What is a joint operation?
In a joint operation, legally independent companies utilize their own personnel in a shared operation. Their employment contracts continue to bind the employees to their respective employer company.
However, to be considered a joint operation pursuant to (labor) law, specific requirements as recognized by the case law of the Federal Labor Court have to be fulfilled. For example, shared operating resources have to be used and there must be unified personnel management between the companies. As a consequence, in light of Section 1 (1) sentence 2 of the Works Constitution Act (BetrVG) a joint works council is also regarded as a strong indication of a joint operation. The absence of a joint works council may be considered a sign that the employees are only formally subject to a unified personnel management.
What did the case before the Federal Labor Court concern?
A lawsuit was filed before the Federal Labor Court by an employee who had been employed by a company providing employee leasing since 2013. His employer and another company at which the employee was deployed as a temporary worker at the time jointly operate an airport. However, a joint works council did not exist.
After the introduction of the statutory maximum duration for temporary employment in Section 1 of the Act on Temporary Agency Work (AÜG) at the beginning of 2017, the plaintiff employee was no longer employed as a temporary worker. Rather, his employer had deployed him in the newly formed joint operation established by his employer and the former leasing company since mid-2017.
However, the employee was of the opinion that an employment contract had existed between him and the former leasing company since mid-2017. He intended to have this legally decided by the labor court. He argued that he had continued to be deployed as a temporary worker from mid-2017 and that the maximum transfer duration had long since been exceeded. Consequently, an employment contract with the leasing company existed.
This legal opinion is questionable: If the employee was deployed by his employer within a joint operation, this would not represent deployment as a temporary worker – at least in the light of the existing case law of the Federal Labor Court.
The Federal Labor Court retains its interpretation – no employee leasing in joint operations
The Federal Labor Court confirmed the existing case law in the current case: In principle, employee leasing does not exist if the contractual employer also pursues its own (company) purposes when deploying an employee, as was the case in this situation. The other company’s right to issue instructions in a situation such as in a joint operation does not change this.
Nevertheless, the prerequisite is that the employee is actually deployed in a joint operation established by the contractual employer and another company together.
This is the case if the intangible or tangible assets of multiple companies are combined and used in a coordinated manner.
Furthermore, the personnel used by the joint operation have to be managed on an operational basis and not on a company basis. Therefore, unified personnel management is essential and needs to be documented in the form of a management agreement.
Last but not least, a joint works council will also serve as a strong indication of a joint operation. However, the fact that a joint works council has not been established on the basis of a collective agreement does not represent an argument that the company is not a joint operation.
The Federal Labor Court had to decide whether all other requirements for a joint operation had been fulfilled in this specific case. The Federal Labor Court referred the case back to the responsible State Labor Court to clarify the further key facts in this regard.
The ruling confirms the Federal Labor Court’s existing case law: The Act on Temporary Agency Work (AÜG) does not apply to a joint operation even after the amendment of Section 1 in 2017. However, the jointly managed business must actually be a joint operation in line with current case law.
