What contracts are draws up for persons on temporary work?

Temporary work involves three categories of people:

• the temporary employment agency;
• the temporary worker;
• the company using temporary work services.

Within this triangular relationship, contractual links exist between:

• the temporary employment agency and the temporary worker: this is an employment contract known as an “assignment contract”;
• the temporary employment agency and the user company: this is a commercial contract known as a “labour supply contract”.

What is a labour supply contract?

The contract concluded between a temporary employment agency and a user company is called a labour supply contract.

Through this contract, the user company is provided with a temporary worker for a specific and non-permanent task, such as replacement of a sick employee, exceptional increase in the company’s activity).

The labour supply contract is a commercial contract, which means that in the event of a dispute between the temporary employment agency and the user company, the Commercial Court has jurisdiction to settle the dispute.

What is an assignment contract?

An assignment contract is a contract concluded between a temporary employment agency and a temporary worker, by which the latter undertakes to perform a task for a third company.

The assignment contract is a real employment contract, which means that the temporary employment agency, and not the user company, is the employer of the temporary worker.

In the event of a dispute, the parties must apply to the Labour Court.

It should be noted that an assignment contract must be concluded in writing and sent to the temporary worker no later than two working days after that person is made available.

If no written contract is concluded, the worker is entitled to compensation for notice from the temporary employment agency. The same applies if the contract does not state that it is concluded for a fixed term.

Can a trial period be included in an assignment contract?

Yes, just like an ordinary employment contract, an assignment contract can include a trial period.

The length of the trial period depends on the duration of the assignment contract:

• it can be a maximum of 3 days worked if the contract is concluded for a period of less than or equal to 1 month;
• it can be a maximum of 5 days worked if the contract is concluded for a period of between 1 and 2 months;
• it can be a maximum of 8 days worked if the contract is concluded for a period longer than 2 months.

Until the end of the trial period, either party may terminate the contract by registered letter, without giving any notice.

It should be noted that the trial period cannot be renewed within the same assignment contract. Furthermore, the assignment contract of a worker rehired by the temporary employment agency to perform an identical task for the same user company may no longer include a trial period.

What pay is a temporary employee entitled to?

The salary of a temporary employee paid by the temporary employment agency may not be lower than that to which an employee with the same or equivalent qualifications hired under the same conditions as a permanent employee by the user company would be entitled to after a trial period.

What is the maximum duration of an assignment contract?

Except for seasonal employment contracts, an assignment contract may not last longer than 12 months, including renewals, for the same temporary worker and for the same job.

If the employment relationship is continued after the expiry date, the contract is transformed into a permanent contract.

In this case, the employee’s length of service is taken into account beginning from the first day of his assignment with the user company.

Can an assignment be renewed?

Within the framework of the same assignment, the assignment contract may be renewed twice for a fixed period, without the total duration of the contract exceeding the 12-month limit.

The principle of renewal and the conditions relating to it must be indicated either in the initial contract or in a rider to that contract.

Can an assignment contract be terminated early?

No, an assignment contract must in principle be carried until the end of its term, except in the case of serious misconduct.

If the temporary employment agency terminates the contract prematurely, the temporary worker is entitled to damages corresponding to the wages he or she would have received until the end of the contract. However, the maximum amount a worker can obtain is limited to two months’ salary.

If the premature termination is caused by the temporary worker, the temporary employment agency is entitled to damages, provided that it has suffered actual damage. The maximum amount to be paid by the temporary worker is one month’s salary.

Can a user company hire the temporary worker at the end of the assignment?

Yes, it must be expressly stated in the assignment contract that the hiring of the worker by the user company at the end of the assignment is permissible.

When a user company hires a temporary employee, the duration of the assignments carried out during the year preceding the hiring is taken into account for determining that employee’s seniority; if applicable, it is deducted from the trial period that may have been included.

Can two successive assignment contracts be concluded with the same temporary worker for the same job?

If an assignment contract has reached the maximum duration of 12 months or if the parties have already renewed it twice, it is not possible to immediately conclude a new contract with the same temporary worker, or even with another temporary worker, to fill that position again.

Before doing so, a period corresponding to one third of the duration of the initial assignment contract must elapse, including renewals. This period is generally referred to as the ‘waiting ‘cooling-off period’.

Only in certain specific cases may this waiting cooling-off period be dispensed with, such as renewed absence of a replaced employee, urgent work, seasonal contract or other.

Which law is applicable to cross-border temporary work?

In order to protect temporary workers, the above provisions must be applied if a temporary employment agency established abroad concludes a labour supply contract and an assignment contract with the aim of employing a worker with a company operating on Luxembourg territory.

It is also Luxembourg law that governs the assignment contract concluded by a temporary employment agency established in Luxembourg for work to be carried out abroad.