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Need a permanent employee? Don’t hire a temp.

The Regional Labour Court (Landesarbeitsgericht, LAG) of Schleswig-Holstein ruled on January 8, 2014 (docket number – 3 TaBV 43/13) that a temporary agency worker must not be used to meet a permanent demand for employment. In this case, the employer, a large subsidiary of a global healthcare group, needed a permanent assistant in a team comprising ten engineers and four executive directors. However, instead of assigning an employee to fill the position permanently, the employer engaged a temporary agency worker who had been in the role for two years. In 2013, the employer applied to the works council for consent to renew the temporary agency worker’s contract. The works council refused to give consent, on the basis that the German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG) provide that temporary agency workers should only be leased out temporarily.

As the works council’s consent was required to renew the contract, the employer petitioned the Labour Court to rule in lieu of the works council’s consent. The Labour Court shared the works council’s opinion. The employer’s appeal has now been rejected by the Regional Labour Court. The Regional Labour Court said that, where a permanent role needs to be filled, a temporary agency worker should only be hired on a short-term, back-up basis and should not replace the need for a permanent hire. This applies even if the temporary agency worker is not hired as a substitute for a permanent employee. On this basis, a works council could withhold its consent to the leasing of a temporary agency worker. The Regional Labour Court granted the right to appeal on points of law to the Federal Labour Court; it remains to be seen whether the Federal Labour Court will uphold this decision.