Ex Ante vs. Ex-Post: Optimizing State Intervention in Exploitive Triangular Employment Relationships

Triangular employment relationships have become increasingly prevalent in recent years. Among the many common triangular, or indirect, employment relationships, are sub-contracting, employee leasing, and employing workers through temp agencies. The sad plight of secondary employees, (those employed through triangular relationships) is clear and well-documented. In most countries various techniques are employed in an attempt to curb the exploitation of secondary employees. This includes, determining who the genuine, legally recognized, employer is, applying joint employer status, and mandating equality and maximal tenure periods. Comparing the efficacy of the specific techniques is somewhat complex. This paper will organize the techniques into two main categories: ex-ante and ex-post; and to analyze the strengths and limitations of the Continental approach (mostly ex-ante) in comparison with the American approach (mostly ex-post). "Ex-ante intervention" refers to the protection of secondary employees through detailed, rule-like legislation, creating restrictions and procedures, governing the treatment of secondary employees. "Ex-post intervention" refers to the method of creating standards leaving the courts with ample discretion to rule upon the legal treatment of each particular employee or employer, based on the circumstances of the employment relationship. This paper will demonstrate some of the weaknesses of the ex-post approach primarily through an illustration of Israeli case law, as well as by comparison to continental and American types of intervention. The paper will also demonstrate some of the advantages associated with the unpredictability of an ex post approach. Following a close comparison of the ex-post and ex-ante techniques, the paper will call for an approach that is based mainly on ex-ante elements, relying, in certain limited situations, on ex-post techniques.