The Temporary Agency Workers Regulations (S.L. 452.133) will come into force on 1st January 2025, replacing the present Temporary Agency Workers Regulations (S.L. 452.106).
Who will be affected by the Regulations?
The Regulations govern the relationship between the employment agency, the user undertaking and, the temporary agency workers or outsourced workers. The employment agency can either be a temping agency or an outsourcing agency who supplies employees to the user undertaking, who in turn makes use of their services. The new Regulations will provide for an extension of the principle of equal treatment and equal pay between the employment agency workers and those of the user undertaking.
What is the difference between the old and the new Regulations? Wasn’t the principle of equal pay for work of equal value already guaranteed?
The new Temporary Agency Workers Regulations extend the principle of equal treatment to those who are employed with an outsourcing agency and not just with a temping agency, as is the current situation under the present Regulations. The concept of an ‘outsourcing agency’ is not one regulated by EU law but was introduced into Maltese law by means of the Employment Agency Regulations (S.L. 452.130). The main difference between the two agencies lies in the person who exercises direction and control over the employees. In an outsourcing situation, this is maintained by the outsourcing agency, whereas in a temping situation, this is exercised by the user undertaking.
The principle of equal pay will also be extended to cover more employees. The present exceptions to the applicability of this principle, mainly that it was not to apply for the first four weeks of the employee’s assignment with a user undertaking and that it was not applicable to those employees who were engaged with an indefinite contract and paid between assignments, will be abolished.
As a result, equal pay will be guaranteed to both temping and outsourced employees, starting from the first day of employment and irrespective of the type of employment contract.
How will the principle of equal pay apply in practice?
Prior to sending employees to a user undertaking, the employment agency must first check whether there are any comparable employees in the user undertaking. If such employees are identified, the agency needs to ensure equal treatment, including equal pay, with those comparable employees.
Therefore, by way of example, if the agency worker earns €8 per hour as per the worker’s employment contract, while the user undertaking’s employee earns €9 per hour, for the duration of the assignment with the user undertaking, the agency worker must also earn €9 per hour (an addition of €1 per hour over the base salary).
This means that prior to each assignment, and prior to agreeing on the terms of the contract with the user undertaking, the employment agency will need to gather specific information from the user undertaking to ensure this equality of treatment.
This will also mean that the salary of the employment agency employee can vary depending on the particular assignment, as long as the pay guaranteed in that employee’s employment contract is respected.
How far does ‘equal treatment’ extend? Does it cover matters such as performance bonuses?
The Regulations provide that equal treatment is limited to ‘basic working and employment conditions’, meaning conditions which relate to:
- rate of remuneration;
- the duration of working time;
- overtime;
- rest breaks;
- rest periods;
- night work;
- statutory annual leave entitlements;
- public holidays;
- the protection of pregnant women, women who have just given birth or who are breastfeeding;
- the protection of children and young people; and
- equal treatment for men and women and any action to combat any discrimination based on sex, race or ethnic origin, religion, beliefs, disabilities, age or sexual orientation.
As regards the first condition, that is, the rate of remuneration, the Regulations provide that this includes the basic wage, any statutory cost of living increase, any statutory bonuses, statutory allowances or allowances payable by law, payment of overtime, payment in respect of public holidays, payment in respect of annual leave, payment in respect of maternity leave and any applicable shift allowances.
This means that the rate of remuneration only refers to what is catered for by law and does not include any performance bonuses or other special allowances which the user undertaking may pay to its employees.
Is the user undertaking employee also guaranteed equal pay as compared to the employment agency employee?
No. If the employment agency employee is being paid by the employment agency at a higher hourly rate than what the user undertaking pays its employees, the latter cannot make a claim for equal pay against their employer.
Which Wage Regulation Order (WRO) will be applicable to the employment agency employees?
The applicable WRO will be that which applies to the employees of the user undertaking. This means that the applicable WRO may change depending on the particular assignment.
What if there is a collective agreement in place covering the employees of the user undertaking?
The conditions of the collective agreement setting out the basic working and employment conditions as outlined above, especially any salary scales, will also be applicable to the employment agency employees.
How can the employment agency cater for the fluctuating salary of its workers?
The employment agency, as the employer, needs to provide a written statement or employment contract to its employees in terms of the Transparent and Predictable Working Conditions Regulations (S.L. 452.126). This information needs to include the remuneration. Since this can vary depending on each particular assignment, the employer can put in place an addendum outlining the increase in the hourly rate or else inform employees about this increase by means of a letter. There is no need to change the contract each time the employee is sent to a different user undertaking. The employment agency also needs to inform its payroll provider in advance to ensure that the latter is equipped to manage payroll where the salary might be changing regularly. The employment agency must also ensure that it gathers information regarding the salary structure of the user undertaking prior to agreeing with the latter on the prices for its services and to ensure that its employees will be paid at the same rate as their comparators at the user undertaking.
Who is liable to ensure equality of treatment?
Ultimately, the employment agency, as the employer, is responsible to ensure equality of treatment for its workers when compared to those of the user undertaking. Any claims for breach of the Regulations will be primarily directed against the employment agency as the employer.
If you’d like further information as to how the new Regulations will impact your business or your employment, please get in touch with us.
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Christine Calleja.