CJEU: Finally a decision on the maximum transfer duration?

 How the CJEU addresses the term “temporary” from Section 1 (1) of the Act on Temporary Agency Work (AÜG).

CJEU: Finally a decision on the maximum transfer duration?

The interpretation of the term “temporary” has fundamental legal implications when it comes to employee leasing. The CJEU addressed this term, among others, in a recent ruling.

“Temporary” as a key concept in the law governing temporary agency work

One key term represents a key aspect of labor law regarding temporary employment: the term “temporary”.

If an employee is leased out to a company on a more than temporary basis, this could give rise to a normal employment relationship with the company utilizing the temporary work.

In view of this, a decision by the CJEU concerning this term was highly anticipated as it could provide greater legal certainty for temporary employment agencies, temporary workers, as well as companies which intend to employ temporary workers.

18 months is the maximum transfer duration (with exceptions)

The Act on Temporary Agency Work (AÜG) stipulates that the employee leasing must be temporary. Yet at the same time, the act does not specify exactly what “temporary” means.

Currently, Section 1 (1b) sentence 1 of the Act on Temporary Agency Work (AÜG) defines the maximum transfer duration as 18 months. However, collective agreements may stipulate exceptions to this regulation.

Yet how much further can the term be extended? The Berlin-Brandenburg State Labor Court expressed its doubts in the case of a deployment lasting 55 months.

The doubts as to whether a transfer lasting this long could still be regarded as “temporary” prompted the State Labor Court to submit several questions to the CJEU for a preliminary ruling.

Question 1: Permanent job and temporary work?

The first question was: Does it matter whether a position filled by a temporary employee is a permanent position and is actually intended to be occupied on a permanent basis? In other words, does the definition depend on the nature of the working relationship?

The CJEU had a different opinion. The “temporary” criterion refers to the planned deployment duration of the temporary worker and not to the position. Therefore, permanent positions can also be filled by temporary workers.

Question 2: Entitlement to an employment contract?

The State Labor Court also wanted to know whether an entitlement to an employment contract arises on the part of the temporary employee if the “temporary” term is not fulfilled. The CJEU ruled that this was not the case. It did not recognize an entitlement to the conclusion of an employment contract with the company employing the worker “on a more than temporary basis”.

Question 3: 55 months too long for temporary work?

Lastly, the State Labor court wanted to clarify whether the 55-month employment period in this specific case could even be considered “temporary” in the sense of Section 1 (1) of the Act on Temporary Agency Work (AÜG).

In this case, the CJEU avoided issuing a binding ruling and did not clearly define what could still reasonably be regarded as temporary. Although permanent deployment to a permanent workplace could represent an abuse of rights, each individual case would have to be considered on the basis of the national regulations, the area of employment, etc. Therefore, the national courts bear the responsibility for monitoring the abuse of rights.

As a consequence, the CJEU has provided some indications as to which criteria national courts should use to reasonably assess what constitutes “temporary” pursuant to Section 1 (1) of the Act on Temporary Agency Work (AÜG). Once again, the court did not issue a binding ruling. Nevertheless, the decision does not represent a free pass for permanent employee leasing.

The CJEU decision amounts to: “It depends”

In its decision (decision dated March 17, 2022, Ref. C-232/20),the CJEU clarified two of the three questions submitted regarding temporary agency work. At the same time, the CJEU also avoided issuing a binding decision as to whether an absolute time limit for temporary postings exists.

As a consequence, the Federal Labor Court now has the task of establishing greater legal certainty here in Germany. At the same time, German courts are responsible for monitoring abuse.
Nevertheless, the ruling does not represent a free pass for permanent employee leasing to fill permanent positions.