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Behind the News: Germany - CWS 30 June 2.12

CWS 30

Europe's largest drugstore chain, Schlecker, was accused of firing staff and then re-employing them via its in-house temporary employment agency -- Meniar -- at almost half the usual hourly wage. But thanks to intense political and public pressure, Schlecker earlier this year announced that it will not continue this practice.

And it appears Schlecker was not alone in its practice. The scandal highlighted the widespread malpractice of German companies to use in-house temporary staffing agencies to reduce pay. Matthias Rumpf, a German spokesperson for the Organization of Economic Cooperation and Development (OECD), said that "Germany stands out internationally because of its two-class society. The OECD indicator shows that when it comes to protection against wrongful dismissal for permanent staff, Germany is among the three member states with the highest levels of protection."

Yet the country is among the 30 OECD member states with the lowest levels of protection for temps and contract workers. As a result of the scandal, the temporary staffing industry -- particularly the in-house temp staffing sector -- has had its reputation tarnished.

There has been a large outcry from some quarters. Politicians like the Labour Minister for the Federal State of North-Rhine Westphalia have openly criticized Schlecker. A Federal Employment Agency (BA) spokesperson, however, was quick to point out that "the Temporary Employment Act does not preclude sacking workers and replacing them with ones from a temporary employment agency under worse conditions. The government would have to change the law in order to prohibit similar actions."

Angela Merkel's government is going to come up with proposals on avoiding temporary employment abuse in the future. Working and pay conditions in Germany are decided by sector-specific collective bargaining between employer organizations and unions. Temporary employment is regarded as its own sector with several unions and three employer organizations, which in the past have refused to collaborate.

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