No employment with hirer in the event of hiring out that is no longer only “temporary”

On 1 December 2011, the legislator included in Section 1 Subsection 1 Sentence 2 AÜG (Law on Temporary Employment) the fact that hiring out of employees must only be “temporary”; this resulted in a dispute as to whether violation of this results in the creation of an employment relationship between the temporary employee and the hirer. After several State Labour Courts also supported this opinion, it has now been opposed by the BAG (Federal Labour Court). A legal consequence of this nature is not compatible with the law.

In the case at hand, the employee was employed with a company with a license for the hiring out of temporary workers, and hired out the majority of its employees to its parent company, the operator of a clinic. Following the ending of the claimant’s work for the parent company after more than three years, he claimed that his employment relationship with the company hiring out was incorrect. His hiring out had not been only temporary, with the result that an employment relationship had been created between him and the parent company hiring him. Following dismissal of the legal action by the Labour Court, the State Labour Court Baden-Württemberg agreed with the opinion that, given the constellation of hiring out of workers that is no longer just temporary, an employment relationship is created between the temporary employee and the hirer.

The BAG set aside the decision of the State Labour Court and dismissed the legal action of the employee as a whole. No employment relationship is created between a temporary employee and a hirer, even if the deployment is not just temporary. The law provides for such legal consequences only in the event of the company hiring out not having the license required by law. This sanction, standardized in Section 10 Subsection 1 Sentence 1 AÜG, cannot be extended to cover other violations of regulations of the AÜG. In view of the number of conceivable violations and the likewise manifold sanctions, it is the task of the legislator to prescribe specific legal consequences. The BAG has therefore, with pleasing clarity, removed the recent legal uncertainty created by various identical LAG (State Labour Court) decisions.

Temporary hiring out

Nevertheless, the BAG had no cause to decide whether continuing, or no longer temporary, hiring out of workers is to be assumed in the case at hand. The question of how the term “temporary” is to be understood remains unanswered. In view of the numerous conceivable constellations of temporary hiring out of workers, only case-by-case decisions can be expected from the courts in this respect anyway, and these will permit transfer to other facts to a limited extent only. In the opinion of the LAG Schleswig-Holstein (ruling dated 8.1.2014, 3 TaBV 43/13), both a person-related as well as a workplace-related consideration must take place here, depending on the constellation of the case.

Given work that objectively arises permanently, the temporary employee should only be involved for the performance of this on an auxiliary basis. Otherwise, his work is no longer “temporary”. This also applies if the temporary employee – employed by the hirer on a fixed-term or indefinite basis – performs permanent tasks for the latter without having replaced a regular employee.

Conclusion

Even if the BAG has clarified a contentious legal issue through the decision at hand, peace cannot be expected in the field of the hiring out of temporary workers. It is possible that the license for the temporary hiring out of workers will be withdrawn in future if the party hiring out no longer hires out its workers only temporarily. Companies that regularly use temporary employees should therefore pay attention to ensuring that the license for the temporary hiring out of workers exists continuously, even given established contractual relations with parties hiring out. In addition, the BAG has recently awarded Works Councils the right to object to the use of temporary employees under Section 99 BetrVG (Works Council Constitution Act) if this is not merely temporary.