Germany: latest working life developments Q2 2018

A draft law on the right for part-time employees to return to full-time work and the success of the third round of collective bargaining in the public and construction sectors are the main topics of this article. This country update reports on the latest developments in working life in Germany in the first quarter of 2018.

Part-time workers' rights to improve

The right to return to full-time work was one of the main demands of the Social Democrats (SPD) during the coalition negotiations in February 2018. Subsequently, the new Federal Minister for Labour and Social Affairs, Hubertus Heil, presented a draft law that will make it a legal right for employees to be able return to full-time work after having worked part time for a set period. The draft law includes the following requirements:

  • The law shall only be applicable for companies with more than 45 employees and for employment contracts of more than 6 months.
  • Employees will need to file a request to reduce their working hours for a certain time period (1–5 years), but will not need to give a reason (e.g. care responsibilities at home).
  • Employers with 46–200 employees only have to grant the request for 1 out of 15 employees.

Furthermore, employers will have to prove that a vacant job is not suitable for a part-time employee or that the latter is not as equally qualified for the job as an external applicant. This shift of the burden of proof to the employer’s side intends to prioritise part-time working employees when filling vacant positions.

Both the Confederation of German Trade Unions (DGB) and the German Employers’ Association (BDA) generally advocate the right to return to full-time work. However, the BDA criticised the added bureaucratic burden, while the DGB criticised the draft law’s limitations, as it doesn’t include all employees. Both organisations hope that adjustments will be made to the legislative procedure on their behalf.

The draft law was approved by the Federal Cabinet in June 2018 and will now be debated in the German Bundestag and Bundesrat.

Wage increase for public sector and construction workers

On 18 April 2018, employer organisations reached a consensus on a new collective bargaining agreement for the public sector in the third bargaining round (the two previous bargaining rounds were unsuccessful and included warning strikes). Led by Interior Minister Horst Seehofer and the United Services Union (ver.di), the final agreement stipulates that there will be individual wage increases for each wage group, rather than a linear wage increase. The agreement will last 30 months and, over three rounds, employees in the public sector will receive a wage increase of more than 7% (approximately €300–€400). It is considered to be a step in the right direction when it comes to closing the increasing wage gap to the open market. This was the last collective bargaining round for the outgoing head of ver.di, Mr Frank Bsirske.

The third round of collective bargaining in the construction sector ended without a result, making an arbitration procedure necessary. This process resulted in a new collective bargaining agreement containing various wage increases and lump-sum payments, which will run for 26 months. While the new agreement will be hard on employers, they agreed to it in order to avoid strikes. The Trade Union for Building, Forestry, Agriculture and the Environment (IG BAU) considers the new agreement to be a success, as employees will also now benefit from the economic boom.

Finally, in May 2018, representatives of the DGB’s eight trade union members met in Berlin to work together on more than 70 socio-political proposals. Areas under discussion included social cohesion and democracy in Germany and Europe, the future of work, social security, and Germany’s capacity to adjust to the changing economy.

Commentary

Germany’s economy remains strong and stable, with the country’s price-adjusted GDP growing by 0.3% in the first quarter of 2018. Furthermore, German exports increased by 9.3% from April 2017 to April 2018. The labour market continues to grow, with unemployment rates at a record low of 5% in June 2018. On 1 June 2018, tariffs on steel and aluminium (which were announced by US President Donald Trump in April) became active. Many feared that these tariffs would have a negative effect on the German economy; however, the actual impact remains to be seen.

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