E U R O P E A T W O R K

A VISION ON #1
TEMPORARY WORK JUNE 07

Following on ADP HR European Atlas, this new

publication focuses on one specific HR theme
and presents the opinions of two leading
European experts and one HR executive.
Welcome to the first issue of "Europe at Work.
A vision on..." covering the challenges of
temporary work at the European level.

James Arrowsmith Frans Mutsaers Tiziano Treu

Associate Professor in Industrial Relations Human Resources Director of SITA Former Italian Minister of Labour,
and Human Resources Management at in the Netherlands Chairman of the Commission for
Warwick Business School Employment & Social Security at the
Italian Senate
"A two-fold approach
"Increase in temporary work to temporary work in a "Towards smoother
is likely to continue" personnel-intensive sector" European harmonisation"
Page 2 Page 4 Page 6

Facts and
figures
p. 8-9

An ADP publication

TEMPORARY WORK
James Arrowsmith
Increase in temporary work
is likely to continue
For more than 15 years, Dr James Arrowsmith
has been studying diverse aspects of flexibility in
EU employment. As he analyses the root causes of the
current temporary work level, he forecasts that the increase
in fixed-term employment will be a lasting trend.

Europe at work: Looking at redundancies or dispose of a between social partners exist in

temporary work rates in Europe,
we can see Spain above 33%, the
UK below 6%, to take two
examples – why are figures so
different in Europe?
James Arrowsmith: I look at it
from a different angle. Most of
worker, therefore employers
more often opt for fixed-term
employment. The UK is the
exact opposite. Hiring and firing
is cheaper and easier, so there
is no hesitation in going for
indefinite contracts.
Poland as in the historic western
countries, so workers have
less weight in the bargaining
process. This is why temporary
employment is going up in
Poland.

“
the historic EU countries, with

Large firms have

more room for
“
a core and peripheral
model

James Arrowsmith,
Associate Professor in Industrial
Relations and Human Resources
Management at Warwick
Business School in the UK

the noticeable exception of the
UK, have fixed-term contract
rates in the range 10-15%.
There is a convergence in
the western economy. The
explanation for the radically
different numbers in the UK and
Spain lies with local regulation
of permanent contracts. In
Spain, it is difficult to make
What about Poland, which also
has a very high temporary work
rate?
Regulation in Poland offers a lot
of flexibility. Firms that decide
to set up there aim to take full
advantage of it, and obviously
don’t use the same rigid models
as in their country of origin. In
addition, no such agreements
Many countries – Germany for
instance – are experiencing a
significant increase in temporary
employment. Will this trend
continue?
I can’t see it going down,
simply because the three major
governing factors are heading in
the same direction. Therefore,
temporary work is likely to

2
continue to increase. Germany
is typical of a country coming
out of recession. Employers
are still reluctant to hire while
unemployment remains high.
A new political context made
temporary work easier to use,
facilitating deregulation and
flexibility. Some indicators
confirm this: between 2003
and 2006, the interim work
agency Manpower multiplied
the number of its branches in
Germany by 5.
a matter of discussion. Do
they work well together? The
bottom line is to determine
if gains from flexibility in
numbers compensate for any
resultant loss of skills. And
again, this brings us back to
our discussion on sectors, since
different sectors have different
requirements in terms of skills.
>>
Dr James Arrowsmith is
Associate Professor in Industrial
Relations and Human Resources
Management at Warwick
Business School, UK.
His principal research areas
are flexible working time
arrangements and performance-
related pay.

