Problems relating to Trade and Investment on Germany
16. Employment |
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Issue |
Issue details |
Requests |
Reference |
| (1) Excessively Protected Labour | - The German labour policy places an excessive importance on worker protection and maintenance of employment. It impedes formation of the proper age composition and employees' adaptation to new business. Furthermore, the long-term employment and the aging of workers frustrate suppression of wage increase, impacting soundness of the corporate finance. In addition, sickness leave is legally permitted. Workers taking sickness leave as a matter of routine negatively affects efficiency in business operation. (Workers are entitled to payment of 100% wage for sickness leave). - Germany is abounded with Laws and Schemes that protect workers so that it is difficult for the management to adjust the labour cost, commensurate with the economic environment. For example, it is difficult to dismiss employees once employed on the payroll, and to adopt the merit-based pay system, as laws and regulations disallow reduction in the annual revenue of employees. - Labour Standard Act (LSA) severely restricts wage reduction and dismissal, obstructing substantively justified assessment of employees, and frustrating adjustment of labour cost, commensurate with the management environment. - The employment under the term contract is limited to 2-years, non-renewable. |
- It is requested that GOG: -- deregulates the inflexible employment terms and the high pay institutional predisposition, and -- reviews legislative provisions to grant a greater power to management. - It is requested that GOG reviews the legislation and expands the managerial authority. - It is requested that GOG overhauls the legislative provisions to allow a flexible and expeditious response to dismissal and reduction in pay. - It is requested that GOG takes steps to overhaul legislation in such a way that flexible measures are available to employers as regards dismissal and wage reduction. - It is requested that GOG removes restrictions on employment contract without the fixed term provisions. |
- Collective Labour Agreement by Occupation - The Working Time Act - Laws relating to protection of workers - Labour Standard Act (LSA) - The Protection Against Dismissals Act |
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