Temporary agency work

This page was last modified on 20-01-2017

A temporary employment relationship is a triangular relationship, which implies the conclusion of 2 different contracts: the assignment contract between the temporary work agency and the temporary agency worker, and the labour supply contract between the temporary work agency and the user company.

Who is concerned

This type of work relationship implies 2 different types of contracts in order to organise the working relationship between 3 parties:

  • the temporary agency worker is bound by a work contract called "assignment contract" with the temporary work agency and is hired out to the user company which purchased temporary agency work;
  • the temporary work agency is bound by:
    • the assignment contract with the temporary agency worker;
    • and a labour supply contract with the user company which purchased the temporary agency work;
  • the user company is bound to the temporary work agency by the labour supply contract which is a contract of a commercial nature.
It should be noted that the operator of a temporary work agency established abroad must respect the regulations which apply to Luxembourg temporary work agencies if the assignment contract stipulates that the temporary agency worker must carry out the assignment for a user company established in Luxembourg.

Prerequisites

The user company can only resort to a labour supply contract for a very specific work assignment which must be limited in time. The position which was created cannot serve the purpose of ensuring the normal and permanent activity of the user company.

The temporary work agency and the user company are liable for criminal charges if they use a temporary agency worker to carry out a general and permanent task, or to ensure the normal and permanent activities of the user company.

Preliminary steps

Procedures for the temporary work agency

A temporary work agency can only operate if it has received 2 business permits:

Note that even if these are 2 distinct authorisations granted by 2 different administrations, the temporary work agency applying for these authorisations is not required to refer the matter to the Minister of Labour. The complete application only has to be submitted to the Ministry of the Economy.

If the temporary work agency starts operation without prior authorisation, it may face criminal charges.

Procedures for the user company

Before resorting to temporary agency work, a business manager must consult with the joint works committee (comité mixte d'entreprise), or failing this, with the staff delegation.

How to proceed

Contract between the temporary work agency and the user company

Contractual terms

The labour supply contract must be concluded in writing between the temporary work agency operator and the user company within 3 working days from the moment the temporary agency worker is made available.

The labour supply contract must be drawn up individually for each worker.

The temporary work agency and the user company are facing criminal charges if:

  • they do not respect the 3-working-days deadline to conclude the labour supply contract;
  • they do not draw up the contract in writing;
  • they do not conclude individual contracts for each temporary agency worker.

Mandatory information

The labour supply contract must include the following information:

  • the name of the absent worker within the framework of a replacement of a salaried worker;
  • the duration of the assignment;
  • the characteristics of the position to be filled;
  • the required professional qualification;
  • the place of work;
  • the normal working hours;
  • the indication of the salary paid by the user company to a salaried worker with the same qualifications (or equivalent), under the same conditions and considered as an equivalent worker;
  • The indication of the reason why the user company resorts to a temporary agency worker.
Any clause in the labour supply contract in which the user company is prohibited from hiring the temporary agency worker after the temporary agency work assignment is deemed null and void.

Mandatory information

In order to protect the future temporary agency worker's safety and health, the user company must inform the temporary work agency of:

  • the required personal qualification;
  • the characteristics of the position to be filled;

On the other hand, the temporary work agency is required to inform the user company immediately of:

  • the assignment contract's end date;
  • the ministerial refusal to extend the business permit of the temporary work agency;
  • the ministerial withdrawal of the business permit.

Safety of the temporary agency worker

Before a temporary agency worker can be sent on an assignment, the temporary work agency must first inform its worker about:

  • the required personal qualification;
  • the characteristics of the position to be filled.

Assignment contract between the temporary work agency and the temporary agency worker

Job offers

The job offers posted by the temporary work agency must indicate in a clear and unequivocal manner:

  • the company name of the temporary work agency;
  • the temporary nature of the job offer.

Contractual terms

Assignment contracts are employment contracts

The assignment contract must be drawn up in writing for each of the temporary workers made available.

The contract must be given to the worker at the latest within 2 working days after the worker is made available.

Mandatory information

The assignment contract must include:

  • the mandatory information which serves as a basis for the fixed-term employment contract, including:
    • the mandatory information in the contract concluded between the temporary work agency and the user company;
    • if the contract is concluded for a precise period of time: the end date of the contract;
    • if there is no end date: the minimum duration for which the contract is concluded;
    • if the contract is concluded to replace an absent worker: the name of the absent worker;
    • the duration of the trial period, if any;
    • the renewal clause;
    • a clause stating that the hiring of the temporary agency worker by the user company at the end of the assignment is not prohibited.

