Gemeinschaftsbetrieb als Alternative zur Arbeitnehmerüberlassung

The labor law risks of temporary employment are widely known. An interesting instrument that is often worth considering in legal advice to avoid these risks is the establishment of a so-called joint venture. This instrument was once again confirmed by a recent ruling by the LAG Mecklenburg-Western Pomerania on June 13, 2017.

Initial situation:
Particularly when service companies provide long-term services for certain companies, the question often arises as to whether these legal relationships are to be classified as “real” work contracts or service contracts or whether they actually represent temporary employment or have developed into one over time. Especially if the service company has to cooperate closely with the client's employees, there is a considerable risk that the legal relationships can actually be classified as "sham work contracts" or "sham service contracts" and thus as temporary employment.
The legal framework for temporary employment became even more stringent as of April 1, 2017. The maximum duration of the transfer is in principle set at 18 months. After nine months of employment, “equal pay” generally applies, meaning that temporary employees are entitled to the same remuneration as a comparable employee in the permanent workforce. A previously common solution to avoid the problem of “sham work contracts” or “sham service contracts” has been eliminated, namely the so-called storage permit. This no longer excludes the invalidity of the employment contract with the lender and the fiction of an employment relationship with the hirer, because temporary employment must now be expressly described as such. Otherwise, the transfer permit has no legal effect. In other words: If temporary employment cannot be legally ruled out from the outset, legal violations and drastic (labor) law consequences are virtually inevitable for the companies concerned.
What design options remain to escape these risks? One option that should always be considered is setting up a joint venture.
Temporary employment/joint operation ratio:
The fundamental idea behind this model is the relationship between temporary employment and joint ventures, as developed by the Federal Labor Court. According to this case law, there is an exclusivity relationship between the temporary employment agency and the joint venture. The Temporary Employment Act does not apply to the employees of the participating companies employed in joint operations. By definition, this means that risks arising from possible violations of the Temporary Employment Act in such employment are eliminated.
This exclusivity relationship between temporary employment and a joint venture is derived from the consideration of the Federal Labor Court, according to which temporary employment requires that the use of third-party personnel on the part of the contract employer (the leasing company) is limited to providing the employee to a third party to promote whose to be made available for operational purposes. According to the BAG, there can be no temporary employment if the employers involved use their employees as part of a business cooperation own pursue operational purposes. The latter is precisely what characterizes the joint operation. As part of a joint venture, the borrower does not have an independent business organization into which he could integrate the employee, as would be necessary for temporary employment.
The LAG Mecklenburg-Western Pomerania has now reconfirmed this exclusivity relationship with a recent judgment dated June 13, 2017 (ref.: 5 Sa 209/16). In this decision, the LAG Mecklenburg-Western Pomerania stated that temporary employment should be distinguished from the employee's work in a joint company. It is not a case of temporary employment if the employees are posted to a joint operation in which their contractual employer and a third party have legally agreed to jointly manage the company.
Arbitrary creation of a joint venture:
In the decision, the LAG Mecklenburg-Western Pomerania also explains again when a joint operation can be spoken of. This definition of a joint operation, which is also based on the established case law of the Federal Labor Court, is the starting point in consulting practice for the possible creation of a joint operation. The LAG Mecklenburg-Western Pomerania explains that the hallmark of a joint operation by several companies is that the material and intangible resources of these companies available in a business establishment are combined, used in an orderly and targeted manner for a uniform technical purpose and that the use of human labor is carried out by a uniform Line apparatus is controlled. The companies involved must have at least a tacit legal commitment to joint management.
The challenge is to use this definition to establish a joint venture in a legally secure manner. In principle, no written contract is required to create a joint venture. The actual circumstances are decisive. If these meet the characteristics of a joint operation, this is also justified. Nevertheless, as a rule, a written “management agreement” should be concluded between the companies involved, especially for documentation and evidence purposes. This management agreement then determines the mutual cooperation between the companies involved, their mutual rights and obligations as well as the distribution of benefits and risks.
With such a legally secure establishment of a joint operation, risks under temporary employment law resulting from cross-company deployment of personnel are excluded.
Conclusion:
The risks associated with the complicated and often difficult to enforce employee leasing law can be eliminated by establishing a joint operation. However, shared ownership is not a panacea. The establishment of a joint venture also has legal consequences for other labor law issues, such as protection against dismissal and works constitution law. These consequences must also be taken into account in the strategic decision as to whether a joint operation should be established between different legal entities. Only a precise analysis of all the advantages and disadvantages associated with joint operation can ensure that the optimal solution is found in each individual case.