Temporary staffing legislation varies by market but restrictions usually fall into one of four areas; length of assignment, reason for the assignment, levels of pay and benefits, or sector prohibition. In certain markets, in addition to national and/or local legislation, the recruitment industry is also obliged to negotiate collective labour agreements with other social partners including unions. General changes to employment legislation may also have an impact on the competitiveness and the costs of the staffing industry. The UK, US and Australian recruitment markets are the most liberal in the world. Northern continental Europe has long-established recruitment markets but here, regulators seek to balance the need for flexibility with an obligation to ensure that the salaries and other benefits of temporary workers are on a par with those of permanent workers. In Southern and Central European markets, recruitment is a relatively new industry sector and legislation is still maturing, as is also the case with Japan.
 There is a clear correlation between liberalisation and the size of the professional/executive recruitment sector in each market; the more relaxed the legislative environment, the larger the size of the professional/executive recruitment market. With liberalisation comes greater social acceptance for alternative work arrangements, a more positive image and a greater likelihood that more highly educated personnel will seek temporary or contract employment opportunities. The positive role the temporary recruitment sector plays in EU labour markets was recognised in 1993. The White Paper on Growth and Competitiveness endorsed by the European Employment Taskforce called on all Member States to better exploit the potential of temporary agency workers and to eliminate all unjustified restrictions on agency work, thereby improving job opportunities and providing high employment standards. Such steps are also believed to play a role in enabling the EU to meet its objectives, established at the Lisbon European Council in 2000, of creating the most competitive and dynamic knowledge-based economy in the world. The Barcelona Council defined full employment as the overarching goal of the EU. From time-to-time, some legal developments have a negative impact on our industry. However, the overriding worldwide trend is for further relaxation of legal restrictions. 2005 was a relatively quiet year for regulatory reform following a number of years where an improving legislative environment provided some impetus to long-term growth in a number of Vedior’s markets. The only development of real significance was in France where, from 1 January 2005, temporary recruitment companies were permitted to provide permanent placement services through their existing office networks for the first time. Previously, such services had to be delivered through separate companies and in separate offices which made the provision of permanent placement services a relatively costly activity. Our operating companies in France have taken advantage of this change in law to offer permanent placement services to their clients. In November 2005, the International Labour Organisation published a draft ‘Guide to Private Employment Agencies: Regulation, Monitoring and Enforcement’ providing advice to those countries in the process of initiating or changing the legal framework for the regulation of private employment agencies. The content of the guide is based on Convention 181 which acknowledges the important role played by the recruitment sector in increasing the effectiveness of the labour market and also recognises that legislation should be designed to support specific national circumstances. This positive endorsement of temporary staffing is indicative of the improving relationship between the recruitment industry and labour unions. No further progress was made during 2005 on the adoption of an ‘EU directive on agency work’. Previous discussions had stalled following objections from a number of countries. The directive currently remains blocked in the European Council and the European Commission is considering withdrawal of the proposal. In its last unapproved draft, the directive would have had a potentially negative impact on the more liberal recruitment markets such as the UK and Ireland and a potentially positive impact on the newer and more highly regulated recruitment markets in continental Europe. While the agency directive may have stalled, there is increasing determination from many parts of the European Union, including the Commission President, to seek a speedy agreement on a services directive. This draft directive includes a ‘country of origin’ principle whereby companies can offer services throughout the EU provided they follow the laws of their home country. In February 2006, the European Parliament voted to exclude temporary work from the scope of the directive. We anticipate that extensive lobbying will be undertaken during the remainder of the year to redress this situation and allow recruitment companies to make effective use of a single market for services and benefit from the removal of existing cross-border barriers. |