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Germany – Contract work increasing at expense of temporary staffing

24 July 2012

Temporary staffing is “so yesterday” the German trade union IG Metall said this week, warning of contract work taking over the “low wage” industry. While the union has recently achieved major collective agreements in the country which will significantly increase pay rates for temporary workers, it argued that these new regulations will lead to a rise in “cheap” contract work.

The head of the employer’s association in the metal industry (Gesamtmetall), Martin Kannegiesser, recently warned that temporary staffing will become significantly more expensive.” He cautioned that companies could indeed make more use of contract labour to avoid higher costs in the sector.

Drawing from a recent study by the Otto Brenner Foundation, the IG Metall’s research institute, the union claims that “entire work operations” will be affected by a rise in contract labour, saying companies are running the risk of losing their expertise by using outsourced employees.

“Contract work is increasingly [and] strategically used to avert rights of co determination and bargaining agreements,” the author of the study, Andreas Koch of the Institute for Applied Economic Research (IAW), said.

Although the study outlines that contract labour is not a negative form of employment per se, it warned of certain aspects this type of labour brings with it.

“Things are getting problematic if contracted employees fulfil tasks on the premises of the customer and receive instructions from their staff,” Mr Koch said. This is what the union has dubbed as “temporary labour in disguise” and “sham contracts.” The union said it will actively fight against such forms of labour after it made a milestone achievement through its recent collective agreement with the temporary staffing industry.  

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