Note that temporary work agencies will be facing criminal charges if:

  • they do not respect the 2-working-days deadline to conclude the labour supply contract or;
  • the assignment contract is not concluded in writing.
Any clause in the labour supply contract stipulating that the user company is prohibited from hiring the temporary agency worker after the temporary work assignment is deemed null and void.

It must be noted that the assignment contract automatically becomes a permanent employment contract in the event where:  

  • the assignment contract was concluded orally ;
  • the assignment contract does not stipulate that it is concluded for a fixed term.

In these 2 cases, managers of temporary work agencies must pay compensatory damages in lieu of notice to their temporary agency worker, whose amount depends on the worker's length of service.

Notice period according to the worker's length of service

Worker's length of service

Notice period to be complied with

less than 5 years

2 months

from 5 to 10 years

4 months

10 years and more

6 months

Existence and duration of a trial period

The assignment contract can contain a trial period whose duration will vary depending on the duration of the assignment.

Duration of the assignment

Maximum duration of the trial period

Less or equal to 1 month

3 working days

Longer than 1 month and less or equal to 2 months

5 working days

Longer than 2 months

8 working days

Each assignment contract can only include one trial period.

It must be noted that if the user company hires the temporary agency worker for an identical task after the assignment, the employment contract cannot include a trial period.

During the trial period, the temporary work agency and the temporary agency worker can unilaterally terminate the employment contract:

  • by registered letter or delivery in person of the resignation with a counter-signature on the copy of the letter of resignation;
  • without notice;
  • without benefits.
When the assignment contract does not have an end date, the trial period is calculated in accordance with the minimum duration of the assignment contract. The end date in this case is the date of return of the absent worker or the conclusion of the work assignment for which the contract was concluded.
Example:
in the case of a replacement of an absent worker, the assignment contract starts on 1 February in year X and ends upon the return of absent worker Y, currently on sick leave until 30 September of year X. The contract is therefore concluded for a minimum duration of 8 months.

Termination of the contract outside the trial period

When the trial period is over, the contract can no longer be terminated by the temporary work agency or the temporary agency worker, except in the event of serious misconduct by one of the parties.

In the absence of serious misconduct, the terminating party is required to pay damages (which are capped).

In the event of termination of the contract before its term by the temporary work agency, the agency is required to pay damages to the temporary agency worker.

The damages can be:

  • an amount equivalent to the salaries which would have been paid to the agency worker until the end date initially agreed on in the contract;
  • limited to the amount the agency worker would have received in the case of a dismissal with notice within the framework of a permanent employment contract.
E.g.: a temporary agency worker is dismissed after the trial period even though the contract should have run for another 6 months. In principle, the agency worker should be entitled to 6 months' severance. However, the same rules apply for a dismissal of a temporary agency worker as for a dismissal with notice under a permanent employment contract. Salaried workers with less than 5 years of length of service are therefore only entitled to a 2-months' severance package.

Duration of the assignment contract

In principle, the assignment contract must contain a precise end date from its conclusion.

Under exceptional circumstances, a precise end date of the assignment contract is not required in the following cases:

  • the replacement of an absent worker;
  • the replacement of a worker whose contract has been suspended for reasons other than a collective labour dispute (e.g. a suspension);
  • the filling of a position which has become vacant but where the successor has not yet begun work;
  • a work position subject to seasonal requirements;
  • work in a sector where permanent employment contracts are usually not used (namely the construction or entertainment industry, etc.).

However, the duration of an assignment contract cannot exceed 12 months, including a renewal, for the same worker in the same work position. A renewal can only be made twice for fixed-term contracts.  

Nevertheless, there are some exceptions:

  • a contract of a seasonal nature can exceed the 12-month limit;
  • the Minister in charge of Labour can extend the 12-month limit if it is in the interest of the workers who carry out activities which require highly specialised skills and a confirmed professional experience in the specialised field of activity.

Assignment contracts concluded in violation of the contractual terms and conditions will automatically be redefined into a permanent employment contract.

It should be noted that the principle of renewal and the conditions of the renewal must be stipulated in a clause in the initial contract or be added in a subsequent appendix to the contract.

Payment of salaries and benefits

The temporary work agency alone is responsible for:

  • paying the temporary agency worker's salaries;
  • paying social security contributions;
  • paying tax charges.

The salary of a temporary agency worker cannot be lower than the salary to which, after the trial period, a (salaried) worker with the same qualification (or with equivalent qualification) would be entitled to if he was hired under the same conditions with a permanent employment contract by the user company.

