Temporary agency work – 5 things all employers should be aware of

Many employers will at some point leverage temporary agency workers in getting through peak periods or covering absences. As the name implies, temporary agency workers typically fill a short-term, temporary need. The worker is employed by the temporary agency that, among other things, pays the employee’s wages and is chiefly responsible for the employer’s obligations. However, the user company also has certain rights and obligations it should be aware of when considering the use of temporary agency workforce.

Check the applicable collective agreement

Among other provisions on temporary agency work, many collective agreements include restrictions on the use of temporary agency work in covering peak periods or work that cannot be performed by the company’s own employees, for example. It is therefore important to review the provisions on temporary agency work of the applicable collective agreement on a case-by-case basis before deciding on the use of temporary agency work.

Review the provisions on temporary agency work under the Employment Contracts Act

Under the Employment Contracts Act, in temporary agency work, the right to direct and supervise the work is transferred to the user company together with the employer’s obligations directly related to the performance of the work and its arrangement. In order for the temporary agency to fulfil its own employer’s obligations, such as paying the proper wages, the user company has a legal obligation to provide the temporary agency worker’s employer with any and all information necessary for the fulfilment of these obligations. In light of the special characteristics of the arrangement, the user company and the temporary agency should outline the distribution of obligations as clearly as possible in the temporary agency work agreement.

The Employment Contracts Act determines the applicable collective agreement and the minimum terms of employment for the temporary agency worker’s employment relationship. The Act also contains provisions that specifically govern temporary agency work, including the following:

  • As a rule, temporary agency workers have the right to access the services and common facilities, such as a canteen or gym, provided by the user company for its employees on the same terms and conditions as the user company’s own employees. However, the user company is not obligated to provide financial support for the temporary agency workers’ use of such services and facilities.
  • The user company must also provide information on vacancies to the temporary agency workers it has hired in accordance with the practice adopted in the company or at the workplace.
  • If a user company employs a temporary agency worker after the temporary agency work period for the same or similar duties, the time that the employee was assigned for use by the user enterprise is deducted from the maximum trial period.

Ensure the occupational safety and health of temporary agency workers

Even though temporary agency workers are not directly employed by the user company, the user company is still responsible for their occupational safety and health in accordance with the Occupational Safety and Health Act.

Before the temporary agency work begins, the user company must define the required professional skills and the special characteristics of the work in sufficient detail. The user company must inform the temporary agency of these details, and the temporary agency then has to pass this information to the temporary agency worker and ensure that the worker has the adequate professional skills, experience and suitability for the work to be performed.

The user company is also responsible for introducing the temporary agency worker to the work, the conditions at the workplace and the occupational health and safety measures, among other things. When necessary, the user company also has to familiarise the worker with occupational safety and health co-operation and communication and with the occupational health care arrangements. To the extent necessary, the user company must also notify occupational health care and the occupational safety and health representative at the workplace when temporary agency work begins.

Account for the use of temporary agency work in co-operation processes

The Act on Co-operation within Undertakings applies to all employers who regularly employ at least 20 employees. When the Act is applied, the employer is responsible, for example, for the following co-operation obligations with respect to temporary agency work:

  • the employer must engage in continuous dialogue with the employee representatives addressing, for example, labour usage and personnel structure, also comprising the principles for using external labour;
  • the employer must include the principles for using external labour in the plan for developing the work community;
  • as a rule, the employer must annually present the employee representative with information on the use of external labour, including information on the work locations, duties and the times during which external labour has been used; and
  • the employer must engage in change negotiations in accordance with the Act on Co-operation within Undertakings if the engagement of or changes in external labour could have a significant effect on the employees as referred to in the Act, such as effects on the duties or arrangement of work of one or more employees.

Procure the information and reports required under the Contractor’s Liability Act

Before signing an agreement on using temporary agency workers, the user company must, as a rule, ensure that the temporary agency fulfils its legal obligations. In practice, this means procuring the information and reports required under the Contractor’s Liability Act (such as a Trade Register extract or equivalent information as well as information on tax payment and employer register status, the applicable collective agreement, and pension insurance premiums paid) from the temporary agency or the appropriate service provider.

This blog was originally published as a HENRY guest blog.