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Germany – APSCo and British Embassy to lobby German government over proposed contractor legislation

05 February 2016

The British Embassy in Germany has agreed to take the lead in discussions between The Association of Professional Staffing Companies (APSCo) and German governmental institutions over proposed changes to the German Labour Leasing Act.

The proposed changes to international contractor laws have already faced opposition from recruitment agencies since draft legislation was outlined in November 2015.

“We are already experiencing a reflex reaction to the proposal, which will be incredibly detrimental to the recruitment profession in Germany and the economy as a whole,” Tremayne Elson, Managing Director of APSCo Germany, said. “End clients will be keen to mitigate themselves from potential risk, and we have already seen one German multinational terminate 180 freelancer contracts in response to the proposals.”
Elson and Carlos Frischmuth, Head of Hays Berlin, met with senior officials at the British Embassy to discuss the proposed changes. Both representatives voiced their intent to lobby German authorities to reconsider, given the possible impact of such a reform. Minster Nahles of the German Ministry for Labour & Social Affairs has already been forced to redraft certain clauses, a revised draft bill is imminent.

“We are incredibly pleased that the British Embassy will be supporting our discussions with the German Government, and alongside Hays, we will engage with German authorities to voice the opinions and support the best interests of the international recruitment profession,” Samantha Hurley, Head of External Relations at APSCo said.

The changes will impose restrictions on the Arbeitnehmerüberlassungsgesetz (AüG) licence which allows companies to ‘lease’ temporary labour. However by widening the definition of a work relationship under proposed reforms, freelancers or contractors will now be directly affected by what is on the surface staff leasing legislation.

“The potential reclassification of more freelance contractors as employees will have an incredibly negative impact on the supply of professional talent in Germany,” Elson said. “With an ageing workforce, specialist contractors are an important resource to countless sectors, and such reforms are likely to drive these vital professionals into other European markets. What constitutes ‘temporary’ is not clearly defined for staff leasing purposes, under the changes any staff leased over 18 months with a single client will be deemed to have an employment relationship. This is a backwards step for all forms of flexible working”

 APSCo has emphasised the direct effect the changes will have on UK based recruitment firms placing contractors in Germany. As well as the potential infringement of the EU Service Liberalisation Policy if the legislation is adopted in its current form.

“These reforms will be detrimental not only to UK recruitment agencies placing contractors within Germany, but also to the growth of the German economy,” Hurley said. “It is clear that these proposals were made with inadequate consultation and little consideration of the potential implications for overseas contractors.”