Unions off-target in opposing manpower agencies

Comment |  A ban on rented labour when others are in line for re-employment would be a blow against jobs. Businesses would be further enticed to operate without their own employed staffs. Manpower agencies would have to cut back on specialists and significant entry points to employment would disappear. This, in a situation where Sweden’s unemployment is over 8 percent, and 25 for youth.

Representatives for six Swedish unions recently wrote a press article claiming that 74 percent of those polled answer no when asked if businesses should be allowed to dodge Sweden’s employment protection law by terminating staff then re-employing them via staffing agencies. The article cited the absence of legal means to stop companies firing people then offering them jobs in manpower agencies. The unions believe they have a mandate to fight this trend when next year’s collective wage talks start.

The fact is that employers are not using staffing agencies to get around the employment protection rules. A business might need flexibility to meet dips and rises even in a situation where it is cutting back. What the unions aren’t saying is that legislation already exists to stop over-use of rented labour. Current practice shows that employers cannot rent staff if the object is to escape the employment protection law’s rules regarding priority.

But Swedish labour laws start with the principle that the employer decides on the scale and direction of an operation based on economic considerations. This is a natural order. Businesses must obviously have the right to choose to run their operations by either employing or hiring, as long as the decision isn’t made to circumvent LAS, Sweden’s employment protection law.

Most companies experience varying demand for their goods or services and thus must adapt to survive. Flexibility can be useful even when in cutback mode. Manpower agencies give Swedish businesses a necessary tool for adapting an operation to demand ups or downs at the same time as they create valuable job opportunities with a high degree of security.

Despite what the unions claim, the private employment business is effective and efficient. Renting staff has being going on for some time in Sweden; the current legislation is from 1993. Staffing agencies currently employ about 60 000 people.

A job with a staffing agency brings a high degree of security — tenure regulated by labour market accords. Collective wage agreements have been reached with all the major Confederation of Trades Unions (LO) members. Employees of manpower agencies enjoy the same conditions won in collective bargaining as everyone else where they work. The business is also a portal to the labour market for weak segments such as youth and immigrants. The manpower business has developed well, even during the crisis, and creates needed jobs. This demonstrates the need for its service.

Sweden is in the process of implementing the so-called Agency Workers Directive. This EU rule has two aims: to improve conditions for employees of European staffing agencies, and to remove limitations on using them. Sweden is in a position where fewer limitations are imminent, not more.

Niklas Beckman