Revision of the Temporary Employment Act Disclosure obligation

With effect from April 1, 2017, extensive new regulations in the area of temporary employment came into force. The aim of the change in the law is to limit temporary work to its core function and to prevent unlawful contractual constructions, in particular bogus work contracts. In the following, we present the main changes to the AÜG that will apply from 01.04.2017. The cited paragraphs already refer to the version of the AÜG from 01.04.2017.

Disclosure obligation

Pursuant to Section 1 (1) sentences 5 and 6 AÜG, lenders and hirers will in future be obliged to expressly designate the assignment of temporary workers as such in their contract and to specify the person of the temporary worker, i.e. to name the temporary worker by name. In addition, according to Section 11 AÜG, the temporary employment agency must inform the temporary worker before each individual assignment that he or she is being used as a temporary worker.

Caution: Failure to comply with the disclosure obligation under Section 1 (1) sentences 5 and 6 AÜG leads to the invalidity of the employment contract between the lender and temporary worker and to the fiction of an employment relationship with the hirer. Furthermore, fines of up to EUR 30,000.00 may be imposed and the temporary employment permit may be revoked.

Maximum duration of hiring out

In future, the maximum assignment period per temporary worker will be 18 months in accordance with Section 1 (1b) AÜG. The assignment period is not linked to the workplace, but to the individual temporary worker, i.e. the temporary worker can be replaced. Previous periods of employment of the individual temporary worker with the same hirer must be taken into account, even if the assignment was with a different personnel service provider. After the 18 months, the interruption period with the same hirer must exceed at least 3 months (i.e. at least 3 months and 1 day) before the same temporary worker may be deployed again.

However, assignment periods prior to 01.04.2017 are not taken into account when calculating the maximum assignment period. The 18 months therefore only start to count from 01.04.2017.

Within the scope of application of a collective agreement of the deployment sector (= hirer), which extends the maximum duration of temporary employment, the collective agreement regulations on the maximum duration of temporary employment can be adopted by company agreement. If the collective agreement contains an opening clause for works agreements, assignment companies not bound by collective agreements can also make use of this, but only up to a maximum assignment period of 24 months. There is no fixed time limit for assignment companies that are bound by collective agreements, i.e. the parties to the collective agreement are not bound by a maximum assignment period of 24 months, but can also extend the assignment period beyond this.

Please note: If the 18-month limit is exceeded for reasons not permitted by the collective agreement, fines of up to EUR 30,000.00 may be imposed on hirers and lenders. In addition, the employment relationship between the hirer and the temporary worker is invalid from the first day of the overrun and, by law, an employment relationship between the hirer and the temporary worker arises in all these cases. These legal consequences only do not apply if the temporary worker objects to the transfer of the employment contract within one month of the date scheduled for the start of the assignment or the maximum assignment period being exceeded and declares that he will adhere to the employment contract with the hirer.

Equal pay

Pursuant to Section 8 AÜG, temporary workers are generally entitled to the same pay as the permanent staff at the company of assignment. Although the AÜG does not provide a definition of equal pay, it does include bonuses, special payments and employer contributions to the company pension scheme in addition to basic remuneration. Remuneration in kind can be paid as compensation in euros, unless the hirer also grants this as remuneration in kind.

In principle, it is only possible to deviate from equal pay in the first nine months of the assignment and only within the scope of a collective agreement. If such a collective agreement deviates from the principle of equal pay, the temporary employment agency must grant the temporary worker the working conditions owed under this collective agreement. Within the scope of application of collective agreements that regulate a gradual adjustment of remuneration, a gradual adjustment to the remuneration of the permanent staff in the hirer's company can take place up to a period of 15 months. However, the longer deviation can only be utilized if the gradual adjustment to the remuneration of the permanent staff begins after a training period of six weeks at the latest.

Assignment periods prior to 01.04.2017 are not taken into account when calculating the equal pay entitlement. The nine or 15 months therefore only start to count from 01.04.2017.

Please note: Violations of the equal pay principle can be punished as an administrative offense with a fine of up to EUR 500,000.00. In addition, the temporary employment permit can be withdrawn.

Ban on strikebreakers

In future, the hirer may no longer employ temporary workers to carry out the work of striking permanent employees during a strike in accordance with Section 11 (5) AÜG, regardless of whether the temporary workers agree to this. Violations may result in a fine of up to EUR 500,000.00.

Date: 6. Jul 2017