Why the EU’s contingent worker laws won’t worry contractors

As the largest single-market economy in the world, the European Union requires a dynamic workforce to deliver growth. And as many UK contractors know from first-hand experience, temporary workers have a key role to play across all the EU’s market sectors, acting as a vital resource for businesses hungry for flexibility.

But recent changes to legislation across the EU will affect temporary workers, creating new restrictions on the contracts that employers can enter into with non-permanent employees.

Despite this, specialised contractors remain the lifeblood of many industries across the union and are actually thriving in the face of adversity, writes Matt Walters, head of operations at Capital Consulting.

What’s behind the legislative changes?

Temporary contracts have been at the heart of recent political debate across the EU, as governments have sought to address problems with long-term unemployment and economic difficulties.

So new legislation aimed at limiting the use of the contingent workforce, and to encourage employers to give permanent contracts, has come about. In particular, sweeping labour reforms have been introduced in a bid to guarantee workers on long-term temporary contracts the right to move onto permanent contracts, with both Italy and Portugal making it less costly for businesses to terminate permanent employment contracts.

France shares similar reforms. In fact, French President François Hollande has announced that small businesses are allowed to renew temporary employment contracts just twice for a total of 18 months. Meanwhile here in the UK, the government has banned exclusivity clauses in as effort to mitigate the risk of employers exploiting the work of employees on zero-hour contracts.

These reforms have been prompted by demands from some parts of the economy for protection for vulnerable workers. These include those in unskilled roles which typically receive low pay and limited employment terms and conditions. This is evident across the continent. In Spain, for example, seven in ten young people are on temporary contracts, and in France 41.8 per cent of all temporary contracts are within manufacturing, many of which are on comparatively lower pay-packages. 

Such reforms come with good intentions but with sweeping changes it is clear that one size cannot fit all, and that’s a good thing, because professional temporary contractors remain highly sought-after. These professional, temporary and contract workers require flexibility in order to fill in-demand roles across the EU, giving them access to a greater number of employment opportunities. And perhaps most importantly of all, where unskilled workers in temporary roles desire increased prospects of permanent work, highly-skilled, professional contingent staff are motivated by a range of different challenges and incentives.

The View from France

The old adage that the French labour force is a rigid one is a stereotype that can be attributed to the introduction of the 35-hour work-week in 1998. But the sentiment of perceived inflexibility is misplaced. Legislation to limit successive temporary contracts is actually there to help those wanting permanent contracts to achieve this.

However, for professional contractors France offers opportunity, especially across the IT sector. Sophia Antipolis, a town which lies just outside Nice, has been dubbed the ‘Silicon Valley of France’ and is testament to the success of the IT industry. There is an enormous amount of IT work currently going on around this area and naturally, there is a constant demand for contractors with highly sought-after, specialist technology skills.

With the likes of the European Space Agency, oil and gas giants Total and Saipem and aircraft manufacturer Airbus all requiring high volumes of niche skills, there is a regular need for other technical personnel, not just IT types. This demand comes from a number of projects, most of which have fixed timescales. The delivery of specific projects is reliant on temporary workers who can be available for the duration of a project, which has created this demand, and it’s a demand that is on the rise as prosperity returns to Western Europe. In line with this is what we are seeing - that France remains an attractive proposition for contractors within these industries, precisely because of those innovative projects that require skills that are often in short supply on a full-time basis.

Opportunities abound

France is not the only country thriving on technical personnel working in temporary roles. The Oil & Gas sector in Italy needs technical contractors for commissioning projects, which are usually short-term, so having a flexible workforce is not only desirable but totally necessary to stay competitive.

Italy’s legislation, like France’s, is in place to protect those that are deemed more vulnerable and to help those wanting permanent jobs, it’s not to harm professional contractors. And with there being a real need for specialised personnel right now, it is ‘business as usual’ for those that are on such contracts.

These professionals echo what we believe -- it is an unfair and untrue assumption that an increase in temporary contractors equals an increase of job insecurity. Flexibility is key across the whole labour market to deliver growth. There is a real need for specialist contractor staff; a demand that domestic workers alone cannot fulfil.

What the EU’s legislative change means for UK contractors

For those seeking contracts across the world’s largest economy, the European Union remains one of the most attractive and lucrative in the world. Legislation seeking to limit the use of contingent workforce is by no means a new idea and one that is shared among many European countries.

However when it comes to highly-skilled contractors, there is simply more demand compared to permanent recruitment, according to recent statistics from the Association of Professional Staffing Companies.

So the market for highly-skilled contractors remains buoyant, and laws which may seem to counter this have little bearing on professional UK contractors looking to relocate.

Contrary to the laws to limit people on temporary contracts, such vacancies have grown in 13 of the 19 Eurozone countries. Furthermore, as growth begins to increase across the continent, flexible working practices will allow the labour force to fill vacancies that will arise, wherever the need.

As a result, temporary contracts will remain relatively unchanged for those seeking opportunities in professional, highly-skilled areas. The purpose of legislation now afoot in France, Portugal and Italy is to help empower those who currently have little job protection – it is these workers who will see a step change. For UK professionals setting out to any of these three nations as contractors, it’s a case of ‘as you were.’ If you’re one of these skilled individuals, you will continue to see European countries as having some of the best working conditions in the world, especially if that work is flexible and even if lesser skilled parts of your host nation’s temporary workforce are being targeted by legislation. In short, when looking to contract overseas, the EU remains not only a viable option but a desirable one.