If the user company does not employ a permanent worker with the same or equivalent qualification as the temporary agency worker, the temporary worker's salary cannot be lower:

  • than the salary stipulated by collective agreement in the sector of activity of the temporary agency worker, or;
  • than the salary paid to a permanent worker with the same qualification (or equivalent qualification), in the same work position in another company.
It should be noted that if the user company upgrades the salaries of their permanent staff during the assignment contract, the user company must notify the upgrade to the temporary work agency. These upgrades have to be immediately applied to the temporary agency worker as well.

Length of service of the temporary agency worker

The temporary agency worker's length of service is calculated by adding up the periods during which the worker has carried out assignment contracts for the temporary work agency.

Relations between the user company and the temporary agency worker

Access to the user company

A temporary agency worker must be able to access the user company under the same conditions as the permanent staff of said company.

This access includes access to collective facilities made available to the user company's internal staff such as:

  • catering facilites;
  • means of transport.

Hygiene and safety conditions

During the temporary worker's assignments, the user company is fully responsible for the respect of hygiene, safety and health measures in the workplace.

The user company therefore has to ensure the proper application of standards regarding the conditions of work and protection of the workers, whether these standards are:

  • legal;
  • regulatory;
  • conventional.

Leave for the temporary agency worker

The temporary agency worker is entitled to paid annual leave during each assignment contract, irrespective of the contract's duration.

The temporary agency worker is therefore entitled to apply for annual leave during each assignment contract. The duration of the annual leave cannot be in relation to the duration of each assignment contract.

The worker can request leave in kind from the user company in proportion to the duration of the assignment at the user company.

In principle, recently hired workers have to wait for 3 months before they can apply for leave. This waiting period does not apply to temporary agency workers.

Duration of the assignment contract

If, at the end of the assignment contract, the temporary agency worker continues work for the user company, the temporary agency worker is deemed to be bound to the user company by a permanent employment contract provided:

  • no new labour supply contract has been concluded between the user company and the temporary work agency;
  • the user company continues to employ the temporary agency worker without signing an employment contract with the worker.

In this case, the worker's length of service is taken into account from the 1st day of his assignment with the user company. If a trial period is foreseen, the length of service will be reduced by the duration of the trial period.

Expiry of the assignment contract

At the end of the assignment contract, the user company must wait for a period equivalent to one third of the duration of the assignment contract before it can fill the same position with a worker with a labour supply contract or with a fixed-term employment contract.

It must be noted that the temporary work agency is not required to reuse the same temporary agency worker for the same position. The position can be filled by any other qualified person.

The grace period cannot be avoided by supplying a new temporary agency worker or by concluding a new labour supply contract with another temporary work agency.

It is only allowed to employ a person under a permanent employment contract.

However, the time limit will not apply in the event of:

  • a new absence of the replaced employee;
  • urgent work;
  • a seasonal contract;
  • a contract for a job which is usually never filled by a person with a permanent employment contract;
  • early termination by the worker under a labour supply contract;
  • prior refusal by the worker to renew the assignment contract, if said contract originally stipulates a renewal clause.

Hiring the temporary agency worker

If the user company hires the temporary agency worker, the duration of the assignments carried out during the year prior to the recruitment will be taken into account when calculating the seniority of the worker.

The period of seniority (or length of service) will be deducted by the duration of the trial period which may apply in the event where the temporary agency worker will be hired to work in the same job.

Statement of assignment contracts for the administration

The temporary work agency is required to provide the Minister in charge of Labour within the first 8 days of each month with a statement of the assignment contracts concluded over the previous month.

Each temporary work agency must specify:

  • the characteristics of each labour supply contract;
  • the characteristics of each worker assigned by namely indicating:
    • name;
    • first name;
    • home address;
    • gender;
    • date of birth;
    • nationality;
    • the occupied position;
    • the economic activity of the user company;
    • the number of days worked;
    • the salary paid;
    • the social security contributions;
    • the leave allowance.

Jurisdiction of the courts

Because the labour supply contract is of a commercial nature, the competent jurisdiction is the district court in commercial matters.

The assignment contract is an employment contract and the labour tribunal is the competent court in the event of disputes.

Who to contact

Ministry of the Economy

B.P. 535 - L-2937 - Luxembourg
Luxembourg
Phone: (+352) 247-74700
Fax: (+352) 247-74701
Email info.pme@eco.etat.lu

Opening hours
The telephone helpline is open Monday to Friday, from 13.00 to 17.00 (not on public holidays).
26, rue Zithe

Postal box L-2939 Luxembourg
Phone: (+352) 2478 6100
Fax: (+352) 2478 6108
Email info@mte.public.lu