Requirements
Definition of the term
Temporary worker assignment is also known as temporary work, staff leasing or temporary agency work.
Temporary work involves three parties:
- The supplier
The employer (supplier of workers’ services) makes his employees available to a third party to work for him. - The user
The user (user of workers’ services) deploys the workers he has hired as he sees fit according to his business requirements, and is entitled to give them instructions. - The temporary agency worker
Although temporary agency workers perform work for the user, they remain the employees of their direct employers (suppliers)
Licence requirement and legal supply of labour
Employers must have a licence if they supply workers as part of their business activities, irrespective of whether supplying workers is the main, or a secondary, purpose of their business.
The provision of a temporary worker can be for a limited period only. The supplier must not let one user have one and the same worker for more than 18 consecutive months. This maximum period of 18 months may vary where collective bargaining agreements provide for different timeframes.
Between them, the supplier and the temporary worker must have established an employment relationship based on an employment contract.
The contract for the provision of temporary labour concluded between the supplier and the user of labour must expressly refer to the provision of temporary worker(s).
In addition, supplier and user must specifically identify the temporary worker in their contract for the provision of temporary labour.
Description of the picture
A temporary agency worker and a supplier (hirer-out) conclude an employment contract.
The supplier – who has a licence to supply labour – concludes a temporary assignment contract with the user (hirer).
The temporary agency worker carries out his/her work for the user.
Consequences of unlicensed assignment of employees
Licence applications
Licences may be granted by the Employment Agency (Agentur für Arbeit) either in Düsseldorf, Kiel, or Nuremberg. The applications for a licence must be made in writing. Which Employment Agency is competent depends on the location of the company’s registered office. There are special rules that apply to companies registered abroad.
The licence is always personal and not company-related.
No licence requirement
A licence is not required, for example:
For secondment to a project-related consortium
The secondment of employees to a consortium that has been organised to complete a project or part of a project is not seen as temporary worker assignment if
- the employer is a member of the project-related consortium,
- collective wage agreements of the same economic sector apply to all the project-related consortium’s members, and
- all the consortium members who are parties to the contract or agreement establishing the project-related consortium, are required to provide the contracted services independently.
For intra-group leasing
No licence is required where an employee works for another employer affiliated to the same group of companies, providing that the employee has not been recruited in order to work as a temporary assigned worker.
In order to avoid short-time working or redundancies
If falling within the scope of the collective wage agreement that applies to both the supplier and the user, and if both belong to the same economic sector, the leasing of workers in order to avoid short-time working and/or redundancies does not require a licence.
- For occasional assignment of employees
By way of exception, no licence is required for the temporary assignment of workers by one employer to another when the assignment is only occasional, and the workers have not been recruited and employed for the purpose of being assigned. - For the occasional deployment of employees
By way of exception, no licence is required for the temporary provision of workers by one employer to another when the deployment is only occasional, unless the workers have been recruited and employed for the purpose of being deployed. - For public service employees
There is no licence requirement where employees relocate their duties from one (former) employer to a different employer, while their employment relationship with the former employer is continued due to an existing collective agreement but the work is going to be performed for the benefit of a different employer. - For the provision of labour between legal entities governed by public law
Where collective bargaining agreements for the public service or the rules governing public-sector religious communities apply, no licence is required for the provision of employees between legal entities governed by public law.
The waiver of a licence does not apply, in principle, where employees are deployed to perform jobs in the building trade, which are customarily carried out by workers.
No temporary assignment in mainstream construction
A supplier of labour shall not provide workforce to a mainstream building contractor if they are to undertake jobs which are usually performed by building workers. A building contractor is a company that provides building services by way of business in the construction sector (Volume III, German Social Code, Section 101(2) (Sozialgesetzbuch - SGB III)) in conjunction with Article 1 of the Building Contractors’ Ordinance (Baubetriebe-Verordnung - BaubetrV))
The scope of a licence to supply workers does not extend to supplying workers for the mainstream construction trade.
Company A, a building and civil engineering firm, has a very full order book and urgently needs some workers: a labourer and an accountant.
Company B, a temporary employment agency, is not allowed to supply labourers to the building and civil engineering firm.
If B is licensed to supply workers, though, it may assign an accountant to A.
Exception:
The temporary assignment of workers between construction firms (from one to another) is permitted. The company supplying workers must, though, have come within the scope of the same industry-wide collective and social insurance agreements, or the same generally applicable provisions, for at least three years. Also, the supplying company must have a licence to supply the workers concerned.
One established tiling company, A, is allowed to supply one of its tilers, Mr. C, to a second tiling company, B, always providing that A has a licence for such assignment.
There is a similar, analogous, arrangement for building contractors that are registered in another European Economic Area member state.
Consequences of temporary assignment in mainstream construction
Defining temporary assignment of workers
A temporary assignment, or supply, of workers exists where circumstances show that temporary staff have, in fact, been assigned. It is immaterial in this context if the relevant contract uses different terms, such as supply of work or services, to describe the assignment.
In the case of a contract for work or services, the contractor organises the activities required to attain the desired economic outcome either himself, or where appropriate, with the assistance of his agents. He is himself responsible for the provision of the services, or for the making of the product specified in the contract.
In the case of a contract for the temporary assignment of workers, the supplier assigns suitable staff to the other contracting party who deploys them according to its own operational requirements.
From a legal point of view which of these two cases applies depends on the actual content of the contract, not on its designation. Such content may be defined by the wording of the contract, but also by its implementation. If the one contradicts the other, it is the contract’s actual operation that determines its legal nature.
To determine whether it is a contract for temporary worker assignment or a contract for work it is necessary to make an overall evaluation based on the qualitative weighting of a number of distinguishing characteristics. In this context, the following criteria are of particular relevance:
- the result of the work,
- managerial authority,
- commercial freedom of disposition,
- performance-based accounting,
- commercial risk, liability.
A contract for services has only a very restricted application. It exists where the service provider deploys his agents to provide an independent service exclusively in his name, and according to his planning (organisation of the service provision and the time to be spent, the number, selection, and qualifications of agents).
Conditions of employment, pay
You will find comprehensive information about the minimum conditions of employment laid down in the relevant legislation (AÜG, AEntG and MiLoG) by following this link:
Additional information about the minimum conditions of employment to be granted pursuant to the AÜG, AEntG and MiLoG legislation
