The Protection of Employees (Temporary Agency Work) Act 2012 was finally passed into law in Ireland on May 16th 2012. It transposed the Temporary Agency Work Directive (2008/104/EC) which had started the long process into becoming a Directive as far back as June 2003.

The lengthy delay may be explained in part by the substantial differences of opinion that emerged between the Member States, the European Commission and the European Parliament. Particularly, these focused on whether agency workers should have to reach a threshold of service before being allowed to compare their treatment at work with that of permanent employees of the hirer (or end user) employer. Ultimately, perhaps to ensure that the measure would finally get through, the question of service was side-tracked, with discretion being reserved to the Member States to decide in the form of social partnership agreements at national level whether to apply a service qualification or not.

Crucially, the pay provisions of the legislation are retrospective to the date that the Directive should have been transposed – 5th December 2011 – meaning that existing agency workers should be entitled to the protection of the Act insofar as it concerns pay from that date.

In general terms, this Directive was the third in a series of measures designed to protect the position of so called ‘atypical’ workers. It followed the Directives on part time work (Council Directive 97/81/EC) and fixed-term work (Council Directive 1999/70/EC) that were transposed into Irish law by the Protection of Employees (Part-Time Work) Act 2001 and the Protection of Employees (Fixed-Term Work) Act 2003 respectively.

Both these pieces of legislation take the general approach of allowing the relevant employee to argue that she or he is being treated less favourably in relation to terms and conditions of employment than a comparable employee. This involves the complainant identifying a nominated comparator and showing that she or he is engaged in ‘like work’ with that person. The definition of 'like work' is the same as that used in the employment equality legislation. Broadly speaking, the complainant must either be performing the same job, a job that is very similar or a job that is (at least) equal in value to that of the comparator, across a range of factors including mental and physical effort, skill, responsibility and working conditions.

It might have been thought that this approach would have been replicated in the agency work legislation. However, it appears that the concept of grounding a claim of less favourable treatment on the basis of a comparator was dropped in the course of the legislation’s progress through the houses of the Oireachtas.

Thus Section 6 (1) of the Act as passed provides that:
‘subject to any collective agreement for the time being standing approved under Section 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment’.

The wording of this section made it clear that an agency worker would only be entitled to the same basic working and employment conditions as might have applied if she or he were directly recruited by the hirer to the same or a similar job. It was therefore speculated that, in response to any particular claim, an agency would only have to show that the agency worker is in receipt of no less favourable terms than she or he would have received if he or she had been directly recruited by the employer’s organisation on the same day. This would not be the same as being entitled to the same terms as a permanent employee doing the same or similar work but who may have been hired in better times when rates of pay, for example, might generally have been higher. It was thought that this restrictive approach would substantially diminish the number of claims that might potentially be brought under this legislation.

However, today’s email reviews a recent decision on appeal of the Labour Court which seems to have fundamentally altered this view.

In this decision, the Court upheld a Rights Commissioner finding and said that the narrow view outlined above was ‘a misunderstanding of the Act’. This case concerned a claim by a number of agency workers against their employment agency employer across three different categories of job to be entitled to the same rate of pay as permanent comparators employed directly by the hirer enjoyed. The Court said that ‘what the Court must examine is the rate of pay of directly employed workers occupying the same job as agency workers as set out in statute, in a collective agreement or which applies generally to those workers’. Reading Section 6 together with the relevant articles of the directive, the Court found that the complainants were entitled to be paid the rate of pay that “applies generally” to directly employed workers occupying the same job, a green light for future complainants to compare their treatment with that of comparable directly employed workers.


Stafford and Isaacson and others (AWC/13/16, Determination AWD 142, 6th February 2014)

The Basic Facts

The claimants in this case were 14 workers employed by the respondent employment agency and assigned to work for a hirer company called Cronin Movers Group, as variously a general operative, a driver or an acting foreman. They brought a claim against the respondent to a Rights Commissioner (RC) under the Act on October 30th 2012, alleging that they were paid a lower hourly rate of pay than directly employed workers of the hirer doing the same or similar work. The RC ruled in their favour and the respondent appealed that decision to the Court.

