The German law on temporary employment is very strict. In general, temporary agency workers are employees. This means that the temporary worker is protected as well as any other employee. Particularly relevant here is the protection against dismissal. In principle, under German Law an employee can be terminated for operational reasons if the employer cannot employ him anymore due to the loss of his position. In temporary employment, however, the temporary worker is not employed by the temporary work agency as employer itself. Instead, he works for another company. However, if the temporary work agency does not find a company where the temporary agency worker can work, this model will no longer work. Nevertheless, the temporary worker continues to be paid under German law during this period, since there is still a valid work contract with the temporary-work agency. Non-payment during this period is prohibited under German law.
For this reason, of course, the temporary work agency has an interest in terminating the employment contract in such a case. Such a termination is necessary, as even an automatic synchronization of this employment relationship with the periods of activity in a third company is inadmissible under German law. However, such termination is subject to strict conditions. If such a termination were allowed, the protection of temporary agency workers would be severely restricted. In a recent ruling, a German Labor Court (local labour court Mönchengladbach, 20th March 2018, docket number 1 Ca 2686/17) ruled on such a termination. Here there was the peculiarity that usually the temporary work agency only worked with one customer. This customer was unable to employ the temporary agency worker between January and March, so he was dismissed at the end of December by the temporary work agency as employer. This termination was inadmissible from the point of view of the court. It stated that the lack of use for three months is not enough. It is one of the purposes of the Temporary Employment Act (“Arbeitnehmerüberlassungsgesetz”) to counteract the use of temporary agency workers to perform permanent tasks. Due to the fact that the employment agency is working almost exclusively for only one company, the validity of the employment protection law would be practically repealed, if the lack of use would be sufficient for a termination. For this reason, the court declared the termination as ineffective.
Here it becomes clear that the German law of temporary employment is different than in many other countries. The temporary worker is also remunerated outside periods of work for a third company and his employment may not end automatically by the end of the transfer to the third company. This then also results in the problems related to the termination. For this reason, a precise examination of the circumstances is always necessary here.