17. Feb 17

CJEU: Labour leasing through members of a sisterhood

The members of a sisterhood may also fall within the ambit of the regulations pertaining to what is termed labour leasing or temporary employment. That was the verdict of the Court of Justice of the European Union (CJEU) in its ruling of November 17, 2016 (Az.: C-216/15).

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The directive on temporary employment might also apply in the event that a sisterhood lends out its members to clinics and nursing facilities. The was the verdict of the Court of Justice of the European Union.

While the sisterhood as a registered association does not aim to generate a profit, its members carry out their activities full time either at the sisterhood or within the scope of loan-out agreements in clinics as well as other healthcare and nursing facilities in return for monthly remuneration. In addition, the members receive other benefits such as holiday entitlements and continued payment of remuneration in the event of sickness.

One member of the sisterhood was supposed to be sent to provide nursing services at a hospital based on what is referred to as a “Gestellungsvertrag” (loan-out agreement) between the clinic and the sisterhood, with the clinic bearing the staff costs and paying an administration fee. However, the works council exercised its veto against this, arguing that lending out the woman on the proposed basis was not temporary and violated Germany’s Arbeitnehmerüberlassungsgesetz (AÜG) [Temporary Employment Act]. The clinic claimed that members of the sisterhood were not employees according to national law, as no employment contract existed between them and the sisterhood.

The CJEU held that even if the members of the sisterhood were not employees under German law, there were many indications that they were employees pursuant to the directive on temporary employment. This is because the members offer their labour and receive remuneration in return. The Court ruled that there were a number of indications that also revealed that the members of the organization enjoyed the same protection as employees. It went on to say that it was irrelevant whether the sisterhood intended to turn a profit. It offers services and receives compensation in return. For this reason, the Court concluded that it could be assumed that economic activity in terms of the directive on temporary employment was being carried out. As such, the CJEU proceeded on the assumption that the directive on temporary employment was applicable here as well. The final decision needs to be made by the Bundesarbeitsgericht, Germany’s Federal Labour Court.

Labour leasing is an important factor for many businesses and industries. Lawyers who are experienced in the field of employment law can advise on issues relating to temporary employment.

For more informations: https://www.grprainer.com/en/legal-advice/employment-law/temporary-employment.html

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