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Temporary assignment of an employee to another employer

We live in the age of the sharing economy. We share apartments, cottages, cars and bicycles. Under current laws, however, we can also share employees, although this option is not yet much used. In our article, we look at when employers can take advantage of it and how to deal with employees affected by such a situation.

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Chapters of the article

Mr. Zdeněk contacted the Office of the Accessible Advocate some time ago and was surprised by his boss who informed him that he would be temporarily assigned to another employer. Mr. Zdenek worked as a driver for a large furniture manufacturing company. However, during the period of the covid, the supply of wood and various components had been stagnant for some time and the employer did not have enough work for all employees as before. He did not want to resolve the situation by making redundancies, especially as he expected to resume full operations. He therefore negotiated a temporary assignment of some of the employees to another company. Mr Zdeněk asked whether the employer had the right to do so and under what conditions he had to accept the situation.

Tip: The type of work you do is defined in your employment contract. For what reasons can your employer reassign you to another position? Are there situations where they must do so? And what would happen if you did not agree to the transfer? This is the subject of our separate article on the website.

Most employers will tell you that one of the most important ingredients in business is quality employees. Economically, humanly and from an organisational point of view, it pays to retain good employees and benefit from their experience and qualities. On the other hand, finding, recruiting and training new employees costs a lot of time, energy and money. This fact is a fundamental motivation for why ’employee leasing’ occurs. As outlined in the opening example, the typical circumstances are as follows: one employer experiences a certain downtime, a lack of orders or a slowdown in production. As this is probably a short-term situation, mass redundancies do not seem to be an appropriate solution. Temporary assignment of employees may be the way forward. In this way, an employee can be assigned to a related company or market demand from another company can be used.

Many businesses have recently been faced with cost-cutting. One of the ways is to lay off some employees. What is the difference between “ordinary” redundancies and collective redundancies, which have a special regime under the Labour Code? And what does this scheme entail? This is the focus of our separate article.

It is perhaps unfortunate that temporary staff secondment has so far been relatively little used and widespread. It is a win-win-win situation. In essence, all three parties involved can benefit from it. The existing employer does not have to lay off and rehire people and is reimbursed for the wages it pays. The employee is not at risk of losing his job and, even if a similar situation were to recur, his position is more stable than in the case of agency employment. The new (temporary) employer is usually assured of quality, trained workers and saves time and money on recruitment.

After the end of the temporary assignment, the employee’s employment does not end; he or she continues to perform the same work for the previous employer, under the same working conditions that are the content of the employment contract.

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Conditions of secondment

  1. A secondment agreement can be concluded no earlier than 6 months after the employment relationship has been established – this provision is intended to ensure that the employee is no longer directly recruited with the intention of being immediately assigned to another employer. At the same time, it is implicit in this provision that this institution cannot be used for agreements on work outside the employment relationship.
  2. No remuneration may be paid for the temporary assignment of an employee to another employer; this does not apply in respect of the payment of expenses. Under the Labour Code, the original employer provides the employee with wages, salary or travel expenses during the period of secondment. However, the salary paid in this way may be reimbursed as part of the reimbursement of expenses. Other expenses, such as social security and health insurance, or various benefits or allowances, can also be reimbursed. However, the assignment itself must be gratuitous, i.e. there is no remuneration agreed between the employers.
  3. Theworking and wage or salary conditions of an employee temporarily assigned to another employer must not be worse than those of a comparable employee of the employer to which the employee is temporarily assigned. However, the employee need not have identical conditions to those he or she previously had with the original employer.
  4. Thetemporary assignment will be negotiated by agreement with the employee. It is clear from the nature of the case that some agreement between the two employers will be concluded at the same time (the content should include in particular the aforementioned reimbursement of costs as well as the time aspect), but the Labour Code does not consider this to be a necessary condition.

The popularly called “employee loan agreement” is officially referred to as a temporary assignment agreement between the employee and the employer. It must be concluded in writing and contain at least:

  • the name of the employer to whom the employee is temporarily assigned,
  • the date on which the secondment is to commence,
  • the type and place of work,
  • the period for which the secondment is agreed. This means, in particular, the period for which the secondment is to be made.

At the same time, however, it may be stipulated, for example, that the secondment will take place only from Monday to Wednesday and that the employee will work for the current employer on the remaining days.

Subject to the above conditions and with the employee’s consent, this can also be done in the case of a temporary assignment abroad.

Duration of the secondment

During the secondment, the employing employer has full control over the work tasks and working conditions of the employee, but cannot act legally on behalf of the seconding employer, such as giving notice to the employee. The scope of the secondment depends on the agreement between the seconding employer and the employee.

Termination of the secondment

Normally, a secondment ends after an agreed period, but it may be extended for a further fixed period as agreed between the employee and the employer. Conversely, it may also end before the expiry of the agreed period by agreement of both parties or by written termination of the agreement. Notice of termination of this Agreement may be given for any reason without giving any reason and the period of notice shall be 15 days from the date of delivery to the other party. The employer to whom the employee is temporarily assigned cannot directly terminate the temporary assignment itself and must always contact the employer with whom the employee is employed. After the end of the secondment, the employee’s employment with the employer will normally resume in full under the original conditions.

Taking over by the new employer

The issue of temporary assignment of employees should not be confused with a situation where there is a transfer of rights and obligations under the employment relationship. This is typically the case in the event of a merger or, conversely, a division of a company. The existing employer does not terminate the employment relationship with employees who transfer to the acquiring employer. The transfer of rights and obligations under employment law is a process whereby a certain legal fact automatically results in a change in the identity of the employer, but the employment relationship continues unchanged. The employment relationship of these employees remains legally unchanged, only the person of the employer changes.

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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.

Education
  • 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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