TimePartner

The case summary below is followed by an analysis provided by Rudolf Buschmann who represented the plaintiff in the proceedings.

In this case, the Court of Justice of the European Union (CJEU) was called upon to provide its interpretation of Directive 2008/104/EC on Temporary Agency Work, and specifically whether a collective agreement which reduces the pay of temporary agency workers compared to workers recruited directly must provide for countervailing benefits.

The CJEU held that a collective agreement which reduces the pay of temporary agency workers compared to workers recruited directly must provide for advantages in terms of basic working and employment conditions which are such as to compensate for the difference in treatment they suffer, in order to respect the overall protection of the temporary agency workers concerned.

The facts concern a temporary agency worker assigned to a user undertaking in the retail sector in Bavaria. Pursuant to a special collective agreement on Temporary Work she received a gross hourly wage of first € 9, then € 9.23, whereas the hourly wage according to the collective agreements of the retail trade was € 13.64. She sued for the difference. 

In its judgement, the CJEU concluded that Article 5(3) of Directive 2008/104/EC, by referring to the concept of ‘overall protection of temporary agency workers’, does not require any account to be taken of a level of protection specific to temporary agency workers that is greater than that laid down for workers in general by provisions on basic working and employment conditions under national and EU law. [Para. 44].

However, the CJEU added that where the social partners, by means of a collective agreement, authorise differences in treatment with regard to basic working and employment conditions to the detriment of temporary agency workers, that collective agreement must, in order to respect the overall protection of the temporary agency workers concerned, afford them, in return, advantages in terms of basic work and employment conditions which are such as to compensate for the difference in treatment they suffer. [Para. 44].

For further analysis of the questions referred to the CJEU and the consequences of the judgement, please refer to the text prepared by Rudolf Buschmann who represented the plaintiff in the proceedings, below. 

The opinion of the Advocate General can be found here and in the documents section below. 
 

 

Analysis - Rudolf Buschmann

Initial assessment

I. The proceedings

1. The plaintiff, represented by us, was employed as a temporary worker by TimePartner and assigned to a user undertaking in the retail trade in Bavaria. Pursuant to a special collective agreement on Temporary Work she received a gross hourly wage of first € 9, then € 9.23. The hourly wage according to the collective agreements of the retail trade was € 13.64. She sued for the difference. The 5th Senate of the BAG (Federal Labour Court) had referred the matter to the CJEU. The wording of the questions gave the appearance that the BAG aimed at the conclusion that German law was compatible with DIR 2008/104. On 5 May 2022, there was an oral hearing, and on 14 July the opinion of the Advocate General. As can be seen from the judgment, the opposing side had applied for reopening of the oral proceedings on 11 October 2022. This application had not been served. The CJEU rejected this application.

2. We had questioned the admissibility and the order of some of the questions in our written pleadings. However, the Court considers that the questions “are therefore not manifestly irrelevant for the purpose of resolving the dispute in the main proceedings”. It then deals with the questions in the order chosen by the Federal Labour Court.

 

II. Consideration of the questions referred

1. The first question is directed to the meaning of "overall protection of temporary workers" in Art. 5 para 3 DIR 2008/104. The CJEU (§ 33) understands overall protection as a justiciable legal concept which was not defined in substance in the Directive. In this § it is not yet entirely clear whether respect for overall protection is a duty of the parties to collective agreements or a duty of the Member States in relation to the authorisation of an opening clause. In § 39, it is then stated that overall protection is only guaranteed if the collective agreement which, pursuant to Art. 5 para. 3 of DIR 2008/104/EC, derogates from essential terms and conditions of employment to the detriment of the employees, compensates this unequal treatment by equivalent advantages. The overall protection is not further qualified, but § 41 clarifies that the compensatory advantages must relate to the essential terms and conditions of employment (Art. 3 para. 1f DIR 2008/104), i.e. duration of working time, overtime, breaks, rest periods, night work, holidays, days off, pay.

§ 42 systematically addresses the difference between DIR Art. 5 para. 2 and para. 3, namely that para. 2 actually allows Member States to derogate from the principle of equal treatment for permanent employees, whereas para. 3 only allows this if advantages are granted with regard to the essential terms and conditions of employment. An understanding that para 3 would allow the same legal consequences as para 2 would be paradoxical. This systematic difference was also a focus of our argumentation.

The guiding principle is then formulated in such a way that a collective agreement must provide for these compensatory benefits, although it makes not entirely clear what the legal consequence is if it does not.

2a. The second question concerns the point of reference for the application of the principle of equal treatment under Article 5(1) DIR. In § 49 the court states that in a first step the essential working and employment conditions in the user undertaking are to be determined, then in a second step a comparison is to be made with the employment conditions from the temporary employment contract, and in a third step an assessment is to be made as to whether the compensatory advantages make it possible to neutralise the unequal treatment. The AG had formulated in his opinion that the compensatory measures must not be of marginal nature. The term “neutralisation” should not differ from this in terms of content. What is important is the point of reference, namely the conditions at the user undertaking. At the oral hearing, the employer's side put forward the "horror vision" that different minimum conditions would then have to apply to different users and sectors for temporary agency workers as well. This is probably correct, but it just corresponds to the wording of the Directive. If certain business models can no longer be practised then, temporary work agencies have a problem, not us. Temporary work is still a particular manifestation of precarious work, at least in Germany. Obviously, German law and the collective agreements in temporary agency work based on it do not meet these requirements.

