Press Release No. 26/2016 IG Metall Welcomes Law Against the Abuse of Temporary Agency Work and Service Contracts

Frankfurt am Main – IG Metall views the decision by the coalition committee to finally submit the draft bill on temporary agency work and service contracts to the cabinet and the parliamentary process as a long-overdue step. “The obstructionist stance of the Bavarian state government and some employers was unnecessary and cost valuable time. It’s positive that things are now moving forward,” said Jörg Hofmann, President of IG Metall, on Wednesday in Frankfurt.

An important and positive aspect of Labor Minister Andrea Nahles’ draft is that the planned new regulation will prevent a shift from temporary agency work to work-for-hire arrangements. “It must be clear to employees on what contractual basis they are working in companies and what entitlements they can derive from that. Anything else is arbitrary,” said Hofmann.

Particularly positive is the strengthened role of the collective bargaining parties in the area of temporary work: “The collective bargaining provisions achieved so far can be continued and further improved on the basis of the law. This will allow us to take into account the interests of both permanent employees and temporary workers,” said Hofmann. IG Metall will now work with Gesamtmetall and the employers’ associations IGZ/BAP to agree on the necessary adjustments as quickly as possible. “However, we will also call on employers’ associations in other industries to finally work with us to establish collective bargaining agreements that limit temporary agency work and ensure fair working and pay conditions. The law supports us in this effort.”

For temporary work, the plan is that affected workers will generally be assigned for no more than 18 months and, after 9 months, will receive the same pay as permanent staff (“Equal Pay”). The parties to the collective bargaining agreement may agree to exceptions to this rule. According to the latest version of the draft bill, even companies not bound by collective bargaining agreements will be able to apply such agreements, provided a works agreement is in place.

Hofmann also emphasized the importance of a legal ban on the use of temporary agency workers as strike breakers. “This helps us in all those industries where we have so far been unable to enforce collective bargaining provisions against strike-breaking.”

The clarifications regarding the distinction between employee status and solo self-employment are also positive. “Here, however, we would have liked even greater clarity through clear criteria.” Hofmann also viewed the improved rights to information and the right to consultation in the context of workforce planning when outsourcing as positive developments.

Overall, the regulations on service contracts fell short of what is necessary to truly and effectively prevent abuse. “But this was already apparent in the coalition agreement,” said Hofmann. IG Metall will therefore continue to work with employees to combat the often scandalous working conditions in service contract companies by establishing works councils and fighting for collective bargaining agreements.