On appeal, the Court found that the complainants were employed by the respondent agency and assigned to work for the hirer before the Act came into operation. Thus, it determined in accordance with Section 6 (3) that their effective date of employment for the purpose of the legislation was 5th December 2011, the date by which the directive should have been transposed.

The Court noted that Section 15 obliges the hirer of an agency worker to provide the agency ‘with all such information in the possession of the hirer as the employment agency reasonably requires to enable the employment agency to comply with its obligations under the Act in relation to the agency worker’. In this regard, the respondent agency contended that it had been informed by the hirer that the rates paid to the complainants were the rates at which direct employees would have been hired on 5th December 2011 had it directly recruited any such employees which it did not.

The respondent further argued that it had been informed by the hirer that any directly employed workers on higher rates of pay doing the same or similar work as the complainants had long service and had been employed when the business environment was more benign and when the Company’s financial circumstances were better. Evidence was provided to the Court of a severe downturn in business for the hirer from January 2008 to December 2012 which culminated in the loss of jobs and a request that reductions in pay and other conditions be accepted, though it appeared that directly employed workers had by and large refused to accept the 5% pay cut requested.

In summary therefore, the principle argument advanced by the respondent was the one speculated in the introduction to this mail; that the complainants are paid the rate of pay that would have applied had they been recruited directly by the hirer to occupy the same job on the relevant date and that therefore the requirements of Section 6 (1) of the Act had been complied with.


The Court's Conclusions

The Court held that Section 6 (1) must be read together with Section 2 of the Act and in light of the provisions of the Directive which the Act transposes. It noted that Section 2 provides that ‘basic working and employment conditions’ means terms and conditions required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer.

In turn, Article 2 states that the purpose of the Directive is to ensure the protection of temporary agency workers and to improve the quality of agency work by ensuring that the principle of equal treatment is applied. Article 5 on the principle of equal treatment in turn states that ‘the basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to the same job’.

Reading these provisions together, the Court concluded that the complainants were entitled to the ‘going rate for the job’. Where this rate is not established by law (i.e. by virtue of any enactment) or by collective agreement, the Court must establish the rate that generally applies to directly employed workers occupying the same job. It is not, it stressed, a notional rate that might be paid to workers employed on a particular date. It stated that ‘if the Court were to consider a hypothetical rate as distinct from the rate that actually applies it would undermine the principle of equal treatment and defeat the purpose of the Directive and of the Act’.

The Court noted the respondent’s acknowledgement that no directly employed workers were recruited by the hirer on or about 5th December 2011. However, the respondent submitted evidence of hourly rates paid to other workers directly employed by the hirer in May 2012 and asserted that this amounted to evidence of what would have been paid to employees directly recruited in December 2011.

The Court found this argument to amount to a ‘misunderstanding of the Act’. It stated that ‘a directly employed worker recruited on a particular rate of pay on 5th December 2011 (had one existed) would not of itself establish a generally applied rate of pay for a category of workers’. Unless such a worker was representative of a class of worker within the meaning of the Act, the Court concluded that she or he ‘would constitute an exception which the Court must disregard’. Equally, it found that the rates paid to directly employed workers five months later could be of no assistance to it in determining the rates of pay that applied in December 2011.

Ultimately, the Court decided that the documents submitted by the respondent clearly showed that directly employed workers occupying the same job were paid a higher hourly rate of pay than that paid to agency workers whose assignment began for the purposes of the Act on 5th December 2011.

A further argument from the respondent that the Court should have regard to the (lower) rate of pay of two named directly recruited employees was rejected when it became apparent that neither occupied the same or similar job as any of the complainants.

Finally, the respondent argued that the downturn in business for the hirer made it unaffordable to pay the same rates as those that applied to long serving workers. The Court stated that it must approach this argument with the utmost caution as the Court of Justice of the European Union (CJEU) has decided that cost alone cannot compromise a fundamental right set out in European Law and this argument was also accordingly rejected.

The Court concluded that the complaint was well founded and directed that the respondent agency pay to each of the complainants the relevant rates that applied generally to directly employed workers with effect from 17 May 2012 (a day after the relevant parts of the Act came into operation), rather than 5 December 2011, the date from which it may be argued that their right to equal treatment in relation to pay accrued.