European Court of Justice: Remuneration of temporary workers must include compensatory benefits

A collective agreement which offers lower pay to temporary agency workers compared to workers recruited directly must provide for compensatory benefits.

In its judgment in Case C-311/21, the European Court of Justice ruled on the remuneration of temporary agency workers, accepting that any differences in treatment introduced by collective bargaining must be adequately compensated.

Table of contents

  1. The Case C-311/21
  2. Directive 2008/104: Derogating from the principle of equal treatment
  3. The judgment of the European Court of Justice
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1. The Case C-311/21

The case concerns the issue of additional remuneration for a female employee employed by the temporary employment agency TimePartner Personalmanagement GmbH for the period from January to April 2017. During that period, the temporary agency worker was employed on a fixed-term employment contract and sent on a mission to a retail company, receiving a gross hourly wage of EUR 9.23.

The salary was in accordance with the collective agreement applicable to temporary agency workers concluded between two trade unions to which TimePartner Personalmanagement and the employee were respectively affiliated. That collective agreement provided for a derogation from the principle of equal treatment enshrined in the law on the provision of manpower (AÜG), and in particular a lower remuneration than that received by comparable permanent employees of the user undertaking under the terms of a collective agreement for workers in the retail sector in the Land of Bavaria (Germany), namely a gross hourly wage of EUR 13.64.

The labour court rejected the employee’s claim. In her appeal in cassation, the temporary employee reiterated her claim, requesting to receive the sum of EUR 1296.72 as the difference between her remuneration and that paid to comparable permanent employees of the user undertaking. In fact, the employee claimed that the relevant provisions of the AÜG and the collective agreement applicable to temporary agency workers did not comply with Article 5 of Directive 2008/104.

TimePartner replied that the AÜG permits derogation from that requirement of equal treatment – enshrined in Article 5 of Directive 2008/104 – by means of the collective agreement, provided that it does not fall below the minimum hourly rates laid down in the legal provisions. Accordingly, the temporary employment agency must only grant temporary agency workers the wage stipulated in the collective agreement. Only if this is lower than the minimum wage set by a statutory provision must the temporary employment agency pay the temporary agency worker, for each hour of work performed in the user undertaking, the remuneration due to a comparable employee of the user undertaking.

2. Directive 2008/104: Derogating from the principle of equal treatment

The German Court of Cassation, hearing the question, asks the European Court of Justice whether – in the present case – there is an infringement of the principle of equal treatment of temporary agency workers, enshrined in Article 5 of Directive 2008/104.

The above-mentioned article allows social partners to derogate from the essential terms and conditions of work and employment listed in Article 5(1) of the directive, while “respecting the overall protection of temporary agency workers”. Working and employment conditions are defined in Article 3(1)(f) of Directive 2008/104. These are conditions relating to working time, overtime, breaks, rest periods, night work, holidays and public holidays, and remuneration.

In the case of the AÜG, the German legislature made use of the possibility offered by Article 5(3) of Directive 2008/104 to derogate from the principle of equal treatment. The question arises as to whether the German legislature has sufficiently ensured ‘respect for the overall protection of temporary agency workers’ through the provisions of the AÜG, which limit derogations from the principle of equal treatment by means of collective agreements.

The Court defines the requirements that a collective agreement concluded by the social partners must meet in order to be able to derogate from the principle of equal treatment of temporary agency workers under Article 5(3) of Directive 2008/104. It specifies in particular the scope of the concept of the “overall protection of temporary agency workers” collective agreements and provides the criteria for assessing whether that overall protection has in fact been guaranteed.

3. The judgment of the European Court of Justice

On December 15, 2022, the European Court of Justice, ruled on the case C-311/21. After recalling the dual objective of Directive 2008/104 to ensure the protection of temporary agency workers and respect for the diversity of labour markets, reiterated that Article 5(3) of that directive through its reference to the concept of “overall protection of temporary agency workers“, does not require consideration to be given to a specific level of protection for temporary agency workers which exceeds that laid down, for workers in general, by national law and by Union law on basic working and employment conditions.

However, where the social partners authorise, by means of a collective agreement, differences in treatment in respect of basic working and employment conditions to the detriment of temporary agency workers, that collective agreement must, in order to ensure the overall protection of the temporary agency workers concerned, accord them, in return, advantages in respect of basic working and employment conditions such as to compensate for the difference in treatment which they suffer.

Although the social partners enjoy a wide margin of discretion in negotiating and concluding collective agreements, they must act in compliance with Union law in general and Directive 2008/104 in particular. Therefore, although the provisions of that directive do not require the Member States to adopt certain legislation to ensure the overall protection of temporary agency workers, within the meaning of Article 5(3) thereof, this does not detract from the fact that the Member States, including their courts, must ensure that collective agreements authorising differences of treatment with regard to basic working and employment conditions ensure, in particular, the overall protection of temporary agency workers.

Regulatory Framework

Act on Temporary Agency Work (Arbeitnehmerüberlassungsgesetz – AÜG)

Reference

Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008 on temporary agency work

Reference

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