Truths and misconception about employment through agencies – An expert view

Employment through agencies, a relatively new concept in Serbia, though widely accepted in the world for decades, is a topic that the media focus on increasingly more often, as do various interested parties: from employers, through ministries, trade unions and employees, to companies providing such services.

The terminology used to define this type of employment is expansive and often confusing. There's talk of temporary employment, employment through agencies, leasing and renting workers, and it's not rare that terms such as outsourcing, temporary staffing and outstaffing are used untranslated.

This is certainly a sensitive subject, as it deals with work relations and employee earnings. The company ManpowerGroup, which has been providing such services for nearly 70 years globally and eight years in Serbia, understands the need to address some common misconceptions.

• Workers employed through agencies have no rights arising from regular employment contracts nor legal protection insurance

The Labor Law of the Republic of Serbia is applicable to all employers, whether employment agencies or any other legal entity. In this respect, right and obligations arising from regular employment contracts apply to those employed through agencies as well. Employees hired this way (depending on the type of contract) have a right to annual leave, sick leave, compensation for transport expenses, meal allowance and vacation allowance, as well as all other right in line with the Law.

• Employees hired through agencies can lose their jobs / be fired at any time

The employment contract with an employee hired through an agency can be terminated only under the conditions defined by the Labor Law. Employees cannot have their contracts terminated without explanation and without steps defined by the law. Workers employed this way aren't deprived of severance payments if they have met legal requirements for the payment.

• An agency can send (“rent”) an employee to various companies against their will

An employment agency, as a formal legal employer, may not send an employee to work for any employer without that employee's consent. An employee signs an employment contract with an agency only if they consent to the work conditions and the job description and they are free to accept or decline a job offer and terminate the employment contract with the agency at any time.

• An agency earns from the salaries of employees, who earn less because they work through an agency

The cost of an agency's services is covered by the employer, i.e. the client, which pays the agency fee, so that salaries are not reduced in favor of the agency. In the majority of cases, the amount of earnings is defined by the end client.

• Workers employed through agencies often earn less than the amount of a minimum wage

Minimum wage is defined by the Law and is, as such, guaranteed. Those employed through an agency may not receive less then the minimum earnings defined by the law.

Also, it is our company's experience that this type of employment is not limited to low-paying jobs, quite the contrary. For example, foreign companies which don't have legal entities in Serbia or are disabled from employing people directly in some other way, also use our services. In this respect, our company employs people in high-paying leading positions.

• Workers employed through agencies can't take out bank loans

If an employee is hired through an agency for a fixed period of time, the rights to banking services may be more limited relative to those enjoyed by permanently employed workers. They are in the same position as directly employed workers who have signed fixed-term contracts. The limiting factor, then, is the bank's policy and the type of contract, not the manner of employment itself. At the same time, an agency can provide the opportunity of permanent employment, depending on the project, and in these cases the hired persons have no difficulty using banking services.

• Operations of employment agencies are illegal

The legislation is Serbia defines the manner of registering, operating and issuing work permits for employment agencies, which is clearly in charge of the Ministry of Labor, Employment, Veteran and Social Policy, which carries out the supervision and is responsible for extending work permits. Due to Serbia's EU integration process and following market demands, it is expected that legal acts and data will be standardized and harmonized, since the developed countries of the EU have extremely well defined regulations. This is precisely what we stand for and we expect that something similar will be implemented in Serbia, as we believe that the practice of the most developed European countries should serve as a model.

• What should be considered in choosing whether to use this type of service or when You get an offer for employment through an agency?

There's a large number of registered employment agencies in Serbia. When cooperating with an employment agency, whether as a client or an employee, we recommend getting informed about the agency and its references. This way, You will make sure whether the agency is professional and whether employees can exercise their rights arising from employment contracts, as well as whether salaries are paid in full and on time and all the HR documentation registered and filed in line with the law.

(Author: ManpowerGroup team)