The supply of temporary workers, as we know, still exists since 40 years. 1947 the first, so called, “Temporary Workers Agency” was established in the United States of America.
The supply of temporary workers for remuneration started in Germany around 1922, anyway through the establishment of the monopole of the employment agency in 1935 this kind of business never grown up. In the end the supply of temporary workers for private or agencies were not allowed- till the decision of the German
Federal Constitutional Court in 1967.
1972 the German Supply of Temporary Workers Law was passed.
Actual temporary workers are represented in all industries with all qualifications. An exemption is the building construction industry, this industry is prohibited.
The supply of temporary workers is a specific “third- party constellation” between a company or an agency, an employee and the hirer/ end client. The employee is employed at the company or agency and the company supply his work to a third party, the hirer. The employment contract between the company and employee includes all obligations and duties in accordance to the German Labour Law. The
hirer has just the obligation to take care of the work protection regulations and that all directions of the employer will be done. The employment has to consider the equality principle; each employee has to be treated like another one in the same position.
The supply of temporary workers through companies is not very common in Europe. Just agencies, companies with the main object of recruitment and temporary workers, are providing such kind of business.
In Germany are different types of agencies, some are specialist in recruitment of skilled workers and some are providing the supply of temporary workers. Others are specialized for technical educated workers or high qualified workers, finance positions and most of the agencies are not specialized.
In each large German city a few of such agencies are registered. In Germany are existing more than 10 000 agencies, which had employed 2 % of the German Citizen.
The temporary work reflects some major advantages in comparison to the traditional labour regulations in Germany:
The AÜG allows a company to meet the short-term demand in human resources, i.e. covering production bottle-necks. As soon this demand is met, the added human resources can be easily downsized again, without following dismissal-juridical regulations. The AÜG allows its holding companies to react adaptable to their changing business requirements.
Another major benefit of the AÜG is that it drives lower cost of employing additional human-resources, as a company does not have the obligation to enter a long-term employment relationship with the added interim staff.
Allowing temporary work provides companies with greater flexibility with regards to personnel reserves for spontaneous and project-related application. The AÜG adds value in times of high demanding markets at a short notice.
The majority of temporary workers are high professionals, bringing valuable core competencies or specialized knowledge to a company. Holding the AÜG license, companies can temporary leverage on the new skill-set of interim staff, nearly without obligations that are usually related to the traditional way of employing staff.
The potential market for agencies is very big Europe- wide, there are a lot of agencies and there are a lot of suspect agencies, which a treating the employees not under the equal principle.
A lot of temporary workers can not be integrated into the hirer company like normal employees, because of the limited employments and changes in places of work.
The common process Europe- wide is a four- party constellation, some agencies are specialized in recruitment, finding the potential employees and the other agencies are finding the potential customer/ hirer. If an employee is interested he/she has to find an agency.
Hiring foreign Citizen for temporary work will be no problem, if the foreign Citizen still have a valid work & resident permit for Germany. It is not possible to get an work & residence permit for a foreign Citizen as temporary worker.
Furthermore is there a possibility to make the E 101 certificate, now called A 1 certificate, applicable for the temporary workers, this would have the consequence for an employee, that he/ she could stay in the social security system of his home country.
Tax wise the double taxation treatment within the EU countries could be applicable, if the workers are not working more than 183 days of a calendar year in Germany. An exemption of German taxation could be applied before starting the employment in Germany.