Agreement creates collective staffing pool in metal and electrical industry

In December 2009, the Ruhr Employer Association and the North-Rhine Westphalia Metalworkers’ Union concluded a collective agreement that provides for a temporary staffing pool among manufacturers in the metal and electrical industry in the Ruhr region in western Germany. The Ruhr Agreement is the largest of its kind in Germany in terms of coverage rate to date. However, the outcome of the agreement remains to be seen.

Two forms of temporary work

In Germany, two forms of temporary work exist: temporary agency work, which is regulated by the Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG), and the temporary assignment of workers by one employer to another in the same craft or industry under the condition of a collective agreement being reached by the social partners. The latter type of temporary work rests on the assumption that establishments in the same sector of economic activity are affected in different ways by an economic downturn and where in one establishment layoffs may be considered, in another staff absence needs to be covered. The bargaining partners both promote collective agreements on temporary staffing pools at local or regional level as alternative measures to layoffs, short-time work and temporary agency work.

However, whereas temporary agency work has been increasing during the recession, the implementation of the latter form of temporary work is still poor. In December 2009, the Ruhr Employer Association (Arbeitgeberverband Ruhr) and the North-Rhine Westphalia Metalworkers’ Union (Industriegewerkschaft Metall Nordrhein-Westfalen, IG Metall NRW) concluded a collective agreement that provides for a temporary staffing pool among manufacturers in the Ruhr region of North-Rhine Westphalia in western Germany. Covering about 350 businesses and up to 70,000 workers, the Ruhr agreement is the largest of its kind in the country in terms of coverage rate to date.

Provisions of Ruhr Agreement

The Ruhr Agreement covers a given list of members of the Ruhr Employer Association, which consists of five local employer organisations in the metal and electrical industry and in related industries. Any other company wishing to implement the agreement has to apply for membership of the Ruhr Employer Association. The agreement provides for the temporary assignment of blue-collar and white-collar workers – excluding trainees and homeworkers – to other establishments under the conditions of the employment contract of the sending establishment. It provides for temporary work as well as for a temporary transfer for training purposes.

The works council is involved under the conditions of the Works Constitution Act (Betriebsverfassungsgesetz, BetrVG). Workers are informed in writing about the terms and conditions of the assignment. Workers aged 55 years or older and employees who have worked with the sending company for more than 25 years have the right to reject the assignment; in all other cases, the employment contract applies.

Wages and annual payments are paid by the sending employer and remain unchanged; wages of pieceworkers – those who are paid a fixed ‘piece rate’ for each unit produced or action performed – correspond to the average wage earned six months before the assignment. Special payments and bonuses are only provided in the event of the respective job tasks existing with the temporary employer. The sending employer makes up for working time differentials by way of a working time account or by issuing payments.

The sending employer is reimbursed by the temporary employer.

Coverage of staffing pools

The idea of either craft-based or sector-based local temporary staffing pools originated at the beginning of the decade and arose from debates on employment protection and regional cluster development. In 2003, Chemnitz Metalworkers’ Union (IG Metall Chemnitz) and several manufacturers in the machinery and equipment industry concluded the first collective agreement providing for a joint staffing pool. Workers had to agree to the temporary work assignment. Later in the same year, in the bargaining regions of North-Rhine Westphalia and Lower Saxony in northwestern Germany, IG Metall and the regional employer organisations in the metal and electrical industry concluded three agreements covering 12 establishments in the Bielefeld area and two companies in Paderborn in North-Rhine Westphalia, as well as 10 manufacturers in Braunschweig in Lower Saxony. To date, IG Metall knows of 15 collective agreements on local staffing pools existing in North-Rhine Westphalia alone.

In response to the economic recession, new agreements attempt to reach out to more businesses. For example, 70 employers in the Siegerland area of North-Rhine Westphalia are covered by a March 2009 agreement concluded by IG Metall and the Siegerland Association of Metal Industry Employers (Verband der Siegerländer Metallindustriellen, VdSM). The Ruhr Agreement applies to 300 establishments.

Impact of temporary staffing pools

Most of the agreements have shown rather poor results, according to IG Metall, as the employers have not made use of staffing pools. Interest in these agreements is growing, however. In Braunschweig, where the agreement is backed by a local development coalition in support of the machinery sector (involving the employer association, trade union, research institutes and, in 2009, 23 manufacturers), the coalition claims to have saved 12 workplaces since 2004 by way of the temporary staffing pool. The most successful case in this regard is the area of Siegen in North-Rhine Westphalia. IG Metall reports that about 300 short-time workers or workers at risk of losing their jobs in this region have transferred to full-time employment with other establishments.

Commentary

From experience, the parties to collective bargaining emphasise that the creation of staffing pools depends on a strong networking structure and the existence of a representative on the employer side promoting and organising the staff transfer. In addition, the local trade union needs to be supportive, and inform and support the works councils. However, temporary staffing can be more costly to the employer than temporary agency work. The results of the Ruhr Agreement remain to be seen.

Birgit Kraemer, Institute of Economic and Social Research (WSI)

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