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Germany – Associations meet with Chancellor to discuss proposed labour reforms

17 March 2014

Representatives of the national associations of the German economy - the Confederation of German Employers' Associations (BDA), the Federal Association of German Industry (BDI), the German Industry and Commerce (DIHK) and the German Confederation of Skilled Crafts (ZDH) met with German Chancellor Angela Merkel in Munich to discuss proposed labour market reforms. 

Merkel's Christian Democrat-led coalition's plans to introduce a national minimum wage and to lower the retirement age for long-term employees to 63. The business leaders had been vocal in their criticism of the Chancellor’s domestic labour market and pension reforms, warning they could undermine the nation's attractiveness as a place to invest. Ulrich Grillo, the president of the Federation of German Industry (BDI) stated that Germany “must introduce the right measures to ensure that we are successful in five years. Germany's labour shortages means that allowing workers to retire at 63 would be counterproductive.”

Thomas Bäumer, Vice-President of the German Employers' Association of Personnel Service (BAP) and a member of the BDA-Bureau, was also part of the delegation. Bäumer raised the issue of proposed amendments to both the Employee Leasing Act (Arbeitnehmerüberlassungsgesetz/AÜG) and Employee Assignment Law (Arbeitnehmerentsendegesetz /AEntG). Under the changes temporary workers assignments are to be limited to 18 months, unless exceptions are formally negotiated in collective bargaining agreements. Workers will be granted equal pay to permanent staff after nine months. There is widespread disappointment among the staffing industry not only at the prospect of greater regulation, but to the prevailing political view that the introduction of several collective bargaining agreements over the last two years provided an insufficient regulatory framework.

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