Temporary Agency Work and Globalisation

Beyond Flexibility and Inequality

Huiyan Fu

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781472447852
• eBook ISBN:
  9781317046264
• Topic: Politics & International Relations
• Subtopic: Business General
• Index: Politics & International Relations

Despite its geographic and industry expansion as part of the ongoing globalisation of service activity, temporary agency work (TAW) is relatively understudied. TAW is characterised by a distinct triangular structure where workers are typically hired by staffing or employment agencies while being 'dispatched' to firms that use them as a type of temporary or non-regular labour. This agency-mediated labour dispatching, as a newly institutionalised industry, has registered rapid growth rates over recent decades across vast swathes of the globe. To a great degree, TAW is part of a wider structural transformation of work and employment under neoliberalism. Arguably, controversy over the expanding non-regular workforce is at its most acute when it comes to unsavoury labour-selling practices. In this connection, TAW is an exemplary field in which to examine today's 'flexible' capitalism and its concomitant phenomenon, i.e. 'inequality'. Featuring holistic and interdisciplinary perspectives, this edited collection provides a comprehensive overview of TAW, in an international context. It reveals how the TAW industry is intertwined with the changing relationship between the state, corporations and labour unions at the institutional-structural level, and also the perceptions and experiences of ordinary workers in everyday practice. By combining global and local forces, macro and micro levels of analysis, and theoretical and empirical investigations, the book offers fresh insights into recurring issues of labour flexibility and inequality, contributes to practical applications and facilitates fruitful cross-national collaborations.

Chapter 1
Introduction: Temporary Agency Work and Globalisation

HUIYAN FU

Hiring but Not Using; Using but Not Hiring

The essence of temporary agency work (TAW) is perhaps most succinctly captured by the Chinese expression ‘yong ren bu gu ren; gu ren bu yong ren’ (hiring but not using; using but not hiring). Being typically hired by staffing agencies, workers are ‘dispatched’ to firms, which use them as a type of temporary labour; in East Asia, they are also known as ‘dispatched workers’. As shown in Figure 1.1, this agency-mediated labour dispatching is characterised by a distinct triangular structure where labour has a dual relationship with staffing agencies and user firms. While workers in TAW are generally considered as employees – with the exception of the UK where they are not granted the employee status under tax regulations and employment laws – differences exist regarding who should be considered as the legal ‘employer’. In East Asia and most European countries, the answer is the agency; in Canada it is usually the user firm; in the US it is quite often both; and in the UK it is neither (Davidov, 2004). Perhaps more importantly, such tangled hiring–using relations open the gates for abuse. For one thing, TAW tends to be fraught with legal ambiguities, making it difficult for the law to tackle manipulative activities; an extreme example is the so-called ‘payrolling’ system where user firms evade their employer responsibilities simply by paying the employee through an agency. The situation is especially grave in countries where the TAW industry lacks broad regulatory support and effective enforcement measures. Workers are also prone to a range of maltreatment and exploitation by agencies and user firms, which abound in everyday practice. While struggling with the temporally and spatially fragmented working patterns, many are excluded from the same array of benefits as are available to regular workers, ranging from job security, bonus payments and social security coverage to childcare, sick leave and paid holiday.

Figure 1.1 The triangular employment structure of temporary agency work

To a great degree, TAW is part of a wider structural transformation of work and employment under neoliberalism, representing the ‘flexibility’ and ‘inequality’ that characterise today’s globalisation. Arguably, controversy over the expanding non-regular workforce is at its most acute when it comes to unsavoury labour-selling practices. In this connection, TAW is an exemplary field in which to examine today’s flexible capitalism and its implications for the changing relationship of labour to the state, to firms, to entrepreneurial opportunities and to the wider world.

