Trade unions ’ opposition to temporary agency work : Evidence from UK workplace data ∗

Trade unions have an ambiguous relationship with the use of temporary agency work. A firm’s employment of agency workers may be perceived as a replacement of directly employed workers or as way to curb union power, which trade unions would oppose. Alternatively, trade unions may encourage the (temporary) employment of agency workers in a firm, if they manage to bargain higher wages for their members. We estimate the relationship between hiring agency workers and trade union activity at the workplace, in particular, the type of collective bargaining agreements. We use British data from the Workplace Employment Relations Surveys (WERS) of 1998 and 2004. Our results show that the probability of hiring agency workers is, depending on the econometric specification, not or even positively associated with trade union activity, both measured at the occupational level of workplaces. These results contradict British trade unions’ anti-agency work rhetoric and rather suggest that trade unions, in exchange for higher wages for directly hired workers, are quite willing to accept agency workers in workplaces. This result may indicate that trade unions put more emphasis on maximising the utility of their existing members by protecting them from wage cuts, instead of maximising the number of permanent workers in a workshop. Trade unions also appear to accept temporary agency workers more readily when unemployment is high.