Update on Reform Regarding German Labour Leasing Laws

After the original legislative proposal made in November 2015 regarding reforms to the Labour Leasing Laws (please also see our Employment Blog contribution dated 10 December 2015) met massive resistance not only within the government but also by employers’ associations and German scholars and jurisprudence, the German Labour Ministry has now presented an amended legislative proposal. The new draft contains e.g. the following amendments:

  • Criteria for labour leasing contracts: The catalogue of criteria to distinguish between labour leasing contracts and work and service contracts has been cancelled. Instead the newly suggested wording of the relevant provision now reflects German case law defining the term “employee”.
  • Maximum Duration: Temporary workers may be employed for up to 24 months instead of merely 18 months by the same hirer on the basis of a works agreement. Furthermore collective bargaining agreements may provide for an even longer period of consecutive employment.

However, the prohibition on use of temporary workers during a strike remains. Even though this new draft reduces the original proposal’s impact on employers in Germany, an agreement regarding reforms has not yet been reached. As a result, the legislative process currently cannot go forward. However, we will of course keep you updated on future developments.