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Germany — Breaches of regulation by staffing agencies up fourfold

07 July 2010

Following on from the recent debate in the German Parliament (Bundestag, Lower House) about the unacceptability of so-called 'revolving doors practices' whereby German companies sack their permanent staff only to re-employ them immediately as temporary employees via an in-house temporary employment agency at much reduced pay and conditions (Schlecker scandal), the left party (Die Linke) have asked the Ministry for Labour a number of official questions, which were leaked to German daily Süddeutsche.

The ministry has confirmed that breaches of regulation by temporary employment agencies went up more than fourfold from 510 in 2005 to 2,139 in 2008. Temporary employment agencies were fined 3.72 million Euro by the Ministry in 2009.


Breaches included the non-payment of social security contributions, the non or late payment of taxes, the non-payment of salaries when temporary employees are off sick and the non or under-payment of holiday entitlements. There were also cases where holidays were not granted altogether or not sufficiently granted.

The strong increase in breaches of regulation must be seen in the context of the strong growth of temporary employment after a change in regulation in 2004 by the then Schröder government (Socialist and Free Democrat coalition). As a result, temporary employment grew from 300,000 in 2004 to 750,000 today.

However, the number of government inspectors who police compliance with regulation did not grow in line with the market. The rate of inspection of temporary employment agencies fell from 9.02% in 2008 to 8.58% in 2009.

Sabine Zimmermann, Labour Market Spokesperson for Die Linke party, said "temporary employees are worse off [than permanent employees] in almost all aspects, anyway. It is therefore a scandal that many staffing agencies don't even adhere to the current insufficient regulation."

The government's employment agency (BA) has now reacted by employing an extra 25 inspectors for temporary employment agencies on a fixed term contract basis for the period between mid-July 2010 to end of 2011. This will increase the total number of inspectors for temporary employment agencies to 100.

Hans-Joachim Fuchtel, State Secretary for Labour, wrote back to Die Linke "breaches can be fined by up to 500,000 Euro. We don't just bark, we also bite."

 

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