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Employment through an employment agency

An employment agency can “lend” its employees to different employers. How does such employment work?

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Employment through an agency – employer and employee perspective

Unemployment is still very low, which is good for employees, but not so easy for employers. Some are struggling to find workers, while others are plagued by fluctuations in sales of their products and services. In both cases, it is possible to use the services of an employment agency that can “lend” workers to employers. What does such cooperation with an employment agency look like, how is it advantageous for both employees and employers, and what to watch out for?

First of all, the most important thing for both the employee and the employer is to do a thorough “research” of the chosen employment agency. Employment agencies provide employment – either by being able to advise on job opportunities or by selecting a suitable candidate for the employer to employ directly. Hiring labour is another form of intermediation. In this case, the employment agency will employ the jobseeker itself and then ‘lend’ the jobseeker to the selected employer for a predetermined period of time and for a certain remuneration. For all these forms of placement, however, the employment agency needs a permit from the employment office. Before you start working with an agency, it is advisable to check whether it is authorised to operate (you can search for individual agencies on the Ministry of Labour and Social Affairs portal).

How it works for an employee

In order to start working with an employment agency, the employee needs to enter into an employment contract or agreement with the agency. These documents must state that the agency undertakes to arrange for the employee to work temporarily for another employer, called the user, and should also include the employee’s commitment to work temporarily for the user. Once these documents are signed, the worker becomes an employee of the employment agency. Once the employment agency finds a suitable user for the worker, it gives the worker written instructions and the worker is temporarily assigned to that user. The employment agency remains the employer of the worker, i.e. only the employment agency pays the worker’s salary, only the employment agency can, for example, terminate the employment relationship, etc., but the worker actually performs the work tasks assigned by the user.

Employees are advised to check carefully what document they sign with the employment agency. The law only allows you to enter into an employment contract or an employment agreement with the employment agency. On the contrary, you cannot conclude a work performance agreement, or the employment agency would not be able to legally assign you to a user.

However, you need to allow for a certain amount of flexibility. A temporary assignment is always limited in time and the employee must then get used to working elsewhere. However, it is certainly suitable for graduates who are looking for their first work experience and want to try out more companies, or for those who are used to working on projects and would welcome a change after completing a job. This is why agency workers are often used in IT.

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What are the employer’s obligations

The employer must compensate the employee for damages or non-pecuniary loss, regardless of whether the employer complied with all safety and other relevant legislation, i.e. even if the employer installed all safety features in the workplace for the employee, adequately checked compliance with safety regulations, etc… However, if the employer proves that the injured employee violated safety regulations with which he or she was properly familiar, and this caused the accident, the employer can avoid the obligation to compensate for damages or loss. The same applies if the injury was caused by the employee’s drunkenness or substance abuse. However, these facts must be the sole cause of the work injury.

Theemployer’s instruction to observe OSH is also important. A case was settled where an employee of a construction company, while insulating a roof, sat on a sheet of metal covering a skylight and it collapsed under him. He collapsed into a ten-metre gap and claimed compensation. However, the Supreme Court ruled in this case that even an informal instruction from the employer, in this case a foreman’s report, “******, don’t climb up there on those skylights, you might fall off.” is sufficient warning.

If an accident occurs at work, the employee must report it immediately to his employer or supervisor, who should issue an accident report and work with the employee to propose a method of compensation.

The employer is obliged to provide compensation for the damage caused by the work injury. This is primarily to make up the employee’s incapacity for work earnings, i.e. the difference between the average earnings before the damage caused by the work injury and the full amount of the wage replacement (until the employee returns to work). There may also be medical costs, if any, pain and suffering and compensation for impaired social life (this is individual and depends more on the medical opinion). Last but not least, there may be compensation for material damage, for example, destroyed watches, etc.

In addition to the work-related injury, there is also an occupational disease, which must be distinguished from the work-related injury. In contrast, it arises gradually and as a result of work.

Employer: Temporary secondment agreement

Even an employer who wants to work with an employment agency as a so-called user and “borrow” employees from the agency must conclude an agreement with the agency. This is a temporary assignment agreement. The agreement must always be in writing. The Labour Code sets out exactly what the agreement must contain. In particular, it must be agreed on what work the ‘borrowed’ employee will do, for how long, from when and in what location, and how much the employer will pay the agency. If the cooperation with the agency will be long-term, it is worth concluding a framework agreement on temporary assignment, where both parties will have agreed on all the necessary matters in general and then always just agree on the specific details for a particular job (for example, that from this Monday to Friday Jana Nováková will work there and there as a warehouseman). In order to avoid possible disputes and misunderstandings with the agency, it is also advisable to specify in the temporary assignment agreement when the user can terminate the temporary assignment of the borrowed employee.

It is also advisable to agree on the procedure to be followed in the event that the agency worker causes damage to the user or, on the contrary, suffers damage himself (for example, an accident at work). The law does not address these issues, so it is a good idea not to underestimate the preparation of the agreement with the agency and to clarify in advance who will be responsible for what.

Using agency workers is not (should not be) cheaper for employers. They will pay for the hire, but can react more flexibly to the market situation. It can “borrow” an agency worker for the time when it really needs and can use him/her (e.g. to bridge a shortage of other labour). If he or she is not satisfied, he or she will be able to terminate the relationship more quickly than with his or her own employee.

On the other hand, all the legal conditions of the temporary assignment must be observed, otherwise the employer risks heavy fines from the labour inspectorate. Thus, if the inspectorate finds that the employer, for example, hired its own employee from an employment agency, forgot to specify the wage conditions of a comparable employee in the assignment agreement, or did specify them but the agency employee did not have the same conditions, it can fine the hiring employer up to CZK 1,000,000.

Temporary assignment of employees

Temporary assignment of employees mainly concerns agency workers. However, this is not the rule, as regular employers can also hire temporary workers, but there are limitations.

If an employee is seconded by an agency, he or she will receive written instructions and will then start a new temporary job. This instruction should tell the worker where he or she is going to work, which user, who his or her supervisor will be, where exactly he or she will work and for how long. Generally, he/she can be ‘on loan’ for a maximum of 12 months, unless he/she requests an extension. During this temporary assignment, all work is assigned, organised and controlled by his new boss, the user to whom he is assigned. The user must by law create favourable working conditions and ensure health and safety at work. However, he or she cannot legally act on behalf of the employment agency in relation to the agency worker, i.e. the user cannot change the employment relationship of the agency worker, give him or her a letter of reprimand or dismiss him or her.

If the employee has more than one employer, he/she needs to keep track of who he/she works for and when. Similarly, any employer who has both tribal and agency employees needs to be careful who they hire from the agency and for how long. It is not permissible to “borrow” a worker who is employed by the user at the same time or who has already been assigned to the user by another employment agency in a given month.

It is important to be careful not to discriminate against the agency worker. Such an employee is also protected by law and cannot have worse working or pay conditions than a comparable permanent employee of the user. In other words, a “borrowed” employee should not be cheaper for the employer. On the contrary, they should always receive at least the same financial and overall working conditions as the user’s own employees have (or would have). However, it is not only the employment agency that has a duty to ensure that the agency worker is not disadvantaged, but also the employer who hires the workforce. For this reason, the Labour Code also requires that information on the working and wage conditions of the employee who performs or would perform the same work as the seconded employee, taking into account qualifications and length of professional experience, be a direct part of the secondment agreement.

Of course, it also includes entitlement to other comparable working conditions, such as holidays, preferential company meals or sick days.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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