Germany: Posted workers
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In Germany the situation of posted workers is regulated by the Posted Workers Act (Arbeitnehmer-Entsendegesetz) which came into force in 1996 - even before the EU Directive. In recent years this legislation has become much debated in so far as it was used to implement national collectively agreed minimum wages in a number of chosen industries. Overall data on posted workers does not exist in Germany, the available data for the construction industry indicates that some 53,000 workers were posted to Germany in this industry in 2008, indicating a substantial decline compared to 2004, when some 76,000 posted workers were registered in this industry.
1. Posted workers: basic facts
1.1 Please provide basic data on the workers posted in your country:
a) number (by gender);
There are no figures or estimates available on posted workers as defined by the EU Directive in sectors other than construction. Data split by gender are not available.
b) distribution across sectors
There are figures on the number of posted workers in the construction sector for which employers from outside Germany pay contributions to the building industry leave-scheme. The collective pay funds in the building industry are handled jointly by the Leave and Wage Equalisation Fund of the German Building Industry (Urlaubs- und Lohnausgleichskasse der Bauwirtschaft, ULAK) and the Additional Pay Scheme of the German Building Industry (Zusatzversorgungskasse des Baugewerbes VVaG, ZVK-Bau). Since 1997, ULAK has also handled the leave fund for employers outside Germany and their workers posted in Germany. ULAK is a legal body by right conferred by the state. Under the umbrella name of SOKA-BAU, ULAK and ZVK are joint institutions of the industrial partners in the German building industry. Each year SOKA-BAU provides figures on the number of employees posted to Germany in the construction sector – see table 1 below. Since 2005 the number of posted workers in the construction industry has constantly declined.
Note: Figures include those employees for which contributions are paid in the country of origin of the employer. Workers are counted only once, even when posted several times a year, as long as they stay with the same employer.
Source: SOKA-BAU, annual reports
1.2 Are there any information on the number (by gender) and distribution across sectors of workers posted to other countries by domestic companies? If yes, please provide details.
There are no official figures or even estimates available on the number of German employees who are posted elsewhere in the EU. It can be assumed, however, that there are only very few German posted workers. Usually these workers are employees with special qualifications or managers who have been sent to foreign subsidiaries of German multinational companies.
1.3 Are there any information on trade union affiliation and collective bargaining coverage of workers posted to your countries, including affiliation to foreign unions and coverage by foreign collective agreements, in addition and beyond the minimum requirements set by legislation? If yes, please provide details.
No, there is no such data or even estimates available.
1.4 Are there any information on trade union affiliation and collective bargaining coverage of workers posted to other countries by domestic firms? If yes, please provide details.
No, there is no such data or even estimates available.
1.5 Please refer the main content and results of major studies on posted workers (either in-coming or out-going), both quantitative and qualitative, which have been carried out in your country.
We could not identify major studies dealing with the quantitative aspects of posting workers to Germany. Some articles in academic journals deal with the question of minimum wages in accordance with the Posted Workers Act. One study conducted in the late 1990s at the University of Essen (Nienhüser 1999) dealt with the question to which extent, in which way and for which reasons construction firms are practising a human resource strategy that can be characterized as “low wage”-strategy by subcontracting projects to foreign contractors which then post their workers to German construction sites.
2. Regulation on posted workers
2.1 Please provide details on the current legislative framework for posted workers in your country:
a) Reference to the law adopting the posted workers directive: number, date, and link to the text, if available, in English;
b) A brief account of any amendments or integrations introduced after the initial adoption;
c) A description of the current legal framework regarding posted workers, especially:
- as regards the way employment conditions are enforced, as required by art. 3.1. of the Directive (see the briefing note for the text of the article):i. by law, regulation or administrative provision, and/orii. by collective agreements or arbitration awards which have been declared universally applicable;- whether the law requires the application to posted workers of:
i. the whole system of labour law or only minimum terms expressly identified with reference to the list in art. 3.1 (see the briefing note for the text of the article).ii. the whole content of collective agreements or arbitration awards which have been declared universally applicable or only minimum terms expressly identified with reference to the list in art. 3.1 (see the briefing note for the text of the article).
- when the employment conditions are set by collective agreements or arbitration awards, please specify which is the legal instrument which make them universally applicable:
i. according to the law. Please specify the law reference number and year and whether it includes certain requirements for universal application. In this latter case, please specify such requirements.ii. according to a ministerial decree. Please specify which minister or political authority can issue the decree and whether certain requirements are needed. In this latter case, please specify such requirements.iii. according to rules on mandatory representation which make collective agreements (in practice) universally applicable.
