Articles

Temporary Work Agency

08 September 2004 (Invest Romania)

IGenerally regulated by Law No. 51 of 2003 on the Labour Code (the “Labour Code”), the actual implementation of temporary work (“Temporary Work”) as legal institution has become effective by the entry into force of the Government Decision No. 938/2004 in the setting-up, operation and authorization of temporary work agents (“GD No. 938 of 2004”).

Whereas the entry into force of GD No. 938/2004 has recently taken place (September 1st 2004), it is difficult to foresee the trends of this institution in Romania yet. I deem therefore of interest an outline of the main features of Temporary Work, pointed by the relevant European Union experience.

Often regarded as a cost-cutting solution, Temporary Work involves a three-party relationship, consisting of a temporary work agent (“TWA”), temporary employee and a user firm. Essentially, the above-mentioned structure entails the hiring out by TWA, by way of a temporary employment agreement, of a temporary employee to be further assigned to the user firm, upon a service agreement, in order to perform temporary and precise assignments for a definite/limited duration (the “Assignment”).

The temporary employment agreement is usually executed for the duration of a single Assignment that may not exceed 12 months. The initial duration may be extended, but only once and up to 18 months. Additionally, in case the temporary employment agreement is concluded for more than one Assignment, the maximum contractual duration of 18 months still has to be observed.

I have underlined bellow some key issues that should be taken into consideration upon the assessment by a prospective user firm of the Temporary Work feasibility, when adopting its employment policy.

(i) The situations where user firms may refer to the services of TWA are restrictively listed in the applicable legislation as follows: (a) replacement of an employee whose employment agreement has been suspended, during suspension; (b) performing services with a seasonal character and (c) performing specialized or occasional activities.

An important issue to be further clarified by the labour market evolution is the nature of the labour offer available for this type of work. European Union statistics indicate that temporary employees are either highly qualified or without relevant professional background or face difficulties in finding permanent work place.

(ii) The service agreement to be entered into between TWA and the user firm should comprise sufficient provisions to cover the absence of a direct contractual relationship between the temporary employee and the user firm.

(iii) Temporary Work is governed by the principle of employees’ equality of treatment, meaning that, on one hand temporary employees’ wages may not be lesser than those received by the user firm’s personnel performing same activities or similar ones, and, on the other hand, temporary employees’ access to all the services and facilities granted by the user firm should not be restricted.

The European Union practice indicates a fluctuating nature of the temporary employees’ wages: compared to user firms’ employees hired for an indefinite duration, the wages of temporary employees are either lower (due to the lack of proper qualifications/experience) or significantly higher (when the specific and temporary task requires highly qualified personnel).

In the end, it should be mentioned that the TWA authorization procedure is due to commence on September 1st, 2004. In case the issuing authority will cancel the TWA authorization, the temporary employment agreements and the service agreements in execution at that date will remain in force until the expiry of their duration, without prejudice to the temporary employees or user firms’ rights.