The history of temporary work

Temporary work, employee leasing, personnel leasing - History

Labour leasing and temporary employment agencies appear to be a thing of the last few decades, but in reality their history began more than 100 years ago. Labour was hired out as early as the 1920s and this was soon regulated by law.

The first beginnings in personnel leasing

In fact, the first law on the paid placement of labour was passed in 1922. This Labour Proof Act was then followed by the AVAVG in 1927, the Act on Labour Placement and Unemployment Insurance.

This was followed by an emergency decree issued by Reich President Paul von Hindenburg. On 6 October 1931, he decreed that temporary employment agencies, i.e. the agents of temporary workers, had to assume the full obligations of an employer. This was followed by a monopolisation of the placement of temporary workers under the National Socialists, which undermined the classic model.

Modern temporary work

It was only after the end of the Second World War that temporary work developed in the form we know it today, with a temporary employment agency providing labour for other companies. The idea itself spilled over to us from the USA. It happened there that a secretary in a lawyer's office fell ill and the two lawyers were unable to find a replacement for her quickly. Resourceful as they were, they recognised the potential that lay in the placement of workers.

Companies often experience staff shortages that cannot be compensated for with a larger permanent workforce. A larger workforce would simply mean higher costs, which is not economically viable. Instead, a company is needed that can help out with labour if necessary.

And so the idea was born and quickly took shape. In 1948, the two lawyers in question founded the first temporary employment agency under the name Manpower Inc. What works is often copied and soon temporary employment agencies were also founded in Europe. This happened from 1956 in Paris and London.

When temporary jobs came to Germany

The new wave of temporary work reached Germany in 1962, although it was not a German company that brought about this development, but a company from Switzerland called ADIA Interim, which provided temporary work internationally and now also wanted to operate in Germany.

It wasn't long before the first difficulties arose with temporary work. The Federal Labour Office held the monopoly on job placement. It now saw this monopoly threatened by ADIA Interim and filed a criminal complaint in court

The case made it all the way to the Federal Constitutional Court in Karlsruhe. There, in 1967, the course was set for the entire future of temporary employment in Germany in response to this development. This was done with the judgement that the supply of temporary workers is fundamentally compatible with the right to free choice of occupation.

The government also addressed the new problem and enacted the Act on the Regulation of Commercial Temporary Employment (AÜG). This primarily served to guarantee minimum social protection for temporary workers and stipulated the obligation to obtain a licence for the provision of temporary employment services.

Further regulations on temporary work

Further regulations followed over the years in response to individual developments on the market. In 1982, for example, the Temporary employment in the construction industry banned. This was the result of numerous violations of applicable laws in this industry. The duration of temporary workers was also increased for all other sectors in 1985. Whereas a maximum of 3 months applied before this time, the new regulation stipulated a maximum of 6 months. This was intended to make temporary work itself more attractive for all parties involved, i.e. intermediaries, hirers and the temporary workers themselves.

But even the 6 months still restricted the supply of temporary workers too much. For this reason, the maximum permissible period was extended to 9 months in 1994. In the same year, the monopoly of the Federal Labour Office in the field of job placement was also ended. This meant that commercial employment agencies were now also permitted.

However, it is interesting to observe how the maximum duration of temporary employment has increasingly become the focus of temporary work. After all, it only took until 1997 for a reform of the AÜG to increase the maximum to 12 months. However, anyone who thinks that this is the last time we will be looking at the duration of temporary employment is way off the mark.

This was followed by legislation on modern labour market services. In the course of this, the maximum duration of temporary employment was extended to 24 months. The Mittelstandsvereinigung Zeitarbeit e.V. (MZV) was also founded.

"Hartz proposals"

Then came the so-called "Hartz proposals" in 2004. These abolished the maximum duration for temporary employment. The ban on synchronisation and the ban on re-employment also disappeared. In return, however, equalisation of key working conditions was introduced, particularly with regard to pay.

However, there is a loophole for the principle of equal treatment. This equal treatment principle can be replaced by a collective labour agreement. There have been enough such collective agreements between the parties in the temporary employment sector to make the situation a little confusing.

The EU intervenes

With the growing importance of temporary work, the European Parliament also felt compelled to take action in this area. To this end, it adopted a directive on temporary employment on 22 October 2008. This directive defines the terms of temporary work and specifies how the commercial hiring out of workers may take place.

The two most important points in the directive are "equal pay" and "equal treatment". This means that there is a clear demand for equal treatment of temporary workers and permanent staff in terms of both pay and working conditions.

Reform of the AÜG in Germany

In Germany, it took until 2011 for a reform of the AÜG adapted this to the provisions of the EU directive. A wage floor was also introduced, which is generally binding. This means that, in principle, it is still possible to deviate from equal treatment with the core workforce by means of a collective agreement. However, the wage floor ensures that existing wages cannot be undermined too far.

The reform also introduced the "revolving door clause". This states that it is possible to send a temporary worker to an employer with whom this temporary worker was still employed as a permanent employee in the last 6 months before the loan.

In addition, the wages of temporary workers must be adjusted to the level of the wages of permanent workers on site in order to meet the Equal Pay to be complied with. This applies to all temporary workers for whom there is no deviating collective agreement. A one-year deadline was set for this, which expired in 2012. This resulted in a number of new collective agreements being concluded.

Conclusion

Temporary employment as a commercial Recruitment has existed in Germany since the 1920s and has been regulated by law several times. In its current form, however, it has existed as a new business model since 1948, when a corresponding temporary employment agency was founded in the USA.

From America, temporary work soon made its way to Europe and arrived in Germany via Switzerland. Over the years, confirmed by court judgements and regulated by law, the importance of temporary work grew until it also came to the attention of the European Parliament. Reformed again by an EU directive, it took on the form we know today.

The principle of equal treatment with the permanent workforce is at the centre of temporary employment and its regulation. This includes equal pay and the same working conditions. However, a collective agreement can deviate from this, even if there are legal restrictions with regard to remuneration.

Looking for temporary workers?

Are you looking for skilled or unskilled labour as temporary workers? We as Personnel service provider we provide skilled labour for industry, IT, Engineering, Medicine, automotive industry, industrial assembly and plant engineering, pipework construction, steel construction, Electrical engineering, Locksmith Welders, Production employee, workers for the Logistics & Transport.