Temporary Work in Luxembourg and Provision of Staff

1. The triangular relationship: the three parties

Temporary work involves three parties whose roles are defined in Art. L.131-1 of the Labour Code.

The temporary work agency

This is the natural or legal person whose commercial activity consists in hiring and remunerating employees in order to place them temporarily at the disposal of user undertakings for the performance of a specific and non-permanent task. The agency remains the legal employer of the temporary worker throughout the assignment.

The temporary worker

The temporary worker is engaged under an assignment contract with the agency, which places them at the disposal of one or more user undertakings. The employment relationship links the worker to the agency, not to the user undertaking.

The user undertaking

The user undertaking receives the temporary worker for the performance of the assignment. It directs and supervises the work without being the legal employer. The assignment must concern a specific and non-permanent task and may not be used to permanently fill a post linked to the normal and permanent activity of the user undertaking (Art. L.131-4).

2. Operating conditions: authorisation and establishment

The activity of a temporary work agency is subject to strict conditions set out in Art. L.131-2.

Prior ministerial authorisation

The agency must obtain authorisation from the minister responsible for Labour, granted after consultation with the ADEM and the Labour and Mines Inspectorate (ITM). Operating without this authorisation is unlawful.

Establishment within the European Union

Authorisation must be refused if the registered office or principal establishment of the agency is located outside the European Union. This rule ensures that Luxembourg law is applicable and that effective supervision by the competent authorities is possible.

Probity and professional qualifications of managers

The persons responsible for managing the agency must demonstrate probity and professional qualifications. These conditions are verified during the examination of the authorisation application.

Reporting obligations

The agency is legally required to provide the Ministry of Labour with a detailed monthly statement of all current assignment contracts (Art. L.131-21). This reporting obligation enhances transparency and enables compliance monitoring.

3. Secondment contract and equal pay

Form and deadline of the secondment contract

A secondment contract must be concluded in writing between the agency and the user undertaking no later than three working days after the worker is actually placed at the user's disposal (Art. L.131-4). Failure to produce a written contract within this period constitutes an irregularity that may affect the validity of the contractual relationship.

Equal pay principle

The equal pay principle is established by Art. L.131-13: the pay of a temporary worker may not be lower than that of a permanent employee of equivalent qualification who would have been hired under the same conditions at the user undertaking. The agency is also required to make the applicable tax and social security deductions from wages.

Invalidity of non-hire clauses

4. Provision of staff between employers: concept and distinction

Unlike temporary work, the temporary provision of staff between employers is not defined in the Luxembourg Labour Code. Its definition derives from the parliamentary records of the Act of 19 May 1994: it is a contract under which an employer temporarily places one or more of their employees at the disposal of another employer. This relationship therefore involves two employers rather than three parties as in temporary work.