If you want to survive on the market, you have to be flexible. If the order situation is low, labour costs for a large workforce do not pay off. However, if the order situation then unexpectedly increases, there must be a way to expand the workforce immediately. Nowadays, this flexibility in personnel planning exists thanks to temporary labour. But there is also an alternative and that is subcontractors. Let's take a look at the difference between the two and how commercial labour leasing differs from covert temporary work.
What is temporary work?
In a globalised world, companies are feeling the cost pressure more and more clearly. In this world, it is temporary labour that enables a company to respond to these cost pressures according to the existing order situation. In simple terms, a small permanent workforce keeps the business running, while temporary workers are available as soon as the order books fill up.
Temporary staffing can be a tactical or strategic solution for the company. As a tactical solution, it enables a company with a relatively stable order situation to compensate for typical staff fluctuations. An employee has planned a family holiday at an inconvenient time? A temporary worker steps in. The secretary is temporarily ill and a temporary worker takes over until she recovers. This simplifies personnel management in day-to-day operations.
But then there are also the companies where everything is possible, from full order books to fewer customers. Here, the permanent workforce is actually smaller than is necessary for maximum operation in order to keep wage costs to a bearable minimum. However, as soon as labour is needed because orders are flooding in, it is the temporary workers who step in. Their salaries can easily be recouped through the new orders, so everyone wins.
Temporary work - a solution to staff shortages?
Particularly qualified specialists are hard to find. As soon as they are needed for a specific job, they can be requested via a temporary employment agency. The higher labour costs often associated with this can easily be justified by the savings that are made during the period in which this expertise is not needed and no wages have to be paid for it.
Temporary staffing is therefore the solution to a whole range of problems. Existing staffing levels can be supplemented in a targeted manner when required by day-to-day operations. Peaks in the order situation can be catered for and skilled workers, for example temporary engineers, are available exactly when they are needed.
Personnel planning is thus simplified and can be organised more efficiently. Above all, however, it is just as dynamic as the conditions on the market demand. This helps companies to position themselves for the future.
Hidden temporary work
A distinction must be made between so-called "covert temporary work" and actual temporary work, such as that provided by Top Zeitarbeit GmbH. This form of temporary work violates applicable law and must therefore be avoided at all costs.
A concealed supply of labour exists if one of three conditions is met. This begins with the fact that the lending company does not have a licence to lend workers on a commercial basis. This means that the hiring company should definitely be checked first. If no proper application for a temporary employment licence has been made, this can be found out via the BA.
Secondly, no Contract for work for the Temporary employment are used. This is abused in this context in order to circumvent the social protection to which the employee is entitled.
Finally, the employee's activity must not be declared as self-employment. This is usually done in order to avoid the payroll taxes and formalities associated with the work.
Commercial temporary work
In contrast to this is commercial temporary employment by a temporary employment agency with a licence. In this context, temporary workers are employed as labour by either completely or at least predominantly changing hirers. This means that the staff work primarily for third parties and these third parties change regularly.
On the other hand, hiring out employees is not a commercial activity if the temporary workers perform their work primarily at the hirer's company. Work in the company of a third party is the exception, not the rule.
The triangular relationship
It is in the nature of commercial labour leasing that there is a triangular relationship between the temporary worker, the temporary employment agency and the hiring company. This entails its own rights and obligations.
There is a regular temporary employment contract between the temporary worker and the temporary employment agency. The temporary worker is employed by the temporary employment agency. In this relationship, the temporary worker has the same rights and obligations as any other employee in any other employment relationship.
The temporary employment agency has disciplinary authority over the temporary worker. This means that it is this company that is responsible for ensuring that the temporary worker performs the work at the right place at the right time.
Between the temporary worker and the hirer the hirer is entitled to demand that the temporary worker performs the work correctly. In other words, it is important that the right work is done. To this end, the hiring company has the authority to issue instructions to the temporary worker.
