Germany: A “Permanent Temp Worker” is not the Lessee’s Employee

by Orrick - Global Employment Law Group
Contact

In Germany, many companies have resorted to utilizing temp workers through a third-party agency instead of hiring their own personnel. Temp workers typically are leased from an agency that employs the temps and assigns them to the company (lessee). This staffing model has increasingly received political criticism and judicial attention.

An area of particular concern is that some companies utilize temp workers “permanently” in order to replace parts of their regular workforce. For example, the lessee company may not agree with the agency and the temp on a defined term of the lease. Companies might seek permanently to use temp workers for staffing their reception area or IT department and thereby reduce costs instead of hiring their own staff. After an amendment to the legislation governing temp work, these companies faced the risk that the temp workers they permanently lease would be deemed their own staff.

In 2011, the German Parliament amended the law regulating the temp workers’ sector—the German Act on Temp Workers (AÜG). The AÜG expressly provides that the leasing of temp workers must be “temporarily” in order to be lawful under the AÜG with the consequence that the leasing arrangement regarding a temp must be agreed to for a defined period (e.g. twelve months). However, the AÜG was not clear in identifying how to determine when, or the consequences to an employer, for a worker leased “temporarily” versus one who was leased “permanent”.

Some Higher Labor Courts (e.g. the Higher Labor Court Baden-Württemberg) ordered that a temp worker who is permanently assigned to the lessee (i.e. not temporarily, or for a defined period only) becomes an own employee of the lessee. According to the Court, the AÜG’s purpose is to only allow a temporary placement of temp workers, and an assignment of a temp worker in conflict with this purpose would result in the temp worker becoming an employee of the lessee.

Other Higher Labor Courts (e.g. Berlin-Brandenburg) rejected this view. They concluded that such strict sanction cannot be derived from violating the AÜG.

On December 10, 2013, the Federal Labor Court (case no. 9 AZR 51/13) ruled that no employment relationship is established when a temp worker’s assignment to the lessee is not temporary. The highest German labor court argued that in absence of an express sanction in the AÜG, the labor courts has no competence to “impose” the fiction of an employment relationship to companies leasing temp workers permanently. According to the judgment, it is solely up to the legislature, either on the EU level or on a national level, to implement such a harsh consequence into the law.

The recent judgment of the Federal Labor Court creates clarity and certainty for the sector of temp work. For now, under AUG, companies utilizing temp workers permanently will not be deemed their employer. However, the new German Federal Government has already announced that it intends to amend the AÜG by allowing temp work only for up to 18 months. It is well possible that express sanctions for the permanent leasing of temp workers will find its way into amendments to the AÜG.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Global Employment Law Group | Attorney Advertising

Written by:

Orrick - Global Employment Law Group
Contact
more
less

Orrick - Global Employment Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.