In one of its most recent decisions (judgement dated 12 July 2016, docket No. 9 AZR 352/15) the BAG ruled that, also in a covert case of temporary employment, no employment relationship between the hiring company and the temporary worker is established if the hirer has a permit to commercially supply temporary workers. 

The claimant worked as a technical draftswoman at the defendant, an automobile enterprise, from 2004 to 31 December 2013. She rendered her services on the basis of an agreement described as a contract for works between the defendant and the contractual employer of the claimant. The latter had a permit to commercially supply temporary workers. The claimant asserted that only a pseudo contract for works had been concluded between her contractual employer and the defendant, and claimed the existence of an employment relationship with the defendant. In her opinion, the defendant could not plead the contractual employer’s temporary employment permit.

The claimant’s action was unsuccessful. In the opinion of the BAG, no employment relationship could be established between the defendant and the claimant even if the claimant had been supplied to the defendant to render employment services as a temporary worker on grounds of a pseudo contract for works. The decisive factor is whether or not the (possible) hirer has a permit to commercial supply temporary workers. Sec. 10 Subsec. 1 sentence 1 in conjunction with Sec. 9 No. 1 German Temporary Employment Act [Arbeitnehmerüberlassungsgesetz, AÜG] stipulates that an employment relationship between the hiring enterprise and the temporary worker is only established if the hirer does not have the required permit. In the absence of unintended regulatory omissions, an analogue application of this provision also does not come into consideration in a covert case of temporary employment. The legislator has only ordained the establishment of an employment relationship in cases of a covert supply of a temporary worker if the hirer does not have a permit, and not in cases where it has such a permit. 

In practice, this judgement means that, until the entry into force of the planned amendments of the German Temporary Employment Act, presumably as per 1 January 2017, the so-called “safety-net solution” [“Fallschirmlösung”] will remain in force. This will no longer be possible as of 1 January 2017, as - with the entry into force of the statutory revision, assuming that the present draft bill is adopted without changes - the contracts between the hirer and the hiring company will have to be expressly labelled as contracts for the supply of temporary employees and the possibility of pleading a precautionary temporary employment permit [“Vorratsverleiherlaubnis”] will therefore no longer exist.