Extension of the employee assignment period up to (at least) 48 months feasible

Fictitious employment contract with the hirer in the event that the maximum temporary employment period is exceeded?

The parties disputed whether an employment relationship came into existence between them by law. The defendant, a company from the automotive supplier industry, employed the plaintiff as a temporary worker since October 26, 2015. The competent Employer’s Association (“Verband der Metallindustriellen Niedersachsens e. V.”), of which the defendant was a member, agreed with the competent union (IG Metall) in a collective bargaining agreement, which came into force on April 1, 2017, that the maximum duration of an assignment of temporary workers may not exceed 48 months in implementation of the opening clause pursuant to Sec. 1 Para. 1b AÜG. In addition, the defendant and its general works council agreed in a general works agreement a corresponding maximum extension of the leasing period in exercise of the opening clause contained in the collective agreement. The temporary work agency deregistered the plaintiff as a temporary employee with the defendant as of April 30, 2020.

The plaintiff sought a declaration of an employment contract with the defendant on the grounds that the maximum temporary assignment period had been exceeded, since his assignment of a total of more than 54 months was no longer to be regarded as "temporary" within the meaning of Sec. 1 Para. 1 sentence 4, Para. 1b AÜG in conjunction with Directive 2008/104/EC of the European Parliament and of the Council of November 19, 2008 on temporary agency work (Temporary Agency Work Directive). The maximum assignment period of 48 months stipulated in the collective agreement or in the general works agreement would exceed the scope of the statutory opening clause. The plaintiff claiming to be entitled to be taken on as a permanent employee. The lower courts dismissed the action. The BAG confirmed the rulings of the lower courts.

Maximum transfer period of 48 months is (still) "temporary

The BAG is of the opinion that no employment relationship pursuant to Sec. 9 Para. 1 No. 1b, Sec. 10 Para. 1 Sentence 1 AÜG was established by operation of law due to exceeding the maximum permissible assignment period.

In accordance with the in Sec. 19 Para. 2 AÜG, the 37 months of the plaintiff's employment with the defendant since April 2017 (only periods of employment after amendment of the AÜG) are decisive for the calculation of the maximum duration of the assignment. In this regard, an employee-related consideration had to be made. It is true that the transitional provision of Sec. 19 Para. 2 AÜG is not compatible with European Union law (see ECJ March 17, 2020 - C-233/20). However, the plaintiff cannot invoke the invalidity in an individual legal dispute between private persons and therefore cannot derive a subjective right to establish an employment relationship with the user (confirmation of BAG, judgment of July 5, 2022, Case No. 9 AZR 476/21).

In a constitutionally compliant manner, the legislator has given the parties of the collective bargaining agreement the authorization to make a deviating determination of the maximum assignment period with regard to the term "temporary" in Sec. 1 Para. 1b sentence 1 AÜG on the basis of a collective bargaining agreement or in corresponding works agreements. In the opinion of the BAG, a transfer period of 48 months is within the scope of what is to be regarded as "temporary" within the meaning of Sec. 1 Para. 1 sentence 4 AÜG in conjunction with Art. 1 Para. 1 Temporary Employment Directive. It still reasonably appears to be “temporary” taking into account all relevant circumstances, which include in particular the industry peculiarities. It follows from Sec. 1 Para. 1b sentence 1, 6 AÜG, which provides for a maximum temporary assignment period of 18 and 24 months, respectively, outside the scope of a collective bargaining agreement, that a temporary assignment may exceed this period in any case. At the same time, a period of 4 years is not to be regarded as "permanent“ since the limits implied by law should not be exceeded multiple times over.

Individual case remains decisive

With its ruling, the BAG fortunately contributes to legal certainty (at least in the metal and electrical industry), according to which the extension of the maximum transfer period to 48 months is considered permissible.

The BAG recently ruled in a similar case (BAG, judgment of September 14, 2022, Case No. 4 AZR 82/21) that the validity of a collective bargaining agreement pursuant to Sec. 1 Para. 1b sentence 3 AÜG, which provides for a deviation from the statutory maximum duration of a temporary assignment, only requires the user to be bound by the collective bargaining agreement. The legislator had granted the parties to the collective bargaining agreement in the employment sector a regulatory power which deviates from the types of collective bargaining standards provided for in the Collective Agreements Act (TVG) (Sec. 1 Para. 1 TVG) and their binding effect (Sec. 3 Para. 1 and 2, Sec. 4 Para. 1 TVG). This collective agreement regulation shall apply to the temporary work agency and the temporary agency worker - irrespective of whether they are bound by the collective agreement.

However, the above result cannot be applied unquestioningly to any other collective agreements in other sectors. It is true that a period of 48 months is most likely to be regarded as "temporary" within the meaning of Sec. 1 Para. 1 sentence 4, Para. 1b AÜG. However, the labour courts are competent to determine what can be regarded as "temporary" on a case-by-case basis, taking into account all relevant circumstances, in particular the specifics of the industry sector. Nevertheless, only in the event of a (serious) misuse of personnel a temporary assignment of 48 months be considered "permanent" in the future.

It also remains open when the BAG would assume that an (even) longer maximum assignment period could no longer be regarded as "temporary" but as "permanent" (e.g. 60, 72 or 120 months). According to the explanatory memorandum to the Temporary Employment Act, various collective agreements exist providing for a maximum assignment period of up to 120 months (cf. BT-Drucks 19/9779, p.8). In this context, particular challenges arise in practice: Although the trade unions have the prerogative to assess the situation in collective bargaining agreement, it is ultimately the labour courts that decide (in retrospect, possibly years later). The present ruling (unfortunately) does not provide any information as to whether 48 months should be regarded as the absolute judicial maximum limit or whether an even longer period could be permissible under (Union) law. The risk for the parties involved remains: Subject to a so-called declaration of adherence by the temporary worker regarding the employment relationship with the temporary work agency, exceeding the maximum transfer period results in the employment relationship between the temporary worker and the temporary work agency being invalid pursuant to Sec. 9 Para. 1 No. 1b AÜG and an employment relationship between the temporary worker and the user being deemed to exist.