Press Release No. 45/2010 BAG ruling puts an end to abuses in the temporary staffing industry

Frankfurt am Main – IG Metall has welcomed the Federal Labor Court’s (BAG) ruling on the collective bargaining capacity of the Christian Trade Unions for Temporary Work and Personnel Service Agencies (CGZP). The ruling confirms IG Metall’s position that the CGZP is not an organization with collective bargaining capacity. “With this ruling, it is now clear that the collective bargaining agreements concluded with the CGZP are invalid, and all employees paid under them are entitled to the same pay and working conditions as permanent employees,” said IG Metall’s legal counsel, Thomas Klebe, on Tuesday in Frankfurt. The BAG’s decision sends a clear signal to employers to stop using pseudo-unions for wage dumping—neither in the temporary staffing sector nor in other areas.

The BAG ruling has enormous legal consequences. “If there is no valid collective bargaining agreement, companies that apply collective bargaining agreements with the Christian trade unions are obligated to retroactively pay all temporary workers the difference between their wages and the regular collective bargaining wages of permanent employees within the applicable expiration and statute of limitations periods,” said Klebe. As a result of the decision, IG Metall anticipates an increase in lawsuits from temporary workers who have thus far been paid based on invalid CGZP collective bargaining agreements. IG Metall will support the affected temporary workers in reviewing and asserting their claims.

The BAG’s ruling also means that social security contributions that were underpaid through and including the year 2006 can be reclaimed from both the staffing agencies and the client companies, Klebe said. In this regard, the respective social security agencies in particular have a duty to take action.