- when the employment conditions are set by collective agreements, please specify which collective agreements are relevant:
i. intersectoral or sectoral. Please provide examples.ii. national or territorial. Please provide examples.
d) whether the legal framework sets a maximum period for considering a worker a “posted worker” rather than a “resident worker”. If yes, please specify this maximum period.
e) whether there are special rules for certain sectors (for instance, construction). If yes, please specify the sectors and briefly illustrate such special rules.
In March 1996, the Posted Workers Act (Arbeitnehmer-Entsende Gesetz, AEntG) came into force even before the EU Directive on the issue was adopted. The law covers all posted workers in the construction sector, other construction-related services and navigation-related services (mainly concerning tugs) (Seeschiffahrtsassistenz). The bulk of posted workers covered by the law, therefore, are in a broad sense construction workers (in Germany, the posted workers issue is seen as relevant to the construction industry only, and there are no rules relating to posting in other sectors).
The Act includes no definition of what a posted worker is nor does it set a maximum period for considering a worker a “posted worker”.
The Posted Workers Act provides the posted workers concerned with the protection of German statutory minimum standards in areas such as working time, paid leave, health and safety, maternity and equal treatment. Furthermore, the law provides that posted workers should be covered by the same minimum collectively agreed pay rates and collectively agreed provisions on paid holidays as German workers. This goal is accomplished by way of the extension of collective agreements. Such an extension applies the terms and conditions of a collective agreement to those employees who are not covered because they are either not members of the signatory trade union or because their employer is not a member of the employers' association which is party to the agreement.
After the adoption of the EU Directive, some details of the law were modified. The most important alterations came into force on 1 January 1999 (DE9901291N). The Posted Workers Act was then extended for an unlimited period, there was a significant increase in the fines for employers who break the law and a new provision was added which makes user companies responsible when their subcontractors contravene collectively agreed standards. The most controversial alteration, however, was that the Ministry of Labour was enabled to declare wages and working conditions to be generally binding by a ministerial directive. This effectively allows the circumvention of the requirement of section 5 of the Collective Agreement Act (Tarifvertragsgesetz) (DE9905200F) which says that a 'committee on orders imposing extensions', consisting of three trade union and three employers' representatives (representing different industries), must approve the extension of a collective agreement by a majority of at least four votes.
The latter amendment was introduced in the light of a major controversy on the employers' side about the extension of collectively agreed minimum rates of pay in the construction sector, which began immediately after the Posted Workers Act came into force in 1996.
On December 2002 the German parliament adopted a major amendment to the Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz, AÜG) which reflected a decision of the European Court of Justice (ECJ) made on 25 October 2001 (in Case C-493/99, Commission v Germany). The ECJ ruled that a requirement imposed by the AÜG - that the hiring out of workers in the construction sector was not allowed unless the company that provided the workers was signatory to all the collective agreements applicable in the German construction sector - was a violation of the EU right of establishment and the freedom to provide services. As a result of this decision, the AÜG now allows companies that usually do business in construction, ie effectively foreign construction companies but not temporary work agencies, to hire out workers to German employers. They must, however, abide by the collectively agreed minimum wages and holiday provisions and participate in the building industry leave scheme. This was secured via a corresponding alteration to the AEntG, which came into force at the same time as the alteration to the AÜG on 1 January 2003.
In 2006 the Act was amended to enclose the building-cleaning industry (DE0609049I) and in 2007 it was again amended to allow to include further industries where the bargaining parties agreed on collectively agreed minimum wages. In April 2009 the Act was reformed and it was made clear that a joint commission (Tarifausschuss) under the Collective Agreement Act (Tarifvertragsgesetz) has to be consulted each time the Ministry of Labour intends to declare a collectively agreed minimum wage generally binding under the Posted Workers Act.
As of June 2009 the following sectors are included in the Posted Workers Act and covered by collectively agreed minimum wages:
- construction industry (Bauhauptgewerbe)
- electrical trades (Elektrohandwerk)
- painting trades (Maler- und Lackiererhandwerk)
- roofing trade (Dachdeckerhandwerk)
- building-cleaning industry (Gebäudereinigung)
- mail delivery services (Briefdienstleistungen) (this extension is still under review in the courts)
In the demolition industry (Abbruch- und Abwrackgewerbe) which is also covered by the Act the collectively agreed minimum wages expired in 2008 and need to be renegotiated. The expiring of the minimum wage agreement does not affect the statutory minimum standards under the Act in areas such as working time, paid leave, health and safety, maternity and equal treatment.
