Serbian Agency Employment Law: Will it help workers or put them in a disadvantage?

Photo: Marko Miletić / Mašina

Domestic legislation has for the first time regulated the position of employees engaged through agencies, although such employment has existed for years. In what way and how much will the new law help agency workers? We discussed this with Jugoslav Ristić, president of the Confederation of Autonomous Trade Unions in Kragujevac and Mario Reljanović, an expert in labour law.

On the one hand, it’s good that the activity of agencies will finally be regulated by the Law on Agency Employment, which will be applied starting March 1, 2020, and will regulate who is allowed to carry out such activity and under what conditions, believes Mario Reljanović, labour law expert and associate of the Centre for Decent Work.

So far it’s been impossible to know who outsources workers and how many people are hired through agencies, states Reljanović. In that respect, it’s a positive novelty that the Law on Agency Employment “prohibits agencies from hiring people on the basis of temporary and periodic working contracts, and that we will finally know who is in the agency-business and how many people are being assigned. An oversight of agencies, that could not have existed so far, will be introduced”, says Reljanović.

Jugoslav Ristic, president of the Confederation of Autonomous Trade Unions in Kragujevac, regards the Law on Agency Employment to be a necessary evil and says that agency work is in no way beneficial for the workers. The state lived up to minimal expectations by regulating this area, but workers cannot expect to benefit from such legislation in the long run.

I would be happiest if agency employment didn’t exist, because it allows employers to earn extreme profits without actually moving a finger. Will the law help agency workers? Probably, if it’s enforced without exception, Ristić said.

Although agency work is present in a number of other countries, it’s usually regulation makes this form of employment an exception rather than the rule. Ristić fears that agency employment will become dominant in Serbia, which could have catastrophic consequences:

If it becomes dominant, the Labour Law and the very notion of employment will be derogated by such practice. Unfortunately, people are hopeless. That’s why we often receive calls from young agency workers who ask for the area to be regulated, in hope that that will bring an at least minimal improvement of their position. When you drive someone to a state of hopelessness, he starts to perceive something that is proven to be bad as a good thing. This is a recipe for humiliating people step by step. This is a dangerous law with potentially far-reaching consequences.

Jugoslav Ristić; Source: Yugoslav Ristic / Facebook

The authorities are siding with agencies and employers

The passage of the law was preceded by a heated debate between the state and employers’ representatives on one side, and trade unions on the other. The fact that the law doesn’t limit the number of workers that a company can engage through agencies was most intensively disputed by the trade unions. Restrictions apply only to businesses of up to fifty employees, while those with more employees can potentially hire all their workers through agencies.

The unions’ request was to limit that number to ten per cent of employees. In addition, they requested that the agencies be obliged to provide bank guarantees, so that workers wouldn’t be left without pay if an agency stopped working. Their requirements have not been met.

It shows again that the government doesn’t have the citizens’ well-being in mind, but only the employers’, and that they act in the interests of the rich. They put themselves on their side, and not the side of the majority of citizens. This is an anti-popular law in my opinion, Jugoslav Ristić concluded.

Although the law seemed to equate the status of full-time and agency employees (at first glance), experts believe that it, in fact, doesn’t. Agency employees hired on permanent basis will not be equal with full-time permanent employees, because agencies can dismiss their employees more easily.

Working on a basis of an indefinite contract, while being hired through an agency, is not the same as being employed on an indefinite basis, according to the Labour Law. This regime is not uniform, because the agency as an employer has a specific reason for dismissal. The agency can dismiss an employee at any time (when he is not assigned to an employer) as redundant, points out Mario Reljanović from the Centre for Decent Work.

He also believes that it is a bad solution that there is no provision guaranteeing the percentage of working time and the amount of earnings in a period of inactivity – a period in which an employee is not assigned to another employer through an agency. This allows agencies to keep an employee at a low percentage of working time, and pay him/her extremely low wages.

A restriction should have been introduced regarding the period of inactivity, that is, the period when an employee is not assigned to another employer. He/she should not be engaged at a lesser percentage than the one he/she was hired for when they were assigned. If a worker was engaged by an employer at one hundred per cent of working time for two years, the agency shouldn’t be allowed to engage him/her at ten per cent of working time and for a minimum wage.

Mario Reljanović; Photo: Marko Miletić / Mašina

Deliberately vague provisions?

The implementation of the Agency Employment Law will be particularly problematic when it comes to strikes and unionizing. The already existing laws have not been taken into account, so certain provisions of the new law may contradict the existing Law on Strike.

The Law on Strike does not recognize the categories of “employer user” and “assigned employee” at all. The Law on Strike also states that an employee can only strike on the premises of their employer, and in this case the employer is the agency. The question then is how to strike within the existing legal boundaries. A pure conflict of two norms that cannot be interpreted properly has been created, explains Reljanović.

He also added that there are shortcomings in terms of the scope of assigning. Comparative law advises that agency employment is generally prohibited in risky sectors and the public sector. However, this is not the case when it comes to Serbian law:

Public companies will thus be allowed to rent employees, so will, with some restrictions, the state bodies. Agency recruitment is not prohibited in any single area that may be problematic. In Italy, for example, civic construction is excluded. In our country, it is now possible for an agency to send a worker without any training to a construction site.

As a particular problem, Reljanovic points out the insufficient protection of minors and the possibility of their recruitment through agencies.

Given the special status of minors, this is a very strange solution. In most countries, juveniles are excluded from being able to be ceded through agencies, Reljanovic concluded.

Translation from Serbian: Iskra Krstić

This article was originally published in Serbian on Dec 12, 2019.

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