For the first time, the Maritime and Commercial High Court has ruled on a violation of the principle of equality of the Temp Act. The violation resulted in modest compensation of DKK 10,000.

Temps are to be treated on equal terms with the permanent employees

This is the first ruling on the principle of equality introduced in the Temp Act on 1 July 2013. The principle of equal treatment implies that temps may invoke the same terms and rights applying to other employees in same positions with the user company. 

Claim for compensation equivalent to the level of compensation of the Equal Treatment Act and the Non-Discrimination Act

The case concerned a laboratory technician who started working for a temp agency in June 2013 at a food company at an hourly rate of DKK 150. As opposed to the company's permanent staff, the temp did not receive pension contributions, allowance as a laboratory technician or holiday allowance.

After the expiry of the temp job, HK raised a claim against the temp agency claiming re-adjustment of holiday, pension and saving scheme and compensation for violation of the Temp Act's principle of equality. HK claimed compensation equivalent to 26 weeks' salary.

The temp agency was of the opinion that the salary of DKK 150 per hour contained all parts of the salary and that the temp did not have a claim for additional payment or a claim for compensation for violation of the principle of equality of the Temp Act.

The Maritime and Commercial High Court compared the violation to a setting aside of the Contract of Employment Act

The Court found that the saving and pension scheme covered by the collective agreement could be included in the temp's hourly pay as this could constitute natural components of the salary. The Court found that the temp agency had not met the burden of proving that the temp had not been placed in an inferior position compared to the other employees. HK therefore succeeded with its claim for addition al payment of approx. DKK 19,000.

It was established that the temp had been paid a lower hourly rate than the other employees, and that the principle of equal treatment had therefore been set aside. The question remaining was then the amount of compensation.

The Court assessed that the violation and its consequences could be compared to a violation of the Contract of Employment Act. The Court did therefore not agree with HK that the violation could be compared to a violation of the Equal Treatment Act and the Non-Discrimination Act. Compensation was therefore fixed at DKK 10,000. 

The temp agency was not covered by a collective agreement

It is worth mentioning that the principle of equal treatment of the Temp Act was only relevant for this case because the temp agency was not covered by a collective agreement. 
This is due to the fact that the principle of equal treatment may be departed from if the temp agency is covered by a national collective agreement between the most representative labour market parties. The same applies if the user company is covered by a collective agreement covering the relevant temp work.

Level of compensation finally fixed?

The ruling establishes that temps are not necessarily to be compared as regards each pay term, but, in general, they are to be placed in a position which is at least as favourable as that of the permanent employees. The temp agency had not met the burden of proof in this respect.

The Temp Act and the legislative history do not fix a level of compensation in relation to violation of the principle of equal treatment of the Temp Act, and it is therefore left to the courts to decide on the fixing of compensation.

The Maritime and Commercial High Court fixes compensation based on the guidelines in case law concerning violation of the Contract of Employment Act. This is remarkable as compensation for violation of the principle of equal treatment in other protective legislation, e.g. the Non-Discrimination Act, is often much higher.

In other legal action where the circumstances are different and where a temp is e.g. dismissed as the temp has invoked the principal of equal treatment, it may be expected that the level of compensation will be assessed based on other guidelines.

HK has appealed against the ruling to the Supreme Court, and it will be exciting to follow whether the Supreme Court agrees with the compensation fixed by the Maritime and Commercial High Court, and whether this compensation will become leading for future cases on violation of the principle of equal treatment of the Temp Act.

contacts

Marianne Lage

Partner

Maria Schmiegelow

Attorney