TAW: An Iconic Symbol of Globalisation

A salient feature of contemporary labour market development is the growth of flexible employment arrangements – variously described by scholars as non-regular, non-standard, atypical, temporary, casual, peripheral, contingent or disposable. Underpinning the trend is flexibility, a popular discourse that foregrounds the necessity of acting in conformity with neoliberal ‘free-market’ principles against the backdrop of increasing globalising processes. TAW, as a new and fast-growing category of non-regular employment, has come to embody the global employment change. As Coe et al. (2007, 2009) point out, the industry plays a strategically important role in delivering labour market flexibility to an increasing range of sectors at both national and macro-regional scales, although control of the industry is predominantly concentrated in American and Western European countries. For the International Confederation of Temporary Work Business (CIETT), TAW is not only a globalising service industry with considerable geographic and industrial diversification, but also a crucial facilitator of wider globalising processes. To be sure, staffing agencies are active institutional agents of neoliberal deregulation, exerting a powerful influence on the construction of flexible work patterns and norms as well as on the choices and constraints of workers.

TAW was practically outlawed during the 1950s in many nations, as stipulated by the International Labour Organisation (ILO) Convention 96, which banned fee-charging private employment agencies (Blanpain and Graham, 2004). However, from the 1970s through the 1980s, the somewhat disturbing notion of ‘labour as commodity’ gradually paled in comparison with the role that private staffing agencies might play in the functioning of labour markets. Conditions beginning to favour TAW accelerated dramatically in the 1990s, a period of heightened globalisation, which saw an emphatic turn towards neoliberalism, a new political–economic orthodoxy promoting free market deregulation and privatisation (Harvey, 2005). While temporal and geographical variations merit close examination, the proliferating acceptance of neoliberal thinking and practices over the past two decades has led to significant changes in labour markets across the world. There has been a widespread endorsement of labour flexibilisation, casualisation and individualisation, which in large part means greater use of short-term or precarious employment arrangements. The corollary is a reconfiguration of the relationship between the state, capital and labour, which systematically tilts the balance of economic power more firmly in favour of capital and against labour. For ordinary workers, this means that the protective coverings under the ‘interventionist’ state – which ‘embedded liberalism’ allowed and occasionally nurtured during the 1950s and 1960s¹ – are stripped away, as Harvey (2005: 168) explicates:

The powers of trade unions and other working-class institutions are curbed or dismantled within a particular state (by violence if necessary). Flexible labour markets are established. State withdrawal from social welfare provision and technologically induced shift in job structures that render large segments of the labour force redundant complete the domination of capital over labour in the market-place. The individualized and relatively powerless worker then confronts a labour market in which only short-term contracts are offered on a customized basis.

The ban on TAW was subsequently lifted in 1997 by ILO Convention 181. Since then, many countries have seen an increasing acceptance of TAW; as Forde and Slater (2005: 251) comment, ‘from raising initial concerns about job quality and insecurity the expansion of agency work has come to be seen by some as a welcome (and inevitable) development’. As a newly institutionalised industry, TAW has registered rapid growth rates over recent decades across vast swathes of the globe. A significant barometer is an exponential increase in the number of workers who actively take part in TAW. In the UK, it increased from just 50,000 in the mid-1980s to 270,000 in the mid-2000s; in Japan, it tripled from 1999 to 2006, reaching more than 3 million in recent years; in Germany, it soared from 134,443 in 1994 to 399,789 in 2004; and in the US, it rose roughly from one million in 1992 to 2.9 million in 2005 (Forde and Slater, 2005; Fu, 2011; Mitlacher, 2007). The growth of TAW is similarly striking in many other countries (see Hall, 2006; Kirkpatrick and Hoque, 2006; Degiuli and Kollmeyer, 2007; Garsten, 2008; Coe et al., 2009; McDowell and Christopherson, 2009; Friedman and Lee, 2010; Knox, 2010; Aletraris, 2010; Hoque et al., 2011; Kuruvilla et al., 2011; Hatton, 2011). Among emerging economies, China is a compelling example; the country’s increasingly informal nature of employment has resulted in the prevalence of dispatched workers, estimated to number about 60 million in 2011, a fifth of China’s more than 300 million urban workers, according to a recent report by the All-China Federation of Trade Unions.

