Unions’ Dilemma When Firms Use Employment Intermediaries

Abstract

This article examines how labour unions influence the use of employment intermediaries. Employment intermediaries, such as temporary help agencies (THAs) and contract companies, are commonly believed to undermine the power of labour unions, by fracturing the collectivism that characterises unions. However, these arrangements may also serve as a buffer in the workplace - protecting the regular workers from fluctuations in labour demand. The analyses are based on 1629 private sector establishments. Two main findings are reported. First, there is a positive relationship between unionisation and the use of employment intermediaries for staffing reasons. Second, highly unionised establishments tend to have the lowest use of THAs and contractors for reasons that may replace regular workers, suggesting that unions are able to influence how employers use employment intermediaries. The findings are discussed in relation to the regulated labour market in Norway.