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The German Association of Temporary Employers (BZA) and the Federation of German Unions (DGB) have agreed new salary levels for temporary employees, which will apply to all their members.
The new agreement will take effect from 1 July 2010 and continue until 31 October 2013. Unions and employers have agreed to raise salary levels for temporary employees in four consecutive stages. From November 2012 onwards the new minimum salary in the Eastern Federal States (ex-GDR) will be 7.50 Euro per hour. In the Western Federal States it will be 8.19 Euro per hour.
The move comes after previous collective bargaining between unions and employer associations failed because DGB sub-unions had disagreed with the outcome.
A special clause was included to prevent the abuse of in-house temporary employees by paying them less than permanent employees. This was very much a reaction to the highly publicised 'Schlecker scandal' where Europe's largest drugstore chain sacked permanent staff to re-employ them via a closely related one-client temporary staffing agency, just to abuse a loophole in the law and reduce their pay.
BZA representative Thomas Baumer, said "especially temporary employees in the new Eastern Federal States will benefit from this new agreement. This will also prepare us for the European Union legislation on temporary employees' right to work anywhere within the EU, which will come into action on 1 May 2011."
Baumer alludes to the general fear in the marketplace that temporary employment agencies based in low-labour cost Eastern European countries would be able to undercut German pay from May next year if no agreement had been reached.