goetzpartners on the legal risks of personnel leasing
Most companies have been employing a growing number of external staff for some years – particularly in the IT, organization and sales sectors. This external support is becoming increasingly integrated into companies. As a result, this type of employment often infringes on the legal requirements of the Law on Temporary Employment (Arbeitnehmerüberlassungsgesetz – AÜG).
“When making a ruling, the contractual relationship in practice is more decisive for the courts than the contractual regulations on paper,” explains Markus Schmid, Managing Director and Head of Restructuring at goetzpartners. In his speech today at the 10th Handelsblatt Annual Conference, he outlined the legal consequences of illegitimate personnel leasing and revealed the options for minimizing risks.
Using a sample project, Schmid explained how goetzpartners helps to successfully deploy external service providers in a completely legal way within companies. For instance, one leading German insurance company (30,000 employees in Germany) was able to achieve the following results:
- Supplier consolidation/Transparency in the procurement of external service providers
- Reduction in the proportion of external staff/Shortened deployment periods
- Price reductions