Agency work as a way out of undeclared work

One in ten Europeans admit that they have purchased goods or services in the past year that might have derived from undeclared work. A third of Europeans know somebody who works undeclared. Far from being a thing of the past, undeclared work continues to present a significant labour market challenge within the EU.

Workers, businesses and public authorities all lose out from undeclared work. Workers have no job security, no rights and often no career progression. Governments miss on revenues which undermines the sustainability of social protection systems. Businesses which hire legitimately are put at a competitive disadvantage compared with businesses operating in the black.

The European Commission set up the European Platform tackling undeclared work in 2016 in order to enhance cooperation between EU countries and help them fight undeclared work. The Platform also includes social partners and enforcement authorities (such as labour inspectorates, tax and social security authorities) and encourages the stakeholders to exchange information and good practices.

The World Employment Confederation-Europe joined the European Platform tackling undeclared work in 2019 in its capacity as EU sectoral social partner and as an observer. “The Platform offers a good network to the World Employment Confederation-Europe to increase awareness of the role of private employment services in offering better working conditions and formal employment“, explains Michael Freytag, WEC-Europe’s Public Affairs Manager. “Agency work offers a way out of informal work, allowing businesses to access flexible labour while securing social rights, benefits and access to training for workers”.

The 2019/2020 work programme for the Platform includes addressing fraudulent activities of temporary agency work, focusing less on the organised part of the sector and rather on the companies of the temporary agency work industry not complying with rules and regulations. The World Employment Confederation-Europe members operate in a responsible manner and have taken action to reduce undeclared work and stamp out non-compliance with national law in several European countries. For instance, an ombudsman system was put in place in Belgium and Portugal to drive down undeclared work, while in the Netherlands the collective labour agreement enforcement authority, set up by the social partners, offers a powerful force in upholding regulation established via collective labour agreements.

 

There is hard evidence that those countries with less restrictive agency work regulation also enjoy lower levels of undeclared work. This is further demonstrated in certain sectors of the economy: Europe’s construction sector for example, accounts for 19% of all undeclared work in the EU and is also a sector where the agency work sector faces ongoing regulatory restrictions on supplying workers in some markets. “Balanced regulation allowing the private employment services sector to play its  role in supporting companies manage fluctuations in demand and smoothly transitioning workers is the key to open, inclusive labour markets and will naturally result in reducing undeclared work,” adds Michael Freytag. “Agency work should not be unduly restricted, as we are unfortunately now witnessing in many European countries.”