Staff Leasing in Germany
The mechanism of staff leasing has grown over the last number of years in Germany. Staff leasing allows for companies to acquire more staff quickly which may be needed during times of quick growth. This is to prevent production bottlenecks from arising. Whereas traditionally staff leasing was used for lower waged jobs, the mechanism is now popular for hiring IT professionals, consultants, engineers and other highly skilled professionals.
In Germany the Labour Leasing License (AÜG – Gesetz zur Regelung der Arbeitnehmerüberlassung) explains the different requirements and relationships when it comes to leasing staff. We also have an article which outlines the rights of temporary workers which should further explain what is expected of employers and how the relationships coexist in this situation.
When it comes to the leasing of highly skilled professionals, this arrangement can benefit both the companies who need these professionals for a short period due to sharp increase in business but also for the leasing company.
The COVID-19 coronavirus crisis has cause numerous difficulties for companies around Germany and the government has responded to the developments. In the area of staff leasing the government have made it easier for companies to lease out their staff. Many companies have had a slow-down in business and this loosening of the rules may be of great benefit for them.
The easing of the requirements in this area has allowed companies to reduce their reliance on short-time working allowance and keep some staff members busy at this time. It also allows the leasing company to build greater connections to the companies needing their staff. The requirements for leasing in this context are stated under § 1(3) AÜG. This article states that the leasing of staff is allowed for:
“between employers, if the temporary assignment is only occasional and the worker is not hired and employed for the purpose of the assignment.“
In other words, the employee in question was not hired for the purpose of being leased to another company and that it is for the duration of this current crisis. Prior to the crisis, the “only occasional” requirement was strictly regulated reducing the usage of the mechanism, but the enforcement has been loosened during this current time.
How to Proceed
If as a company, you have faced a slowdown in business this option of leasing employees might be a suitable option. Leasing staff to another company keeps that employee on your books but also them fully employed at a time of difficulty for your company. During this time, as the employee’s employer your company will be responsible for their employment rights in issues such as annual leave, which is worth bearing in mind.
The employee in question must agree to be hired out and must not have been hired for this purpose. Essentially, it should be shown that this situation has developed because of the current crisis. The company should also intend to bring the employee back into the fold and not provide them to the leasing company on a permanent basis. When deciding whether to go down this route it is advisable to keep your employee informed throughout the process.
As the company using the leased employees, there is a responsibility to make sure that the leased staff is treated fairly within the company. Mistreating such employees (by not treating them equally) may lead to future problems in terms of employment law cases and in their relationship with the other company. Equality in this regard refers to pay rate and conditions. Should there be no employee in the company working in the same area at the company then they will need to examine other companies in the field pay such staff members.
Contact our employment lawyers today if you would like specialised assistance in how to proceed when it comes to leasing staff.
Advantages of Staff Leasing in Germany
There are many advantages to be gained by employers through the usage of staff leasing. These advantages exist even during more predictable times. Should you need further advice about the benefits and risks of staff leasing for your company, please make sure to consult with our lawyers for German employment law. These advantages are:
- Reduced costs of hiring the individual: leasing staff may save costs as the regular hiring process is simplified. Contact need be made with the company supplying the short-term staff and together the right individual can be paired with your company,
- Time saved in the hiring process: by working with a leasing company, gaps can be filled in the company quickly. Once again, the lack of a hiring process (in the traditional sense) saves time for the company.
- Short-term demand: the need for an increase in staff numbers may be related to a temporary need. The staff member in question may not be required once demand returns to normal levels. This is particularly useful when it comes to project work which require more staff.
- Quick Access to Specialists: leasing specialised professionals (whether in communications, IT or other fields) allows companies, regardless of size, to access the expertise particular projects require.
- Employment law rights: when it comes to issues such as holidays and illness payments, this is the territory of the employer leasing the employee. Your company is not responsible for this.
As can be seen there are advantages to bringing in staff through leasing them. However, as the employee in question has not been hired from the usual processes this may also bring about some degree of risk. For example, the employee in question may not exactly what is required for the project in mind, they may not be a suitable fit for your company, the agreement reached with the leasing company may present you with less control than you desired etc. Therefore, it is crucial that you work with an experienced employment law professional to ensure that this matter is resolved in a proper manner.
At Schlun & Elseven Attorneys, our employment lawyers are committed to providing continuous support and counsel to our clients throughout this crisis. We have previously outlined the relationship between Employment Law and COVID-19. Our offices are located in Cologne, Aachen and Düsseldorf and we have conference rooms in Berlin, Munich, Hamburg, Stuttgart and Frankfurt. However, at the moment we can also provide our services by phone, through email and by video conferencing.
For updates on the COVID-19 coronavirus crisis in Germany as they occur please visit the Robert Koch-Institut website. Updates here can be found in English as well as German.
If you need help with staff leasing due to this crisis then please contact our lawyers. We operate in several languages including English. We will remain active throughout this crisis to ensure that our clients receive the assistance they deserve. Contact us today for further counsel.