A significant amount of new employment legislation is expected or is already in place for 2017. Key changes will be in the hiring of temporary workers through an agency (referred to as “personnel leasing” in Germany), employee protection and equal treatment.

Reform of laws regarding personnel leasing

One of the main developments in 2017 will be the long expected reform of the German Act on Temporary Employment (Arbeitnehmerüberlassungsgesetz – AÜG), as well as other related laws, with effect from 01 April 2017. Aiming to reinforce the rights of temporary workers during personnel leasing and in particular to prevent the malpractice of work contract arrangements (Werkverträge), (these are contractual arrangements under German law intended to circumvent the applicability of the German Act on Temporary Employment), the key changes include:

  • A maximum leasing duration of 18 months (extendable in certain cases by way of a collective labour agreement or works agreement);
  • A requirement that the personnel lease be labelled as such in the agreement between lender and borrower;
  • The principle of equal treatment will apply including equal pay, with restricted possibilities of deviation;
  • The prohibition of the use of temporary workers as strike-breakers;
  • Consideration of temporary workers in most relevant legal thresholds in rules on works constitution and corporate co-determination.

Maternity Protection

Initially planned to take effect in January 2017, significant changes to the German Maternity Protection Act (Mutterschutzgesetz – MuSchG) aimed at improving the health protection of nursing mothers and pregnant women as well as the (unborn) child, are expected to be implemented in the course of 2017. Changes are expected to include the expansion of the scope of the Maternity Protection Act so that it covers not only employees and homeworkers, but also – amongst others – third party managing directors, apprentices and trainees as well as, in certain cases, pupils and university students. Further, it is intended to extend the 12-week maternity protection period after childbirth (i.e. the period during which employees are not allowed to work) to mothers who have given birth to a disabled child, and the special protection against dismissal to mothers who have had a miscarriage after week 12 of pregnancy. The latter may then not be dismissed for a period of 4 months after such miscarriage.

Changes intended to improve wage equality

Aiming to close the „gender pay gap“ in Germany, the Federal Cabinet decided upon the introduction of the Law for the Promotion of Transparency of Pay Structures (Entgelttransparenzgesetz) at the beginning of this year. Planned to take effect in July 2017, the law in particular affords employees in companies with normally more than 200 employees, the right to information regarding the criteria and procedure for wage determination as well as the right to information about the average monthly gross wage and two other wage components of comparable employees of the opposite gender, if there are at least six employees in that comparable position. Besides this, companies with more than 500 employees are requested to examine (by way of a survey, an analysis and a final report) their compliance with wage equality requirements in their business and, if a breach is determined, to implement the necessary measures to ensure compliance.

For more information, please see our previous blog post in German.

Envisaged changes regarding rules on occupational pensions

A draft bill for a law aimed at making occupational pensions more popular with SME’s and low-income earners (Betriebsrentenstärkungsgesetz) is currently being discussed and – if passed – will be implemented in 2017. The proposed changes include the introduction of a defined contribution commitment and the ability to stipulate compulsory deferred compensation in collective labor agreements (which will include a right of objection for the employee, the so called “opting-out system”). Furthermore, the proposed changes include a special tax relief for employers when they pay a certain amount of occupational pension for their employees and fulfill further requirements as stated by the draft bill.

Recent changes for severely disabled employees

The law on the improvement of the participation and self-determination of persons with disabilities (Bundesteilhabegesetz) came into force on 01 January 2017 and considerably strengthens the protection afforded to severely disabled employees. Most importantly, the dismissal of a severely disabled employee with or without due notice is now (similar to the rules governing the participation of the works council participation before a dismissal) invalid, if the representative body for severely disabled employees is not heard prior to the dismissal. Furthermore, it is intended that the definition of “disability” will be as defined by the UN Convention on the Rights of Persons with Disabilities with effect from 01 January 2018.

For more information, please see our previous blog post.

Discussed changes for part-time employment

Another draft bill currently discussed could lead to amendments to the German Act on Part-Time Work and Fixed-Term Employment (Teilzeit- und Befristungsgesetz – TzBfG). The proposals include the introduction of a right for employees who temporarily switch from full-time to part-time work, to return to their full-time employment. Such a right currently only exists for those who switch to part-time employment during parental leave and leave for carers.

Minimum wage adjustment

Finally, while transitional provisions still apply to certain industrial sectors, the minimum wage was increased from EUR 8,50 to EUR 8,84 as of 01 January 2017.

This post was prepared with the assistance of Kilian Kliemann, Trainee, Norton Rose Fulbright LLP (Munich).