Temporary agency work

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Summary:

Temporary work is a triangular relationship between the temporary agency worker, the temporary work agency and the user company.

In a temporary employment relationship, the temporary work agency enters into two contracts simultaneously:

  • an assignment contract with the temporary agency worker; and
  • a labour supply contract with the user company.

Who is concerned

Three categories of persons:

  • the temporary agency worker:
    • bound by an employment contract called an 'assignment contract' with the temporary work agency; and
    • sent on assignment to a company using temporary staffing services;
  • the temporary work agency is bound by: 
    • an assignment contract with the temporary worker; and
    • a labour supply contract with the user company that purchased the temporary agency work;
  • the user company:
    • which is bound to the temporary work agency by the 'labour supply contract', which is a contract of a commercial nature; and
    • which welcomes the temporary agency worker into its company.

Prerequisites

The user company may only use the labour supply contract to perform:

  • a specific task; and
  • limited in time.

The position which was created cannot serve the purpose of ensuring a normal and permanent activity within the user company.

Failing this, the temporary work agency and the user company may face criminal charges.

Preliminary steps

You cannot carry out your activity without first obtaining two authorisations:

  • a business permit from the Ministry of the Economy;
  • an authorisation from the Ministry of Labour.

To save time, you can submit both requests at the same time.

If you carry out your activity without prior authorisation, you may be subject to criminal penalties.

Before resorting to temporary work, the business manager must consult:

  • the joint works committee; or
  • failing that, the staff delegation.

How to proceed

Job offers

In its job offers, the temporary work agency must clearly and unambiguously state:

  • its company name; and
  • the temporary nature of the job offer.

Contractual terms

The assignment contract:

  • is an employment contract; and
  • must be drawn up in writing for each of the employees made available.

The contract must be given to the worker at the latest within 2 working days after their assignment. Failing this, the temporary work agency and the user company may face criminal charges.

In the event that no written contract is concluded, the employee is entitled to compensation in lieu of notice from the temporary work agency. This compensation is intended to offset the lack of notice to which the employee would have been entitled if the rules had been followed.

It should be noted that the temporary work agency established abroad must respect the regulations which apply to Luxembourg employment agencies if the assignment contract stipulates that the temporary agency worker must carry out the assignment for a user company established in Luxembourg.

Mandatory information

The assignment contract must include:

  • the mandatory information that forms the basis of the fixed-term employment contract;
  • the end date, if the contract is concluded for a fixed period of time;
  • the minimum duration for which it is concluded, if the contract does not have an expiry date;
  • the name of the absent employee, if the contract is concluded to replace an absent employee;
  • 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 authorised.

Any clause in the assignment contract that prohibits the temporary agency worker from entering into an employment contract with the user company following their temporary assignment is null and void.

With some exceptions, an assignment contract is automatically converted into a permanent contract if:

  • it has been agreed verbally; or
  • it has been concluded for a period exceeding 12 months:
    • for the same position; and
    • for the same worker; and
    • including renewals; or
  • it does not specify that it is a fixed-term contract.

In the absence of a written document specifying that the assignment contract was concluded for a fixed term, the temporary work agency must pay its employee compensation in lieu of notice. The compensation is to be calculated based on length of service.

Notice period based on the employee's length of service
Employee's length of service Notice period to be complied with
less than 5 years 2 months
from 5 to less than 10 years 4 months
10 years and more 6 months

Duration of the assignment contract

General principles

In principle, the assignment contract:

  • must have a precisely defined end date from the outset;
  • may not exceed 12 months, including renewals, for the same employee in the same position;
  • can only be renewed twice for a fixed period.

It should be noted that the principle of renewal and the conditions for renewal must be subject to:

  • a clause in the original contract; or
  • a subsequent amendment to this contract.

Any contract concluded in violation of the conditions relating to the fixed term of the contract shall automatically be reclassified as a permanent contract (CDI).