Since April 2009 another 6 industries have been included in the Act for which collectively agreed minimum wages can be introduced:
- special services in mining (Bergbauspezialarbeiten)
- professional further training (Berufliche Aus- und Weiterbildung)
- waste disposal (Entsorgungswirtschaft)
- industrial textile services (in particular industrial textile cleaning) (Industrielle textile Dienste)
- security services (Bewachungsgewerbe)
Since April 2009 the Act includes special provisions on the inclusion of caring services (care of elderly persons). To a large extent organisations providing these services belong to churches which are exempt from collective bargaining. In these cases a special commission under §12 AEntG shall deal with the question of minimum standards.
2.2 Monitoring of implementation of regulation
a) whether a monitoring system for collected data and information on the number and employment conditions of posted workers was set up. If yes, please provide details on such system (bodies involved, structure, methods of collection and dissemination of information, etc.) and its effectiveness;
No formal monitoring system was set up.
b) whether measures were introduced to make the information on the terms and conditions of employment generally available to foreign service providers and to the posted workers concerned.
No special measures were introduced - it is up to employers and trade unions to inform posted workers about their rights.
c) whether the law envisages the implementation of special labour inspections devoted to verify the number and employment conditions of posted workers. If yes, please provide details on how these are organised and on their effectiveness and outcomes.
2.3 Please specify if particular rules have been devised to deal with specific situations of posted workers:
a) the current rules for the posting of temporary agency workers in your country, especially whether the law requires the application to temporary agency workers of:
i) the whole legislation on temporary agency work or only minimum terms expressly identified with reference to the list in art. 3.1 (see the briefing note for the text of the article).
ii) the types and requirements for temporary agency work established by national legislation (compared to those envisaged by the legislation of the country of origin). For example, can temporary agency workers be posted under contractual arrangements – such as indefinite duration staff leasing - which would not be available for national temporary work agencies?
Temporary work agencies are not covered by the Posted Workers Act which means there are no generally binding minimum wages for temporary workers posted to Germany (however, there is no data available on whether the posting of temporary workers by temporary work agencies to Germany is of any relevance).
b) the current rules for employment conditions in public procurement, notably whether the law:
i) requires explicitly the application of specific terms and conditions of employment to be awarded public procurement contracts. If yes, please specify what kind of terms and conditions of employment must be applied (comprehensive terms or only minimum levels?).
ii) requires explicitly the application of specific collective agreements to be awarded public procurement contracts. If yes, please specify what kind of agreements must be applied (national, sectoral, territorial) and to what extent (the whole agreement or only certain and minimum provisions?).
iii) allows awarding authorities to require the application of specific collective agreements to be awarded public procurement contracts. If yes, please specify to what extent this possibility is used (almost always, often, rarely, almost never) and what kind of agreements are more often considered for such clauses (national, sectoral, territorial).
iv) envisages specific clauses in the case of posted workers. If yes, please briefly illustrate the contents of such rules.
There are no such provisions in the Act.
3. Positions and actions of the social partners and government on posted workers
3.1 Please indicate the positions and main initiatives that the social partners and the government have taken with reference to posted workers, either in-coming or out-going, and especially indicate:
a) the presence of a debate on the relevance and consequences for national labour law and industrial relations institutions of recourse to posted workers. If such debate is present, please refer its main contents and whether it refers to specific sectors.
For the trade unions the debate on posted workers was strongly influenced by the idea to protect domestic workers from so-called wage dumping. Right from the beginning the Act was also seen as a tool not only to implement general minimum standards with regard to posted workers but also as a means to implement minimum wages for all domestic workers by way of extending collective agreements. This has given raise to much debate amongst employers’ associations. A good example for this was the debate on the employers’ side which began immediately after the Posted Workers Act came into force in 1996 and culminated in 1999. The main opposition came from employers' associations outside the construction sector. In April 1999, the collective bargaining parties in the building industry - the Trade Union for Building, Forestry, Agriculture and the Environment (IG Bauen-Agrar-Umwelt, IG BAU) and the two employers' associations, the Federal Association of the German Building Industry (Hauptverband der Deutschen Bauindustri e, HDB) and the Central Association of the German Building Industry (Zentralverband des deutschen Baugewerbes, ZDB) - agreed to raise hourly minimum pay rates from 1 September 1999. However, the Confederation of German Employers' Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) and the three employer representatives on the committee on orders imposing extensions made clear that they would not approve an application for the extension of this agreement (DE9909117F). As a consequence, the Federal Ministry of Labour and Social Affairs decided to make use of its new powers and extend the collective agreement on construction minimum wages by way of a directive. A similar debate was seen in 2007, on the issue of extending the Act to further industries (DE0711019I; DE0712039I).
b) any positions expressed or actions taken in view of the recent rulings by the European Court of Justice (cases Laval un Partneri - C-341/05, Rüffert - C-346/06, Commission v Luxembourg – C-319-06).
