Can temporary workers continue to be paid less than regular workers? Yes, says the Federal Labor Court and provokes criticism with its fundamental decision.
In the end, the big bang in the temporary work industry did not materialize before the Federal Labor Court: The common practice, according to which temporary workers can be paid less than permanent employees by collective agreement, has endured. The collective agreements in temporary work do not contradict EU law, the Fifth Senate ruled in Erfurt on Wednesday. As a result, a temporary employee from Bavaria, who had been suing the authorities for the same wages as the core workers for years, was now also defeated by the highest labor judges.
The presiding judge of the Fifth Senate, Rüdiger Linck, explained that effective regulations had been made in temporary work in order to be able to deviate from the principle of equality. The ruling was eagerly awaited in the industry after the European Court of Justice (ECJ) had previously set clear rules in the dispute that has now been decided. The Luxembourg judges ruled last December (Case C-311721) that temporary workers can only be paid less under the collective agreement if this unequal treatment is compensated for elsewhere in the collective agreement – for example through additional free time. It is about respecting the so-called overall protection.
Reference to government-set minimum wages
According to the Federal Labor Court, such compensation is the right to continued payment of wages during non-hire periods. According to the law, temporary workers in Germany – unlike in France, for example – continue to be paid for the times in which they are not borrowed. The salary in non-operational times is determined by the legislature – the compensation therefore does not have to be made through the collective agreement, argued the Senate. This also applies to fixed-term employment relationships.
In addition, the Erfurt judges referred to the lower wage limits set by the state, which the collectively agreed remuneration of temporary workers must not fall below. In addition, the payment of lower wages is now limited to the first nine months of the temporary employment relationship.
The union side regretted the judge’s verdict. “We did not succeed in enforcing the principle of equal treatment,” said Rudolf Buschmann from DGB legal protection, which represented the plaintiff in Erfurt. During the negotiation, Buschmann explained that, in his opinion, the remuneration during non-deployment times cannot compensate for the disadvantages of temporary workers under the collective bargaining agreement. “The permanent employees also have this advantage, so there is no better position for temporary workers,” Buschmann argued.
The employment law expert Wolfgang Däubler was also disappointed: “The Federal Labor Court avoided the correct implementation of the ECJ ruling and thus missed a good chance of equal pay for equal work.” According to the ECJ, the compensation for poorer positions must be provided in the collective agreement, since the statutory regulation is not sufficient, said Däubler.
The salary differences are sometimes significant
The legal representative of the defendant company, Oliver Bertram, spoke of a very important judgment: “The tariff system can remain in place.” The two employers’ associations in temporary work – the Federal Employers’ Association of Personnel Service Providers (BAP) and the Interest Group of German Temporary Employment Agencies (iGZ) – see the decision as strengthening collective bargaining autonomy for the future. “The move to collective bargaining was an important step for the temporary employment industry,” explained both associations in a joint statement.
According to the trade unions and employers’ associations, there are currently almost 800,000 temporary workers in Germany. That is around two percent of all employees. Collective bargaining agreements, which iGZ and BAP have concluded with the DGB trade unions, apply to almost the entire industry.
The wage differences between temporary workers and permanent staff vary depending on the pay group – but according to data from the Institute for Labor Market and Occupational Research (IAB), they are sometimes considerable and amount to between 24 and 30 percent. However, employers also point out that there are temporary workers who are better paid than regular workers – such as academics.
At the time of the dispute, the plaintiff retail agency worker was earning around a third less hourly wages than the regular employees. This was possible because her temporary work agency paid according to the collective agreement, which allows the principle of equal treatment to be deviated from. This prompted the presiding judge Linck to ask the unions: “We are dealing here with collective agreements that were concluded by DGB unions. Why did you do that?”