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Some of Austria’s largest staffing firms are threatening to pull out of the country over controversial legislation that will tighten regulations in the temporary staffing industry.
Local media report that ManpowerGroup, Trenkwalder and Powerserv have considered deserting the Austrian market over the new Temporary Employment Act (AÜG) which will increase costs for staffing companies.
Trenkwalder and ManpowerGroup, the two largest recruiters in the country, first spoke out against the Act in March this year, saying it would endanger some of the 275,000 temporary vacancies in Austria.
The firms have expressed their frustration over a planned charge of €110 which will be applicable when the employment service between a temporary and their employment agency is terminated.
“If the law is introduced as things stand now, we will withdraw from business involving low qualified workers,” said Manpower head in Austria, Erich Pichorner. The focus in the future will instead lie on recruiting highly qualified staff.
Trenkwalder, the 25th largest staffing provider in the world, is considering taking more drastic steps. Head of the company, Klaus Lercher, does not exclude axing staff and closing some of its agencies. His announcement comes shortly after his appointment to lead the Austrian staffing association (VZA).
There are around 90,000 temporary workers in Austria, a third of which are unskilled workers. Mr Lercher has warned that unemployment in the country, currently one of the lowest in the European Union, could rise substantially with illegal employment increasing.
Unions, which are keen to cut “precarious work” in the country, have dismissed the claims.