Exceptions:

Open-ended contract

In some cases, the assignment contract is concluded without a specific end date, but with a minimum duration:

  • in the event of replacing an absent employee (due to illness, dismissal, vacancy before the successor takes up their position, etc.);
  • for seasonal work;
  • work in a sector where permanent employment contracts are usually not used (notably the construction or entertainment industries, etc.).

The contract will therefore run:

  • until the return of the absent worker; or
  • until the fulfilment of the purpose for which it was concluded (e.g. seasonal employment).

For example: in the case of replacement of an absent worker, the assignment contract begins on 1 February of year X and expires when Mr Y, currently on sick leave until 30 September of year X, returns to work. The contract is therefore concluded for a minimum duration of 8 months.

Contract for more than 12 months

The duration of an assignment contract may exceed 12 months in case of:

  • a seasonal contract;
  • the Minister of Labour may extend the maximum period of 12 months in the interests of employees who perform activities requiring:
    • highly specialised skills; and
    • proven professional experience in that specialisation.

Trial period

The assignment contract may include a trial period whose duration will vary depending on the duration of the assignment.

Trial period based on the duration of the assignment
Duration of the assignment Maximum duration of the trial period
Less than or equal to 1 month 3 working days
More than one month and less than or equal to 2 months 5 working days
More than 2 months 8 working days

Each assignment contract may only include one trial period.

Please note that if the temporary work agency hires the worker for an identical task after the assignment, the new work 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 mail; or
  • by delivery in person of the resignation with a counter-signature on the copy of the letter of resignation;

No notice period is required and no compensation is payable to the temporary agency worker.

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.

Termination of the contract after the trial period

Once the trial period has ended, neither the temporary work agency nor the temporary agency worker may terminate the contract, except in the event of serious misconduct by one of the two parties.

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

Termination of the contract by the temporary work agency

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 must be:

  • an amount equivalent to the salary which would have been paid to the worker until the end date initially agreed on in the contract;
  • limited to the amount the agency worker would have received if he had been dismissed with notice within the framework 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 pay. However, in this case, the rules governing dismissal with notice provided for in the case of a permanent contract shall apply. Salaried workers with less than 5 years of service are therefore only entitled to a 2-month severance package.

Termination of contract by the temporary agency worker

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 amount of damages:

  • must correspond to the actual damage suffered by the company; and
  • may not exceed the amount of salary corresponding to the length of the notice period that would have been required of the employee if the contract had been a permanent employment contract.

Payment of salaries and benefits

The temporary work agency is solely responsible for the payment of:

  • the temporary agency worker's salary; and
  • the social security contributions; and
  • tax charges.

The temporary agency worker's salary cannot be lower than that which a permanent employee of the user company would be entitled to:

  • after the trial period; and
  • with the same or equivalent qualifications.

At the end of every month, the temporary work agency must give the temporary agency worker a detailed and accurate statement showing how the salary was calculated. This statement must indicate:

  • the period of work; and
  • the total number of working hours corresponding to the remuneration paid; and
  • the rate of pay for the hours worked; and
  • any other remuneration in cash or in kind.

Salary increases applied to permanent staff of the user company during the term of the assignment contract must be:

  • reported to the temporary work agency; and
  • applied immediately in favour of the temporary agency worker.

Length of service of the temporary agency worker

All periods during which the temporary agency worker was linked to the temporary work agency by assignment contracts must be taken into account to calculate the length of service of a temporary agency worker.

Statement of assignment contracts for the administration

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

The temporary work agency must specify:

  • the characteristics of each labour supply contract;
  • the characteristics of each worker made available, including:
    • the worker's first and last names, address, gender, year of birth, and nationality;
    • the occupied position;
    • the user company’s economic activity;
    • the number of days worked and the remuneration paid;
    • the social security contributions;
    • the leave allowance.

Contractual terms

The labour supply contract must be concluded:

  • in writing between the temporary work agency and the user company; and
  • within three working days of the temporary agency worker being made available; and
  • separately for each worker.

