AWD141

FULL RECOMMENDATION

AWC/13/9

DETERMINATIONNO.AWD141

(128020/29/43/45/50//56/57/63//68-TAW-12/JW)

INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 25(2), PROTECTION OF EMPLOYEES (TEMPORARY AGENCY WORK) ACT, 2012

PARTIES :

O 'REILLY RECRUITMENT LIMITED
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)

- AND -

MAGDALENA ZAREMBA,KINGA WOJTOWICZ-KANIA,MALGORZATA SASIN,DOROTA DABROWSKA,JULITA DABROWSKI,MARIUSZ KALINOWSKI,EWA STANISZEWSKA,BEATA PAMPUCH,ARKADIUSZ PAMPUCH
(REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION)

DIVISION :

Chairman: Mr Hayes
Employer Member: Ms Cryan
Worker Member: Mr Shanahan

SUBJECT:
1. Appeal of Rights Commissioners Recommendations R-128020/128029/128043/128045/128050/128056/128057/128063/128068-taw-12/JW.

BACKGROUND:

2. The Worker appealed the Rights Commissioner’s Decision dated 11th April 2013 to the Labour Court in accordance with Section 25(2) of the Protection of Employees (Temporary Agency Work) Act 2012 on the 1st May 2013. The Court heard the appeal on the 27th September 2013. The following is the Determination of the Court:

DETERMINATION:

Eights complainants employed by O’Reilly Recruitment Ltd and are assigned to work in AQF Ltd doing the same or similar work as directly employed workers. Directly employed workers are paid €10.08 per hour. The Complainants are paid €8.65 per hour.

On 25 June 2012 the Complainants wrote to their employer claiming that their rate of pay infringed the Protection of Employees (Temporary Agency Workers) Act 2012. They claimed the same rate of pay as directly employed workers i.e. €10.08 per hour.

On 5 July the Respondent replied rejecting the claim and stating that they were paid in accordance with the terms of the Act. It stated that it was advised by AQF Ltd that it would have paid new recruits employed on the 5^thDecember 2011, the effective date of the Act, €8.65 per hour and not what it claimed was an historic rate of €10.08 per hour.

The Complainants referred a complaint to the Rights Commissioner on 13 November 2012. A hearing took place on the 27 February 2013. A decision issued on 11^thApril 2013. The Rights Commissioner decided that the Complaint was not well founded.

The Complainants, by way of notice dated 20^thMay 2013 appealed against that decision to this Court. The case came on for hearing on 27 September 2013.

Position of the Parties

Complainant’s Position
The Complainants submit that they are “Agency Workers” within the meaning of the Act. They argue that their basic “working and employment conditions” are less favourable than those that apply to directly employed workers. They state that they are paid €8.65 per hour while the rate of pay of directly employed workers is €10.08 per hour. They submit that this infringes section 6(1) of the Act.

Respondent’s Position
The Respondent acknowledges that the Complainants perform the same work as directly employed workers. It submits that it was informed by the Hirer that directly employed workers have long service. It submits that it was informed by the Hirer that trading conditions had changed in recent years with the result that it would not at present or on 5 December 2011 when the Act came into effect, employ workers on those historical rates. It states that it did not in fact employ any direct workers around that time but had it done so it would engaged them at the rate of €8.65 per hour.

In support of its position the Respondent submitted a letter sent to it by the hirer dated 6 February 2013. It states (verbatim):

AQF ltd was formed as the result of a merger of two existing foam businesses on 1^stJune 2005. All existing employees rights transferred with them to the new business, the shortest serving employee having joined in November 1999. The majority of our direct employees have 20 years plus service with the company.

Since 1999 AQF have employed only one permanent direct employee as a general Operative which was (redacted) on 28^thApril 2008, the rate of pay as can be seen on her offer letter is €8.65 per hour. AQF also employees direct temporary staff on an ongoing basis, the rate of pay for direct temporary staff is €8.65 per hour, please see pay slips attached.

If AQF Ltd were seeking permanent General Operatives at present the rate of pay for this position would be €8.65 per hour.
The agency staff provided by O Reilly Recruitment are afforded the exact same working conditions as the direct permanent employees of AQF Ltd in relation to basic pay, working time, rest periods, rest breaks, overtime rates, annual leave and public holidays.
The agency workers also receive the identical benefits in terms of Health and Safety training, Canteen and general facilities, PPE and Christmas bonus.

I do not understand where this claim is coming from as the comparable rate of pay is €8.65 per hour.

It submits that it relied on this letter as evidence of the rate of pay the Hirer would apply to direct workers employed on 5 December 2011.

On that basis the Respondent submits that the complaints are not well founded and should fail. It asks the Court to uphold the decision of the Rights Commissioner.

The Law

This Act was signed into law on 16^thMay 2012. It transposes into Irish law Directive 2008/104/EC of the European Union on Temporary Agency Work. Consequently the Court is obliged to interpret and apply the Act, as far as possible, in light of the wording and purpose of the Directive so as to achieve the result envisaged by the Directive. The Act commenced on 16^thMay 2012. Sections 2, 3, 4, 5, and 6 are deemed to have commenced on 5^thDecember 2011, the date on which Members States were required to implement the Directive.

The purpose of the Directive is set out at Article 2 thereof as follows:

The purpose of this Directive is to ensure the protection of temporary agency workers and to improve the quality of temporary agency work by ensuring that the principle of equal treatment, as set out in Article 5, is applied to temporary agency workers, and by recognising temporary work agencies as employers, while taking into account the need to establish a suitable framework for the use of temporary agency work with a view to contributing effectively to the creation of jobs and to the development of flexible forms of working.

