Temporary work: tips and pitfalls

Written by: Eglė Gliaudelytė, Jolanta Raudonytė; COBALT (Lithuania)

In Lithuania, as in other countries, the use of leasing or agency workers offers welcome flexibility to employers, especially when the workload is unpredictable. However, it is important to understand the legal requirements and restrictions on this type of work

“Employee leasing,” also described as “temporary employment,” can provide organizations with flexibility, especially when workloads and staffing needs vary. It can also help reduce the costs of recruitment and employment, human resource management and payroll accounting.

With the increase in remote work opportunities, the demand for agency workers is also on the rise. A foreign company seeking to recruit in Lithuania does not need to relocate its activities or register in Lithuania for tax purposes, as employees can be employed through a temporary employment agency.

However, there are many cases where the selected model of operations has characteristics of temporary work but is not considered temporary work.

For example, organizations often enter into a service agreement where they agree on the assignment of a specific employee to work for a client, the location and hours of work, the nature of the work, and compensation.

Some groups have also set up intra-group sharing agreements. An employee is employed by a company but works for several companies of the group, which assures him of sufficient work. Sometimes an employee of one organization works for another that has the equipment and supplies needed to do the job.

In other cases, a foreign national is employed by a company to which simplified conditions for the employment of foreign workers apply, although the employee performs his duties for another employer.

However, not everyone is aware that practical solutions such as these must comply with specific legislative requirements. For example, if you are not on the official list of temporary employment agencies, you are not eligible to perform temporary work. If you do so, the head of your organization may incur administrative liability for participating in illegal business activities.

In addition, not only will you be fined, but you could also have the products produced in this activity and the income generated from this activity confiscated.

When an employee works for a company other than the one for which they were employed, or when the rules of employment of foreign workers are violated, it is illegal work. Consequences for the sanctioned employer go beyond financial penalties and may include restrictions on hiring foreign workers, exclusion from public procurement procedures, ineligibility for government subsidies, benefits or aid. State. The continued provision of these services becomes a “ticking time bomb” that will sooner or later lead to unwanted liability.

Do you operate as a temporary work agency?

Check if your activity includes the following elements of the interim:

  • A company engaged in employee leasing is an employer of record. If your duties as an employer are limited to concluding, modifying and terminating an employment contract, paying wages and other costs, you are most likely acting as a temporary work agency. In making this assessment, the courts also consider whether the company is engaged in the type of activity to which the role of the assigned employee is assigned.
  • Reports. If you do not exercise control over the work process, the employee complies with the instructions and internal rules of the client, the client provides the employee with work equipment, it is likely that the client acts as a user company.
  • Remuneration. If the client reimburses the employer’s costs on salary, vacation pay, employee severance pay, it is likely that there is a temporary employment relationship.

For example, an employer argued in litigation that its employee took instructions from the customer, worked under the supervision of the customer, used equipment provided by the customer, and that the service agreement between the parties provided that ‘the client will arrange the whole working process from start to finish’.

However, the court of first instance did not consider that the elements necessary for the existence of a temporary employment relationship had been met. According to the facts of the case, the client did not carry out any real supervision, did not give instructions or directives to the employee; in other words, he did not organize the work process from start to finish and the employee complied with the verbal instructions of the other employees of the employer.

What else do you need to know?

This type of relationship is characterized by the sharing of the role of employer between the temporary work company and the user company and the obligation to respect specific obligations.

The temporary work agency is obliged to pay the temporary worker the same salary that he would receive if he were permanently employed by the user company. The user company is also subsidiarily responsible for compliance with this requirement.

It follows that if the employee does not receive the appropriate salary from the temporary work company, the employee can claim it from the user company.

The user enterprise must create the same working and employment conditions for workers employed through a temporary work agency as for its permanent employees. This requirement applies to wages, working and rest time and leave entitlements.

Temporary workers must also have access to collective facilities, such as canteens, childcare and transport services, on the same basis as other employees, unless there are objective reasons justifying different conditions. .

Before agency workers start work, they must be informed by the user company of the working conditions, work regulations and must be informed of the potential risks associated with the work they will be performing, including qualifications, skills or specific medical checks necessary. .

The responsibility for the user’s failure to comply with the commitment to implement measures guaranteeing health and safety at work is also shared by the temporary work agency. The position adopted by the case law of the courts is that in the event of an accident at work, it is necessary to assess whether the employer (temporary work company) and the user company have correctly fulfilled their obligations, that is i.e. whether they exercised sufficient control over employees’ compliance with health and safety requirements.

The temporary work agency cannot prevent the temporary worker from taking up employment with the user company and is not authorized to prevent the latter from employing the temporary worker. Any agreement prohibiting use and/or imposing penalties for violations of such prohibitions is invalid.

The user company is prohibited from replacing its employees dismissed without fault by temporary workers. The prohibition aims to prevent abuse by employers and their attempt to avoid dismissal procedures and the resulting financial consequences, i.e. severance pay. Employees dismissed under these circumstances may request a declaration of illegality of their dismissal from the Labor Disputes Commission.

If there is no agreement in place on the transfer of the intellectual property created by the employee for the user company, the owner of the intellectual property will be the direct employer: the temporary work agency.

Conclusion

Although temporary employment may seem like a tricky and complicated process, employers find this option more convenient, as projects vary and business needs change. However, it is important to understand the law and take the right approach.

#agency workers #employeeleasing #employerofrecord #employmentrights #Lithuania


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