An important instigator of the rise of TAW is the changing role of the state vis-à-vis capital and labour under neoliberalism. The decrease in both regulation of capital and protection of labour, as typically observed in the US and the UK, gives rise to the ease with which employers are able to recruit and dismiss workers. At the same time, the strengthened state–capital alliance – manifested in different ways and with varying degrees of success across nation-specific circumstances – puts a substantial strain on the bargaining power of labour unions. A large body of research suggests that labour’s power to organise has diminished as capital has become ever more powerful, transnational and global, as Jeong and Aguilera (2008: 123) point out:

employers, taking advantage of the shift in their balance of power with unions in increasing global competition, have sought to dismantle the centralized bargaining structures and the unions have been forced into a defensive stand under the decline in union coverage of product markets, diversification in corporate structures and widespread work reorganization (from Taylorist towards flexible work organization).

This has resulted in so-called ‘bargaining decentralisation’ in many industrialised economies, characterised by the voluntarist nature of centralised bargaining without the state’s substantial backing. A good example here is Germany, a typical co-ordinated market economy where collective bargaining was upheld by high levels of solidarism among government, business and organised labour. This well-known social partnership has recently undergone a reconfiguration of co-ordination moving towards ‘segmentalism’; a shrinking core of workers, resulting from individual firms opting out of collective agreements and a creeping expansion of non-regular workers, has led to shrinkage in the coverage of collective bargaining (Thelen, 2009: 481–482). The less solidaristic situation provides employers with latitude to choose individual or single-employer agreements that subject employees to reduced wages and lesser terms, as well as with more scope to bypass the principle of equal treatment – according to the EU directive, workers in TAW shall enjoy the same employment and working conditions as if they were directly hired to perform the same tasks. Furthermore, pay conditions laid down in the German TAW industry’s collective agreement, according to Mitlacher (2007: 585), are typically below the level of remuneration paid in many other industries.

Compared to Germany, the consequence of the declining collective bargaining for ordinary labour is much more severe in liberal market economies such as the US, where union influences and/or legislative frameworks are significantly weaker and individual agreements are the norm, and in emerging economies such as China, where national unions behave like ‘government agencies’ and enterprise-level unions are incapable of enforcing laws and contracts (Friedman and Lee, 2010: 521–523). In Japan, the distinct bargaining structure of ‘enterprise unionism’ has left workers in TAW and other non-regular arrangements out of the protection of mainstream unions, as well as a social safety net that are devised mainly to safeguard regular or core workers (Jeong and Aguilera, 2008; Yun, 2010). It is worth noting that TAW’s tripartite employment structure poses various challenges to unionisation and tends to create diverse responses among labour unions at different levels (national, industrial, firm or local) (see, for example, Heery, 2004; Olsen, 2005; Bergström and Styhre, 2010). As a result, agency-mediated workers are in most cases being exposed to either complete exclusion from or partial and unfavourable coverage of collective agreements.

The state’s withdrawal from many areas of social provision, together with the decline of union bargaining power and the general weakness inherent in protective labour and employment regulations, has a profound impact on the well-being of employees. Of particular concern are those engaging in TAW and other non-regular modes of work, who are easily hired and released with reduced pay, fringe benefits and security. To construct political consent on labour market flexibilisation, state policies and legislative changes tend to be legitimised by such popular discourses as ‘unprecedented globalising processes’ and ‘untrammelled market forces’, which Coffey and Thornley (2009) rightly dismiss as the ‘self-effacing’ state not passively adapting to global economic forces beyond its control so much as constructing the very conditions to which it claims to be responding. The state’s pro-growth and pro-capital stance is further strengthened by employer associations’ claim that heightened global competition puts increasing pressure on them to seek new ways of reducing costs. Flexibility – or ‘flexicurity’ in the context of the European Union² – then emerges as a powerful strategy where TAW and other forms of non-regular employment are seen to assume greater importance in the cost-cutting of labour, along with other major shifts including work intensification and the shrinking of the core labour force.

