AUG Germany

The new law on the “Arbeitnehmerüberlassungsgesetz” (AUG) or “Temporary Employment Act” is intended to curb the excesses of
temporary work. It came in to place on the 1st of April, 2017. What is it, what changes for temporary workers and what are the
consequences?

Temporary work is an integral part of the German labour market and over the years, the subject of intense political debates.

The Federal Labour Minister Andrea Nahles, did not want to accept the current temporary labour laws any longer: "that work is depreciated by
misuse of temporary work and work contracts".

This is how things currently stand:

· Leiharbeiter i.e. someone who is working at the end client, but being employed through a third party. Generally these individuals work in poorer conditions than their permanent counterparts.

· The temporary work agency is charging the end client a fee for providing the candidate. There are currently over 10,000 temporary agencies in Germany

· The end client can book as many temporary workers as needed. As such, they can keep a small permanent workforce without risking any long contracts or legal obligations.

What has changed:

1. Maximum work period

Temporary workers may only work with the same entity for up to 18 months in succession. This is to prevent a temporary worker working full-time for
many years with fewer benefits than a permanent employee.
However, they may be employed for more than 18 months if the activity is interrupted for at least three months not including sick leave & vacation.
As it stands leave periods before the 1st of April 2017 are not taken into account. An infringement can therefore be presented for the first time

as of October 1, 2018.

2. Equal Pay

The new regulation stipulates that a temporary worker must earn just as much as his permanent counterpart after nine months. Exceptions can be made if:

· Consignors and borrowers have bound themselves to a collective agreement.

· In the case of a three-month discontinuation of work

3. “Strikebreakers”

Temporary staff working via a third party company are no longer allowed to continue working whilst employees are on strike.

· Exceptions can be made if the freelancer undertakes a job which the employees on strike have not started.

4. “Parachute solution”

As it stands, if a freelancer is working through an agency for a client, should he decide to become a permanent employee, the agencies and the client
can form an agreement to easily make this transition.

Due to the new AUG law, this is no longer possible as Freelancers and Permanent employees must be clearly defined as separate.