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Germany – Over 1,000 agency workers suing staffing firms over low pay

11 June 2012

There are currently more than 1,000 temporary agency workers in Germany who are suing staffing firms for equal pay after having received lower salaries due to a “sham” collective agreement, it has emerged over the weekend.

The German Confederation of Trade Unions (DGB), which also offers legal protection, has registered 1,000 legal procedures which claim for payment in arrears of €3.5 million. This was revealed by the in-house counsel of the trade union IG Metall, Thomas Klebe, who also told the German Press Agency that “there were and are many more claims.”

This follows last month’s court rulings by the Federal Labour Court (BAG) which clarified that the former Christian trade unions (CGZP) has always lacked bargaining capacity and should never have been allowed to negotiate collective agreements. Under these agreements, staffing firms were able to significantly underpay temporary workers, also paying lower social security contributions. 

The recent BAG rulings have now paved the way for temporary workers to pursue equal pay lawsuits - primarily against smaller staffing firms as these were the major beneficiaries of the now discredited CGZP agreement.

The Social Security and Pension Offices is also suing for retroactive payment of the difference between equal pay for equal work and the wages negotiated with CGZP. In fact, the potential payment to temporary workers is dwarfed by the amount being pursued by the social security authorities. Mr Klebe said that backdated social security pay amounts to €300 million alone which will also increase pension benefits for temporary agency workers.

“We expect that the social contributions will be paid. If a staffing firm is not able to pay, the hiring company must do so, according to the law,” he said. Companies will also not be able to demand protection of confidence, but Mr Klebe denied that the retroactive payments will bankrupt staffing firms. “No company has filed for bankruptcy over this,” he said.

A higher social court in Mainz recently ordered a staffing firm to pay €1.4 million in outstanding social contributions for temporary workers who the firm had hired between 2006 and 2009.

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