EU Court Delivers Dual Blow to Employers: Unpaid Wages Transfer Automatically, Temp Staff Limits Cannot Be Reset
Published on 06/16/2026 at 13:34 | Redaktion boerse-global.de
When a business changes hands, outstanding wage claims now follow the new owner by law — no signature from the worker required. The European Court of Justice made that clear in a judgment issued on June 11 (Case C?216/25), striking down any national rule that demands explicit employee consent for the transfer of unpaid salary entitlements.
The ruling directly concerns Germany’s implementation of EU Directive 2001/23/EC, which governs the safeguarding of employees’ rights when businesses are sold. According to the Luxembourg judges, the transfer of such claims happens ex lege — automatically by force of law. Member states remain free to impose joint liability on both the old and new employer, but they cannot condition the transfer itself on worker approval.
Temporary workers face a fresh hurdle on assignment limits
On the same day, the Advocate General at the ECJ issued advisory opinions on a related question: whether the 18?month maximum assignment period for temporary agency workers resets when the hirer’s business is sold. The answer is no.
Under Germany’s Act on Temporary Agency Work (Arbeitnehmerüberlassungsgesetz, AÜG), a leased employee may work for the same hirer for no more than 18 consecutive months. The Advocate General stressed that the seller and buyer of a business count as the same entity for calculating that period. Allowing a reset would let firms sidestep the legal cap through strategic corporate transfers. The purpose behind the limit is to prevent companies from permanently replacing their core workforce with temps.
Equal-pay rules tightened, evidence requirements raised
The two ECJ decisions add to a string of rulings strengthening the position of temporary workers. Germany’s Federal Labour Court (BAG) had already ruled in October 2019 that deviations from the equal-pay principle are permissible only under narrow conditions. Simply referencing a collective agreement in the contract is not enough — the employer must apply the full set of rules without restrictive side deals.
Employers must also be meticulous with formal notices. The same BAG judgment in October 2019 held that merely pointing to church labour regulations in the employment contract does not suffice to demonstrate a valid limitation period. The employer must provide the full text of such deadlines; otherwise, the worker can claim damages.
The economic risk stays with staffing firms
The financial hazards of agency work continue to rest with the leasing companies. A 2011 ruling by the Hesse Regional Labour Court established that temporary?work agencies have no general entitlement to short?time work benefits when assignments dry up. Downtime in this sector is considered typical and therefore avoidable.
Meanwhile, structural change is leaving visible marks on the labour market. In Bavaria, the number of people on transfer short?time work jumped from 680 in September 2023 to more than 2,150 in September 2025 — a threefold increase concentrated in the automotive and mechanical?engineering industries. Nationwide, the Federal Statistical Office recorded a slight population decline of 0.1 percent for 2025, intensifying the already severe pressure from skilled?labour shortages.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
