World Employment Report 2001

Negotiating the new economy: The effect of ICT on industrial relations

5. Industrial relations and the "atypical" worker – Agency workers

It was suggested at the start of this chapter that the traditional paradigm of the "typical" worker (the full-time employee with a linear career progression) is unlikely to reflect the complexities of work in the modern economy. For convenience we may choose to describe workers who do not fit this model as "atypical". We should be aware, however, that increasingly the atypical may be becoming the norm. For example, the temping agency Manpower, which worldwide has more than two million temporary workers each year, is effectively the largest private provider of work in the USA.

For the trade unions, the issue of the "atypical" worker may be regarded almost as a touchstone in assessing how well they are adapting as institutions to changing work realities. Are these workers looking to trade unions as their representative bodies, and are unions successfully meeting their needs and requirements? Or are they choosing to go elsewhere for assistance in areas relating to their work?

This section will explore the implications of agency work; we shall then move on to consider the recent growth in self-employment.

The use of agency staff cannot be put down simply as a consequence of ICT. Changes in corporate organisational structure and management introduced by companies in the 1980s and 1990s – the decision to identify "core" business activities and use outsourcing for non-core activities, for example – are arguably more important factors. Nevertheless, it is highly significant that the world"s most famous IT centre, Silicon Valley in California, relies so heavily on agency staff. Silicon Valley can be seen not only as an innovative powerhouse for technological development but also as a trendsetter for labour practices, likely to be copied both elsewhere in the US and elsewhere in the world.64

Employment data for Santa Clara county, the administrative district which includes Silicon Valley, show striking growth in non-standard forms of employment, including agency work. The Table 8 is taken from a recent American academic study.65

Table 8: Contingent workers in Silicon Valley, California, 1984 and 1997




Percent change

Temporary workers








Total, all types of non-standard workers (upper estimate)




Total, all types of non-standard workers (lower estimate)




Total, civilian workforce




Source: California Economic Development Data

According to this research, somewhere between 27% and 41% of the total workforce are "non-standard", a category which also includes part-time workers and independent consultants.

The same study investigates the role played by temporary agencies in the operation of the Silicon Valley labour market.66 The six largest operating in 1997 are given as follows:

Table 9: Temporary work agencies in Silicon Valley, California, 1997.

Name of company

Total number of temporary placements in valley

Number of recruiters in valley

Offices in valley

Manpower Staffing Services




Adecco Employment Services




Barrett Business Services




American Technical




Accustaff Inc




Crossroads Staffing Services




Source: San Jose Business Journal.

It is relevant to note that the role performed by temporary staffing agencies such as these was one which, in previous times, would have been much more readily performed by trade unions. In fact, a number of US unions have attempted to continue the tradition of the "hiring hall" in the modern labour market. During the fall-out period from regulatory reform of the telecoms sector in the USA, the Communications Workers of America union (CWA) set up pilot employment centres in Cleveland, southern California and later Seattle, designed to help workers made redundant from AT&T and the "Baby Bell" telecoms companies find other jobs in the sector.67 Nevertheless, the rapid growth of web-based companies such as suggests that work search and hiring services are now areas where the private sector is dominant.

Temporary workers have featured strongly in the efforts of the US trade union federation AFL-CIO to organise workers in Silicon Valley's IT sector, an initiative closely associated with the policies introduced after the election in 1995 of a reforming AFL-CIO president John Sweeney. The AFL-CIO's South Bay Central Labor Council focuses on the Santa Clara and neighbouring San Benito counties. Its director Amy Dean, who is in her mid-thirties, has sought to develop community links through the creation of Working Partnerships, a non-profit institute based in San Jose. Working Partnerships undertakes a range of research and educational activities but also explores new models for employee representation. Its Temporary Worker Employment Project offers agency workers both the functions of a professional association and also a placement agency service linking them with job opportunities.68

Hundreds of kilometres north of Silicon Valley, the CWA union has been attempting to organise the many thousands of temporary workers (about 6,000 in 1998, or about 35-40% of the workforce) employed by Microsoft at its Seattle, Washington, headquarters. Microsoft's policy in excluding temporary workers (including so-called "permatemps") from standard employee benefits was challenged in a long-running class legal action Vizcaino v Microsoft. As an indirect result of this case, Microsoft recently introduced sweeping changes in its approach to temporary workers. From July 2000, Microsoft has obliged agency workers to take a 100-day break after working for the company for a year; the company claims that, through this means, the workers involved do not become entitled to standard employee benefits. Since early in 2000, however, Microsoft has increased significantly the number of regular, full-time jobs available to contract employees. Former agency workers who join Microsoft's payroll receive medical coverage, paid holidays, sick leave and access to the company's share option scheme; the base salary, however, may be less than that paid previously.

Microsoft, like other IT companies in the USA, is not by tradition a unionised firm. The closest thing to an organisation attempting to undertake a traditional representative role for employees is the Washington Alliance of Technology Workers (WashTech), which appropriately enough uses a web site as its main way of reaching members and potential members. Although part of the CWA, it is interesting that WashTech does not stress this link. Its web site comments: "Because traditional labor organizations have been slow to adapt to the changing nature of the American workforce, we are building a new type of organization. We are committed to being democratic and worker-driven, and to addressing the unique challenges faced by high-tech workers."69 WashTech attempts to address concerns both of agency staff and directly employed staff at Microsoft.

The emphasis we have given to these developments on the USA's west coast can be justified by the importance the companies based there play in global ICT developments. However it would be wrong to give the impression that the issue of agency workers applies only in the USA. Concern about the growth of agency workers was one of the factors behind industrial action taken in Britain against BT by the Communication Workers Union. A one-day strike in 1999, the first in BT for thirteen years, focused in particular on call centre working and the extensive use which BT had been making in its call centres of agency staff. The settlement of the dispute saw BT commit itself to reduce agency staff use considerably – from 60% to 20% in one division, for example.70

In the wider European context the European Trade Union Confederation made proposals in 1999 to the employers' bodies UNICE (Union of Industrial and Employers' Confederations of Europe) and CEEP (European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest) for the negotiation of a framework agreement on temporary agency work. ETUC's approach followed the conclusion of an agreement between the European social partners on the regulation of fixed-term contracts.71