1. ILO Regulating Decent Work Conference
Exploring the global regulatory mosaic of the temporary staffing industry: temporary agency work in BRICS
Dr Jennifer Ferreira
ILO Regulating Decent Work Conference
Geneva July 2015

2. Outline Temporary agency work Growth of temporary agency work in BRICS
National Varieties of Temporary Staffing Industry
Regulatory Approaches
Summary

3. The Temporary Staffing Industry
global annual sales revenue for the temporary staffing industry reached €299.3 billion.
12 million FTE working in agency work.
260,000 temporary staffing agencies across the globe.
Source: (Ciett, 2015)
Temporary agency worker
Labour Contract
Worker Placement
12 million in agency work 5.2% growth
Agency-Client Contract
Temporary
Staffing
Agency
Employer

4. Temporary Agency Work Global Distribution
Source: Ciett (2010)

5. Temporary Agency Work Global Distribution
Source: Ciett (2014)

6. National Varieties of the Temporary Staffing Industry
Resistance and lobbying activities
TRADE UNIONS
Market expansion strategies (e.g. diversification, acquisition, organic growth)
DOMESTIC AGENCIES
TRANSNATIONAL AGENCIES
Lobbying for favourable regulation
NATIONAL & INTERNATIONAL TRADE BODIES
Client firms and workers segmented by geography, sector, firm size and occupation
NATIONAL TEMPORARY STAFFING MARKET
Regulation of the Temporary Staffing Industry
THE MULTI-SCALAR STATE
Regulation of the mainstream employment relationship
Welfare system and changing nature of job provision
Competitive dynamics
Market expansion strategies (e.g. diversification, acquisition, organic growth)
Based on Coe, Johns and Ward, (2009).
See Watts (2013) for European case studies.

7. National Regulation: Temporary Agency Work Sub-national regulation
Regulation Framework
Global: ILO C181
Regulation of temporary agency work focuses on:
Obligations for temporary staffing agencies
Requirements of licenses to operate
Provisions for equal treatment
National Regulation: Temporary Agency Work
National Regulation:
Standard Employment
Sub-national regulation
Self-regulation

8. Global Influences – C181: Private Employment Agencies Convention, 1997
A framework of guiding principles:
how to improve regulation of TSI
increase labour market flexibility
foster development of temporary staffing agencies
Instrument for setting minimum standards for the industry
According to Ciett (2013) the benefits of ILO convention 181 for countries that ratified it:
Lower levels of informal and undeclared work;
High correlation with democracy
More cooperation between public and private employment services;
Greater protection for freedom of association;
Full respect for the right to strike;
Meaningful and constructive social dialogue in the temporary agency work sector;
Better protection of agency workers by forbidding fee-charging;
Better wages for agency workers;
Controlled and mitigated development of the industry.

9. Global Influences – C181: Private Employment Agencies Convention, 1997
Source: ILO website

10. Regulation Frameworks
Category
Characteristics
Examples
Type 1
Liberal industry regulation; liberal labour market regulation
UK, US, Ireland
Type 2
Liberal industry regulation, lightly regulated labour market
Australia, Czech Republic
Type 3
Liberal industry regulation; highly regulated labour market
Germany, Netherlands, Japan, Sweden
Type 4
Strict industry regulation, lightly regulated labour market
Belgium, Italy
Type 5
Strict industry regulation; strict labour market regulation
France
Source: Coe, Johns and Ward (2009)

11. Regulation Frameworks
Market Type
Examples
Characteristics
Market Driven
Europe UK
Rapid agency work development with appreciable drop-off in the crisis.
Open regulatory environment with limited restrictions
Liberal economies favouring flexibility over security
Non-Europe
US, Australia,
Social Dialogue
#western Europe
Netherlands, Switzerland, Austria, Germany
Significant degree of agency work penetration in relatively mature market.
Moderately regulated, varying balances of flexibility and security.
Labour market organized and regulated by collective agreements between social partners.
Nordics
Sweden, Norway, Denmark, Finland
Historically low AW penetration and slow industry development.
Unique Nordic and social and economic system.
Asia
Japan
Generally liberal economies but high value on security and social acceptance challenges
Legislator Driven
Western Europe
France, Belgium, Luxembourg
Penetration depending on level of industry development, ranging from below to above average.
Highly regulated, weighted towards job security over flexibility.
Historically labour markets with high unemployment relative to Social dialogue peers
Mediterranean
Italy, Greece, Spain Portugal
Emerging Markets
Eastern Europe
Czech Republic
Nascent industries with agency work recognized only recently.
Regulatory policies still in development.
Economic policies and market dynamics still evolving
Latin America
Brazil Argentina
India, China
Based on: Ciett/BCG (2013:88)

