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Germany — Court ruling could have fatal results for temporary employment

08 December 2009

The labour court of Berlin has ruled on Monday that the minimum wage agreements negotiated by the 'Tariff Association of Christian Unions for Temporary Employment and Staffing Agency Services' (CGZP) are null and void because CGZP only represents a small section of the industries it has negotiated minimum wage contracts for, Financial Times Deutschland reports.

Minimum wages in Germany are negotiated by industry sector between unions and employer organisations. Temporary employees are regarded as their own sector. If the estimated 200,000 temporary employees CGZP claims to represent do not have a legally valid minimum wage agreement, the equal pay rule applies which means that temporary employees will have to be paid the same amount as their permanent employee counterparts, i.e. far more money.

Peter Mumme, President of Temporary Employment Association AMP, said "this will increase the cost of temporary employment over night to such a degree that most companies cannot afford it anymore. 100,000 temporary employees on low wages could lose their jobs over this."

Claus Matecki, Board Member of the German Association of Unions (DGB) has welcomed the court ruling. He said "CGZP is not a union. It is an association which promotes dumping wages."

CGZP has now decided to take the case to the highest labour court in the land (Bundesarbeitsgericht). Mumme comments "if the highest labour court agrees with the ruling [by the labour court of Berlin] this will have a fatal impact on Germany as a business location."



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