Is temporary employment more Some of his publications…

frequently used in small "Why is there not more ‘annualized-
businesses? hours’ working in Britain?", Industrial
There is no evidence for this, Relations Journal, 39, (forthcoming in
as large firms have more room May 2008)
for a core and peripheral model: L’interim en UE : les stratégies des acteurs
invest in key strategic skills and sociaux en Europe, with
R. Belkacem, C. Kornig and F. Michon
use temporary workers as a
ed. Les Mondes de l’intérim (forthcoming
buffer. Let’s not forget that in 2008)
the traditional reasons for
"Temporary Agency Work in the Enlarged
temporary work are seasonal EU", Luxembourg: European Commission,
requirements and substitution 2006
for low-skilled profiles. The "The European cross-border dimension
first influencing factor is the to collective bargaining in multi-national
sector of employment, which is companies", with P. Marginson, European
interrelated to a certain extent Journal of Industrial Relations, 12:3, 2006
with company size. Needs range
from large manufacturing
companies having to absorb
production peaks to additional
business in retail firms during
the Christmas period.

How are temporary work figures

influencing HR strategies?
Flexibility is a criterion that
companies consider as they
move facilities from one country
to another. There are pros and
cons to this approach. It puts
questions on the table in HR
departments. What about the
training of temporary workers,
especially when there are safety
issues? Are temporary workers
motivated and committed to
quality results? Coexistence

EXPERT
between permanent and
temporary workers is also

3
TEMPORARY WORK
Close-up on SITA in the Netherlan
A two-fold approach t
W
aste collection and treatment
is the type of business where
customers can’t really wait.
SITA Netherlands & Flanders (SITA NL/ in a personnel-intensiv
FL) serves 60,000 clients, many of them
small professionals, and can’t afford to
lose contracts because of absent personnel. The waste collection business requires accurate ope
“In waste collection, we replace anyone team staffing, and SITA Netherlands constantly calls
who is sick, in training or on vacation by
temporary agency personnel. A round that interim personnel. It also hires most of its new emplo
requires three people can’t be done by
fewer” underlines Frans Mutsaers, Human under one-year contracts, which is a common practi
Resources Director of SITA NL/FL. “We have This two-sided approach to temporary work is facilita
made a time commitment to our customers
and need to adjust our blue-collar workforce. the so-called Dutch flexicurity model.
In short, we must be very flexible.” On the top
of the company’s 3,500 people in operation,
350 workers on average come from
temporary agencies for periods that can be as
short as one day.

Above the national average

This intensive calling on interim workers
leads to high temporary work figures at SITA
NL/FL. “With peaks of 25% interim workers
during the July/August period, we are no
doubt above the Dutch national average*”
analyses Frans Mutsaers. “We are highly
dependent on temporary work. This is simply
due to the nature of our sector. SITA has a
comparable level of interim workers in other
countries where it operates, such as the UK,
France and Germany.” At SITA, temporary
work is managed locally in each country, and
there is no policy shared at the European level.

Besides sector-driven short-term employee Flexibility and protection

substitution, there is another facet to
temporary work at SITA NL/FL that also
adds to the total. The company hires its
new staff with fixed-term contracts, which
is a common integration practice in the
Netherlands. “As our legal frameworks
permit, people usually start with us under
a one-year contract, though this is not
systematic and depends on profiles and
vacancies”, SITA NL/FL HR director
explains. “We consider such employees
as though they had signed a permanent
contract, and 95% of them eventually stay
with us.”
With interim workers for short-term
substitution on the one hand and fixed-term
contracts for new recruits on the other, SITA
NL/FL’s temporary work policy makes good
use of Dutch regulations, described by some
experts as an example of flexicurity**. For
instance, interim workers are considered
permanent employees of their agency after
26 weeks of regular service. And public
employment policies encourage interim
agencies to engage in training their staff.
“Our interim workers are also trained on
safety by their agency” points out SITA NL/
FL HR Director. “Our law gives us enough

4
nds
to temporary work
ve sector
erational flexibility for business on the one hand and
s on the possibility to protect our people on the
other.”
>>
oyees Frans Mutsaers, 50, is the Human Resources
One-year fixed-term contracts for new Director of SITA Netherlands/Flanders
ice. employees also provide both parties with (Belgium), based in Arnhem (NL). He is a
ated by flexibility. “Employees can resign on short member of the Board of Directors of SITA
notice”, explains Frans Mutsaers, “it’s Netherlands/Flanders and a member of the
a well-accepted way to start that helps
SUEZ worldwide "350 TopEx" group.
workers to integrate. The contract can be
extended twice, but after three years the
employer has to switch to a permanent His responsibilities cover general HR activities

“
contract.” But under market pressure, this for SITA Netherlands/Flanders, with direct
also remains a matter for social bargaining: management of an HR Department of 45 people.

