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Nexia Ebner Stolz

Legal Advice

Temporary staffing on a permanent basis

As long as the staffing agency is licensed, no employment relationship is established with the client when a temporary staffing arrangement becomes long term

Nowa­days it is impos­si­ble to pic­ture the wor­king world wit­hout tem­porary emp­loy­ment. Howe­ver, when pub­li­cly dis­cus­sed, it is a highly con­tro­ver­sial sub­ject. Tem­porary emp­loy­ment is criti­ci­zed for dis­pla­cing per­ma­nent emp­loy­ment and giving a free pass to low sala­ries. Now the BAG (The Federal Labor Court) has step­ped in and for the first time made some addi­tio­nal necessary spe­ci­fi­ca­ti­ons in the legal frame­work.

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In its deci­sion on July 10th, 2013, it ruled that tem­porary staf­fing that is in fact not tem­porary is not per­mit­ted accor­ding to Sec. 1 (1) sen­tence 2 AÜG (Tem­porary Emp­loy­ment Act) (Az. 7 ABR 91/11).

What is the back­ground? Fol­lo­wing the chan­ges to the Tem­porary Emp­loy­ment Act (AÜG) that took effect at the end of 2011, tem­porary staf­fing may only be “tem­pora­ry“. Due to a lack of spe­ci­fi­city, this inde­finite legal term has so far been lar­gely igno­red in practice. Accor­din­gly, in most cases emp­loy­ers have been con­ti­nuing to use tem­porary emp­loy­ment just as before the legis­la­tive change. The deci­sion of the BAG has now put an end to this.

On Decem­ber 10, 2013, the BAG ruled on ano­ther mat­ter rela­ting to the use of tem­porary staff (Az. 9 AZR 51/13). At issue this time was whe­ther an emp­loy­ment rela­ti­onship is estab­lis­hed bet­ween the tem­porary wor­ker and the cli­ent if the use of the tem­porary wor­ker is not actually tem­porary. On that, the BAG has now made clear that no emp­loy­ment rela­ti­onship is estab­lis­hed bet­ween a tem­porary wor­ker and a cli­ent unless the staf­fing agency does not have a license (Sec. 10 (1) sen­tence 1 AÜG). In the Tem­porary Emp­loy­ment Act (AÜG), law­ma­kers pur­po­sely refrai­ned from man­da­ting the crea­tion of an emp­loy­ment rela­ti­onship with the cli­ent as the legal con­se­qu­ence for using a tem­porary wor­ker on a long-term basis. EU law is no dif­fe­rent in this respect. It is up to law­ma­kers, not the labor courts, to choose from among the many pos­si­ble sanc­ti­ons and deter­mine a pen­alty.

In the case deci­ded, an IT pro­fes­sio­nal that was hired out to a hospi­tal ope­ra­tor from 2008 to 2011 deman­ded a per­ma­nent posi­tion and pay­ment of wage dif­fe­ren­ces. His rea­so­ning: the assign­ment was not actually tem­porary. The­re­fore, an emp­loy­ment rela­ti­onship had been estab­lis­hed with the hospi­tal pro­vi­der. The BAG did not agree, howe­ver, hol­ding that no emp­loy­ment rela­ti­onship had been estab­lis­hed.

Since a ruling about whe­ther the tem­porary IT wor­ker was used on a more than tem­porary basis was not necessary in this case, what the term “tem­porary” really means - at least in terms of dura­tion - is still an open ques­tion. There will con­ti­nue to be uncer­tainty con­cer­ning the lega­lity of “tem­porary” staf­fing going for­ward. Until the BAG furt­her spe­ci­fies the limits of tem­porary staf­fing arran­ge­ments, we will have to accept the pre­sent legal uncer­tainty. In any case, it is advisa­ble for the emp­loyer to limit the dura­tion of any tem­porary emp­loy­ment.

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