Personnel leasing is the official designation for the term “temporary work”. In personnel leasing, a personnel service provider provides the work of his employees to other companies for a limited time. A prerequisite for this is a written employment contract between the personnel service provider and the customer company. In Germany, temporary work is regulated by the Personnel Leasing Act (AÜG). The AÜG stipulates that temporary employment companies require an official permit for personnel leasing.
The Federal Employment Agency is responsible for supervising temporary work in Germany, among other things. It gives service companies the official authorization for commercial personnel leasing and ensures that the provisions of the AÜG are complied with.
DIN standards can refer to objects, procedures, or work processes. Established standards are intended to govern these and make thus them easier. In the area of quality management, DIN standard EN ISO 9100 is the most widespread standard nationally and internationally. Certification in accordance with ISO 9001 forms the basis for continuous improvement processes within a company. ARWA Personaldienstleistungen is certified as an entire company in accordance with DIN EN ISO 9001:2008 since 2014.
Companies that utilize temporary employees in their own operation within the scope of personnel leasing are known as the contracting company. Here, a personnel leasing agreement is concluded between the providing temporary employment company (staffing agency) and the customer company (contracting company). This establishes the framework for the provision. The contracting company has the right to issue instructions to the temporary employee, but otherwise no contractual commitment.
Skilled workers are commercial industrial workers who received their qualifications in a recognized profession by means of a two to three and a half year training program. The skilled worker’s certificate is equivalent to the journeyman’s certificate issued in the various handicraft traits as a leaving certificate and CCI examination certificates in the commercial area. Almost two out of five temporary employees work as a skilled worker, three out of five employees overall. ARWA Personaldienstleistungen offers professional newcomers or experienced skilled workers a quick start and long-term jobs with attractive conditions.
A minor employment relationship or a so-called “mini-job” exists if the pay does not regularly exceed 450 € per month. When checking whether the income limit of 450 € per month is exceeded, regular monthly pay should be utilized. This is determined depending upon the number of months, for which employment for pay exists. Here, the period under consideration is a maximum of 12 months. This results in an income limit of 5,400 € per year maximum with a continuous employment relationship lasting at least 12 months.
According to the current job market report of the Federal Employment Agency from the year 2015, around half of all temporary employees work as assistants. Temporary work offers people with comparably low qualifications and people who might have lost touch with the labour market following periods of unemployment a new chance for employment. Assistance seeking jobs often find a fast and uncomplicated entry in temporary work as well as the opportunity to get to know various employment areas.
With more than 2,900 member companies, the iGZ is the most powerful employers’ association in the temporary employment branch. The objective of the association, which consists primarily of midsize personnel service providers that are especially active in the area of personnel leasing or procurement, is the advising, representation, education, and promotion of the mutual professional interests of the member companies in all employment or social law and branch-specific matters. Fairness, dependability, respect, trust, and integrity are the guiding principles of “good temporary work”, on which the iGZ code of ethics is based. The around 2,900 member companies of the interest group have obligated themselves to follow these principles. ARWA Personaldienstleistungen has been a member of the iGZ since October 2013.
Companies use temporary work not only as an opportunity to bridge temporary personnel shortages, but also sometimes for the recruitment of employees to supplement their regular staff. The term “sticky effect” is used when temporary workers who stood out during the stipulated leasing period due to their professional and personal performance are hired by the contracting company with a direct employment relationship.
Employers who would like to lease employees to third parties within the scope of their commercial activities require an authorization for personnel leasing to do so. After examination by the regional office of the Federal Employment Agency responsible for the company, the initially temporary authorization is usually granted on a permanent basis. In addition to the permanent authorization for personnel leasing, reputable personnel service providers also have the necessary clearance certificates of the responsible professional association, health insurance fund, and tax authority. ARWA Personaldienstleistungen has had a permanent authorization for personnel leasing and all necessary clearance certificates since 1991.
Minimum wage denotes the minimum pay as specified by the state or those party to a collective agreement. Regulations regarding the minimum wage apply to either the hourly rate, or monthly salary for full-time employment. Aside from national minimum wages, there are also regional regulations which apply to different federal states or cities, for example.
From the 1st June 2016, the new minimum wage for all temporary employees in pay group 1 is €9.00 in West Germany and €8.50 in East Germany. This was negotiated in September 2013 by those parties participating in a collective agreement.
The individual organization and disposition of all temporary employees utilized within the company and the handling of administrative procedures necessary for this on the basis of the Personnel Leasing Act (AÜG) is performed by coordinators who are specifically qualified and trained for this purpose. If necessary, this service can also be performed as in-house support directly in the customer company.
A high level of transparency and straightforwardness of the processes is created for companies by central handling. Internal decision makers are released from AÜG-processes. Reaction times are noticeable reduced for special operational requirements.
The recognized profession of personnel service assistant requires three years of training in the area of personnel management. The final examination is taken before the chamber of commerce and industry. Personnel service assistants are central contact partners for customers and employees of a personnel service provider. However, a personnel service assistant could also work in the personnel department of a company or in public service following his/her training. In the area of temporary work, personnel service assistants coordinate inquiries from customer companies and plan deployments of the employees. They represent the interface between the contracting company and temporary employees.
