What is a transitional service company?
A temporary services company (EST) is one whose corporate purpose is to supply workers to a user company to carry out a certain temporary or occasional work.
In which cases do transitory services companies operate ?
- Replacement of workers (medical leave, maternity leave or holidays).
- Organization of extraordinary events (organization of congresses, fairs, exhibitions, etc.).
- Execution of new and specific projects (construction of new facilities, new markets).
- Start of new activities in new companies.
- Occasional or extraordinary increases in activity.
- Urgent, precise and urgent work (repairs, installations).
What type of contract must be signed in the temporary services regime?
- Contract to make workers available: itis concluded between a temporary services company (EST) and a user company to supply workers to the latter. The requirements of this contract are:
– Be in writing within 5 days from the worker’s incorporation or 2 days if the contract is for less than 5 days.
– Individualize the parties.
– Indicate the cause for contracting temporary services.
– Indicate the positions or positions for which it is hired.
– Indicate the term for which it is contracted and the agreed price. - A copy of the employment contract of the worker (s) with the EST must be sent to the user company where the services will be provided.
- Temporary services work contract: itis concluded between the worker and a Temporary Services Company (EST). The requirements of this contract are:
– Be in writing within 5 days from the worker’s incorporation or 2 days if the contract is for less than 5 days.
– Contain at least the mentions of the individual employment contract.
– A copy of the employment contract must be sent to the user company where the worker will provide services.
In which cases will it not be possible to contract the provision of workers?
- To perform representation tasks of the user company, such as management, assistant management, agents or proxies.
- To replace workers who have declared a legal strike in the respective collective bargaining process.
- To assign workers to other temporary service companies.
What are the responsibilities of the user company?
- Direct responsibility of the user company in terms of hygiene and safety with respect to the workers supplied.
- Subsidiary responsibility regarding the labor and social security obligations of the supplied workers. In other words, it responds when the temporary services company (EST) does not comply with its obligations.
What are the sanctions for the user company in cases of infringement and fraud of the law?
In the event of a violation of labor law, when a temporary service worker is hired from companies not registered in the Labor Directorate register, the worker will be considered a worker of the user company. In addition, you will have a fine of 10 UTM for each worker hired.
On the other hand, there is fraud against the labor law when employment contracts have been concluded in cases other than those authorized by law or concealing a permanent employment relationship. The sanction is that the worker will be considered a dependent worker of the user company.
What are the penalties for the temporary services company (EST) in cases of violation of labor law?
- Fine of 80 to 500 UTM for transitory service companies (EST) that do not comply with the operational and constitution requirements required by law (registration, guarantee, etc.).
- Cancellation in the registry and a fine of 10 UTM for each worker hired by temporary service companies (EST) that are parent companies, subsidiaries, associates, related, and that have an interest, participation or relationship with the user companies.
- Cancellation in the registry of temporary service companies (EST) when there is serious and repeated non-compliance with labor and social security legislation, and due to bankruptcy.
Does the user company know the terms of the contract that was signed between the temporary services company (EST) and the workers?
Yes, a copy of the temporary service employment contract is sent to the user company where the worker will provide services.
The user company must fully comply with the conditions agreed between the worker and the temporary services company (EST) regarding the provision of services (duration of the working day, daily and weekly breaks, nature of the services and place of provision of the same).
How long can a temporary employment contract last?
In the case of worker replacements, it will be extended for the duration of the permanent worker’s absence. For extraordinary events and increased production, the employment contract to provide services may not exceed 90 days. And in the cases of new projects and the start of activities in new companies, the term may not exceed 180 days. These contracts may not be renewable. However, the contract may be extended until the 90 or 180 days are completed in your case.
What rights does the worker have under a temporary employment contract?
Compensatory compensation for holidays, when you provide continuous or discontinuous services, for at least 30 days in a 12-month period since you enter the temporary services company (EST).
The workers have the right to maternal jurisdiction for the duration of the provision of services to the user company.
Transitional service companies (EST) must train at least 10% of the workers they make available in the same period each calendar year.
Can a temporary services company charge the worker for their placement in a company?
No, by express legal prohibition. You also cannot charge for the training delivered.
Who is the direct employer in a temporary work regime?
The temporary services company (EST) with which the contract is established. If the worker continues to provide services in the user company once the agreed time has expired, his / her employment contract becomes indefinite and his employer will be the user company.
What obligations does the worker have to the user company?
- Submit to the organization and management of the company for the fulfillment of its functions.
- Comply with the regulations of order, safety and hygiene of the company.
- Submit to attendance control made by the company.
Can workers under temporary service contracts form unions and / or bargain collectively?
Yes, but always within your temporary services company (EST). They cannot unionize with the workers of the user company.
Will workers on temporary services be able to work overtime?
Yes, but they will be agreed between the worker and the EST as stipulated in article No. 32 of the Labor Code .
Who responds in case of work accidents and / or occupational diseases?
In the event of an accident or illness during the provision of the service, the user company must immediately report the fact to the managing body to which the respective temporary services company (EST) is affiliated. And it will pay the damages if it was due to its own negligence or that of a third party, as stipulated in Article 69 of Law No. 16,744 .
What is required to be a Transitional Services Company (EST)?
- Be registered in the special and public registry of the Labor Directorate.
- Include in the name or trade name of the company the expression “Transitory Services Company” or the acronym “EST”.
- Not being parents, subsidiaries, associates, related, or having an interest, participation or relationship with the user companies.
- Establish a guarantee in the Labor Directorate, to respond to the labor and social security obligations against its workers and the fines for infringement of the Labor Code, in the following terms: amount of 250 base UF, which is increased according to the number of workers hired; periodic adjustment every 12 months.
How many productive items can a temporary services company (EST) develop?
It must have the exclusive purpose of making workers available to third parties, as well as the selection, training and education of workers, as well as other related activities in the field of human resources. The same temporary services company (EST) can provide workers of different specialties to other companies.