The European Union Court of Justice has ruled this week that member states must remove unjustified restrictions on the use of temporary agency work.

Kevin Barrow, partner at international legal practice Osborne Clarke, told Recruiter the ruling could see growth for the UK staffing sector in European markets. 

He said the UK staffing industry “has long been moving into European markets” but cost and difficulty was “unnecessarily increased” by different rules in different countries, for example when it was legal to use an agency worker and when it was not.

The ruling makes it harder for EU countries to justify such restrictions, he said.

The court’s directive follows a case focusing on the use of agency workers in Finland — Shell Aviation v the Finnish transport workers’ union. 

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The ruling provides clarification to article 4 of the Agency Workers Directive (AWD) and states that prohibitions or restrictions on the use of temporary agency work are only allowed on grounds of general interest.

Those grounds include protection of temporary agency workers, requirements of health and safety at work or the need to ensure that the labour market functions properly and abuses are prevented.

To comply, member states must either remove any prohibitions or restrictions which cannot be justified under the article or adapt legislation in order to gain compliance with the AWD.

The ruling has been welcomed by some in the staffing industry. 

Annemarie Muntz, president of Eurociett, the European confederation of private employment services, said the ruling had been “much anticipated”.

“The court decision clearly confirms Eurociett’s assessment that the required review of restrictions by member states is not a one-off exercise, but that there is a permanent obligation on them to comply with article 4(1) of the Agency Work Directive.”

Tom Hadley, director of policy and professional services at the Recruitment and Employment Confederation (REC) said: “This is a step in the right direction. We welcome the court’s finding that member states must review restrictions on a rolling basis and remove arbitrary and unjustifiable barriers to the use of agency workers.”

Samantha Hurley, head of external relations and compliance at the Association of Professional Staffing Companies (APSCo) said the relaxing of restrictions on the use of flexible working was welcome and the association would call on the new government to review UK regulations in light of the decision.

Barrow said the Agency Workers Directive was designed to give rights to agency workers but it was perceived to stifle UK competiveness and inhibit flexibility.

Negotiations eight to 10 years ago, he said, resulted in a provision requiring EU countries to deregulate so that local rules about when agency workers could be used and when they could not would have to be repealed.

However, the wording was vague and therefore countries retained some of the local rules if they were considered to be essential for various local purposes.

“What the judgment may now mean is that attempts by EU countries to inhibit the growth of UK style staffing in their countries will no longer be possible, or at least will be harder for the local countries to justify local rules for fear of enforcement action against them by the EU.”

Eurociett’s Muntz added it would now be up to national authorities and courts to determine whether restrictions in national laws or collective labour agreements are compliant with the objectives and the scope of the AWD.