Information on the AÜG reform

On 21 October 2016, the Bundestag passed comprehensive amendments to the AÜG on the basis of the Federal Government's final draft bill of 1 June 2016 on the reform of the Temporary Employment Act (AÜG), which will come into force on 1 April 2017.

1 Introduction of a maximum transfer period §1 para. 1b AÜG
In future, a maximum transfer period of 18 months will apply. This is calculated in relation to the employee, not the workplace. As a result, a temporary worker may not be deployed with a client for longer than 18 months.

1.1 Calculation of the 18-month period - interruptionperiod
When calculating the 18-month maximum assignment period, previous assignment periods (calculated from 01.04.2017) with the respective customer are to be taken into account, regardless of whether the respective temporary worker was assigned to this customer via the same or another lender. This shall not apply if the temporary agency worker has not been employed by this client for more than three uninterrupted months in the meantime.

1.2 Opening clause for collective agreements and company agreements
The legislator creates the possibility to deviate from the 18 months and to determine a different (longer or shorter) maximum assignment period. These deviations are possible through collective agreements or company agreements of the client sector/company concluded on the basis of such collective agreements.

1.3 Sanctions in case of violation of the maximum duration of temporary employment:
The law provides for three sanction options. Exceeding the 18-month limit will in future be an administrative offence on the part of the hiring company and the respective customer, punishable by up to EUR 30,000 per individual case.

Furthermore, the reliability check of the holder of a temporary employment agency permit is to be carried out in future explicitly on the basis of the criterion of compliance with the duration of the temporary employment. There is a threat of consequences for the temporary employment agency permit, up to and including its revocation.

At the same time, the law stipulates that the employment relationship between the temporary agency worker and the lender is invalid and an employment relationship with the client is created. However, the temporary worker is given the right to object in writing to the transfer of his employment relationship to the client within one month after the 18-month period has expired ("declaration of retention").

1.4 Calculation of the assignmentperiod
Only the assignment periods completed as of 01.04. 2017 are used to calculate the maximum assignment period.

2 Equal Pay after 9 months of deployment §8 para. 4 AÜG
The new AÜG contains the obligation directed at the temporary employment agency to pay a temporary worker "equal pay" in principle after nine months of deployment with the same customer. Thus, at the end of this assignment period, the respective temporary worker must be placed in the same position in all remuneration matters as a comparable employee of the client.

The term "equal pay" is not defined in the law. Which remuneration components are subject to "equal pay" (for example, the company pension scheme for permanent employees) has not yet been conclusively clarified, but all fixed and variable remuneration should be included.
However, the AÜG contains a presumption provision. According to this, it is presumed that equal pay is paid if the temporary worker receives the "collectively agreed remuneration" of a comparable permanent employee. In addition, it is stipulated that if benefits in kind are granted, a "value adjustment in euros" can be made. Thus, at least benefits in kind are part of "equal pay".

2.1 Greater leeway when applying a collective agreement on industry surcharges
The legislator creates the possibility to deviate from the statutory "Equal Pay" for assignments that are subject to a collective agreement on industry surcharges (TV BZ). To this end, the collective bargaining parties must amend the 10% integration deduction.

2.2 Calculation of the 9-month period - interruptionperiod
For the calculation of the "9-month period" and its interruption, the above explanations on clause 1.1 and clause 1.4 apply

3 Labelling obligation §1 para. 1 AÜG
In future, there will only be an effective employee leasing contract (AÜV) if the contract between the lender and the hirer is expressly designated as such before you "let the temporary worker work or have him work."

This means that in future the lender and the hirer must conclude an AÜV before the temporary worker starts work.

If the contract is not specifically designated as an AÜV, it is invalid with the consequence that an employment relationship is created between the hirer and the temporary agency worker. However, the temporary agency worker is entitled to object in writing to the transfer of his employment relationship to the hirer within one month of the date agreed between the hirer and the lender for the start of the assignment. ("declaration of retention").

In addition, the lender and the hirer commit an administrative offence punishable by a fine of up to € 30,000.00 if they do not disclose a supply of workers but carry out it covertly.

