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Germany — The row over job protection regulation has started already

30 September 2009

Even before the negotiations between the coalition partners of the newly elected German government have started, there is already disagreement on whether job protection laws should be loosened, Frankfurter Rundschau reports.

Whilst Chancellor Merkel had stated that she did not want to touch job protection regulations, politicians from her own Conservative Party (CDU) are now asking for changes. CDU politician Michael Fuchs said, "we have to investigate in detail which well-meant regulations actually hinder the hiring process."

The smaller Coalition Party (Free Democrats, FDP) have been asking for various measures to free up the hiring and firing process in Germany, which has one of the most regulated labour markets in Europe.
Dieter Hundt, President of the Association of Employers (BDA) said, "the German labour market needs more flexibility. This is not about sacking existing employees. It is about giving job seekers the chance to enter the labour market."

BDA and Coalition Party FDP are both advocating that employers and employees should be given the legal right to agree to replace the current stringent job protection regulation with a compensation payment in the case where employer and employee decide to part company.

Ulrich Walwei, Vice-President of the Institute for Labour Market Research (IAB) said, "in the last few years many elements of flexibility have been introduced into the labour market such as temporary employment and contract work. Companies can test these employees without much risk already."

"In the long-term we have to decide whether we want to loosen employment protection regulation for everybody or whether we want to have hugely protected core personnel on the one hand and completely unprotected temporary and contract workers on the other. If we decide on the former, temporary employees become obsolete."



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