2b. The question of the BAG is whether a derogation from the working conditions of the user undertaking is only permissible for temporary agency workers employed for an indefinite period. This question is answered in the negative, as was already the case in the AG's opinion. In view of the different structure of para. 2 and para. 3, this was to be expected. Interesting is the statement in § 56 that temporary agency workers employed for a fixed term in the user undertaking must be granted a significant advantage in order to compensate for the difference compared to the working conditions in the user undertaking.

A Problem could be § 55 where the court says:

55 It should thus be noted that Article 5(2) of Directive 2008/104 itself establishes the actual compensation – namely, pay for the time between assignments – to be afforded to temporary agency workers who have a permanent contract, in return for a derogation from the principle of equal treatment as regards pay, whereas paragraph 3 of that article allows the social partners to negotiate independently both the exact nature of the derogation from the principle of equal treatment and the advantage deemed capable of compensating for the effects of that derogation, provided that the overall protection of temporary agency workers is respected.

Presumably, employers will argue, citing this paragraph, that no further compensation is necessary for workers with a permanent contract with the agency, since they continue to be paid in the time between assignments. This argument is not convincing. Also, a user undertaking bears the entrepreneurial risk for the workers it employs and must pay them regardless of whether work is available. Thus, permanent employment with a temporary-work agency is not an advantage as such over the employment with the user undertaking. Finally, an overall comparison must be made. Often the working conditions of temporary workers are also worse than those of the user undertaking in other respects, such as notice periods, fringe benefits, etc. These disadvantages must also be included in the overall comparison.

3. The question concerns the regulatory obligations of the Member States to guarantee that collective agreements are only concluded with respect for the overall protection. Here it is stated that Member States may well leave the realisation of their social policy objectives to the social partners within the framework of para.3. Important in this respect is § 64: "That power does not discharge Member States from the obligation of ensuring, by the appropriate laws, regulations or administrative measures, that all workers are afforded the full extent of the protection provided by Directive 2008/104" (reference to the Daimler judgement, where the plaintiff was also represented by us). § 65 also formulates an obligation of the Member States to respect the overall protection when allowing an opening clause. § 67 then formulates an obligation of the social partners to respect overall protection when formulating their collective agreements. Sentence 4 then states that the national legislature is not required to lay down the conditions and criteria designed to respect the overall protection of temporary agency workers, within the meaning of that provision. I understand this to mean that the legislator is, however, obliged to include overall protection as a precondition for divergent collective agreements in national law. The review would then have to be carried out by national courts.

(5) The question is directed at the degree of review of collective agreements in the light of Article 28 CFR. On the one hand, the CJEU emphasises the autonomy of the social partners and their broad discretion (§ 73). However, this is limited by the duty to ensure respect for Union law. The right to collective bargaining … ,within the scope of Union law, must be exercised in compliance with that law (§ 74,75). The Court concludes that national courts have an obligation to ensure that collective agreements which permit unequal treatment in respect of essential terms and conditions of employment must respect overall protection (§76). According to § 77 national courts are to examine this. According to § 78, they should do everything within their jurisdiction to ensure that collective agreements are consistent with the requirements of Article 5(3) of Directive 2008/104.

III. Consequences

(1) Obviously, neither the AÜG (Arbeitnehmerüberlassungsgesetz) nor the collective agreements on temporary agency work based on it meet these requirements. Indeed, the AÜG allows downward deviations in collective agreements without requiring overall protection or compensatory measures. § 65 formulates an obligation of the Member States to respect the overall protection of workers when allowing opening clauses. This results in an obligation to amend the national Act by determining overall protection as a prerequisite for the opening clause.

2. In § 66, the CJEU also formulates a duty of the social partners to respect the overall protection. Collective agreements that do not meet these requirements must therefore be corrected.

3. In the further proceedings, it will be a question of how national courts, in this case first of all the BAG, carry out the judicial review required by the CJEU. The CJEU has not made any statements on a horizontal effect of Directive 2008/104. However, it obliged national courts to review CBAs to see whether they fulfil the requirements of overall protection. In my opinion, this is not a question of interpretation. The court cannot interpret a CBA that does not provide for overall protection in conformity with European law in such a way that it itself now provides for different compensatory measures. The consequence would have to be that court must declare invalid provisions that deviate from the principle of equal treatment to the detriment of temporary agency workers without providing for compensatory measures. The legal consequence would then have to be that, according to Art. 5 para. 1 of the Directive, the essential terms and conditions of employment in the user enterprise should be directly applicable.

Rudolf Buschmann

Lehrbeauftragter Universität Kassel

Spohrstr. 6-8

34117 Kassel

0561-23919