Politicians in Germany are increasingly looking into tightening laws around contract labour after unions have warned of sham contracts. Experts believe these types of labour contracts will rise over the coming months because alternatives, such as temporary agency work, have become more expensive.

Contract labour (Werkvertrag) obliges the contractor to produce the promised work and the employer to pay the agreed remuneration. But politicians fear that abuses in the industry are ripe.

Chancellor Angela Merkel recently criticised the use of contract labour. After a meeting with trade unions, she said that contract labour is increasingly used to avoid pay rates agreed in collective agreements. Politician Peter Weiß, from Angela Merkel’s CDU party, told Die Welt today that “better inspections” are needed.

Next month the ministry of labour will host a specialist convention to hear proposals on how abuses of contract labour can be averted. But the president of the German Association of Employers (BDA), Dieter Hundt, warned of tightening measures. He said there was no reason to “discredit, question or legally change contract labour.”

Germany recently introduced higher pay rates for agency sectors in major sectors such as the metal and electrical industries. This has raised concern over whether other forms of contingent labour may gradually replace temporary staffing as employers seek to duck higher costs.