Germany: Flexible forms of work: 'very atypical' contractual arrangements

  • Observatory: EurWORK
  • Topic:
  • Published on: 04 March 2010

Heiner Dribbusch

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This study looks at very atypical employment forms in Germany.

1. Definition and trends

1.1 Please describe the incidence of the following forms of employment that go beyond non-standard employment in your country, including any upward or downward trends over the past five years, plus, if relevant and appropriate, a brief explanation of the labour market context:

  • Very short part-time contracts (less than 10 hours per week)

  • Short fixed-term contracts, of either less than six months, less than three months or less than one month

  • employment without formal written contracts, (based on oral contracts)

  • “zero hours” contracts/on-call work, where workers can be called upon at short notice to go into work. Do these contracts guarantee a minimum number of working hours a week? Do these contracts offer a fixed hours pattern or can the employer vary working hours?

  • any other forms of employment that are considered to be non-standard in your country (excluding regular part-time, temporary agency work and economically dependant work).

The most prominent form of non-standard employment are the so-called ‘mini-jobs’ in Germany. ‘Mini-jobs’ are mostly marginal part-time employment. ‘Mini-jobs’ are jobs paid a maximum of €400 a month, which, since new legislation came into effect in April 2003, is the threshold above which jobs are liable to social security contributions (DE0302105F). Although there is no legal limit as to how many hours a month people may be employed for €400 (previous limits were abolished by the new legislation) most of these jobs can be considered to be marginal part-time (with up to 15 hours per week). They are widespread in private households and in the private service industries.

Whereas in December 2003 5,981,807 people had a ‘mini-job’ (as only employment), this figure rose to 7,103,628 in December 2007 (Source: Bundesagentur für Arbeit, BA). An additional 2,160,442 employees had a ‘mini-job’ as a side job (December 2007).

There is no data available on other forms of very atypical employment. The only exception is employment without a contract. 3% of employees had no employment contract in 2005 (Fourth European Working Conditions Survey, Eurofound).

1.2 What is the legal framework surrounding these types of employment– has it changed over the past five years, possibly in reaction to trends? Please note that this CAR does not include undeclared work.

The legal framework for ‘mini-jobs’ has not changed since 2003. With effect from April 2003 the earnings threshold above which employees must pay tax and social security contributions in respect to ‘mini-jobs’ (geringfügige Beschäftigung) was raised by legislation from EUR 325 to EUR 400 per month. This preferential treatment also applies to people who have (only) one minor job in addition to their main job. Employers, however, must pay a fixed percentage (25%, compared to 22% before 2003) of the amount paid to the employee up to this threshold in taxes and contributions to pensions and healthcare insurance. The payment procedure for these employers’ contributions and flat-rate tax has been simplified, and both of them now go to a single collection agency. Where the employee’s gross income is above EUR 400 per month, employers will have to pay the usual 21% of gross income in social security contributions.

1.3 Is there any data on the transitions between:

  • non-standard forms of employment and standard forms of employment, and

  • non-standard forms of employment and unemployment/inactivity?

In other words, can non-standard forms of employment be seen as a stepping stone to more standard forms of employment, or perhaps conversely can non-standard employment contracts lead to inactivity?

There is no such data available concerning the forms of non-standard employment mentioned above. A study on mini-jobs by the Institute of Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans Böckler Foundation (Hans-Böckler-Stiftung, HBS) (Brandt 2006) found that mini-jobs are most often a dead-end for people previously unemployed and not an appropriate way into standard employment.

1.4 How prominent is the academic/policy debate on non-standard employment in your country? Please briefly summarise the content of the debate.

There is an extensive debate on non-standard employment in Germany which focuses in particular on ‘mini-jobs’ and temporary agency work (e.g. Seifert and Brehmer 2008)). With regard to ‘mini-jobs’ (the only form on non-standard employment featured in this study) the focus is on two issues. One is on the consequences of this form of employment for the dynamics within the labour market. In particular the Institute for Work and Technology (Institut Arbeit und Technik, IAT) published two important studies. Kalina and Voss-Dahm (2005) found that there is a tendency that in industries with large shares of so-called low-skilled jobs (e.g. cleaning, hotel and catering, retail) ‘mini-jobs’ tend to replace standard forms of employment. Another study of the IAT (Kalina and Weinkopf 2006) found that there is a strong link between ‘mini-jobs’ and low-pay. According to this study ‘mini-jobs’ are regularly low-pay jobs.

In a broader scope the debate focuses on precarious employment and in particular on temporary employment contracts, self-employment and contract working.

2. The nature of the work carried out by those in non-standard employment

2.1. The nature of the work

  • the sector

  • the type of enterprise (size etc.)

  • the type of activity (eg low-skilled jobs such as cleaning, or high-skilled jobs such as IT consultant roles or jobs in creative arts)

Marginal part-time work and ‘mini-jobs’ are found in every sector and in all types of enterprises. There is no data available about the relation between mini-jobs and firm size. In some sectors such as industrial cleaning almost half of employees (47.3%) were ‘mini-jobbers’ in 2004. The share of mini-jobbers in retail was 26.3% compared to a share of 15.3% for the whole economy (Source: BA, Sonderauswertung IAT, Kalina and Voss Dahm 2005). There is a link between mini-jobs and so-called low-skilled jobs.