12. Temporary Agency Work Restrictions
Collective labour agreements
Quotas
Obligation to report
Option for derogation
License / Authorisation
License to operate
Max length of assignment
Prohibition to replace striking workers
Reasons for use
Sectoral bans
Equal pay
Limitations for contract renewals
Proportion of workforce

13. OECD Employment Protection Legislation Index – Temporary Employment
Source: OECD (2015)

14. OECD Employment Protection Legislation Index – Temporary Agency Work
Source OECD (2014)

15. Source: Ciett/BCG (2013: 51)

16. Number of agency workers - Millions Temporary staffing agencies
Temporary Agency Work: BRICS
Country
Number of agency workers - Millions
(2013)
Penetration rate % (2013)
Temporary staffing agencies
Brazil
0.6
36,982
Russia
0.34
0.1 20
India
1.3
2,621
China 27
3.6
19,935
South Africa
0.8
9.2 UK
1.2
3.9
18,180 US
11.0
2.0
35,020
Source: Ciett (2015, 2014)

17. Brazil
Brazil identified as a region of future potential growth for agency work in early 2000s.
Transnational agencies have a long presence in the region.
Reasons for lack of expansion previously include unstable economy, high levels of informal employment and extremely low wages.
Experienced significant increase in agency workers, 11% increase since 2006.
Temporary Employment Act (Federal Law no: 6019/74):
Temporary staffing agencies must be registered with the Ministry for Labour and Employment.
The agency must comply with any requests for information made by the Ministry;
Temporary agency workers can be used to work in urban areas to meet a temporary or seasonal need for regular and permanent employees, or to cope with an extraordinary workload increase;
The maximum cumulated duration of temporary agency work contracts is three months, unless authorised by the Ministry of Labour and Employment; ·
There are no restrictions on the number of renewals or extensions of temporary agency work contracts within the three month limit; ·
Temporary agency workers must receive the same pay as a worker doing the same work for the user firm

18. Brazil
OECD EPL (2012): 4.125
From July , Ministry of Labour amendment: Allow temporary workers for longer periods of time under certain circumstances.
“Currently the temporary agency work sector faces significant restrictions in Brazil. Regulation governing our sector dates back to 1974 and provides only two instances in which temporary agency work can be used. It also restricts the maximum assignment length to just three months and provides limited options for renewal. As a result employers have no option than to turn to other forms of flexible work which may offer less protection to workers.” Denis Penel in Global Recruiter (2015).
“Brazil has gained international prominence as one of the leading countries in the business of temporary employment, reflecting the importance that labour market intermediaries have acquired in the internal dynamics of the Brazilian economy” (Guimares, 2015)

19. Russia
OECD EPL (2012): 1.125
The law does not provide any arrangements regulating the activities of TWAs.
No restrictions in the case of assignments at the user firm (no regulations in labour law).
No limit for assignments. No limit for open-ended TWA contracts between the agency and the worker. 5 years for fixed-term TWA contracts between the agency and the worker.
No requirement for authorisation or reporting obligations.
A TWA worker must receive the same pay as a worker doing the same work for the user firm.

20. Russia According to Smirnykh and Wörgötter (2013:25-26):
“In general, agency-work contracts were used by a small number of enterprises but had a very high rate of growth…
…the increase of unstable employment segment at Russian enterprises using non-standard labour contracts demonstrates the transformation of standard labour contracts for an increasing number of employees. It indicates the necessity to improve the Russian labour legislation, which is still mostly oriented to standard labour relations considering working conditions of employees.”
In 2001 the Labour Code of the Russian Federation replaces the Code of Labour Acts of the Russia Federation 1971.
Temporary agency work although becoming more common, aren’t fixed in the LC RF, leading to both legal uncertainty and vulnerability of those engaged in this form of work.
Now the underlying principle of the draft law is not to veto temporary agency work but instead to narrow its scope of application
New law in restricting use of temporary labour to come into force in restricting use of temporary staff to nine months.

21. India
OECD EPL (2012):1.81
Contract labour is generally allowed for non-core activities but there is no consensus about what is the effective regulatory environment applying to the staffing industry and whether contract labour laws and rules apply to that industry.
No limits for assignments or contracts.
Contractors and user firms with more than 20 employees are required to obtain a license before engaging contract workers. The license is valid for 12 months, after which it can be renewed by following the same procedure.
Wage rates and working conditions of the contracted worker must be the same as those of a worker employed directly by the user firm to do the same type of work.