Failing this, the temporary work agency and the user company may face criminal charges.

Mandatory information

This contract must include:

  • the reason for which the temporary agency worker is called upon;
  • in case of a replacement of an absent worker, the name of that 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 schedule;
  • the salary received by an equivalent worker in the user company.

Any clause in the labour supply contract preventing the user company from hiring the temporary agency worker after the temporary work assignment is null and void.

Mandatory information

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

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

This information must be communicated by the temporary work agency to the temporary agency worker before sending them on assignment.

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

  • the assignment contract's end date;
  • any ministerial refusal to extend their business permit;
  • the ministerial withdrawal of their business permit.

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 which are available to the user company's internal staff such as:

  • catering facilities; and
  • means of transport.

Hygiene and safety conditions

During the temporary agency worker's assignment, the user company is solely responsible for complying with all conditions of:

  • hygiene;
  • safety;
  • occupational health.

The user company therefore has to ensure the proper application of all standards regarding working conditions and protection of workers.

Leave for the temporary agency worker

Temporary agency workers are entitled to statutory annual leave for each assignment, regardless of its duration.

The duration of the annual leave is independent of the duration of each assignment contract.

Temporary agency workers may take their leave in kind or in cash from the user company:

  • in proportion to the duration of their assignment; and
  • as soon as they enter service.

Unlike newly hired permanent employees, temporary agency workers are not required to wait for a three-month trial period before taking days off.

End of the assignment contract and hiring of the temporary agency worker

At the end of the assignment contract, the temporary agency worker and the user company may decide to continue their working relationship:

  • without drawing up a new contract: in this case, the worker is considered to be bound to the user company by a permanent employment contract (CDI);
  • upon conclusion of a new contract (permanent or fixed-term) and the actual hiring of the worker.

In these two cases, the temporary agency worker's length of service is taken into account from the first day of the assignment with the user company. Where applicable, this length of service will be deducted from the duration of the trial period.

Expiry of the assignment contract

Upon expiry of the assignment contract, i.e. when it automatically ends due to the passage of time, the user company must observe a waiting period equivalent to one third of the assignment contract before filling the same position again within the framework of:

  • a labour supply contract; or
  • a fixed-term employment contract.

This waiting period cannot be circumvented by:

  • the assignment of a new temporary agency worker; or
  • the conclusion of a new labour supply contract with a new temporary work agency.

Only permanent contracts are permitted, except in the following cases:

  • the renewed absence of the replaced employee; or
  • urgent work; or
  • seasonal contracts; or
  • a contract intended to fill a position in a sector where it is not customary to use permanent contracts; or
  • early termination by the temporary agency worker under an assignment contract; or
  • prior refusal by the temporary agency worker to renew the assignment contract, if said contract originally stipulates a renewal clause.

Please note that the temporary work agency is not required to use the same temporary agency worker for the same position. The position can be filled by any other qualified person.

Jurisdiction of the courts in the event of disputes

The assignment contract between the temporary agency worker and the temporary work agency is an employment contract. The labour tribunal therefore has jurisdiction in case of a dispute between these parties.

The user company is bound to the temporary work agency by the labour supply contract which is a contract of a commercial nature. The district court or magistrate's court therefore has jurisdiction in disputes between these two parties, depending on the amount in dispute.

Who to contact

2 of 6 bodies shown

Ministry of the Economy General Directorate for SME, Administrative Simplification, Craft and Retail (Business Permit department)

Address:
Luxembourg
B.P. 535, L-2937 Luxembourg
Phone:
(+352) 247 74 700
Monday to Friday from 9.00 to 12.00 and from 13.30 to 16.30 (except on public holidays)
Email address:
info.pme@eco.etat.lu
Website:
https://meco.gouvernement.lu/en.html

Related procedures and links

Procedures

Links

Further information

FAQ - Travail intérimaire

sur le site de l’Inspection du travail et des mines (ITM)

Legal references

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