25 November 2021 Matthew Devey  -  Timon Grau  -  Dr. René Döring Employment and Incentives - Pensions

German coalition agreement: Labor and social policy highlights

The coalition agreement presented by the German parties SPD, Greens and FDP on November 24, 2021 also contains many labor and social policy plans. We have summarized the most important ones for you.

Fixed-term contracts
  • The remuneration of an employee from budgetary funds will be no longer be a valid reason for justifying a fixed-term employment.
  • Fixed-term employment contract(s) with the same employer for which there is a valid reason will generally be limited to a maximum period of six years.
Working time
  • No changes with regard to the principle that the daily working time will not exceed eight hours.
  • Collective agreements could provide that employees will be allowed to organize their working time more flexibly under certain conditions and deadlines.
  • Collective agreements or works council agreements based on collective agreements can provide for deviations from the current daily maximum working time to a limited extent.
  • In dialogue with the social partners, it will be examined whether there is a need for adjustments in view of the ECJ judgement on working time. Flexible working time models such as trust-based working time will still be permissible.
Agile work/Homeoffice
  • Homeoffice (as a way of agile work) is to be distinguished from “telework“ and the scope of the Workplace Ordinance (“ArbeitsstättenVO“).
  • Employees in suitable jobs will be granted a right to discuss agile work and working from home which may only be refused by the employer for in certain circumstances. Alternative collective arrangements will be possible. Agile work will be possible throughout the EU.
Collective bargaining autonomy
  • Public procurement by the federal government will be tied to compliance with a representative collective agreement of the respective sector.
  • Continuation of the previous collective agreement after business spin-off provided the previous owner remains the same (“Tarifflucht“).
Operational co-determination
  • Works councils can decide whether they want to work analogue or digital.
  • Testing digital works council elections in a pilot project.
  • Trade unions’ have a right to digital access to operations.
  • Obstruction of democratic co-determination to be classified as an official offence.
Corporate co-determination
  • Group attribution from the Co-Determination Act (“MitbestG“) will be transferred to the One-Third Participation Act (“DrittelbG”) in the event of de facto genuine control.
  • Government wants to advocate the abolition of the freezing effect of SE establishments.
Personnel leasing
  • Improved protection of employees in cross-border postings.
Short-time allowance
  • Covid-19 regulations will be evaluated at the end of the pandemic, especially with regard to low incomes.
Whistleblowing
  • Transposition of the directive on whistleblowing, whereby whistleblowers are not only protected from legal disadvantages when reporting breaches of EU law, but also when reporting significant breaches of regulations or other significant misconduct whose disclosure is in the special public interest.
Company Pensions
  • Investment options with higher returns will be possible.
  • The social partner model must be implemented.
Pay Transparency Act
  • Employers’ associations will be able to assert individual rights of the employees.
Parental leave and allowance
  • Extension of the special protection against dismissal by three months after return.
  • Two-week paid leave for the partner after birth.
  • Extension of the partner months by one month.
  • 15 days of child sick leave per child and parent, 30 days for single parents.
Minimum Wage
  • One-off increase to EUR 12 per hour.
Mini- und Midijobs
  • The mini-job limit is raised to EUR 520, the midi-job limit to EUR 1,600 per month.
Statutory Pension
  • Minimum level of the statutory pension of 48 per cent.
  • Contribution rate does not exceed 20 per cent.
  • Partial capital cover of the statutory pension insurance, initially with EUR 10 billion in 2022. Will be professionally managed as a permanent fund and invested globally.