2. Germany: Judgment of Landesarbeitsgericht Berlin-Brandenburg (Higher Labour Court) on the establishment of an employment relationship in case of permanent supply of temporary workers

In its judgment of 09.01.2013 (case no. 15 Sa 1635/12), the 15. chamber of the Landesarbeitsgericht Berlin-Brandenburg ruled in a case, in which the company supplying temporary workers (lender) belonged to the same group as the borrower, that if a supply of temporary workers is permanent, this leads to an employment relationship between the borrower and the temporary workers.

The supply of temporary workers requires a commission in accordance with § 1 Subsec. 1 German Personnel Leasing Act and is temporary according to a reform of the Act with effect of the 01.12.2011. A supply of temporary workers without commission leads to an employment relationship between the temporary worker and the borrower in accordance with § 10 Subsec. 1 German Personnel Leasing Act. However the Act does not give details on when a supply is considered temporary and what legal consequences the supply of temporary workers on a permanent basis has.

In the present case, the borrower (defendant) operates hospitals and used nursing staff that was employed with a lending company of the group. The staff was used on permanent jobs, for which no regular workers were present. The lending company had permission for the supply of temporary workers. The claimant entered into an employment contract as a nurse with the lending company by employment contract of 30.09.2009, effective as of 01.01.2010. She filed a petition in order to determine that her employment relationship was with the borrower as of 01.01.2010. Her petition was dismissed in first instance; however the appeal with the Landesarbeitsgericht Berlin-Brandenburg was successful. The 15. Chamber ruled that:

1. In the area of the supply of temporary workers, it is considered an institutional abuse of rights, if the lending company of a group only supplies workers to one or more companies within the group, however is not advertising on the market and the involvement of the lending company is only used in order to lower labour costs and make termination protection actions futile. The consequence is that the borrower is treated as employer.
2. For the period as of 01.12.2011, an already given permission in accordance with § 1 German Personnel Leasing Act is restricted on the supply of temporary workers. The supply of workers on a permanent basis is not (no longer) permissible. If the supply of workers to a borrower is not only temporarily, this leads to an employment relationship with the borrower in accordance with § 10 Subsec. 1 Sentence 1 2. alternative, 9 No. 1 German Personnel Leasing Act.
3. A supply of workers on a permanent basis cannot be considered temporarily. This is the case if the worker is employed on a permanent job, for which no regular workers are present.

It is to be noted that in the present case the employment contract between the nurse and the lender was concluded prior to the reform at the end of 2011. Because of this among others, a different chamber of the Landesarbeitsgericht Berlin-Brandenburg ruled in October 2012 in parallel proceedings, that even in case of non-temporary supply of workers, no employment relationship is established with the borrower, since the Act does not provide for that kind of legal consequence for a non-temporary supply (see judgment of 16.10.2012, Case no. 7 SA 1182/12). Both chambers have preserved their decisions for appeal, so that the Federal Labour Court will soon have the opportunity to elaborate on the meaning and legal consequences, which derive out of the amendment of the word “temporarily” during the reform proceedings.

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