system, proper enforcement is neces-sary and social partners should be involved. In most legislation on PrEA, the fun-damental principles are found in laws where concrete, but also variable provisions, can be found in regulations such as ministerial ordinances or decrees. Some laws vest the enforcing agencies with the power to set up their own rules and regulations, i.e. concerning the licensing conditions. Th is may be a useful way not to overload a general law, such as a labour code, with detailed provisions, and to ensure a constant review process. Th e enforcing agency may directly react and change any provision of

Background and context 2

1. For a historical overview of the policy debate around PrEA see ILO (1994): Th e role of private employment agencies in the functioning of the labour market, Geneva.

a ministerial regulation that has proven to be ineff ective in monitoring the activities of PrEA. Further, it is essential in the process of elaborating such laws that equality issues and gender considerations be integrated.

If legislation regulating business activities of PrEA is elaborated, it should in the fi rst place be consistent in itself; in addition, it should correspond to the overall labour market and migration policies for employment in a country. Experience has shown that this is necessary because contradictions between national legislation and policies can present a serious obstacle for the eff ective implementation and enforce-ment of PrEA regulations. In addition, during the legislative process, a country should consider existing government administrative capabilities to implement the proposed provisions. It can already be quite obvious, for example, at the stage of the draft ing process, that the capacities of the designated enforcement authority are limited. It would, in such a case, be advisable to keep the obligations and require-ments for PrEA as simple as possible, otherwise the enforcement process could be overburdened. Member States of the ILO are entitled to assistance from the Offi ce when draft ing new labour legislation.2

Article 3 of Convention No. 181 sets forth that, before draft ing and adopting legislation, the organizations of workers and employers should be consulted. Spe-cial attention should be paid to particularly vulnerable workers, such as women or migrant workers. In order to take their concerns into account, it may also be advisable to consult with relevant civil society organizations and other stakeholders.

Governments may, according to Article 2 (4) (a) of ILO Convention No. 181, aft er having consulted the most representative organizations of workers and employers, exclude certain “private employment agencies from operating in respect of certain categories of workers or branches of economic activity”. Such an exclusion of private market participation of PrEA in recruitment activity may be meaningful in cases where malpractice by private agencies has occurred in the past. Governments, there-fore, may view the protection of workers to be better guaranteed by public employ-ment services. An exclusion of private recruitemploy-ment activities, however, may only be advisable in those circumstances where the public employment services of a country are actually capable of providing them. Th is question is, however, not only related to the fi nancial capacities of States, but perhaps, more importantly, to the perceived acceptance of jobseekers in using the services of governmental agencies. If it was the case that some jobseekers would rather use private agencies than public services, it would be advisable to allow and regulate the participation of private recruitment agencies in the national labour market.

Two important related provisions of the Convention, Articles 4 and 11, emphasize the rights of workers to freedom of association and collective bargaining.

PrEA legislation should include stipulations specifying that the workers recruited

2. Th e ILO Programme on Social Dialogue has prepared a tool that could also be of general help in this regard: the Labour Legislation Guidelines can give advice and assistance in draft ing new labour laws.

Available at: http://mirror/public/english/dialogue/ifpdial/llg/main.htm

are aff orded these rights, as well as adequate protection in relation to: minimum wages; working time and other working conditions; statutory social security ben-efi ts; access to training; occupational safety and health; compensation in cases of occupational accidents and diseases and insolvency and protection of workers’

claims; and, maternity protection and benefi ts. Article 12 further indicates the responsibilities of PrEA that involve employing workers with services made avail-able to a third party, referred to as “user enterprise”.

Recommendation 188 states that “private employment agencies should not make workers available to a user enterprise to replace workers of that enterprise who are on strike”. Several countries have adopted legislation that prohibits the replace-ment of regular workers who are on strike by agency staff . In the United Kingdom, for example, the Conduct of Employment Agencies and Employment Business Reg-ulations 2003, which came into force in April, 2004, restricts the provision of job-seekers during industrial disputes.

There are instances where some developed countries’ legislation legal-izes profi t-oriented PrEA, treats them as any other business and, therefore, the employers and workers are covered under general labour legislation. Th is allows for a smooth deregulation of PrEA, especially where strong labour unions exist, having secured the working conditions of the employees through collective agree-ments. A number of good case examples are those of Sweden 3 and Germany,4 where PrEA and temporary workers are covered by collective agreements that stipulate the employment relationship.

Th ese are also indicative of the positive role of social dialogue in regulating and monitoring PrEA. Th e Netherlands and Denmark have statutory regulations on PrEA, whose legal framework has been achieved through collective labour dia-logue, emphasizing the growing role of collective bargaining in the expansion of the sector.5

It is important that all laws and regulations be publicly known and circu-lated. Th is prerequisite could enable those PrEA applying for a licence to realisti-cally expect its issuance, if conditions are met. Any decision taken by authorities, either referring to the licensing or the monitoring process, should be comprehen-sible, traceable and clearly based on the regulations. Th e conditions for obtaining a licence should be transparent, objective and known to applicants. Th e circumstances under which licences may be revoked or withdrawn should be known by future licensees. Th is includes a reasonable and realistic time limit for authorities to decide on an application for a licence.

3. Nystrom, Brigitta. “Th e Legal Regulation of Employment Agencies and Employment Leasing Companies in Sweden”, Comparative Labor Law and Policy Journal, Vol. 23, No. 1, Published August, 2003.

4. Collective Framework Agreement on Temporary Work, Germany. http://www.bza.de/tarif/

tarifvertraege.php.

5. “Temporary Agency Work in an enlarged EU”, June, 2006. Th e full report is available at http://

eiro.eurofound.eu.int/thematicfeature14.html.