A temporary employment relationship is a triangular relationship which involves the establishment of 2 different contracts in parallel: the assignment contract between the 'temp' agency and the worker, and the labour supply contract between the agency and the user company.
Who is concerned
This type of working relationship involves 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 an 'assignment contract' with the agency, and is hired out to the user company which purchased temporary agency work;
- 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 is bound to the temporary work agency by the labour supply contract which is a contract of a commercial nature.
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.
Procedures for the temporary work agency
A temporary work agency can only operate after having obtained 2 business permits:
- a business permit issued by the General Directorate for Small and Medium-Sized Enterprises at the Ministry of the Economy;
- and the authorisation to be issued by the Minister in charge of Labour.
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
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-day 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.
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 work schedule;
- 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 needs to hire a temporary agency worker.
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;
- 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
The job offers posted by the temporary work agency must indicate, clearly and unequivocally:
- the company name of the temporary work agency;
- the temporary nature of the job offer.
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 assigned.
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 fixed period of time: its end date;
- if there is no end date: the minimum duration for which the contract is concluded;
- if the purpose of the contract is in relation with the replacement of 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-day deadline to conclude the labour supply contract or;
- the assignment contract is not concluded in writing.
It must be noted that the assignment contract is automatically changed into a permanent employment contract in the event that:
- the assignment contract was concluded verbally;
- the assignment contract does not stipulate that it is concluded for a fixed term.
In both these cases, managers of temporary work agencies must pay compensatory damages in lieu of notice to their temporary agency worker. The amount of these compensatory damages depends on the worker's 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
from 5 to less than 10 years
10 years and more
Existence and duration of a trial period
The assignment contract may include a trial period whose duration will vary depending on the duration of the assignment.
Duration of assignment
Maximum duration of the trial period
Less than or equal to 1 month
3 working days
5 working days
8 working days
Each assignment contract may 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 severance pay.
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 beyond the trial period
When the trial period is over, the contract can no longer be terminated by the agency or the temporary 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 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.
Duration of the assignment contract
In principle, the assignment contract must contain a precise end date from the moment it is drawn up.
Under exceptional circumstances, a precise end date of the assignment contract is not required in the following cases:
- replacement of an absent worker;
- replacement of a worker whose contract has been suspended for reasons other than a collective labour dispute (e.g. a suspension);
- filling a position which has become vacant but where the official successor has not yet begun work;
- seasonal work;
- work in a sector where permanent employment contracts are usually not used (notably the construction or entertainment industries, etc.).
However, the duration of an assignment contract cannot exceed 12 months, including a renewal, for the same worker in the same position. Fixed-term contracts may only be renewed twice.
Nevertheless, there are some exceptions:
- a seasonal contract can exceed the 12-month limit;
- the Minister for Labour can extend the 12-month limit if it is in the interest of workers carrying out activities which require highly specialised skills and a proven professional experience in the specialised field of activity.
Assignment contracts concluded in violation of the contractual terms and conditions will automatically be changed into a permanent employment contract.
Payment of salaries and benefits
The temporary work agency alone is responsible for:
- paying the temporary agency worker's salary;
- paying social security contributions;
- paying tax contributions.
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 equivalent qualification) would be entitled if the temporary worker were 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 position at another company.
Length of service of the temporary agency worker
The temporary agency worker's length of service is calculated by adding together the periods during which the worker has carried out assignment contracts for the 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 which are available to the user company's internal staff such as:
- catering facilities;
- means of transport.
Hygiene and safety conditions
During the temporary worker's assignments, the user company is fully and solely 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 working conditions and protection of workers, whether these standards are:
- foreseen by law;
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 take annual leave during each assignment contract. The duration of the annual leave is independent of 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 with the user company.
In principle, recently hired workers have to wait 3 months before they can request 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 to 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 them.
In this case, the 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 taken away from 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.
This 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.
However, the grace period will not apply in the event of:
- the renewed absence of the replaced employee;
- urgent work;
- a seasonal contract;
- a contract for a job for which permanent employment contracts are not the norm;
- early termination by the worker under an assignment 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 from 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:
- their name;
- their first name;
- their address;
- date of birth;
- 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 EconomyGeneral Directorate for Small and Medium-Sized Enterprises (Department for Authorisations of Establishment)
Postal address :
B.P. 535 / L-2937 Luxembourg
Phone : (+352) 247-74 700The telephone helpline is open Monday to Friday, from 9.00 to 12.00 and 13.00 to 17.00 (not on public holidays).