On 26 June 2008 the German Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales, BMAS) held a conference about the consequences of the Laval and Rüffert cases on German labour law, to which representatives of the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) and the Confederation of German Employers’ Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA) were invited. In a statement the representative of the DGB, Helga Nielebrock stressed that the DGB accepts the institution of the ECJ even if it does not agree with its rulings as in these cases. The DGB called for an overhaul of the EU legislation and the resulting case law of the ECJ. To this end, the DGB the campaign of the ETUC for a ‘social progress clause’ to be inserted into Community law, on the grounds that the internal market freedoms should no longer be more highly valued than the collective bargaining autonomy and freedom of association enshrined in national law. At national level the DGB hopes for legislation that enables to maintain collectively agreed minimum standards in procurement procedures.
The representative of the BDA, Roland Wolf, stated on behalf of the employers’ associations that although the BDA was often critical of a number of ECJ rulings it does in principle welcome the rulings in the Laval and Rüffert cases. Regardless of one’s attitude towards the Posted Workers’ Directive the BDA thinks that the ECJ was right in not allowing member states to invent (for protectionist reasons) rules that effectively prohibit the use of posted workers or make their employment unprofitable. The BDA stresses that the ECJ rulings would not require any changes in national legislation.
There is a constant disagreement between DGB and BDA when it comes to minimum wages. Whereas the DGB calls for a national minimum wage and short of that welcomes all amendments of the AEntG which allow further industries to implement national collectively agreed minimum wages, the BDA is strongly opposed to this practice which according to the BDA is a misuse of the AEntG.
3.2. The main campaigns or initiatives undertaken by the social partners specifically aimed at posted workers or firms posting workers. If such campaigns or initiatives are present, please indicate their main features and whether they refer to specific sectors. Please cover, in particular:
a) Trade union initiatives
The IG BAU as the trade union in particular concerned with the issue of posting workers in the construction industry and the DGB support the ETUC in its demand for a ‘social progress clause’ to be inserted into Community law (see above). Besides that there are currently no major campaigns directed towards posted workers. IG BAU supports posted workers in claiming proper wages.
b) Employers initiatives with regard to:
There were no major campaigns or initiatives which were explicitly directed towards posted workers or employers posting workers.
c) Any kinds of joint action undertaken by the social partners with regard to the issue of posted workers
The WSI is not aware of any joint initiatives apart from those in the construction sector outlined above which concerned the implementation of collectively agreed minimum wages. The SOKA-BAU as bipartite institution provides an international online service for employers posting workers to Germany.
4. Collective disputes and case law on posted workers
4.1 Please indicate whether collective disputes involving posted workers are frequent or increasing in recent times.
There have been no industrial disputes around the issue of posting workers or with a particular involvement of posted workers.
4.2. Please provide information on any major collective disputes which concerned the utilisation of posted workers in your country.
4.3 Please provide information of existing case law in your country involving posted workers.
We could not identify major decisions on the issue of posting workers in Germany in recent years. According to the legal advice service of the DGB there might be individual cases of posted workers claiming wages but as these workers are in general not a member of a German union those cases are hardly known. The most prominent case in the context of posting workers in Germany was the Rüffert case which was eventually decided by the ECJ.
The debate on posted workers in Germany has substantially changed over years. In the past the focus was on the potential consequences of posting for domestic jobs. In recent years, however, the debate has shifted towards the setting of minimum standards in the context of a much larger debate on the introduction of a statutory minimum wage in Germany. The reason for this new focus had not been primarily a concern about a growing number of posted workers and their situation but the growth of low wage employment in general, in particular as a consequence of the liberalisation and privatisation of public services.
Nienhüser, W. (1999): „Legal, illegal, ...“ – Die Nutzung und Ausgestaltung von Arbeitskräftestrategien in der Bauwirtschaft?, in Industrielle Beziehungen, 6 (3), pp. 292-319.
Heiner Dribbusch, Institute of Economic and Social Research, WSI