Labour leasing: Changes to temporary employment

Labour leasing: Changes to temporary employment

Labour leasing: Changes to temporary employment

The legal provisions pertaining to labour leasing, also referred to as temporary employment or subcontracted work, are being shaken up.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The Bundestag, Germany”s lower house of parliament, recently passed the so-called Gesetz gegen den Missbrauch von Leiharbeit und Werkverträgen (legislation protecting against abuse of temporary and contract work). According to information provided by Germany”s federal government, almost one million people were employed as temporary workers at temporary employment agencies last year. They, along with employers, will now have to adapt to changes.

The bill essentially provides for two substantial changes to the duration and remuneration of temporary employment. To prevent temporary work from becoming a permanent feature, it shall be limited to a maximum duration of 18 months, i.e. the temporary worker cannot be lent out to the same firm for longer than this. After this period of time has passed, the company can either take the worker on full time or the agency must remove the loaned worker from the firm in question and ideally have him work at another company. Having said that, the bill also includes exceptions: If a collective bargaining agreement is in place for the respective industry, it is possible to arrange a longer upper limit for labour leasing. Companies that are not bound by collective bargaining agreements are also able to potentially set a longer maximum term by adopting the applicable collective agreement for their sector or making use of an opening clause in a collective agreement for company works agreements.

Another new addition are the provisions on equal pay. These state that temporary workers must receive the same wages after nine months as the permanent workforce in comparable jobs. In cases involving relevant collectively-agreed arrangements on bonuses for temporary employees, the temporary workers may receive a progressive increase in their wages in advance. Equal pay does not then have to have been achieved until after 15 months have passed.

Furthermore, temporary employees can no longer be used to break a strike. This means that they can only be used in firms gripped by industrial action if they do not assume any activities carried out by striking workers. Additionally, the bill aims to prevent works contracts from being redeclared later as labour leasing.

For a lot of businesses, temporary employment is an important means of maintaining flexibility. Lawyers who are experienced in the field of employment law can advise on temporary work.

GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

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