- Contingent Workforce Strategies 3.0 - http://cwstrategies.staffingindustry.com -

Why ‘de facto employment’ matters to a growing CW management program

When successful contingent workforce (CW) management programs grow beyond their initial borders, understanding risk issues like “de facto employment” is as critical as understanding the language differences and business cultures of the new global markets you are expanding into. Without that knowledge, expansion success is going to be hard to achieve.

But what does de facto employment mean? De facto is a Latin phrase meaning “as a matter of fact.” In other words, in some European jurisdictions, an indefinite engagement relationship will be presumed permanent employment in certain circumstances — especially one where the staffing agency client is demanding and executing a lot of control over the work service being delivered.

Other issues that will be taken into account in defining “de facto employment” are:

Whereas the North American marketplace seems to require judicial case precedents to define co-employment and independent contractor status, many global markets have clearly defined market rules and prohibitions in the placement of contingent workers in specific marketplace operations — and they can differ from market to market. The European Union’s Agency Workers Directive actually attempts to eliminate restrictions on the use of temporary agency workers, in order to contribute to the development of the temporary work sector as a flexible option for employers and workers.

The risks associated with de facto employment are many and serious since the prohibitions are clear and legislated:

In addition to de facto employment, other general global market risk issues can include:

Global markets have multiple and sometimes unique CW program management business practices that are typically formed by the legislative rules and laws established in each marketplace. Understanding these market idiosyncrasies will make the global expansion of a CW program more productive and successful. Either way, these market-specific idiosyncrasies are out there lurking for the uninformed and changing constantly.