License

Reasons for denial of a license to operate a temporary employment agency (part I)

The office of the Federal Employment Agency (Bundesagentur für Arbeit) in charge decides on the granting of a license to operate a temporary employment agency (read more…). Sec. 3 (1) of the German Law on Temporary Employment (AÜG, Arbeitnehmerüberlassungsgesetz) lists the reasons for which the Federal Employment Agency can deny and/or revoke the license. Please see two related documents here and here where we explain the several reasons.

 

Failure to comply with regulations

If facts justify the assumption that the temporary employment agency is unreliable, the Federal Employment Agency may deny the license. The term ‘reliability’ does not have a precise legal definition. Sec. 3 (1) AÜG initially lists a number of conditions under which the applicant must be assumed to be unreliable.

The use of the expression ‘in particular’ suggests that this provision is not exhaustive, but only contains an exemplary list.

Pursuant to sec. 3 (1) no. 1 AÜG, a person is deemed to be unreliable who violates in particular the following regulations:

  1. All social security regulations in the field of health, pension, accident, care and unemployment insurance
  2. Reporting and notification obligations and in particular the obligation to pay social security contributions
  3. Withholding and payment of wage tax, failure to pay other taxes, such as value-added tax
  4. Regulations concerning temporary employment agencies pursuant to sec. 14 I 1 of the Trade, Commerce and Industry Regulation Act (GewO, Gewerbeordnung), sec. 292 et seqq. of the Third Book of the Code of Social Law (SGB III, Sozialgesetzbuch (SGB) Drittes Buch (III)) and, for instance, the honouring of agency vouchers pursuant to sec. 421g SGB III
  5. Regulations concerning the employment of foreign employees, for instance, pursuant to sec. 6 (1) no. 2 of the Work Permit Regulation (ArGV, Arbeitsgenehmigungsverordnung) and sec. 40 (1) no. 2 of the Act on the Residence, Economic Activity and Integration of Foreigners in the Federal Territory (AufenthaltsG, Gesetz über den Aufenthalt, die Erwerbstätigkeit und die Integration von Ausländern im Bundesgebiet)
  6. Health and safety regulations under public law, pursuant to the Working Hours Act (ArbZG, Arbeitszeitgesetz), the Law for the Protection of Mothers During Work, Training and Studies (MuSchG, Gesetz zum Schutz von Müttern bei der Arbeit, in der Ausbildung und im Studium), the Law for the Protection of Youths at Work (JArbSchG, Gesetz zum Schutze der arbeitenden Jugend) as well as accident prevention regulations pursuant to sec. 11 VI AÜG.
  7. Statutory maximum daily working hours pursuant to the ArbzG

The use of the expression ‘in particular’ suggests that this provision is not exhaustive, but only contains an exemplary list.

Pursuant to sec. 3 (1) no. 2 AÜG, the license must be denied if the temporary employment agency is unable to properly fulfil the usual obligations of an employer in terms of how the business is organised. (read more…)

The license can also be denied if the temporary employment agency fails to provide to the temporary employee the working conditions (equal treatment and equal pay – read more…) including remuneration to which the temporary employee is entitled pursuant to sec. 8 AÜG. (read more…)

 

However, not every violation of one of these regulations automatically means denial or non-renewal of the license. For example, occasional accounting errors during holidays or illness alone will not result in denial of the license.

 

See Part II and Part III for more reasons that can lead to denial of the license to operate a temporary employment agency.

 

 

Picture credits: Photo by John Matychuk on unsplash.com