The COVID-19 coronavirus crisis has caused great difficulties in the German labour market. In some fields, however, there have been shortages of employees. During the COVID-19 coronavirus crisis, steps were taken in staff leasing to deal with these shortages, which we will outline in this article.
If you have faced issues in the field of employment law due to the COVID-19 coronavirus crisis, then please make sure to contact our office. Over the past few weeks, we have been helping our clients in the issues they have faced during these unprecedented times. If you require legal assistance with concerns about staff leasing, then our lawyers are here to help you.
Staff Leasing in Germany
The mechanism of staff leasing has grown over the past few years in Germany. Staff leasing allows companies to acquire additional staff quickly, which may be needed during periods of rapid growth. This is to prevent production bottlenecks. 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 Labor Leasing License (AÜG – Gesetz zur Regelung der Arbeitnehmerüberlassung) sets out the requirements and relationships governing the leasing of staff. We also have an article outlining the rights of temporary workers, which should further explain what is expected of employers and how these relationships coexist in this situation.
When it comes to leasing highly skilled professionals, this arrangement can benefit both companies that need these professionals for a short period due to a sharp increase in business and the leasing company.
The COVID-19 coronavirus crisis has caused numerous difficulties for companies around Germany, and the government has responded to the developments. In the area of staff leasing, the government has made it easier for companies to lease out their staff. Many companies have had a slowdown 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 to be leased to another company, but rather for the duration of the current crisis. Prior to the crisis, the “only occasional” requirement was strictly regulated, reducing the use of the mechanism, but enforcement has been relaxed during this period.
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 keeps 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, including 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 arisen due to 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 uses leased employees, there is a responsibility to ensure that leased staff are treated fairly within the company. Mistreating such employees (by not treating them equally) may lead to future problems with employment law cases and their relationship with the company. Equality in this regard refers to pay rate and conditions. If there are no employees in the company working in the same area, they will need to examine other companies in the field to pay such staff members.
Contact our employment lawyers today if you would like specialized assistance with how to proceed regarding leasing staff.
Advantages of Staff Leasing in Germany
There are many advantages for employers from using staff leasing. These advantages exist even during more predictable times. Should you need further advice on the benefits and risks of staff leasing for your company, please consult our lawyers specializing in German employment law. The 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 that requires more staff.
- Quick Access to Specialists: leasing specialized 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 through the usual processes, this may also bring about some degree of risk. For example, the employee in question may not know 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 give you 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 Rechtsanwälte, 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.
If you need help with staff leasing due to this crisis, 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.