2.2. Work organisation

  • working hours (eg. unsocial working times, rather than working hours)

  • shift patterns.

There is no data on shift patterns or working-times of marginal part-timers (‘mini-jobbers’). In some industries - such as cleaning - employees often work unsocial hours (e.g. cleaners in buildings come when other employees leave) but there is no quantitative data on the extent of unsocial hours available.

3. Consequences of non-standard work on working conditions

  • pay

  • working hours

  • exposure to risks and accidents at work

  • work-related health problems (including problems related to mental health) and occupational illnesses

  • Social consequences such as a lack of job security

  • training and career development opportunities

  • job quality: is the content of the job interesting and/or does it require the worker to possess a certain level of knowledge and skills?

  • Employment rights (equality, non-discrimination, right to collective bargaining). Are there any control mechanisms to ensure that these rights are not being breached? Are there any mechanisms to ensure that employees can lodge complaints about breaches of employment rights?

As mentioned above there is strong evidence that ‘mini-jobs’ are closely linked to low-pay employment. However, there is no special data available on working hours or the exposure to risks and accidents at work.

4. Impact on health and safety

  • what are the main health and safety issues for workers in non-standard employment?

  • are there any control mechanisms to ensure the health and safety of these workers?

  • what is the role of the labour inspectorate?

  • what mechanisms exist to ensure that employees can lodge complaints relating to health and safety?

Mini-jobbers are - like all other employees, covered by the statutory accident insurance. There is, however, no obligation for mini-jobbers to be in a statutory health insurance. However, if they are insured either through another job which is liable to social security contributions, or by way of a family insurance, the employer has to pay a contribution to this insurance. The latter is not the case if the mini-jobber is in a private health insurance or no insurance at all.

Employers have to declare the mini-jobbers to the Employer's Liability Insurance Association (Berufsgenossenschaft, BG). However, even if the employer does not declare the employee to the BG, the employee is nevertheless insured against accidents at work.

There is no special BG for mini-jobbers but they are covered by BG applicable to the respective industry their employer belongs to.

5. Views and actions of policy makers and social partners

5.1 Have there been any actions taken by policy makers and/or social partners to change the regulatory framework surrounding non-standard forms of employment, or to encourage the growth or decline of any particular practice?

On 17 December 2002, the mediation committee of the lower house of the German parliament (Bundestag) - where the governing coalition of the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) and Alliance 90/The Greens (Bündnis 90/Die Grünen) holds a majority - and parliament’s upper house (Bundesrat) - which is controlled by the Christian Democratic Party (Christlich Demokratische Union, CDU) and Christian Social Union (Christlich Soziale Union, CSU) opposition parties - agreed a compromise on a bill designed to reform employment in the 'low-wage sector'. This bill included – apart from an almost complete deregulation of temporary agency work - the above mentioned legislation on ‘mini-jobs’.

5.2 What are the views of policy makers and social partners on these issues?

At the time of the 2002 legislation the president of the Confederation of German Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA), Dieter Hundt, welcomed the new legislation as a step in the right direction, as it cuts 'red tape' and simplifies procedures for employing people in small part-time jobs. In 2006 the BDA was opposed to an increase in employers’ contributions to social security insurance from 25% to 30% for ‘mini-jobs’. In a statement of January 2008 the BDA reacted negatively on plans by the parliamentary party of the SPD to reintroduce an upper working time limit of 15 hours a week for ‘mini-jobbers’. The BDA argued that only a small minority of employees with ‘mini-jobs’ would actually work longer than 60 hours per month and that the introduction of a legal upper limit on working hours for jobs paid €400 would mean an introduction of a minimum wage for ‘mini-jobbers’ by the back-door.

By contrast, representatives of the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) and of the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) suspected as early as 2002 that the new legislation would lead to an increase of these comparatively low-paid jobs which would help to replace full-time regular employment. In a statement from February 2006 the chair of the DGB, Michael Sommer, renewed this critique and demanded that this form of employment be abolished. In March 2008 the DGB deplored the fact that the positive development of the labour market was to a large extent due an increase in non-standard employment and low-wage jobs. According to the DGB the extension of these forms of employment lowered the overall level of social security. While acknowledging that these forms of employment allowed for more flexibility for companies and that mini-jobs were perhaps even welcomed by some employees as a means for additional income these forms of employment would prosper – especially because job insecurity and a lack of job alternatives would force employees to accept low-paid jobs.

6. Commentary by the NC

All official data points to the fact that in recent years non-standard forms of employment have been on the increase. This is particularly well documented for temporary agency work and ‘mini-jobs’.In both cases legislative deregulation created incentives for employers to choose this kind of employment. In a number of industries - for example in retail - there is strong evidence that the increase of ‘mini-jobs’ happened at the expense of regular full-time and part-time employment.

This increase went along with an expansion of the low-paid jobs sector. This expansion was deliberately promoted by legislation in the years 2002 and 2003. Substantial cuts in unemployment benefits and far more restrictive measures on means-testing meant that more people were forced to accept these jobs if they wanted to avoid losing all benefits. Whereas employers welcomed these measures and both Social Democrats and Christian Democrats hailed this legislation as a necessary stimulus to reduce unemployment, trade unions remained largely reluctant and deplored the damaging effects of low-pay employment on overall job standards and the quality of work.

Heiner Dribbusch, Institute of Economic and Social Research, WSI

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