Labour hire or works contract in a business acquisition: review records and actual practice

Section 3 AÜG describes the key roles. The provider contractually commits personnel to perform work for third parties. The hirer uses the provider's personnel for tasks of its own business. The term covers employees and employee-like persons. The transaction review should assign these roles for each agreement and assignment.

Under section 4 AÜG, the true economic substance is decisive. For a relationship described as a works contract, four questions are particularly important: Is there a distinguishable work attributable to the contractor? Is the work performed mainly with the contractor's materials and tools? Are the personnel integrated into the hirer's organisation and subject to its line and technical supervision? Does the contractor bear responsibility for the success of the work?

These features must be supported by evidence from the actual practice. The contract heading, description of services and invoice do not answer the question on their own. Work instructions, schedules, contacts, systems and tools, acceptance records and correspondence about defects or success are more informative.

Section 13(1) AÜG requires the provider to keep ongoing records from the start of its labour-hire activity. For each person, section 13(2) names the first and last name, social insurance number, date of birth, sex, nationality and whether the person is classified as manual staff or office staff.

The records must also show the name and address of each hirer, its VAT identification number and its statutory representative body or relevant professional association. The start and end of every assignment must be traceable for each person. In the data room, these details should be reconciled with the agreement, service note, notice and payroll evidence.

The section 13(2) records and copies of service notes under section 11(4) and notices under section 12 must be retained until five years after the last entry. The transaction review should therefore test whether historical records for completed assignments are still complete and readable.

Section 13(8) AÜG contains a specific record-keeping duty for the hirer of personnel supplied from the EEA. The hirer must keep the person data and the start and end of each assignment and record the relevant providers, in particular their names and seats.

These records and copies of notices under section 12(3) must also be retained for five years after the last entry. The annual data transmission uses a separate allocation: instead of the hirer's professional affiliation and the federal state of its business, the state in which the provider has its seat is stated. The data room should make the cross-border structure visible.

This rule does not answer every issue raised by international personnel deployment. Before signing, record the provider's seat, the hirer, the employment state, the assignment period and the available notices separately. Other employment, wage and social-security requirements remain outside this AÜG record review.

The acquisition agreement should reflect the reviewed assignments in a schedule or a linked data-room list. For each entry, bring together provider, hirer, person, activity, start and end, contractual basis, actual organisation and open records. This shows which facts come from the target and which the acquirer still needs to verify.

Where evidence is missing, govern delivery, remediation and cooperation precisely. Depending on the finding, the appropriate response may be a pre-signing measure, a condition to completion or support after completion. The clause should describe the finding and its consequence rather than relying on a broad heading.

For EEA assignments, include the hirer perspective. The acquirer must check whether the target keeps its own records and whether providers can be identified by name, seat and assignment data. Include the result in the risk list and the responsibility matrix for the period up to completion.

The answers provide initial orientation. The actual organisation, documents and assignment remain decisive.