The principle of equal treatment, referred to in this Article, is elaborated by Article 5 as follows:

The principle of equal treatment
1.The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.

Section 6 of the Act faithfully transposed Article 5 of the Directive in providing as follows:

6.— (1) Subject to any collective agreement for the time being standing approved undersection 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.

Subsection (3) of s.6 of the Act provides:

(3) Where the assignment of an agency worker commenced before 5 December 2011 and ended or ends on or after that date, that assignment shall, for the purpose of determining the agency worker’s basic working and employment conditions in accordance with subsection (1), be deemed to have commenced on that date.

The meaning to be ascribed to the term ‘basic working and employment conditions’ is set out at s.2 of the Act as follows:

"basic working and employment conditions” means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement, or any arrangement that applies generally in respect of employees, or any class of employees, of a hirer, and that relate to—

(a) pay,
(b) working time,
(c) rest periods,
(d) rest breaks during the working day,
(e) night work,
(f) overtime,
(g) annual leave, or
(h) public holidays;

Pay is defined by the same section as:-

(a) basic pay, and
(b) any pay in excess of basic pay in respect of—
(i) shift work,
(ii) piece work,
(iii) overtime,
(iv) unsocial hours worked, or
(v) hours worked on a Sunday,

Section 15(1) states:

It shall be the duty of the hirer of an agency worker to provide the employment agency that employs that agency worker with all such information in the possession of the hirer as the employment agency reasonably requires to enable the employment agency to comply with its obligations under this Act in relation to the agency worker.

Conclusion of the Court

It is common case that the Complainants were assigned to the hirer on or before 5 December 2011. Accordingly they are deemed to have commenced their assignment on that day.

It is also common case that the Complainants and directly employed workers are engaged to do the same work for the hirer. Direct workers are paid a higher rate of pay than those agency workers. On the face of it this amounts to an infringement of Section 6(1) of the Act.

The Respondent argues that it is advised by the hirer that those direct employees enjoy historic rates of pay that for trading and business reasons could no longer apply. It argues that the hirer states that had it employed workers directly into those positions on 5 December 2011 it would have paid them €8.65 per hour. It argues that €8.65 per hour is the rateto which a worker” would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.” On that basis it argues that it has not infringed section 6(1) of the Act.

By paying €8.65 per hour the Agency submits that it is effectively complying with the Act.

The evidence before the Court is that all but one of the workers directly employed by the hirer was paid a rate of €10.08 per hour. The Complainants are paid €8.65 per hour.

The single exception came to the Hirer under a transfer of undertakings arrangement and was paid the rate of €8.65 per hour. This rate was subsequently increased by the first phase of the relevant National Agreement then in force. No further increases have been applied to this worker. In light of the manner in which this worker came to the hirer the Court distinguishes this worker from the rates that apply generally within the hirer.

The Respondent argues that the higher rate is a legacy rate of pay that would not be applied to anyone directly employed on 5 December 2011. It argues that the Court in deciding this matter must have regard to Section 6(1) of the Act that provides that the relevant rate of pay for comparison purposes is the rate to which a directly employed worker “would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.”It submits that the Hirer has pursuant to Section 15 of the Act, stated that that rate is €8.65 per hour. It argues that the Court should decide accordingly.

The Court does not accept that contention. Section 6(1) must be read together with Section 2 of the Act and the Directive which state:

“basic working and employment conditions” means terms and conditions of employment required to be included in a contract of employment by virtue of any enactment or collective agreement,or any arrangement that applies generally in respect of employees, or any class of employees,of a hirer,(emphasis added)

Article 2 of the Directive states:

The principle of equal treatment
Article 2(1) of the Directive states:

The basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job.

When read together the Court finds that the test set out in Section 2 of the Act is an objective one. It must determine if there is a legislative provision, collective agreement or general arrangement in place that sets the general working and employment conditions, including the basic rate of pay, of directly employed workers. Where such an “arrangement” that “applies generally” to directly employed workers is in place the Court must, in order to apply the principle of equal treatment, set out in the Directive and transposed into Irish law by the Act, apply that rate to Agency workers assigned to the hirer.

The Court cannot substitute a hypothetical rate posited by the Hirer for the actual rate of pay that in fact generally applies to directly employed workers doing the same work as assigned agency workers. If the Court were to do so it would defeat the purpose of the Directive and of the Act and thereby could not be lawful.

The Court therefore determines that the complaint is well founded.

Redress

The Schedule of the Act states:

A decision of a rights commissioner under subparagraph (2) shall do one or more of the following, namely—

(a) declare that the complaint was or, as the case may be, was not well founded,
(b) require the employer to take a specified course of action (including reinstatement or reengagement of the employee in circumstances where the employee was dismissed by the employer), or
(c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances but not exceeding 2 years remuneration in respect of the employee’s employment,

and the references in the foregoing clauses to an employer shall be construed, in a case where ownership of the business of the employer changes after the contravention to which the complaint relates occurred, as references to the person who, by virtue of the change, becomes entitled to such ownership.

Determination

In accordance with Clauses (a) and (b) of subparagraph (3) above, the Court determines that the complaints are well founded and it directs the Respondent herein to adjust their rates of pay to €10.08 per hour, with effect from 5^thDecember 2011.

The Decision of the Rights Commissioner is set aside and substituted with the terms of this Determination.

Signed on behalf of the Labour Court

Brendan Hayes
3rd February, 2014______________________
JMcCDeputy Chairman

NOTE

Enquiries concerning this Determination should be addressed to Jonathan McCabe, Court Secretary.