Understanding the difference between “work contract” and “worker transfer” is a legal necessity. And it is of great importance in German labor law. The distinction between these two types of employment contracts contributes to a cooperative and legally secure working environment. It is an important guide to ensuring compliance with the legal framework in Germany.
For employers, choosing the right contract plan is critical to managing teams. At the same time, it ensures legal harmony. For employees, on the other hand, understanding their contract means knowing their rights and responsibilities. Let's take a closer look at the meaning and differences between a work contract and an employment contract.
What is a work contract?
A work contract is a contractual agreement in which one party (“entrepreneur”) undertakes to provide a specific service. The other party (“purchaser”) is obliged to pay for this service. This type of contract focuses on the result of the work and not on control over the provider of the work/service. The time spent on the execution of the work is not important here. Nor the way it is completed. What is important is that the work or service is carried out successfully.
The subject who carries out the order is independent. He is solely responsible for his own taxes and contributions. And he is not considered to be employed directly by the client. The work contract offers more flexibility and results orientation.
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What is temporary employment?
The Employee leasing is a special form of employment contract. It is used in temporary employment or personnel leasing. The role of the legal employer is taken over by the personnel agency. It provides and hires out workers who it rents out to a customer company. The duration of this type of employment is determined in advance.
In connection with the temporary employment of employees, three parties are usually involved:
- Employees (temporary workers) – a person employed by a staffing agency. It is used to fulfill tasks for the customer company.
- Employer (the recruitment agency) – the legal employer of the hired employee. The personnel agency is responsible for all administrative tasks related to the employee. This includes taxes, payroll, contributions, etc. The agency has a contractual relationship with both the employee and the client company.
- Customer company – an organization for which the temporary worker carries out business tasks. This company needs additional workers for a temporary period. This is a company that is looking for additional temporary workers. Therefore, it obtains the required workers through the personnel agency. In order to use the services of the recruitment agency, it enters into such a contract with the agency. The customer company monitors the employee's work. However, the employee is employed by the recruitment agency and not by the company he works for.
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Is a temporary employment contract an employment contract?
Although a temporary employment contract (also known as a temporary employment contract or temporary employment contract) is a form of employment, it is fundamentally different from a traditional employment contract.
An employment contract is usually concluded between an employer and an employee and regulates the conditions of direct employment. The employee is permanently employed by the employer and performs his work directly for him.
A temporary employment contract, on the other hand, is concluded between a lender (often a personnel service company) and a hirer (the company that needs the temporary employee). The lender hires the employee and gives him or her to the hirer, who uses the employee's work. The employee is therefore employed by the lender, not the borrower, and performs his or her work for the borrower.
While an employment contract often provides for permanent or long-term employment, a temporary employment contract is usually limited in time and serves to cover temporary bottlenecks or support specific projects.
What needs to be taken into account when hiring out employees?
When it comes to temporary employment, there are various legal and practical aspects that are important for both employees and employers. Here are some points to consider when hiring out employees:
- Employment contracts and agreements: both the lender (the personnel service company) and the hirer (the company that needs the temporary employee) must conclude clear and legally valid employment contracts with the employee. These contracts should specify working conditions, salary, working hours and all other relevant details
- Legal regulations: specific legal rules and regulations apply to temporary employment. These include, among others, the Temporary Employment Act (AÜG) in Germany or similar laws in other countries, which protect the rights of temporary workers and regulate the conditions for employers.
- Equal Treatment Principle: according to the Equal Treatment Principle, temporary workers must generally receive the same working conditions as comparable permanent employees in the user company. This affects, among other things, salary, working hours, vacation entitlement and other social benefits.
- Clear communication: transparent communication between the lender, the hirer and the temporary worker is crucial. All parties should clearly understand expectations, responsibilities and work requirements.
- Occupational safety and health protection: the hirer is responsible for compliance with health and safety regulations in the workplace, including ensuring that temporary workers receive appropriate training and safety equipment.
- Monitoring and control: the lender and the hirer should jointly monitor the work performance and satisfaction of the temporary worker. Regular communication can help identify and solve any problems at an early stage.
Summary
It is important to point out that employment contracts and temporary employment contracts have fundamentally different purposes and structures. They serve different needs. They form a different framework for industrial relations. Both contracts are regulated by German labor law. And their common goal is to ensure clarity in labor relations, fairness and legal compliance.
