Labour law amendments come into force

From 1 January 1999, a package of labour law amendments came into force in Germany, largely arising from the wish of the new "red-green" coalition government to revoke some of the more controversial changes introduced by its conservative-liberal predecessor. The amendments concern continued payment in the event of sickness, dismissal protection and regulations on posted workers.

On 19 December 1998, a new law on "corrections in social security and the safeguarding of employee rights" (Gesetz zu Korrekturen in der Sozialversicherung und zur Sicherung der Arbeitnehmerrechte) was adopted by the new "red-green" government (DE9811281F), which thus revoked some of the most controversial social changes made by the former conservative-liberal coalition (DE9702202F). As far as labour law is concerned the new law, which came into effect on 1 January 1999, contains new provisions in the following areas.

  • Continued payment in the event of sickness. The new government has reintroduced 100% pay from the first day of illness. In 1996, the former government had reduced "sick pay" to 80% of the previous wage, which led to various trade union protests and became one main reason for the failure of the first attempt to build a national "alliance for jobs". However, the unions were able to enforce 100% continued payment in most collective bargaining units in exchange for concessions to the employers regarding other labour cost-cutting measures (DE9709131F).
  • Dismissal protection. The new government reintroduces full dismissal protection for all workers who are hired in companies with more than five employees. The former government had limited comprehensive dismissal protection to companies with more than 10 employees. In addition, the new government has extended the so-called "social criteria" (eg age, length of service or family situation) which must be taken into account by employers in the event of redundancies.
  • Posted workers. In order to fight against social and wage "dumping" in the German construction industry, the new government has extended the Posted Workers Act for an unlimited period (the current Act runs until August 1999). Furthermore, it has broadened the content of the Act - which was previously limited to certain minimum wages - to all provisions of the collective agreements in the construction industry. The new administration has also sharply increased the maximum fines for employers which breach collective agreements (from the previous DEM 500,000 to DEM 1 million) and added a new provision which makes user companies responsible when their subcontractors contravene collectively agreed standards.
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