Between the hirer and the temporary employment agency There is a contract in the neighbourhood that regulates the cooperation between the two. This labour leasing contract determines the working hours and the specific activity. In addition, there is the price or rate for the hourly rate. In addition, the temporary employment agency receives an invoice amount for hiring out the labour.
Other employee leasing requirements
Temporary work must be carried out as part of an economic activity. This means that the activity must involve the provision of goods or services on a specific market. Non-profit assignments and intra-group temporary work are also deemed to be economic temporary employment.
The commercial supply of temporary workers must be of a temporary nature. Currently, temporary workers can be hired out by the hirer for a maximum of 18 consecutive months. However, this maximum duration can also be regulated differently by collective agreement. This option has often been utilised.
For temporary work, a Temporary employment contract used. This must comply with the provisions of the German Temporary Employment Act (AÜG). This means that the contract must transparently regulate the conditions of the assignment so that there are no surprises for either party.
Furthermore, as already mentioned here several times, equal treatment of temporary workers compared to the permanent workforce must be ensured. In addition, there are collective agreements that often deviate from this principle of equal pay and equal treatment.
Essentially, however, equal treatment means that temporary workers receive the same pay, the same working hours, the same holidays and the same bonuses. This also includes access to communal facilities. This includes catering services as well as means of transport. Discounts for employees and the company pension scheme are not included. Here too, however, collective agreements may deviate from this.
Differentiation from subcontractors
Theoretically, a company can also use the use of a Subcontractor This gives us a certain degree of flexibility in personnel planning. In practice, however, things look a little different.
In the case of temporary work, the hiring company assigns its workers to the hirer for a certain period of time. They then work for the hirer as if they were part of the hirer's workforce. In a similar case, a subcontractor deploys its own employees at the place of assignment, for example at another company. The worker himself uses his labour as a temporary worker for the third company. In the case of a subcontractor, on the other hand, he continues to work for his main company, except that this main company takes on an order at the third company.
Temporary work - Subcontractors - Differences
If one of these points applies, then this is temporary work. If none of these points apply, then a subcontractor has been commissioned to complete a project.
A subcontractor:
- Dispatches its workers
- Liable for the result
- Has employees with specialised training and many years of professional experience
- Can be ordered without restriction on the duration of use.
However, the following applies to temporary employment agencies:
- That it only provides labour
- Not liable for the success of the work
- The temporary workers are not necessarily professionally trained and do not have a wealth of professional experience
- The deployment period of the temporary staff is limited
If there are defects in the work, a subcontractor can be asked to rectify them. Here it is particularly advisable to clarify in advance exactly what is expected as the finished end product. Construction plans, specifications and the like can be used for this purpose.
Whilst subcontractors do not directly influence the number of available staff, they are able to provide support in dealing with order peaks. In return, they can fulfil parts of the orders with their staff and, in particular, their skilled workers, so that fewer staff are required by the company itself to complete the entire order.
Project-related specialists who can be brought in-house via subcontractors offer a major competitive advantage. In addition, these new specialists offer the opportunity to offer new specialised areas or to expand the core area of the company's own business.
The prompt provision of specialised personnel by subcontractors can save costs in the long term in the form of wage and ancillary costs. In addition, these specialists remain active in their specialist area, constantly gain experience from different companies and therefore represent a particularly attractive area of specialised personnel.
Conclusion:
Commercial employee leasing describes the provision of temporary workers to a hiring company when the latter has an increased need for personnel. This increases efficiency in the hiring company and enables better personnel planning.
A commercial supply of temporary workers does not exist if the supplying company does not have a licence to do so. It is also not the case if work is performed under contracts for work and labour or if the work is presented as self-employed work.
The appointment of a subcontractor must also be distinguished from temporary work. The subcontractor supports the customer with its personnel, who, however, remain under the specialised supervision of the subcontractor. This also does not constitute the hiring of labour.
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