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Europe's largest drugstore chain Schlecker, which stands accused of sacking staff and then re-employing them via its in-house temporary employment agency Meniar at almost half the usual hourly wage (6.70 Euro instead of 12.50 Euro) has given in to political and public pressure from the highest ranks of the German establishment.
Trade union Verdi had accused Schlecker of forcing its employees to take new contracts through the temporary employment agency, which the union believes is entirely controlled by Schlecker.
The Labour Minister for the Federal State of North-Rhine Westphalia, Karl Josef Laumann, had equally accused Schlecker of 'systematic wage evasion' and the Federal Labour Minister, Ursula von der Leyen said on German television on Sunday, that "the case would have to be examined closely to see if there is abuse."
The German Association of Temporary Employment Agencies (BZA) has been quick to distance itself from the business practices of Schlecker. BZA spokesman Wolfram Linke told Deutsche Welle, "such business practices are not consistent with the original meaning of temporary work and hurt the reputation of all temporary employment agencies."
When interviewed on the legality of Schlecker's actions, a spokeswoman from the Federal Employment Agency (BA) said that "the Temporary Employment Act does not preclude sacking workers and replacing them with ones from a temporary employment agency under worse conditions. The government would have to change the law in order to prohibit similar actions."
However, Schlecker has obviously decided that all this unwanted publicity is doing the drugstore chain's reputation tremendous harm.
Florian Baum, Head of Corporate Communications at Schlecker, therefore announced yesterday that the drugstore chain had resolved with immediate effect not to pursue any further contracts with temporary employment agency Meniar.
Achim Neumann of Verdi told Deutsche Welle, "I think this is fantastic. Obviously, a tremendous amount of pressure was necessary to convince Schlecker that abusing temporary employment law is unacceptable. This is a very positive sign."