How is German staffing legislation changing?
Prevention of abuse of contract work (Werkvertrag):
· Measures to prevent illegal contractual terms regarding contract work which operate to the detriment of contract workers.
· More effective controls of staffing arrangements.
· Works councils will have additional information rights.
· Hidden employee leasing (i.e staffing companies dressing up the supply of staff as something else to avoid regulation) shall be subject to legal sanctions. Many UK and US staffing companies have entered the German market on a "dressed up as statement of work / project consultancy" basis. This may be harder to get away with going forward. The German tax and social security authorities are also on the look out for "dressing up" and have had to help staffing companies deal with significant assessments in fake self-employment cases recently.
Employee Leasing Act (AUG):
· Assignments of temporary workers will be limited to 18 months. However, there shall be options to deviate from such assignment limits in collective bargaining agreements or in works agreements (Betriebsvereinbarungen).
· In addition, there shall be equal pay after 9 months but with assignments generally not lasting that long, it is being assessed as to whether this should apply after 3 months instead (as is the case in the UK).
· Temporary workers cannot be used as strike-breakers (mirroring the law in the UK).
Whilst the detail of the new regulatory provisions and implementation date is not yet known, staffing companies need to prepare. There may be "work arounds" in relation to collective bargaining agreements.
We will keep you up to date with how this situation progresses but please get in touch with our German staffing partner, Thomas Leister, should you have any queries.
To find out more about the German recruitment market as well as the global economy and information on expanding into new territories come along on 15th October to the RI International Expansion event. it is free for recruitment agency owners, managers and directors. For more information email firstname.lastname@example.org