Agency worker law

Agency worker law

Agency worker law refers to a body of law which regulates the conduct of employment agencies and the labour law rights of people who get jobs through them. The typical situation involves the person going to an employment agency and then the employment agency sending the person to an actual employer for proper work.


Private employment agencies have not been viewed favourably by international law. The International Labour Organization called for the establishment of public employment agencies in their place. To prevent the abusive practices of private agencies, they were either to be fully abolished, or tightly regulated. In most countries they are legal but regulated.

Probably inspired by the dissenting judgments in a US Supreme Court case called "Adams v. Tanner", the International Labour Organization's first ever Recommendation was targeted at fee charging agencies. The Unemployment Recommendation, 1919 (No.1), Art. 1 called for each member to,

"take measures to prohibit the establishment of employment agencies which charge fees or which carry on their business for profit. Where such agencies already exist, it is further recommended that they be permitted to operate only under government licenses, and that all practicable measures be taken to abolish such agencies as soon as possible."

The Unemployment Convention, 1919, Art. 2 instead required the alternative of,

"a system of free public employment agencies under the control of a central authority. Committees, which shall include representatives of employers and workers, shall be appointed to advise on matters concerning the carrying on of these agencies."

In 1933 the Fee-Charging Employment Agencies Convention (No.34) formally called for abolition. The exception was if the agencies were licensed and a fee scale was agreed in advance. In 1949 a new revised Convention (No.96) was produced. This kept the same scheme, but secured an ‘opt out’ (Art.2) for members that did not wish to sign up. Agencies were an increasingly entrenched part of the labor market. The United States did not sign up to the Conventions. The latest Convention, the Private Employment Agencies Convention, 1997 (No.181) takes a much softer stance and calls merely for regulation.

Particular jurisdictions

European Union

A new directive has been proposed since 2002 to regulate the agency relationship. It promised equal pay for work of equal value, after six weeks work. It has not yet passeed out of draft mode.


In Germany the [ "Arbeitnehmerüberlassungsgesetz"] (Employee Hiring Law of 1972) regulates the agency relationship. It Following the provisions in the "Burgerliches Gesetzbuch" (Civil Code) on the law of leasing goods or finance, the agency relationship is seen as a triangular arrangement, with different obligations on each side. The worker is an employee of the agency only. The contract between the agency and the end-employer is termed as a hire of labour. Between the worker and the end-employer there is no contract. There is only a statutory obligation to give equal treatment in terms and conditions of work.

United Kingdom

The UK's main piece of legislation falls under the Employment Agencies Act 1973. This used to require licensing, but has not since 1994. There is an exception, for employment agencies working in the agricultural, shellfishing and food packing sectors, under the Gangmasters (Licensing) Act 2004.

United States

*"Adams v. Tanner"
* In "Ribnik v. McBride", 277 US 350 (1928) the Court struck down a similar New Jersey law attempting to regulate agencies, Justices Stone, Brandeis and Holmes dissenting. This is probably no longer good law.
*Doubt was placed on the leading dicta of "Adams v. Tanner" in "Olsen v. State of Nebraska" 313 US 236 (1941) and "Lincoln Union v. Northwestern Co.", 335 US 525 (1949) 535. In the latter, Mr Justice Black, said that "Adams v. Tanner" was part of the "constitutional philosophy" which struck down minimum wages and maximum working hours.

ee also

*At-will employment
*UK agency worker law


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