A Dutch union representing contractors working at the largest European Space Agency (ESA) establishment has accused the agency of trying to circumvent European labor regulations and announced plans to take some of its manpower suppliers to court.

The announcement is a culmination of a dispute that began in 2019 when a change in Dutch labor law clarified rights of contractors loaned to third party organizations via manpower companies. 

Contractors employed in permanent roles that are identical to jobs performed by staff members are entitled to equal treatment including salary and benefits, according to the Dutch labor regulations. That, however, is not the case at ESA, the union said. Contractors at the European Space Research and Technology Center (ESTEC) in Noordwijk, a coastal town between the Hague and Amsterdam, as well as at other ESA establishments across Europe, earn considerably less than ESA’s direct staff members.

The exact difference varies contractor by contractor, but disparities of more than $1,000 per month have been reported. On top of that, at the time of the law change, most ESTEC contractors were receiving no pension contributions and healthcare coverage, unlike ESA’s direct staff members, sources said.

An investigation by the Dutch Social Affairs and Employment Inspectorate, instigated by complaints of three contractors, concluded that the affected workers should be covered by the new law. The framework under which these contractors were loaned to ESA was, according to the Inspectorate’s report, meeting the criteria for matching pay: the employees were directly selected by ESA, reported to ESA managers and fulfilled identical tasks as workers employed as the agency’s staff.

“The inspectorate wrote a report three times with a clear conclusion: there was a case of making labor available,” the CNV Union wrote on its website. “This means that the hirer's remuneration applies. In other words: the seconded employees are entitled to the same remuneration as permanent employees of ESA. But seconded workers to ESA currently do not receive equal pay.”

The Dutch Social Affairs and Employment Inspectorate refused to comment on its findings, but the translated report, publicly available via the CNV Union’s website, describes obstacles the investigating inspector faced because of ESA’s refusal to allow access to its premises citing its diplomatic immunity.

“In the period from October 2020 to February 2021 I, the rapporteur, spoke to representatives of ESA. During our conversations I repeatedly pointed out that the Dutch Labour Inspectorate wished to have access to the ESA premises, wanted to talk to ESA employees and wanted access to the employment conditions ESA applies to its employees,” the report states. “ESA took the position that this was not possible because of the inviolability of its premises and records and the immunity of the employees.” 

ESA is an intergovernmental organization that is outside any national jurisdiction and protected by diplomatic immunity, granted to it by its founding Convention. The agency has used its diplomatic immunity repeatedly in legal cases brought forth by its formal staff members and contractors, which Supercluster reported on earlier.

ESA told Supercluster in an email that the agency as well as the manpower suppliers in question “disagree” with the conclusions made by the labor inspector and that it had “cooperated with the Dutch labor inspector by providing access to requested information and explanations,” which “included among others the incomparability of tasks between loan contractor personnel and ESA staff members and the differences between employees of private Dutch companies and international civil servants.”

The CNV Union refused to say, which companies it plans to take to court but the translated report available on its website concerns a contractor employed via manpower company MODIS. 

Roderik Mol, the union’s representative, told Supercluster that the union plans to file the cases with the Amsterdam District Court by the end of August. Mol added that the Union is facing the same challenges as the Dutch Labour Inspectorate, attempting to obtain information from ESA. 

“We have been asking for the information that we need but they say ‘no, we are an international organization, our archives are inviolable, and we are immune,’” Mol said. “This situation has been going on for about two years now.”

In addition to the Netherlands, ESA has facilities in France, Germany, Italy, Spain, U.K. and Belgium. The agency’s 2,200 staff members enjoy a multitude of benefits with their competitive salaries. In addition to those workers, about 2,700 contractors are believed to work at ESA, the majority of those at ESTEC.

According to more than 50 internal ESA sources (past and present contractors and staff members), who have spoken to Supercluster under the condition of anonymity, ESA teams have historically consisted of staff members and contractors employed through different manpower companies working together on the agency’s projects. 

In 2019, a court in Italy ruled that ESA and its manpower company Kelly Services were in breach of European labor in the case of communications professional Ivan Balenzio. Like the ESTEC contractors, Balenzio, who had been fired from his role after suffering a burnout, complained about his salary being about 1,000 euros lower than that of his staff colleague. The District Court in Velletri decided that Kelly Services should pay Balenzio 210,000 euros, but the company appealed the decision. The case is now heading to the Italian supreme court.

According to documents available to Supercluster, ESA wants to bring its use of on-site contractors in line with European labor laws by changing their employment framework from Manpower Assignment Scheme (MAS) contracts to service contracts. While workers employed under MAS agreements “may be integrated into ESA teams and may receive day-to-day instructions from ESA staff,” according to the ESA document, service contractors “deliver a clearly defined service under the supervision and direction” of their manpower company, using their own equipment.

The contractors that spoke to Supercluster and the CNV Union, however, describe this change simply as a bureaucratic exercise designed to further erode contractors’ rights.

“In our opinion, it's a way to avoid the equal pay discussion,” Mol said. “The contracts are changing now, people who have been MAS are made to work under Services, and that means that the way they work, and their legal status is going to change.”

One source said that to satisfy the criteria of a service contract, ESA is creating “almost fake work packages for our duties to be evaluated every quarter.” The source added that the new set-up requires “more managers” overseeing a contractor and “more time for administrative work” on top of the contractor’s regular duties. “I will still be expected to provide the same support I do now, and I am already very busy,” the source said.

A survey conducted by the CNV Union among more than 200 ESTEC contractors last year found that while 85% of the respondents said their role within ESA was equal to a regular ESA staff role, only 1% said they were rewarded equally for their work. 93% of the survey participants said that contractors and staff members were overall not treated equally at ESA and 88% believed that ESA as an organization was not actively looking after the best working conditions for contractors. 

ESA told Supercluster that it “pays close attention to compliance of contractor companies with applicable national law” and “that new service contracts may be implemented at ESTEC to ensure consistency across ESA establishments.”

“Any such contract would of course be established for activities allowing this approach in full accordance with applicable Dutch law,” the agency’s spokesperson added.

The contractor discontent is not limited to ESTEC. A source working at the European Space Operations Center (ESOC) in Darmstadt, Germany, ESA’s second biggest establishment, described a similar situation, involving new layers of management added between the contractors and their staff colleagues.

“It's like there's suddenly a trench between us,” the source said. “In the past, we were one team of staff and contractors who could talk together and distribute tasks. That’s no longer possible. The regulations now require that our head of unit who is an ESA staff member talks to a service manager from the contract company who can then assign a task to us.”

In a statement on its website, the CNV Union describes the transition as a “formal legal scaffolding that does not align with the spirit of the law, disregarding the interests of those affected.” The union urges ESA to stop the transition and ensure that any new contractual arrangements take into account the well-being of contractors as well as the Dutch and European legislation.