Luther's posting contains some misonceptions and generalities.
Originally posted by LutherAdon:
The non legalese reason: if you are hired through an agency the company has not made any commitment to you and can get rid of you at the drop of a hat and do what they will with you so long as it complies with the legal code.
Absolutely incorrect. When you sign a contract with a company, you have a committment. However, what your friend probably did was get hired as a contract worker. Allow me to elaborate.
Case 1
Company ABC wants to hire someone, so the turn to recruiting agency RA-1. RA-1 sends them candidates and eventually they hire one. ABC and the employee sign a contract and he then works for ABC.
Case 2
Company ABC wants to hire someone, so they turn to a different type of recruiting agency (which is a very generally term to begin with), which we'll call RA-2. In this case, the employee is technically an employee of RA-2. There is no contract between the employee and ABC. There is some contract between ABC and RA-2, but usually makes no mention of any specific employee.
Case 3
My last company was Vaultus. Vaultus, like many smaller companies, contracted out their payroll and benefits. Technically, I was an employee of HRLogic, the payroll company. Of course, for all practical purposes, I was a Vaultus employee.
This is all moot anyway. Most software engineers have employee-at-will contracts. They all say you can be terminated, at any time, without warning, with or without cause. Read your contract carefully, I'll bet this clause, or one very similar to it, is in it.
Originally posted by LutherAdon:
Another instance is the simple fact that one of my friends hired through an agency as a web developer worked for a company for two years as he was not an employee did not get a vacation ever save the legal must holidays ie Christmas. When he was laid off he did not get a penny severance and he never got a raise.
Again, he was clearly a contractor. A contractor, as in Case 2 above, is not eligible for paid holidays or vacation days. In theory, the contractor gets a higher hourly wage.
Originally posted by LutherAdon:
The last instance is someone I know who works in an office who happened across what the company who hired him is paying for their services. The temp agency is marking them up 100%!
Well this is clearly a contractng agency, case 2 above. 100% markup is actually fairly common (or was during the bubble).
My point is recruiting agencies != contract firms. It just so happens that some companies which fall into the loosely definaed category of recruiting agency happen to be contract companies.
--Mark