New collective agreements for temporary agency workers

On 18 February 2005, representatives of all trade unions affiliated to the Confederation of German Trade Unions (DGB) signed a new pay agreement for temporary agency workers with the Association of German Temporary Employment Agencies (iGZ), representing a number of small and medium-sized temporary agencies. This agreement provides an increase of 2.2% for temporary workers in the so-called basic pay scheme, moving the lowest pay level to EUR 7 an hour with effect from 1 March 2005. Employees in higher wage-schemes will only receive minor increases or no increase at all. In another agreement concluded in December 2004 between the DGB-affiliates and the Federal Association of Temporary Employment Agencies (BZA), whose members include some of the major companies in the sector, it was agreed that the partial adjustment of eastern German pay rates to western German pay levels which had been previously agreed for 2005 will be delayed by one year.

On 18 February 2005, representatives of all trade unions affiliated to the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) signed a new pay agreement for temporary agency workers with the Association of German Temporary Employment Agencies (Interessengemeinschaft Deutscher Zeitarbeitsunternehmen, iGZ), representing a number of small and medium-sized temporary agencies. This agreement provides after two so-called zero-months (January and February 2005) ie months without no increase at all and for an increase of 2.2% for temporary workers who are in the so-called basic scheme following two zero months (January and February 2005) when there is no increase at all. This moves the lowest hourly pay to EUR 7.

However, in 2003 the framework collective agreement on pay grades (DE0308203F) concluded between the DGB-affiliates and the iGZ introduced not only 9 pay grades which differ according to the qualifications demanded for the work to be done, but also three pay levels within each grade - the so-called 'basic scheme' (Eingangsstufe), the 'main-scheme' (Hauptstufe) which was set 3% above the basic scheme and an 'extra-scheme' (Zusatzstufe) which was set 3.5% above the main-scheme. A promotion in the schemes was possible according to length of employment or performance. According to the iGZ, currently about 45% of employees currently covered by this agreement are in the basic scheme, 25% in the main-scheme and about 30% in the extra-scheme.

The bargaining parties now agreed that workers in the main-scheme will only receive a 0.4% increase and that the provision determining that pay in the main-scheme to be 3% above the basic-scheme will be abolished. The extra scheme will completely be removed from the framework agreement but all workers who were in this scheme before March 2005 will keep it. Workers in the extra-scheme, however, will receive no increase at all. The pay agreement has a duration of 12 months until 31 December 2005.

In another agreement concluded in already in December 2004 between the DGB affiliates and the Federal Association of Temporary Employment Agencies (Bundesverband Zeitarbeit Personal-Dienstleistungen, BZA), whose members include some of the major companies in the sector it was agreed that the partial adjustment of eastern German pay rates to western German pay levels which according to the collective agreement concluded in 2003 would have to take place in 2005 (DE0308203F) will be delayed by one year. As agreed in 2003, however, wages of employees covered by the DGB/BZA-collective agreements raise by 2.5% in 2005 moving the lowest pay rate to EUR 7.02.

Collective agreements between the DGB trade unions and both iGZ and BZA are estimated to cover about 50% of all temporary agency workers in Germany. BZA and iGZ complain about competition of companies which pay employees according to collective agreements agreed with various collective bargaining associations of the small Christian Federation of Trade Unions (Christlicher Gewerkschaftsbund, CGB) which undercut pay and conditions of the collective agreements concluded with the DGB affiliates.

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