GERMANY: Annual Update – Expected labour law changes in 2016

Temporary Employees

Rules to protect temporary employees supplied by agencies: There are plans to introduce new rules in the near future to protect temporary employees supplied by Temporary Work Agencies. The proposed rules include the following:
• A limit on the supply of a temporary employee to a company. The supply period must not exceed 18 months, unless a collective agreement or company agreement says otherwise;
• After 9 months, the temporary employees must be paid the same as the Company’s permanent employees;
• If the temporary work arrangement is in reality an employment situation, an employment contract will be implied; and
• A prohibition on using temporary workers as “strike-breakers” during labour disputes.
Action required: No action is required at present, but employers who use temporary employees should keep an eye on how the law develops in this area.

Labour unions

Rules to identify applicable collective agreement: In July 2015, rules were introduced to determine which collective agreement applies when there is more than one labour union representing the workforce. The position now is that where there are two or more labour unions representing the same category of employee at the same workplace, the collective agreement of the labour union with the most members will apply. Although the rule was implemented in 2015, its effect will be more apparent in 2016.
Action required: If there are more than two unions, inform staff about the effect of the rule, review staff membership, and ensure the employer’s practices and procedures comply with the presiding applicable collective agreement.

Female board members

Quotas for female board members: As of January 1, 2016, large companies listed in Germany must ensure 30% of the supervisory board are women.
Action required: If relevant to the business, apply the new gender quota.

Minimum wage

Reduced time reporting obligations: Employers were previously subject to extensive reporting obligations regarding employees’ daily working time. This was to show they were being paid at least minimum wage. In July 2015, an exemption was created. There is now no recording obligation in respect of employees who receive regular monthly remuneration in excess of €2,958. This is because it will be obvious that the employer is paying the minimum amounts. Although the exemption was created in July 2015, its effect will be more apparent in 2016.
Action required: Track employees’ remuneration and amend existing reporting policies and procedures.

Free movement

Access to German labour markets: In July 2015, the restrictions on Croatian workers’ access to the German labour markets were removed. The impact of this change will be more apparent in 2016.
Action required: No action is required, save that employers can now hire workers from Croatia, free from restrictions.