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Germany – Temporary employment no threat

16 August 2013

In a discussion by the Federal Association of Personnel Services (BAP) it was announced that temporary workers are not a threat to the security of permanent staff. There is on-going debate in Germany regarding the use of temporary workers and the impact on permanent staff. In July, the federal labour court ruled that companies may no longer recruit temporary staff for indeterminate periods of time.

Speaking at the discussion Dr Oliver Stettes of the German Economic Institute (IDW) in Cologne, reiterated that temporary recruitment was not a tool for companies to replace permanent staff.

In the seven years to 2012, the number of workers in Germany increased +17% with a corresponding decline in unemployment benefit of -33%. While Dr Stettes conceded that temporary job numbers have increased, they have done so in relation to permanent jobs. Every second job created is temporary; however the conversion rate to permanent positions is high – particularly in the industrial sector.

Dr Matthias Heider of the Christian Democrats (CDU) pointed out: “Companies need flexibility with no loss of manpower. The allegation that companies replace their permanent workers with temporary recruits is untrue. Companies want to avoid large business fluctuations.”

The vice president of the BAP Wilhelm Oberste-Beulmann stated that fees and wage dumping were no longer problems in the industry. “We take the candidates off of unemployment benefits and they gain qualifications.”

Patra Crone, MP for the Social Democrats (SDP), added that temporary workers were important to allow for rapid deployment and flexibility. The SDP advocate the implementation of parity for all employees. However, Crone cautioned that: “There are still companies that strategically exploit [workers]. Many domestic companies do not want temporary workers, because it disturbs the company. Temporary workers get less money and have fewer rights.”

Germany’s current labour law states that temporary employees work under the supervision and in-line with the instructions of the user enterprise. If the dispatching of employees is on a long term basis, which is assumed in case of a dispatching period longer than 12 months, it is considered commercial. Commercial dispatching is permitted only under the strict preconditions of the Act on the Commercial Transfer of Employees. First, the business of the temporary work agency needs permission by the Federal Institute of Employment. Secondly, the dispatched worker must be employed on a permanent basis, except for under particular circumstances when a non-renewable fixed-term contract is justified. Dispatched employees are entitled to maternity protection, parental leave, continued payment of remuneration in case of sickness, 24 days of holiday (including Saturdays), social insurance, and statutory redundancy provisions.

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