22. India
‘with a million youth added to the workforce every month and with barely 2% having any formal skills, staffing in the most effective type of employment, which bends the curve in favour of our youth and helps them become further employable”.
ISF President, 2015
Flexi-staffing
Estimated 600,000 new flexi-staffing jobs to be created in 2015.
Sector expected to grow from 1.7 million to 9 million workers by 2025.
Potential to account for 10% of India’s formal sector employment.
Absence of clear regulations has an adverse impact on workers welfare.
“a clear legislation on temporary staffing is critical for reducing unemployment and the number of illegal workers. Private staffing agencies working within the legal framework can be key repositories of knowledge on the labour market, and can be of great help to law makers. Qualified agencies should also undertake training to improve the employability quotient of the workforce.”
GI Group President, 2015

23. China OECD EPL (2012):1.75 Dispatch workers
Placement of temporary workers: temporary, ancillary or substitute positions.
In practice widely used in many different situations.
A temp agency shall conclude a fixed-term employment contract of at least two years with a temporary worker.
There is no restriction on duration of assignments (dispatch contract) as long as it falls within permitted work such as temporary, ancillary or substitute position.
Temp agencies need registered capital of no less than Rmb
No obligation in the Employment Contract Law for ongoing reporting to authorities.
Temporary workers have the right to the same pay for the same work as the workers of the user firm.

24. China
December 28, 2012, Standing Committee of the National People's Congress passed an amendment (effective July 1, 2013) to the PRC Employment Contract Law.
Labour dispatch may be used only for :
(i) temporary (no more than six months),
(ii) auxiliary (staff engaged in the Company's non-core business who provide services to those involved in the core business) or
(iii) substitute (staff hired to temporarily replace employees on fixed leave).
Agencies need a license form a local labour bureau and registered capital RMB 2 million
2013 Amendment (effective 2016):Host companies will be limited to hiring only up to 10% of their workforce through labour dispatch.

25. Mr Makhubele, VP of APSO in Staffing Industry Analysts (2015)
South Africa
OECD EPL (2012): 0.5
Labour brokers
No restrictions on sectors or renewal of assignments.
No limit for contract duration.
A temporary employment service is required to register with the Department of Labour.
Temporary agency workers are the employees of the agency and are bound by any collective agreement, sectoral determination or legislation that binds the agency.
“The temporary employment industry generates more than USD 3.3 billion each year – resulting in additional revenue for government in the form of taxes and VAT. The industry also directly employs approximately 20,000 people.”
Mr Makhubele, VP of APSO in Staffing Industry Analysts (2015)

26. South Africa Labour Relations Amendment Act, No 6 of 2014
Those providing ‘temporary services’ will be employees of the agency.
Section 198(1) defines temporary services as either:
Services limited to a fixed time period of not more than three months,
Where employee is substituting a temporarily absent permanent employee,
Where a work category is classified as temporary, or the temporary period if determined by a collective agreement.
Outside of this definition – employees of the client of the agency not the agency itself.

27. Summary
The regulation of temporary agency work is dynamic and often complex.
Regulatory environments are affected by sector specific and wider labour market issues.
The BRICS countries represent a selection of countries with very different developing regulatory environments against a range of wider labour market contexts.
Next steps:
to explore the impact of regulatory changes to temporary agency work in BRICS countries.
to consider how the changes to temporary agency work fit into a broader labour market environment for non-standard employment.

28.
@jennywrenwatts

29. Key References
Ciett (2010) Agency Work Industry around the world. Brussels: Ciett.
Ciett (2013) Workers enjoy more protection in countries that have ratified ILO Convention No181 on private employment agencies. Available at:
Ciett (2014) Economic Report. Brussels: Ciett.
Ciett (2015) Economic Report. Brussels: Ciett.
Ciett/BCG (2013) Adapting to change. Brussels: Ciett.
Coe, Johns, and Ward, (2009) Managed Flexibility: Labour Regulation, Corporate Strategies and Market Dynamics in the Swedish Temporary Staffing Industry, European Urban and Regional Studies, 16(1):
Global Recruiter (2015) Brazil works. Global Recruiter: 12.
Guimaraes, N. and Vieira, P. (2015) ‘Labour Flexibility in an already flexible market’ In Fu, H. Ed. Temporary agency work and globalisation: beyond flexibility and inequality? Farnham: Gower.
ILO (2015) Ratifications of C181. Available from:
OECD (2014), Graph  Incidence of temporary agency work, Brazil, OECD and other selected countries, 2010: Temporary agents as a percentage of active working-age population, in Investing in Youth: Brazil, OECD Publishing, Paris. DOI: 
OECD (2015) OECD Statistics. Available from:
Smirnykh and Wörgötter (2013) Why do Russian firms use fixed-term and agency work contracts? IZA Policy Paper No. 54
Watts, J. (2013) The institutional context of temporary staffing: a European cross-national comparative approach. University of Manchester. Unpublished PhD thesis.