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Germany — In-house temporary employment agencies to cut wages

16 November 2009

More and more large German companies have founded their own in-house temporary employment agencies in order to hire out staff to themselves and thereby avoid industry-agreed minimum wages, Wirtschaftswoche reports.

Minimum wages in Germany are agreed in each industry sector via bilateral agreements between employers and unions. There is no general national minimum wage as such. Minimum wages differ from one sector to the next.

The temporary employment industry is regarded as its own sector. Temporary employees are therefore often not covered by minimum wage agreements in the sector they operate in and employers can abuse this to pay less.
Discount drugstore chain 'Schlecker' has founded its own in-house temporary employment agency 'Meniar' in order to hire out temporary employees to the 'Schlecker' chain at hugely reduced salaries. Travel agency TUI,
Volkswagen, Deutsche Telekom, BASF, the German Red Cross and even Essen University Hospital are accused to have done a similar thing.

Temporary employment industry associations BZA and iGZ are appalled by such behaviour. BZA President, Volker Enkerts, said "to found a temporary employment agency just to avoid bilateral industry agreements is a con, which gives temporary employment a terrible name." BZA represents among others temporary staffing giants Adecco, Randstad and Manpower.

Ariane Durian, President of iGZ, said "this is nothing but salary dumping." Her colleague Volker Enkerts has asked the German Minister for Labour, Franz Josef Jung to prevent such behaviour in the future. He said "we want a situation where internal temporary employees are paid the same as permanent in-house staff."



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