Perhaps more effectively, policy-makers and employer associations often extol the virtues of TAW by referring to employee-oriented flexibility, i.e. the voluntary nature of TAW. This discursive tactic is usually emphasised on two fronts. First, TAW is linked with the emergence of a new knowledge-based, service-dominated global economy, which causes a rise in the demand for highly skilled workers in knowledge-intensive industries. The growth of TAW is regarded as ‘empowering’, suggesting that those knowledge workers increasingly choose to sell their services to a number of firms through labour market intermediaries. Second, TAW is widely promoted as meeting the demands for flexible work of particular groups who are marginally attached to labour markets, including youngsters, women with children and the elderly. Flexibility as such speaks of freedom, liberalisation and individualised needs – appeals to such dominant Christianity-derived cultural values bulk large in today’s neoliberal regime (Harvey 2005: 40).

It is noteworthy that the TAW industry plays a pivotal role in shaping developments, creating impression and managing discourses. Manpower and Adecco, two titans of multinational agencies, achieved revenue of over €35 billion in 2012, with over 1.3 million people on assignment each day across the world. Leading staffing agencies have also stepped up their efforts to facilitate further legislative relaxation of regulations, to lobby social partners to influence the context in which they will do their future business, to move into new geographic markets, and to widen products and services in a growing number of industries (Peck et al., 2002; Ward, 2004). As Peck et al. (2005) rightly argue, more than a predatory ‘external’ presence, TAW has become an active domestic and transnational player in the ongoing flexibilisation of labour markets, co-evolving with wider changes in employment and society, a development of real significance.

However, selling flexibility through delivering their product, labour, entails a particular type of politics. It is true that many people have benefitted from neoliberal structural changes and achieved higher levels of living standards, particularly in developing countries such as China and India. Nevertheless, the much-touted popular flexibility discourses deflect attention from the deleterious and debilitating impact of neoliberal globalisation on the vast majority of the global working class. Critics point out that flexibility is to a great extent foisted upon the general populace while redistributing power in favour of capital and corporations. The so-called empowerment associated with flexibility resides with only a handful of well-qualified, high-status and affluent workers and is in fact reflected in the growth of ‘precarious’ employment contracts and relations among those at the bottom end of the labour market with little security, low wages and poor working conditions (McDowell and Christopherson, 2009). In their edited volume on Labour and Challenges of Globalisation (2008), Bieler, Lindberg and Pillay argue potently and poignantly how increased power of capital over labour has led to increased informalisation, insecurity and degradation of work and rising inequality in a context of widely reported global economic growth and improved productivity. Similarly, Harvey’s detailed exposition of a brief history of neoliberalism (2005) highlights ‘accumulation by dispossession’, a class project of greater domination where a neoliberal flexible accumulation regime has redistributed and consolidated more and more wealth and power in ever smaller fractions of the capitalist class. The division between regular/formal and non-regular/informal labour is of particular significance in this respect; the ongoing labour deregulation, flexibilisation and casualisation have rendered a great many global precarious working classes as well as third-world peasants powerless, dispossessed and impoverished. The widening socio-economic gaps on a world scale are certainly one of the most noticeable characteristics of neoliberalism.

Compared to directly hired non-regular employment, TAW is more institutionally organised, just-in-time and reliable, which appeals to a wide range of user firms. The increased use of agency-mediated workers has much to do with employers’ short-term cost-reduction considerations and ‘numerical flexibility’, which serve as a crucial part of corporate strategy to meet peaks and t...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• About the Editor
• Notes on Contributors
• Foreword by Dave Parkin
• 1 Introduction: Temporary Agency Work and Globalisation
• 2 Selling Flexibility, Institutionalising Insecurity: The US Temporary Agency Work Industry in the 1970s
• 3 Bridges or Traps? Employment Precariousness, Temporary Agency Work and the Labour Market Status of MG Rover Workers Four Years after Plant Closure
• 4 Temporary Agency Work in Australia, Germany and Singapore
• 5 The Temporary Agency Work Industry and its Regulatory Environment: Evidence from Australia
• 6 Dispatched Labour in South Korea: Regulatory Issues and Causal Analysis
• 7 Fragmented Work in Post-bubble Japan: Negotiating Identity, Gender, Age and Class in Triangular Employment Relationships
• 8 Labour Flexibility in an Already Flexible Market: Temporary Agency Work in Brazil
• 9 Conclusion: Beyond Flexibility and Inequality
• Index