The temporary agency clause in the employment contract of a temporary worker remains a much-discussed topic in employment law. Especially in the case of illness, disputes frequently arise. Can a temporary employment contract automatically end when someone reports sick?
In this article, we explain what the Supreme Court decided on 17 March 2023. You will also read what this means for temporary employment agencies, client companies, and temporary workers. In addition, we provide practical examples and conclude with a FAQ.
Want to learn more about employment law in general? Also visit our page on employment law.
What is a temporary agency clause?
A temporary agency clause is a special provision in a temporary employment contract. In essence, the clause stipulates that the employment contract ends by operation of law as soon as:
- the client company no longer wishes or is able to engage the temporary worker, or
- the temporary worker can no longer perform the agreed work (for example, due to illness).
It is important to note that the termination does not take place through dismissal, but automatically. This distinction is crucial for the legal assessment.
The case: dispute over continued payment of wages during illness
In the case that came before the Supreme Court, a temporary worker was seriously injured during work. He lost two fingers while working as a machine operator. He subsequently reported sick. The temporary employment agency immediately terminated the employment contract by invoking the agency clause.
The temporary worker considered this incorrect. He argued that his employment contract had not been validly terminated and claimed continued payment of wages during illness. The district court dismissed the claim. The court of appeal, however, ruled that the agency clause would be in conflict with the prohibition on dismissal during illness and awarded continued payment of wages.
Ruling of the Supreme Court
The Supreme Court subsequently provided clarity. According to the Supreme Court, the temporary agency clause does not conflict with the prohibition on dismissal during illness.
Why not? The prohibition on dismissal relates to dismissal by the employer during illness. With a temporary agency clause, there is no dismissal. The contract ends by operation of law. Therefore, the prohibition on dismissal does not apply.
The Supreme Court also emphasised that there is no general statutory prohibition on the termination of an employment contract by operation of law in the event of illness. For other situations, such a prohibition sometimes does exist (consider specific protection regimes), but illness is not covered by these.
However, an important point of attention applies: the agency clause only works correctly in practice if the client company actually requests the termination of the assignment. If such a request is absent, the invocation of the agency clause may come under pressure.
Consequences for temporary employment agencies, client companies, and temporary workers
For temporary employment agencies and client companies
The ruling provides clarity and confirms the flexibility of the agency clause. At the same time, it requires careful record-keeping. Document:
- when and why the client company requests termination of the assignment;
- how and when the temporary worker was informed;
- which provisions in the temporary employment contract and applicable collective labour agreement apply.
Also be aware of overlap with other risks, such as liability in the event of a workplace accident. You can read more about this on our page on personal injury (relevant if the illness is related to an accident).
For temporary workers
For temporary workers, this can be disadvantageous. The employment contract can end while someone is ill. This can have consequences for income and security.
It is therefore important to seek advice promptly if you have doubts about whether the agency clause has been correctly applied. Consider, for example, situations in which the client company has not actually made a termination request, or in which the clause has not been validly agreed upon.
Practical examples
Practical example 1: sick report after a workplace accident
A temporary worker falls from a ladder and is unable to work for weeks. The client company indicates on the same day that it has no suitable work available and requests termination of the assignment. The temporary employment agency subsequently invokes the agency clause. In line with the Supreme Court ruling, this can be upheld, because the termination takes effect by operation of law and does not constitute a dismissal.
Please note: this is separate from any liability for the accident. In the event of injury, there may additionally be a separate route to recover damages.
Practical example 2: the client company says nothing, but the agency terminates anyway
A temporary worker reports sick. The temporary employment agency immediately terminates the contract "due to the agency clause", but cannot demonstrate that the client company terminated the assignment. In such a case, there is room for dispute. The agency clause may then be less firmly established, because the actual trigger (termination by the client company) has not been properly substantiated.
Practical example 3: ill, but the client company wants the temporary worker back later
A temporary worker reports sick, but the client company indicates that it wishes to re-engage the temporary worker after recovery. There is no request for termination of the assignment. If the temporary employment agency nevertheless applies the agency clause, this can lead to a conflict. The dispute then quickly centres on evidence, communication, and the specific contractual provisions.
Checklist: how to avoid problems (brief and practical)
- Verify that the agency clause has been correctly and formally agreed upon in writing.
- Record the client company's request for termination of the assignment in writing.
- Inform the temporary worker clearly and in a timely manner, and retain evidence of that communication.
- Check the applicable collective labour agreement (for example, ABU/NBBU) for additional conditions.
- When in doubt, conduct a risk assessment before invoking the clause.
FAQ
1) Can a temporary employment contract end through the agency clause when the temporary worker is ill?
Yes. The Supreme Court has confirmed that this is in principle permitted, because the termination takes effect by operation of law and does not constitute a dismissal. The prohibition on dismissal during illness therefore does not apply.
2) Must the client company always take action before the agency clause takes effect?
In practice, this is often essential. If the client company does not terminate the assignment (or this cannot be demonstrated), the invocation of the agency clause may give rise to dispute.
3) Does a temporary worker then have no right to continued payment of wages at all?
If the employment contract has actually been validly terminated, the obligation to continue paying wages under that contract ceases. In individual cases, there may well be a dispute about the validity of the termination or about other entitlements. Always have this assessed on the basis of the file.
4) What if the agency clause is not properly included in the contract?
Then the clause may not be validly invoked. This depends on the precise wording, the written record, and the applicable collective labour agreement provisions.
5) What can a temporary employment agency do to limit risks?
Ensure written evidence of the client company's request, clear communication to the temporary worker, and a brief file note with the factual reason and relevant contractual provisions.
Conclusion
The Supreme Court confirms that the temporary agency clause can also be a valid instrument in the event of illness. At the same time, careful application remains important. Documentation and timing often make the difference.
Do you have questions about the temporary agency clause, illness, and continued payment of wages? Or would you like to discuss the right approach in a specific case? Please feel free to contact us via contact. For business-related questions, you can also visit corporate law. For payment disputes, you can find more information at debt collection.
Useful external sources: For background information, also consult the government information on employment contracts and collective labour agreements and the general information from UWV on work and income.