Volkswagen gives up on internal temporary employment agency

In April 1997, after opposition from the company works council and the IG Metall metalworkers' union, Volkswagen gave up its plans to create a new internal temporary employment agency, whose employees would be paid below the rate of the Volkswagen company agreement.

On 2 April 1997 it became public that during the ongoing collective bargaining at the German automobile company, Volkswagen, management had made a proposal to create a new "internal temporary employment agency" (Zeitarbeitsgesellschaft). Depending on the incoming orders, the agency's newly hired employees would be set to work at the different Volkswagen plants. Volkswagen proposed to pay the new temporary employees under the terms and conditions of the current branch-level collective agreement in the metalworking industry.

Volkswagen traditionally does not follow the branch-level collective agreement but has its own company agreement which usually provides for higher wages than set at branch level. In view of this, the proposal to hire new employees under conditions which were below the Volkswagen company agreement provoked a sharp rejection by the works councils and the metalworkers' trade union, IG Metall. The Volkswagen company works council said that, according to the management's proposal, there would be workers at Volkswagen who were paid an hourly wage which was about DEM 5 below the current average wage. The general secretary of the company works council, Hans-Jürgen Uhl, declared that the introduction of a temporary employment agency would lead to a "two-class system," whereby workers working together on the assembly line would get different wages. On 17 April 1997, after a new round of negotiations, management finally announced that it would give up its plans for an internal temporary employment agency.