In Germany, a number of employees’ rights and employers’ obligations depend on specific thresholds regarding the number of employees assigned to a business unit or a company. The German Federal Labour Court recently decided two cases with regard to agency workers and their effect on dismissal protection and on the number of works council members at the hirer’s business:

  • If an employer employs more than five employees (or more than ten with respect to employees hired after 31 December 2003), the provisions of the Act on Protection against Unfair Dismissal apply. This means that an employee who has been employed for at least six months may be terminated only if such termination is justified by lack of capability, by conduct, or for redundancy reasons.

The German Federal Labour Court decided that in business units where agency workers are employed on a regular basis, they have to be taken into account when determining the number of employees at the hirer’s business unit with regard to dismissal protection. So even though the agency workers are not employed by the hirer, they count towards the threshold providing the regular employees of the hirer with employment protection.

  • In German businesses that employ at least five persons, employees have the right to elect a works council that represents their interests vis-à-vis the employer. The number of members to serve on the works council depends on the number of employees of that business.

In this context, too, the court decided on 13 March 2013 – contrary to its previous rulings – that in business units which regularly employ agency workers those workers count for the determination of the number of works council members.

Agency workers have not entered into an employment relationship with the hirer; however, the aforementioned decisions show a clear tendency of the German Federal Labour Court that agency workers hired on a regular basis have to be taken into account with regard to the determination of the hirer’s business size.

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