Contracting companies are not temporary employment agencies, but those engaging in illegal labour leasing may be

Commentary on the Ruling of the Court of Justice of the European Union of October 24, 2024 (case C-441/23)

Abstract

The ruling of the Court of Justice of the European Union October 24, 2024, in the case C-441/23, highlights that the Spanish legal framework is not in compliance with the Directive on Temporary Work Agencies (TWA Directive), as the requirement for administrative authorization under Spanish law is not provided for in EU legislation. Furthermore, restricting the concept of TWA solely to authorized entities would hinder a uniform interpretation of the Directive and would undermine the effectiveness of that directive by inordinately and unjustifiably restricting its scope. This judgement obliges the Spanish legal system to consider a reform of the legislation on companies that provide temporary workers. In the meantime, any contracting company that engages in a relationship with a principal company should be considered a TWA only, and exclusively, when it relinquishes control over its managerial authority in favour of the principal company, thus falling within what is currently classified as unlawful worker transfer.