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Germany – Pension fund presents staffing firms with bill for €54 million

06 July 2012

Thousands of agency staff who had worked under the illegal bargaining agreement created by the former Christian Unions (CGZP) can expect higher pensions, following several rulings by the Federal Labour Court in May. This will dramatically increase the costs for staffing firms which had signed up to the now void agreement.

“We automatically re-calculate the pension entitlements of all of those who are insured… our audits have revealed that [those workers] have been paid under the CGZP agreement,” told Dirk von der Heide of the German pension insurance fund to the newspaper Handelsblatt. He also pointed out that nobody had to put a request forward to receive the higher pension rates.

This is a direct result of the court rulings by the Federal Labour Court (BAG) which clarified in May that the CGZP had 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 rulings have not only paved the way for temporary workers to pursue equal pay lawsuits, primarily against smaller staffing firms, but have also allowed the German authorities to claim back outstanding social security payments which have been estimated to total around €100 million. 

The pension insurance fund has investigated almost 1,400 staffing firms and is still in the middle of calculating exact sums. So far it has notified 833 firms, Handelsblatt writes, requesting contributions of €54 million. 

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