The confederation of German trade unions (DGB) has criticised that employers in the country possess vast “creativity in inventing new low-wage schemes”, warning that after temporary employment, businesses are now looking for the “next legal loophole” by increasingly using contract work and sham self-employment.

Head of the union, Michael Sommer, said in an interview with the German newspaper Süddeutsche Zeitung that he is not against contract work per se but if contract employees “work with permanent staff, using the same work equipment… the suspicion is confirmed that we are dealing with temporary staffing in disguise.”

The DGB has often accused the temporary staffing industry in Germany of wage dumping and Mr Sommer now says that contract workers are used to push wages down and worsen working conditions.

The pay of contracted workers in certain industries, such as the retail sector, is said to be particularly low for contract employees and are therefore “cheaper” than temporary staff. In January this year large-scale raids took place in two major supermarket chains in Germany as it has been alleged the firms underpaid agency and contract workers.

Mr Sommer argued that permanent employees are also affected by the rising use of contract staff   as they are “immensely put under pressure, working for lower pay or increased productivity, so that they don’t lose their jobs to contract workers.” He has urged the Government “not to look away” and tackle the “abuse” occurring with contract work.

Although there are no official statistics, the amount of contract work is said to have doubled in almost a decade to 600,000 in 2011, according to the labour market think-tank IAB.

Some studies also seem to indicate that contract work is becoming more common in certain sectors, such as the food industry where contract staff increasingly seems to replace temporary workers. Although Labour Minister Ursula von der Leyen is looking into the issue, Mr Sommer has warned not to delay the investigation.