Germany: collective negotiations in the interim employment sector at a time of a faltering economy and manpower shortages

On 17 September social partners in the interim employment sector commenced negotiations to renew collective agreements that are set to expire on 31 December 2019. Mandated by its members, the DGB (German Trade Union Confederation), is calling on the sector’s employers’ federations, the iGZ and BAP to raise salaries by 8.5% for the Germany’s 900,000 temporary workers within the interim sector. One of the DGB’s goals is to secure a clear increase in the lowest salary scales that the confederation holds are too close the legal minimum salary. In addition, the union confederation is calling for a revision to the current framework agreement (Manteltarifvertrag) on working time and leave periods with, inter alia, the introduction of a union bonus payment. More concretely, the DGB wants the amount of holiday bonus and 13^th month payment to equal a month’s salary and be permanently included in the collective agreement. The DGB is also seeking to negotiate longer paid leave (currently set at 24 days per annum), and in addition wants temporary worker bonus payments for night time work, week-end work, and work on public holidays to be aligned with those earned by domestic employees. The employers’ federations however refuse to agree to any deterioration in the economic situation that these ‘exaggerated’ demands would provoke. Temporary employment companies are in fact often the first to feel the onset of economic recession and they are already starting to see their business revenues recede. At the same time however demographic ageing is generating a shortage of skilled manpower in several sectors and good salaries are necessary to attract skilled labor. In short, the employers’ federation resistance can’t afford to be too radical.