The new act on the legal position of temps will ensure that temps are subject to the same rights as permanent employees when it comes to a number of central issues. This is the last of a number of acts which are to protect against discrimination based on the employment form. The act introduces a principle on equal treatment ensuring that the terms of temps as regards pay, holiday, etc. correspond to at least what they would have been subject to had they been employed directly by the user company.

On the way for a long time

In 2008, the European Parliament and the Council adopted Directive 2009/104/EC of 19 November 2008 concerning temporary agency work ("the Directive"). The Directive should have been implemented no later than 5 December 2011. For a long time, the labour market parties disagreed as to how the Directive's principle on equal treatment was going to be implemented in Danish law, which has led to the wide delay of the introduction of the bill. But the Ministry of Employment has finally submitted a draft bill for consultation. The bill will be introduced on 17 April 2013, and it will presumably be adopted in almost the same form as introduced.

Applicable law

So far, the employment terms of temps have not been separately regulated in Denmark. Temps are, however, covered by the general legislation applicable to salaried employees are thus entitled to a contract of employment, holiday, breaks and rest periods under the Working Environment Act.

The terms of temps have so far mainly been regulated by collective agreements. However, some temps have not been regulated by collective agreements, and the terms of such temps are very much subject to the regulation in the new act.

The bill

The purpose of the Directive and the bill is to ensure that temps are given certain rights relating to the special conditions characterising temp work. This especially concerns the fact that temps are subject to the instructions of the agency and the user company. The purpose of the Directive and the act is to ensure that temps are not discriminated against in relation to employment terms, and the bill therefore introduces the principle of equal treatment. In addition to this principle, the bill ensures that temps have access to the user company's facilities and benefits and information on vacant positions with the user company.

The bill prohibits the agency from claiming payment from the temp in return for employment, if any, with the user company, and the bill also prohibits clauses preventing the temp from becoming employed with the user company after the end of the temp period.

Finally, the bill introduces a duty of information of the employee representatives with the user company as to the application of temps.

Principle on equal treatment

The introduction of the principle on equal treatment implies that temps may invoke the terms and rights applying to other employees in same positions with the user company.

The terms covered by this principle are only the ones listed in section 3 (1) of the bill. These are working hours, overtime work, breaks, rest periods, night work, holiday, public holidays and pay.

If a company is covered by a collective agreement, temps must as a minimum be subject to the rights stipulated by this collective agreement. This e.g. means that temps are also entitled to days off if this appears from the collective agreement.

The provisions on pay that apply under the collective agreement of the user company will also be decisive for the minimum pay to the temp. This does not only apply in relation to minimum pay, but also to allowances and overtime pay.

In particular, as regards pay during sickness, the principle on equal treatment is important to temps undertaking work normally covered by the Salaried Employees Act. Traditionally, temps are not considered salaried employees and are therefore not entitled to pay during sickness. As the principle on equal treatment also applies to pay, this means that temps - who would be considered salaried employees if employed directly with the user company - are now entitled to pay during sickness.

Deviation from the principle

The legislature has chosen to apply the possibility of the Directive to deviate from the principle on equal treatment in connection with collective agreements. The bill proposes that a temp cannot invoke terms and rights applying to other employees with the same positions with the user company, if the agency is covered by or has accepted a collective agreement entered into by the most representative labour market parties applying to the entire Danish area and regulating the pay and work terms mentioned in the provision on the principle of equal treatment.

According to the comments of the bill, it depends on a specific assessment who are to be considered "the most representative labour market parties".

The possibility of deviating from the principle of equal treatment under a collective agreement implies that a temp cannot reply on this principle in a specific situation where the temp is subject to less favourable terms than the temp would have been subject to under the principle of equal treatment. If the agency is covered by a national collective agreement between the most representative labour market parties, the condition for deviating from the principle has been fulfilled.

The right to deviate from the principle of equal treatment is to be interpreted in such a way that the collective agreement replacing the principle must - based on an aggregate assessment - place the temps as if they had as a minimum been covered by the principle of equal treatment.

Sanctions

Violation of the act may result in a sanction and compensation to the temp discriminated against. However, neither the Act nor the legislative history behind the act fixes a level of compensation.

Comments

The tradition of the Danish model of letting the labour market parties regulate the employment terms by way of collective agreements has been strengthened by the bill. The legislature is trying to avoid social dumping by giving special status to Danish collective agreements in relation to the right of deviation as the right under the Directive to deviate from the principle of equal treatment is implemented in such a way that deviation may only take place under a collective agreement entered into by the most representative labour market parties in Denmark, and which applies to the entire Danish area.

Foreign temp agencies cannot deviate from the principle of equal treatment by way of collective agreements from their own countries.

The bill defines payment very broadly and, as mentioned above, it appears from the bill that payment as defined under section 3 (1) of the act includes both pay during sickness and pension contributions, which may be surprising as pay during sickness has not normally been part of the Danish pay concept, but has been considered a benefit.

It is also noted that, even if pension contributions are part of the Danish pay concept, this could have been avoided as pensions within the EU go under the name "social security schemes", and as article 5 (4) of the Directive leaves it to each member state to decide whether payments such as pay during sickness and labour market pensions are to be included in the pay concept.

This is a very wide-ranging area which will affect both canteens and fitness facilities, but perhaps also home workstations etc. as mentioned in the legislative history.

The bill will be introduced on 17 April 2013, and we will follow it closely.

The content of this Newsletter is not, and should not replace, legal advice.

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Jonas Enkegaard

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Marianne Lage

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