In its judgment of 15 December 2022, the Court of Justice of the European Union (“CJEU”) addressed the issue of collective agreements reducing the remuneration of employment agency employees compared to employees employed directly by the user.

In the case under review, the agency worker was assigned to the user for a position in the retail sector. In compliance with the collective agreement made between the German trade union, of which the agency worker was a member, and the trade union of service workers, of which the agency worker was a member, the employee’s gross hourly wage was set at EUR 9.23.

However, this collective agreement set lower remuneration than that granted to the user’s employees under the collective agreement for employees in the retail sector in the Land of Bavaria, which reached EUR 13.65. According to the agency worker, this violated the principle of equal treatment recognised under German law.

The agency worker therefore brought an action before the competent labour court seeking to be granted additional remuneration in an amount equivalent to the wage difference between agency workers and comparable workers employed directly by the user.

In particular, the employee invoked breach of the principle of equal treatment of employees of employment agencies, which is enshrined in Article 5 of Directive 2008/104/EC on agency work. However, the Agency Work Directive allows a collective agreement to depart from the principle of equal treatment in the area of basic terms and conditions of employment, while respecting the overall protection of agency workers.

Following the dismissal of the action at first instance and on appeal, the agency worker appealed to the Federal Labour Court, which referred several preliminary questions to the CJEU on the interpretation of the referenced provision of the Agency Workers Directive.

The CJEU thus set out to define the conditions to be met by a collective agreement that seeks to depart in its wording from the principle of equal treatment of employment agency workers and to clarify the hitherto unclear content of the concept of “general protection of employment agency workers”.

In the present case, the CJEU concluded that, where a collective agreement allows for a difference in treatment in terms of basic terms and conditions of employment (such as those relating to the length of working time, overtime, rest periods, remuneration, etc.) to the detriment of agency workers as compared with those enjoyed by the user’s own employees, the ‘overall protection’ of those agency workers is ensured only if they are granted advantages designed to compensate the effects of that unequal treatment.

Again, such compensatory benefits must be linked to the basic terms and conditions of employment.

In principle, therefore, employees of employment agencies are entitled to the same basic terms and conditions of employment that would apply to them if they were employed directly by the user. However, compliance with the principle of equal treatment can also be achieved by granting certain benefits to compensate for any differences in treatment, thus fulfilling the overall protection of employment agency workers.

Therefore, when negotiating a collective agreement, from the employer’s point of view, it is first necessary to determine the basic terms and conditions of employment that apply to agency workers if the user would employ them directly, and then to compare these terms and conditions of employment with those arising from the collective agreement that applies to agency workers. Finally, it is necessary to assess whether any compensatory benefits granted outweigh the differential treatment, to which agency workers may be subjected.

Czech labour law treats the issue of working conditions of agency workers in such a way that the employment agency and the user are obliged to ensure that the working and wage conditions of a temporarily assigned employee are no worse than those of a comparable employee of the user. The Labour Code thus puts agency workers on an equal footing with regular staff, where, simply put, identical working conditions as those of regular staff are applied to agency workers.

The CJEU decision described above thus reminds us and specifies in greater detail the options and, in particular, the conditions, under which it is possible to depart from the principle of equal treatment when setting the working conditions of agency workers. The decision of the CJEU thus opens the door to contemplation that it is possible to negotiate different conditions for agency workers, but with sufficient compensatory benefits to offset the effects of unequal treatment so that the overall protection of agency workers is met.

Author: Veronika Odrobinová, Jessica Vaculíková