“
We need to adjust are
our blue-collar
workforce
“For specific profiles that
difficult to recruit, like
some sales representatives,
some higher management or
some ICT (Information and
Communication Technologies)
As a director, Frans Mutsaers is also in charge of
all Environment, Quality & Safety (EQS) aspects
for SITA Netherlands/Flanders, for which he
manages a dedicated EQS team of 35 people.

positions, we sometimes propose SITA Netherlands & Flanders

permanent contracts”, concludes
the SITA NL/FL HR Director.
* 15.5% in 2005 (source: Eurostat)
** “The concept of ‘flexicurity’: a new
Frans Mutsaers, approach to regulating employment
Human Resources Director
and labour markets” by Ton
of SITA in the Netherlands
Wilthagen and Frank Tros (http://
home.medewerker.uva.nl/f.h.tros/
bestanden/2004_TRANSFERa.pdf)
A leader in waste collection
and treatment
SITA Netherlands & Flanders (Northern
Belgium) is a service provider in the
collection, recycling, and treatment of waste.
The company employs 3,500 employees and
has a turnover of e 640 million. SITA Waste
Services is a part of SUEZ, an industrial
and services group active in sustainable
development that provides innovative
solutions in energy and the environment.
SUEZ has 170,000 employees and a total
revenue of e 40 billion, 80% of which is
generated in Europe.

PRACTICES

5
TEMPORARY WORK
Tiziano Treu
Towards smoother European
harmonisation
An expert observer of the European labour market and
former Italian Minister of Labour, Tiziano Treu underlines
the link between rigidity of regulations and temporary
work contracts in various European countries, as well as
existing differences from North to South. To reconcile labour
flexibility with social cohesion, he has presented a series of
recommendations to the Council of Europe.

Europe at work: Why are
temporary employment rates, as
measured by fixed-term contract
figures, steadily rising throughout
Europe? What is your view on this?
Tiziano Treu: The fact that the
number of employees with fixed-
term contracts is slowly growing
confirms a continuous need for
some degree of flexibility in the
company. These figures are not
worrisome as such with a few
most preoccupying aspect is the
recent trend that can be observed
in hiring young people with
fixed-term contracts – to give an
example – which is the case with
50% of them in Italy.
This trend doesn’t seem to be
uniform throughout Europe though.
Why are there such differences
from one country to another?
The factors that explain the gap
contracts are considered to be
too rigid and the costs associated
with dismissals too high.
When it is easy to terminate
an indefinite contract, as in the
UK for instance, the fixed-term
employment rate remains low.
This explains why some countries
are easing their regulations –
Italy recently reduced labour costs
for indefinite contracts by 3% and
Spain has decreased the cost of

“
exceptions, like Spain, where between European countries in dismissal.

A move towards
flexicurity
by collective
“
agreements
Tiziano Treu,
former Italian Minister of
Labour, Chairman of the
Commission for Employment
& Social Security at the Italian
Senate

the fixed-term employment rate terms of temporary employment

is significantly higher than in also explain the acceleration
other European countries. The I just mentioned. Indefinite

