C-441/2023: The ECJ Interprets Article 3(1)(b) Of The Directive On Temporary Agency Work, Significantly Reinforcing Its Protective Framework

The ECJ, in its recent Decision on case C-441/2023¹, ruled, upon request for a preliminary ruling by a Spanish court, that "nothing in the definition of 'temporary-work agency', as set out in Article 3(1)(b) of Directive 2008/104, requires that, for an undertaking to be regarded as a temporary-work agency within the meaning of that directive, it must have prior administrative authorisation to engage in that activity in the Member State in which it operates."

In other words, Article 3(1)(b) of Directive 2008/104/EC applies to any entity that enters employment contracts to assign workers to user undertakings temporarily under their supervision, even if not recognized as a temporary-work agency by domestic law.

In the examined case, the employee (LM), after a traineeship at Microsoft, entered employment with several companies that had service contracts with Microsoft. After being employed by her last employer (Spanish company Leadmarket) and assigned (once again) to Microsoft for more than three years to perform marketing services for the latter which were not provided by any of its employees, she was dismissed by her direct employer. When LM disputed her dismissal, she argued that Microsoft should be jointly and severally liable for the consequences of her invalid dismissal, including her re-employment.

Leadmarket, the direct employer of LM, was not recognised by Spanish legislation as a temporary-work agency, meaning that it did not have the relevant administrative authorisation required by law to operate as such. Hence, based on a strict application of the Spanish law, LM would not fall within the scope of the legislation on temporary-work agencies, which transposed the Directive, and therefore the protective scope of the Directive.

Therefore, the Spanish court enquired whether the Directive nevertheless applies to an undertaking which, without being recognised under national law as a temporary-work agency, assigns a worker to another undertaking, since the Directive does not appear to require prior administrative authorisation.

In paragraph 34 of Decision on case C-441/23 it is stated that the Directive does not make the status of 'temporary-work agency' subject to the condition that an undertaking must assign a certain number or percentage of workers to another undertaking in order to be regarded as a temporary-work agency within the meaning of Article 3(1)(b) of that directive.

As ruled by the ECJ, if the Directive was applicable only to undertakings that had obtained prior administrative authorisation, provided for by their domestic law, this would undermine the effectiveness of that directive by inordinately and unjustifiably restricting its scope (paragraph 41). Additionally, such a limitation would allow any undertaking that, without being in possession of such authorisation, assigns workers who have concluded a contract of employment with it to other undertakings to escape the application of Directive 2008/104 and, therefore, would impede workers from receiving the protection afforded by that directive (paragraph 42).

The interpretation of Article 3(1)(b) of the Directive by the ECJ is remarkable for Greek reality and enterprises operating in Greece, where there is also a similar obligation for undertakings to obtain an administrative authorisation to operate as a temporary-work agency, and most importantly because of the widespread use of service contracts by Greek enterprises. Commonly, when an enterprise decides to outsource an internal activity, not only a secondary but also a main one, it concludes a project/services contract to engage (numerus) employees through a third party, meaning a services provider that is not recognised under Greek law as a temporary-work agency based on the requirements of Law 4052/2012.

In addition, Case C-441/23 should not be overlooked by the Greek legal system, since it brings back to our memory two important Greek court decisions: Decision 43/2020 of the Athens Single-Member Court of Appeal and Decision 2041/2022 of the Supreme Court, which set aside the first, due to incorrect interpretation and application of the relevant provisions regarding temporary-work agencies.

In the above Decision 43/2020, Athens Court of Appeal ruled that the defendant company operated, in fact, as a temporary-work agency -although it had not obtained the relevant administrative authorisation- since it hired the plaintiff and other workers to assign them, for a fee, to the other defendant, indirect employing company, under the latter's direction and supervision. Noteworthy, this seems to be "endorsed" by paragraph 43 of ECJ Decision on case C-441/23 which rules that article 3(1)(b) of Directive 2008/104 must be interpreted as meaning that that directive applies to any natural or legal person who enters into a contract of employment or an employment relationship with a worker in order to assign him or her to a user undertaking to work there temporarily under that undertaking's supervision and direction, and who assigns that worker to that undertaking, even though that person is not recognised by domestic legislation as a temporary-work agency because the person does not have the relevant administrative authorisation.

However, the Supreme Court of Greece, with its Decision 2041/2022, ruled that the provisions of Law 4052/2012 do not directly or proportionately apply, as in that case the defendant company was not recognised under Greek law as a temporary-work agency, and the only applicable provisions were those regarding project contracts. Hence, the Supreme Court of Greece set aside the decision of Athens Court of Appeal and referred the case for further hearing to the same court.

Thus, it would be interesting to await the new decision of the Athens Court of Appeal and see whether it will apply the relevant legislative framework on temporary-work agencies, and how compliance with the interpretation of the Directive by ECJ will influence its ruling.

Footnote

1 JUDGMENT OF THE EUROPEAN COURT OF JUSTICE ON THE CASE C‑441/23 (2024). Available at: https://curia.europa.eu/juris/document/document.jsf?text=&docid=291563&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first∂=1&cid=4141126

Originally published on 11 Novemer, 2024

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