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Germany – Collective agreement imposes surcharges on temporary workers

22 May 2012

The trade union IG Metall, which represents workers in the metal and electrical industry, has negotiated a surcharge on top of the base rate for around 240,000 temporary employees in the industry – but the association of temporary employment agencies (iGZ and BAP) has warned that temporary staffing will now become more expensive and decrease job opportunities for low-skilled workers.

The negotiations concluded last night in Frankfurt am Main and will see a surcharge for temporary workers of up to +50%. The new collective agreement will be valid from 1 November 2012 with a contract period running to 2017. iGZ and BAP said that this agreement fulfils a “central demand by politicians to equal pay in the industry.”

“Staffing firms have gone to the limits of their capacity. In our most important client sector – the metal and electro industry – temporary employment will now significantly slow down. The additional charges for client companies will be grave. Unfortunately this will have a negative impact on the labour market, particularly for unskilled workers,” said the head of the negotiation association (VGZ) Thomas Bäumer.

“This result may be a success for autonomy in wage bargaining in Germany […] but the costs will also be paid by those for whom temporary labour has so far represented a great opportunity to return to the labour market,” added Holger Piening, who also sits on the board of the VGZ.

Under the new agreement, temporary workers will see a surcharge of 15% after working in one company for six weeks. This will continuously rise – after three months, the surcharge will increase to 20%, then to 30% after five months, to 45% after seven months, eventually reaching 50% after a nine-month period of employment in one company.

The collective agreement will serve as a guideline for future bargaining negotiations.

This comes after the IG Metall recently won a 4.3% pay rise for 800,000 workers in the industry which has already been perceived as the benchmark for nationwide settlements, affecting over 3.6 million workers.

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