6
 How has temporary employment
changed the human capital of
companies?
Subordinate employees
are still a great part of the
workforce, but other work
arrangements, notably with
independent workers, have
emerged. Some of these
workers, even though not
legally speaking subordinates,
find themselves in a situation
of economic dependence on
one or many companies. They
form a new grey area between
dependent employment and
self-employment.
What are the drawbacks of that
situation?
The level of protection may vary
within the same company. There
is a need to tailor the level of
protection to the various types
of workers. On the one hand,
new regulations should consider
extending some, but not all,
standard rights to workers in
the grey area, like protection
against abrupt termination,
health or safety. On the other
hand, highly independent,
skilled employees that are hired
with a subordinate contract
could be given more room for
self-determination, for instance
in the field of working time.
What would be an alternative
approach then to flexibility in
Europe?
Given the differences between
countries, there is no general
answer. In my view, some
Mediterranean countries need to
improve flexibility in their
regulations. Simultaneously,
labour market and welfare
services must be developed,
pretty much as in the nordic
countries. A general idea is that
workers should be protected
rather than jobs. In such a
model, trade unions could
contribute as service providers
on the labour market. With that
in place, new employment
policies could be designed to
combine the flexibility required
for competitiveness and the
security expected by workers –
a move towards real flexicurity.
When workers benefit from a
safety net in case of
unemployment, they feel more
secure. Flexibility can then
increase.
Can this be harmonised at the
European level?
This must be tailored country-by-
country, sector-by-sector. In my
view, quantitative limits should not
be fixed by law, but by collective
agreements. A three-fold approach
is required for the system to
self-regulate. First, move towards
flexible regulation by agreement.
Second, develop labour market
and welfare services for workers.
Third, provide an incentive so that
employers use fixed-term contracts
only when necessary. But with
the existing differences between
countries, the most sensible
approach can only be smoother
harmonisation.
7
>>
Tiziano Treu was the Italian
Minister of Labour and Social
Security from 1995 to 1998
and Minister of Transport and
Navigation from 1998 to 1999.
He has been a Senator since
2001, and is Chairman of the
Commission for Employment
and Social Security at the Italian
Senate.
He has been a Professor of
labour law at the Catholic
University of Milan since 1988,
and has written numerous
books and publications on
labour law, trade union law and
industrial relations – Italian
and comparative – including
Labour Law in Italy, whose
revised second edition has just
been published (ed. Kluwer Law
International).
Mr Treu has presented his vision
at numerous public meetings,
notably in November 2005 before
the European Council in
Strasbourg at a session entitled
"New forms of flexibility: how
should labour law evolve?",
and in November 2002 before
the International Labour
Organization in Geneva with
"Labour law and social change".
EXPERT

facts & figures

Ratio of employees with limited duration contract

FI
16.5

NO
9.5 EE
2.7
SE
16.0 LV
8.4
DK ue
iq
9.8 alt LT
rB
Me Ratio of employees
ord 5.5
uN with limited duration
rd
Me contract as a % of
IE total employment
3.7 NL
UK PL < 5%
15.5 25.7
5.7 5 - 8%
DE
BE
14.2 8 - 10%
8.9 CZ
LU 8.6 10 - 15%
5.3 SK
5.0 15 - 20%
AT > 20%
e
iqu

9.1 HU
t

FR CH
tlan

7.0 Source: European Communities Eurostat

13.3 12.8 SI 2006 – Data 2005
nA

RO
17.4
a

IT 2.4
Océ

12.3

e
BG oi r
rN
6.4 Me

PT ES
19.5 GR
33.3
11.8
Mer M
éditerranée

MT
4.5 CY
14.0

Did you know?

• In EU 25, on average, part-time employment rate • In Eu 25, over 25 million people worked with a
was 11.4% in 2005. limited duration contract in 2006.
• Usual hours worked per week by part-time
employees in 2006 in EU 25 was 19.9 hours.

8

facts & figures

Ratio of employees with limited duration contract: variation 2004-2005

2004
2005
2004
2005

ES PL PT SI FI SE NL DE CY FR CH IT GR DK NO AT BE CZ LV HU BG UK LT LU SK MT IE EE RO
Source: European Communities Eurostat 2005-2006 – Data 2004-2005

ES PL PT SI FI SE NL DE CY FR CH IT GR DK NO AT BE CZ LV HU BG UK LT LU SK MT IE EE RO

15%
Limited duration contract: variation 1996-2006
15%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: European Communities Eurostat 2006 – % of temporary employees 1996-2006

9
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© ADP Europe - June 2007 - Reprinted in January 2008

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