The personnel service assistant profession is very and multifaceted. Important prerequisites for the job as a personnel service assistant are a high degree of organizational skill, structured work methods, and social competence, in addition to distinct social skills and communication skills.
The term quality management collectively refers to all measures for the improvement of work sequences within the company. Here, the areas of planning and control as well as the monitoring of communication and manufacturing processes are given particular attention. Other areas of focus are the maintenance and improvement of customer and employee satisfaction. A quality management system ensures that products and processes meet defined requirements by means of the standardization of certain action and work processes. ARWA Personaldienstleistungen has an internal quality management (AQM) system and is certified in accordance with DIN EN ISO 9001:2008 for the areas of personnel leasing, outsourcing, personnel procurement, and on-site/in-house management. The ARWA-quality management system is being continuously expanded by new and sensible components and is therefore subject to a continuous improvement process.
A quality management system ensures that products and processes meet defined requirements by means of the standardization of certain action and work processes. ARWA Personaldienstleistungen has an internal quality management (AQM) system and is certified in accordance with DIN EN ISO 9001:2008 for the areas of personnel leasing, outsourcing, personnel procurement, and on-site/in-house management. The ARWA-quality management system is being continuously expanded by new and sensible components and is therefore subject to a continuous improvement process.
The term recruitment originally came from the military. It refers to the process of filling personnel contingencies within a troop. Today, the term is primarily used in the commercial branch. It refers to all processes necessary for the procurement of personnel.
Within a company, the recruiting department assumes the control and monitoring of all processes for personnel recruitment in order to procure employees in the necessary quality, quantity, timeframe, and location.
The recruitment process serves to bring employer and employees together from the job description to the applicant selection to the job interview.
Regular personnel refers to employees that are part of the permanent staff of the company and are employed by this company continuously and without interruption. In order to supplement the regular personnel, temporary employees can be utilized for a fixed term for seasonal peaks, time-dependent projects, or other internal requirements. In order to ensure the quality of regular employees and temporary employees, the provisions of the Equal Payment and Equal Treatment Act are usually in effect for employees that are utilized in customer companies within the scope of the Personnel Leasing Act.
A wage agreement can permit differing provisions if it does not fall short of the minimum hourly rates stipulated in a legal ordinance.
In the Federal Republic of Germany, a wage agreement is concluded between two wage agreement parties. These include employers or employers’ associations and unions. The wage agreement governs rights and obligations between the contract parties and stipulates provisions regarding the contents, conclusion, and termination of employment relationships and operational and works constitution matters.
The Collective Bargaining Act (TVG) describes all legal provisions regarding the wage agreement. This is in effect until one of the wage agreement parties terminates the agreement or the agreed-upon time for the wage agreement has expired.
The leasing period refers to the time in which the temporary employee is utilized in a customer company. When the AÜG was introduced in 1972, the maximum leasing period was three months. In the years that followed, the leasing period was increased step-by-step to 24 months. For the purpose of making the job market more flexible, the maximum leasing period limitation was lifted in January 2003.
Staffing agencies is another term for temporary employment companies.
An employment relationship exists between the temporary employee and the staffing agency/temporary employment company. The concluded contract is an employment contract with all rights and obligations. The temporary employment company is thus the regular employer of the temporary employee. During the employment relationship, the staffing agency must ensure that the contracting company employs the employee in accordance with the contract and complies with the worker protection legislation.
In turn, the customer company concludes a personnel leasing agreement (AÜV) with the staffing agency for the leasing of an employee. Upon signing the AÜV, the customer company receives the right to give instructions to the temporary employee.
The legal basis of the right to give instructions is formed by the Trade Regulation Act (GewO §106). According to this, the employer has the right to give instructions to the employee and to utilize him/her in accordance with operational requirements and changes. Here, the obligations of the employment contract, wage contract, or the works agreement and laws must be complied with. For example, instructions may include the type and location as well as the quality of the work, the assignment of work in case of colleague illness, and organizational conduct. During temporary employment, the temporary employee is subject to the right of the customer company to give instructions upon signing the AÜV. However, the temporary employee is assigned to the temporary employment company for the entire duration of his deployment from an employment and social law point of view.
Temporary employment refers to a triangular structure between the employer, employee, and the company in which the (temporary) employee works for a fixed period. Here, the temporary employee has a fixed employment relationship with his employer (personnel service provider) who temporarily leases his employee to the customer company.
For jobseekers, who would like to return to work after an extended family leave or people, who would like to make a start in a completely new professional field, temporary work can represent a step in the right direction.
The temporary employment branch in Germany has developed into an integral part of the job market in the past few years. In order to be able to maintain one’s own competitiveness over the long-term, the greatest possible flexibility has become essential for companies. This flexibility often cannot be achieved by means of the classical job market. With qualified employees, temporary employment offers the optimum solution, especially for time-dependent tasks and projects or seasonal peaks.