4 Obligation tospecify
It is stipulated that the person of the leased worker must be specified before (!) the start of the respective assignment.
Therefore, personalisation (specification of surname, first name and, if applicable, date of birth) is required before the start of the assignment of the respective temporary worker. A violation of the obligation to specify can be punished with a fine of up to € 30,000.00 for both the lender and the client.

5 Duty to inform §11 para. 2 AÜG
Likewise, the employee intended for temporary employment must in future be informed - also before (!) every temporary employment - "that he is working as a temporary worker".

A violation of this can be punished with a fine of EUR 1,000 per individual case.

6 Explanation of the legislator (to paragraphs 3.-5.)
The amendments regarding the labelling, specification and information obligation are justified by the fact that in the past workers were hired out under alleged contracts for work and services. In the event that this constellation was uncovered, the alleged contract for work contractor could hold a hiring permit. He could invoke this and thus avoid the legal consequences of illegal hiring out of workers provided for in the AÜG. In future, the alleged contract for work and services contractor and his client should not be in a better position in these constellations than the person who illegally hires out workers, even if he has a hiring-out permit. (= omission of the "parachute solution").

7 Prohibition of chain hiring out Section 1 (1) AÜG
The Act also provides for the first standardisation of the prohibition of so-called chain hiring out. It has always been the legal opinion of the Federal Employment Agency that the continued hiring out of temporary workers is not permissible. However, there was no legal regulation on this, so that the Federal Employment Agency was almost unable to sanction violations of chain leasing.

It is now expressly provided that the hiring out of temporary workers will only be permissible in future if an employment relationship exists between the "hirer" and the temporary worker. A violation of this prohibition of chain hiring out can be threatened with a fine of EUR 30,000 per individual case.

8 Prohibition of the use of strikebreakers §11 (5)
Up to now ,the AÜG has only given a temporary agency worker the right to refuse to perform work in the event of a strike in the company where he is employed. The temporary agency worker should not have to act as a strike breaker.

The "strikebreaker ban" was implemented in the iGZ and BAP framework collective agreements during the last round of collective bargaining. Thus, temporary employment agencies applying the iGZ or BAP collective agreements are already prohibited from using agency workers as strike breakers.

9 Changes in the area of co-determination
Temporary agency workers count towards the calculation of the number of works council members in the client company, which can affect the size of the works council and the number of exempted works council members. Both the Works Constitution Act and the Co-Determination Act contain thresholds according to which, for example, the size of employee representative bodies depends on the number of employees. Here, the law provides that temporary workers are counted. The BAG had previously ruled this way for various thresholds (BAG, decision of 13 March 2013 - 7 ABR 69/11 on section 9 BetrVG and most recently on corporate co-determination BAG, decision of 4 November 2015 - 7 ABR 42/13).

Further amendments to the Works Constitution Act clarify the works council's rights to information in customer operations.

For example, according to section 80, paragraph 2 of the Works Council Constitution Act (BetrVG), the works council must be informed about third-party staff assignments and their contractual basis. Therefore, the AÜV will probably have to be presented in those passages that touch on co-determination issues. Pursuant to section 92 of the Works Council Constitution Act (BetrVG), the works council must be informed about the extent to which it is planned to carry out tasks in the enterprise in the future with the company's own employees or with third party personnel. This is merely a linguistic clarification, as the BAG has already understood the right to information under section 92 BetrVG in this sense.

10 Summary of changes

• There is a maximum transfer period of 18 months.
• Deviations from the statutory maximum period of temporary employment are possible through collective agreements of the customer industries or company agreements concluded on the basis of such collective agreements.
• The AÜV must be designated as such before the start of the assignment.
• Temporary employment agencies and clients must name the temporary worker before the assignment.
• The temporary worker must be informed before each assignment that he is being used as a "temporary worker".
• Any agency worker who is deployed with the client for longer than 9 months must be paid the remuneration of a comparable permanent employee.
• Periods of deployment prior to 01.04.2017 are not taken into account for both the maximum assignment period and the entitlement to the comparable remuneration.
• The use of temporary agency workers in companies that are on strike will be prohibited by law.
• Chain hiring will be prohibited by law.