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The German automobile manufacturer Volkswagen signed a new agreement on Friday to offer equal pay to agency workers worldwide. The agreement has been hailed a “milestone” and news reports suggest the company aims to implement its targets within the next three to five years.
VW signed the so-called “Temporary Work Charter for the Volkswagen Group” which sets out the “moderate” use of temporary agency work. In the future, the company plans to have a share of 5% of temporary agency staff in their company although it said this figure was only a guideline.
But VW set out clear plans on improving pay rates for paying agency workers. “The principle of equal pay will be implemented in a staged plan. With growing experience and qualifications, the remuneration of temporary employees within the Group will develop in line with that of permanent staff,” the firm said.
The company has also committed itself to offer more training opportunities for agency workers and use it as a tool to hire workers on a permanent basis.
“With this agreement, we are again setting a milestone in equal treatment for employees. In the Volkswagen Group, temporary workers are not second-class employees. The Charter provides for the implementation of equal pay and equal treatment as well as for a maximum duration of deployment,” said Group Works Council Chairman, Bernd Osterloh.
Unions have also welcomed the deal. Berthold Huber, the President of “IndustriAll Global Union” and IG Metall, said: “The charter states that the number of temporary employees will always be in an appropriate ratio to the number of permanent staff.
“The agreement between the employer and employee representatives that temporary work will not be misused as a tool for cost reduction is further confirmation of the special culture of codetermination at Volkswagen. This codetermination culture is one of the main reasons for the success and strength of Volkswagen.”
The principle of equal pay for temporary workers, while a requirement in most European staffing markets (under the EU Agency Work Directive), is not a legal obligation in many other staffing markets such as the US. In this respect, it is believed that this agreement is the first of its kind and, therefore, may have some influence on policy makers outside Europe.