EMCC European Monitoring Centre on Change

Temporary sublease of employees

Luxembourg
Phase: Management
Típus:
  • Fostering mobility
Utoljára módosítva: 18 August, 2020
Név:

Prêt temporaire de main-d'oeuvre

Angol név:

Temporary sublease of employees

Coverage/Eligibility

As defined in article L. 132-1 of the labour code, the ‘prêt temporaire de main d'oeuvre’ is limited to companies that are not temporary work agencies that, with prior authorisation from the Ministry of Labour and Employment on the advice of the Public Employment Agency (ADEM) may put on lease their employees with another employer for a limited period of time and in the following limited circumstances:

  • threat of layoffs or under-employment;
  • performance of casual work (provided that the receiving company is not capable of performing the tasks itself and that the receiving company belongs to the same branch of activities than the sending company);
  • company restructuring in the context of a group of companies;
  • implementation of another legal measure, the Job Retention Plan (plan de maintien de l'emploi).

Main characteristics

Framed within rather restrictive conditions, the use of temporary sublease of employees means that, in practice, workers are sent by their initial and legal employer – the sending company –  to work for a third party – the receiving company. This third party can be a company, but it may also include public authorities such as public agencies or local authorities in limited and strict circumstances. These limitations are mainly linked to the fact that public institutions often do not have an independent budget to decide whether to welcome additional workers. 

The instrument is considered as a tool used in times of fluctuating economy, to respond to the common needs of two companies: one which temporarily lacks work and the other one which temporarily experiences a rise in demand and therefore needs more workforce. As such, the prêt temporaire de main d’oeuvre permits the safeguarding of jobs: the worker who is temporarily no longer needed in their original company will provisionally move to another company which needs extra workforce, and once this fluctuating period is over, they are supposed to return to their original company. Resorting to this mechanism helps to avoid the need of dismissing and re-hiring employees over time, and appears to be advantageous both for employees who do not have to experience unemployment and for companies which save the costs of dismissals and recruitment processes. 

Outside the four limiting conditions mentioned in article L. 132-1 of the labour code, the law offers the possibility for the Minister of Work, Employment, Social and Solidarity Economy to exceptionally authorise employers, for the duration he determines, to sublease their employees provided that this sublease is covered by an agreement between social partners. The Minister of Work, Employment, Social and Solidarity Economy makes this decision on the basis of a reasoned request.

To be accepted, this request must be:

  • jointly presented by the sending company and the receiving company, and
  • accompanied by the opinion of employee representatives from the sending and the receiving companies.

However, this prior authorisation can be bypassed. If the duration of the temporary sublease does not go beyond eight weeks – successive or not – within a six-month reference period, a mere prior notification can be addressed to the Public Employment Agency (ADEM) jointly by the sending and the receiving companies. In practice, the authorisation is granted very quickly – approximately within a week – and is rarely denied, except in cases when a provisioned condition is not respected.

Regarding the duration of the sublease, due to its temporary nature, the request must state a limited period of time. However, this duration is very variable and can go from a few weeks to several months, depending on the reason why temporary sublease of employees was used.

In the event of temporary sublease, the employment contract between the employee and his company of origin is maintained without any loss of salary for the employee. There can be no discrimination: the remuneration paid by the sending company to its subleased employees cannot be below that paid to permanent employees with the same or equivalent professional qualifications in the receiving company (Art. L. 132-2). 

Financial support can be granted exclusively under the implementation of an Job Retention Plan. As explained above, when subleasing an employee, the sending company has to pay the wage corresponding to the position filled in the receiving company. If this involves a salary increase, the Ministry finances through the Re-Employment Help a variable proportion of the wage which is the difference between the wage of the receiving company and 90% of the previous wage the employee perceived in the sending company. These public subsidies for wage maintenance can last a maximum of four years.

Funding

  • National funds
  • Employer

Involved actors

National government
Minister of Work, Employment, Social and Solidarity Economy
Public employment services
Public Employment Agency (ADEM)

Effectiveness

Implemented with the objective of safeguarding jobs, the ‘prêt temporaire de main d’oeuvre’ is meant to produce positive effects on two levels. First, it helps to improve the labour market and the economy at the macro level, but also influences working conditions. 

Originally, the ‘prêt temporaire de main d’oeuvre’ was introduced as a bridge between companies who could lend workforce to each other according to their needs. This was particularly suited to Luxembourg if we consider the size of the territory, as most of the companies know each other and it is therefore easier to collaborate. As a consequence, this scheme helps to prevent companies from dismissing employees when they know that they experience a cyclical crisis in the short-term and not a structural one, and that they might therefore have to re-hire employees.

As a side effect, it also encourages the cooperation between companies established in Luxembourg and helps to create networks.

Strengths

This scheme helps to prevent companies from dismissing employees when they know that they experience a cyclical crisis on the short-term and not a structural one, and that they might therefore have to re-hire employees.

The main effect for workers who are subleased and work for a different company under this scheme is that they experience a change in their working conditions. The receiving company does not necessarily have the same mode of functioning than the sending company, and workers will have to adapt to these changes, whether they are positive or negative. For instance, workers might experience a change in their work schedules or in the internal rules applicable within the company.

This can be considered as a positive aspect in that it increases the workers' employability and stimulates them. It is indeed seen as a way of gaining new experiences and skills as workers often have to adapt to other technologies and work processes that are different from the ones they used in their company of origin.

The greatest advantage resides in the fact that the sublease provides them job security. At the end of the provisional period, they either rejoin their company of origin as if they have always worked for this one, or they will be integrated to the permanent staff of the host company. The 'prêt temporaire de main d'oeuvre' can be effective on this aspect, as there is no report that, after the sublease period, employees end up being dismissed.

From the companies' point of view, the 'prêt temporaire de main d'oeuvre' also has benefits. It prevents them from frequently going through dismissals and recruitment processes and hence saves costs. Likewise, companies manage to keep their qualified and trained workforce, even if they have to temporarily send them to another company. For receiving companies, the period during which the temporary sublease takes place can also be used as some sort of trial period, during which they can test the employee and decide to employ him directly after this period or not.

Weaknesses

No study on the measure has yet been conducted.

There is no intermediary body which coordinates the working relationship between the companies. It is up to the sending companies experiencing downturns to find a receiving company that would welcome some employees for a certain period of time. Companies also have to present jointly the request for implementing the 'prêt temporaire de main d’oeuvre' to the Minister of Work, Employment, Social and Solidarity Economy. Even if there is some support to encourage exchange between companies, it could be tricky to convince companies in the same field of activity that they can use workforce hired by their competitors.

Példák

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