Temporary Agency Workers and the Daimler case

Anthony Kerr, UCD Sutherland School of Law

According to Eurostat, the number of temporary agency workers, as a proportion of the EU workforce, has increased from 1.8% in 2011 to 2.6% in 2020; ranging from 7.6% in Malta and 5.5% in Germany to 0.3% in Greece and Hungary. Directive 2008/104/EC (“the Directive”) purports to establish, in the words of Recital 12, “a protective framework for temporary agency workers which is non-discriminatory, transparent and proportionate, while respecting the diversity of labour markets and industrial relations”.

It has been well documented by Countouris and Horton (“The Temporary Agency Work Directive: Another Broken Promise?” (2009) 38 Industrial Law Journal 329-338) that the Directive was only adopted “after nearly three decades of debate and failed attempts at regulation”. As the authors observe, the issue of protecting “agency workers” was first addressed in the 1974 Council Resolution concerning a Social Action Programme ([1974] O.J. C13/1). Eventually, “after years of political stalemate and obstruction on the part of certain Member States”, an agreement reached between the Trades Union Congress and the Confederation of British Industry in May 2008 enabled the UK government to agree to a much “watered down” Directive to that which the European Commission had initially proposed (COM (2002) 0149 final).

So, unlike the Framework Agreements annexed to Directives 97/81/EC and 99/70/EC which provide that, in respect of “employment conditions”, part-time and fixed-term workers shall not be treated in a less favourable manner than comparable full-time or permanent workers, Article 5 of the Directive provides that the principle of equal treatment for temporary agency workers applies only to their “basic working and employment conditions”, such as pay (but not necessarily sick pay or pension) and working time.

Article 5.5 requires the Member States to take “appropriate measures” with a view to preventing “misuse” in the application of the Article and, in particular, with a view to preventing successive assignments designed to circumvent the provisions of the Directive. There are no provisions comparable to clause 5 of the Framework Agreement on Fixed-Term Work, which sets out a menu of measures to prevent “abuse” of successive fixed-term employment contracts. Consequently, in Case C-681/18, JH v KG ECLI:EU:C:2020:823, the Court of Justice held that Article 5(5) did not require the Member States either to place limits on successive assignments to the same user undertaking or to require that there must be some technical, production or organisational reasons for having recourse to temporary agency work.

The adjective “temporary” appears 38 times in the text of the Directive (excluding the Recitals) and the adverb “temporarily” appears four times; all in Article 3 in the context of defining a temporary agency worker, a temporary work-agency and a user undertaking, this last phrase being defined as a person for whom “a temporary agency worker works temporarily”. The Directive, however, contains no temporal limitations on the supply to, or use by, user undertakings of temporary agency workers. So, if a worker is engaged by a temporary-work agency and is then placed for many years with a user undertaking, is that worker a “temporary agency worker” working “temporarily”?

In Case C-232/20, NP v Daimler AG (ECLI:EU:C:2022:196), the claimant had been assigned by a temporary-work agency, for a period commencing 1 September 2014 and ending 31 May 2019, during which he was made available exclusively to Daimler to work on its engine assembly line. His assignment had been subject to 18 extensions over that period. In proceedings issued in June 2019, NP sought a declaration that an employment relationship existed between him and Daimler since, at the earliest, 1 September 2015 or, at the latest, 1 May 2019. He submitted, in particular, that his assignment to Daimler, since it had lasted longer than one year, could not be regarded as “temporary”. Both the Advocate General and the Court of Justice focussed their attention, not on the adjective “temporary”, but on the adverb “temporarily” in finding that permanent jobs, and jobs that were not performed to provide cover, were not automatically precluded from the scope of the Directive. The nature of the work, however, was to be taken into account by the referring court in determining whether NP’s successive assignments to Daimler could be justified so as not to amount to the misuse of temporary agency work in a manner inconsistent with Article 5(5).

It is significant that the Directive does not address the employment status of agency workers, namely whether they are employees of the agency or of the user undertaking or, indeed, whether they are anybody’s employees: see, for instance, the English Court of Appeal decisions in Dacas v Brook Street Bureau [2004] ICR 1437 and James v Greenwich London Borough Council [2008] ICR 545 holding that the claimants both fell into a sui generis category, being neither an employee of the agency nor of the user undertaking. In Daimler, the Court of Justice said that, in the absence of domestic law provisions imposing penalties for non-compliance with the obligations deriving from the Directive, temporary agency workers could not benefit from a “subjective right” under EU law based on the creation of an employment relationship with the user undertaking.

In Ireland, this issue was resolved, prior to the implementation of the Directive, by the legislature providing that an agency worker was deemed to be an employee of either the agency or the user undertaking depending on the legislation. Under the Unfair Dismissals Acts 1977 - 2015, NP would have been deemed to be an employee of Daimler enabling him to seek reinstatement.