Temporary workers and thresholds – When does a temporary worker count as a normal employee?

Temporary work is a hybrid in employment law and thus leads to many problems: Although there is an employment contract with the leasing company, the employee works for another company. The question of assignment to one of these companies arises in many aspects of German labor law. In particular, where the number of employees is decisive for legal standards, it must be clarified whether only “normal” employees or also temporary workers are covered.

Often, the law links legal consequences to a minimum number of employees in a company:

  • For example, in companies with more than ten employees, special protection against dismissal applies (sec 23 law against unfair dismissals (“Kündigungsschutzgesetz” – KSchG)). For this threshold regularly occupied temporary employment positions should be taken into account.
  • In companies with more than 20 employees, there are also special rights of participation in serious company changes (sec. 111 Works Constitution Act (“Betriebsverfassungsgesetz” – BetrVG). For this threshold, temporary workers who have been in the company for more than three months are also to be included.
  • The size of the works council also depends on the number of employees in the company. Here, too, temporary workers who are employed for more than three months in the company are to be included in the calculation (sec. 7 (2) Works Constitution Act).
  • The regulations on employee participation in the Supervisory Board (sec. 9 Co-determination Act (Mitbestimmungsgesetz (MitBestG)) also include temporary workers for the hurdle of 8,000 employees.

The Federal Labor Court of Germany has now had to decide on another element (docket number 2 AZR 90/17 (A)). With so-called collective redundancies (“Massenentlassungen”) the sec. 17 law against unfair dismissals justifies special measures, depending on how big the enterprise concerned is. This is based on the requirements of the Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies. There are special reporting requirements for companies with 20 to 60 employees terminating more than 5 employees and 61 to 500 employees for the dismissal of 10% of the employees or more than 25 employees. In this specific case, 12 workers were dismissed. The company had less than 120 employees without temporary workers but more than 120 with temporary workers. It was therefore necessary to decide whether or not temporary workers should be taken into account. Here it would be in the interest of the employer to include temporary workers, since less than 10% would have been affected and there would be no reporting requirements. This question has been very controversial in Germany so far because there has not yet been a leading case on this point.

The Federal Labor Court of Germany has now ruled that the decisions on the other laws cannot be transferred to this case, since the specific purpose of the regulation must be upheld in each case. For this reason, the Federal Labor Court was unsure how to interpret the sec. 17 law against unfair dismissals. A definitive clarification cannot be taken by the Federal Labor Court, as this regulation is based on the European Council Directive 98/59/EC. The Federal Labor Court therefore submitted this question to the ECJ on 16 November 2017 for a ruling. Until the ECJ has decided on this (usually this takes one to two years), the question remains unanswered. Temporary workers thus remain a big problem to consider when calculating thresholds.