The new German government's plans for a modern working environment

The new federal government, consisting of social democrats (SPD), the green party (BÜNDNIS 90/DIE GRÜNEN) and the liberals (FDP), has been in office since 8 December 2021 and is now taking up its activities. The parties have already presented their plans for government activities in the current legislative period with the newly negotiated coalition agreement. The parties also have ambitious plans for employment law. The coalition partners state that they want to "shape the modern world of work, enable professional opportunities and reconcile security and flexibility". Below, we summarise which concrete projects are on the federal government's agenda.

Increase of the minimum salary and the remuneration limit for mini-jobs

The coalition agreement takes up one of the SPD's big election promises: The increase of the minimum wage. Since 1 January 2022, the minimum salary is 9.82 € per hour. The new federal government plans to successively raise the minimum salary to 12.00 € per hour. Subsequently, the Minimum Wage Commission (Mindestlohnkommission) will decide on further steps of increase.

In addition, the salary limit for mini-jobs is to be increased to 520 € per month, the midi-job salary limit to 1,600 € per month.

Working time

The principle of the eight-hour working day is to be fundamentally maintained. Exceeding the eight-hour limit should continue to be permissible only in some special cases. In addition, a limited possibility to deviate from the maximum daily working hours by collective agreements and works agreements shall be created.

In dialogue with the social partners, the federal government intends to examine what need for adjustment arises from the CCOO decision of the ECJ, which has already been considered by several German courts (read more about this here), regarding the working time legislation.

Fixed-term contracts

At the end of the last legislative period, the SPD was urging a far-reaching reform of the law on fixed-term contracts. The possibility of limiting the duration of employment contracts without an objective ground was to be considerably restricted. Such plans are not reflected in the coalition agreement. However, in order to avoid chain fixed-term contracts, the future federal government plans to limit fixed-term contracts to a maximum of six years for which no statutory upper limit has been set so far (restriction of jurisdiction in case of "abuse of rights"). Exceeding the maximum duration is intended to be possible only in narrowly defined exceptions.

The promotion of mobile working

The introduction of a legal right to mobile work failed in the last legislative period due to rejection by the CDU/CSU parliamentary group. The coalition agreement now revives this concept. Employees in eligible jobs shall be given the entitlement to a consultation regarding mobile working and home office work. Employers shall only be able to object to such a request if operational concerns conflict with it. In this context, there should be room for deviating collective agreements or company regulations. In addition, mobile work should be possible throughout the EU without any problems. It remains unclear what concrete changes – for example, the abolition of tax obstacles to mobile work abroad – are planned in this regard.

Works contracts and employee leasing

The coalition agreement does not target specific projects with regard to works contracts (Werkverträge) and employee leasing, but recognises them as "necessary instruments". Any amendments to the German Temporary Employment Act that may be required as a result of European law jurisprudence are to be addressed in the context of the evaluation of the law. The federal government plans to prevent systematic and structural violations of employment law and occupational health and safety through more effective law enforcement.

Codetermination

The federal government plans to further develop co-determination in companies against the background of digitalisation. To this effect, works councils shall be able to decide for themselves whether they work in analogue or digital form. Online works council elections are also to be at least trialled. In addition, it is planned to give trade unions digital access to workplaces in order to strengthen their right of access under Article 9 (3) of the German Constitution. The coalition agreement leaves open complex and controversial questions about the form of the digital access right.

Against the background of the recently made public attempts by companies to prevent the establishment of works councils, the plan to classify the obstruction of democratic co-determination as an official offence in the future becomes clear. Such behaviour would thus be a criminal act that would be prosecuted ex officio. According to the current legal situation, the obstruction of works council elections is only prosecuted at the request of a very limited group of authorised petitioners.

Another project of potentially great importance for companies is the further development of corporate co-determination. The aim is to put an end to the "avoidance of participation in the growth of SE companies". This means that in the future, companies would no longer be able to retain their advantageous co-determination status if they exceed relevant threshold values for co-determination after converting into an SE.

Tariff autonomy

With the plan to strengthen tariff autonomy, the social partners and the formation of collective agreements, another SPD election campaign concern has found its way into the coalition agreement. To this effect, the coalition agreement provides for possibilities of deviation for the social partners at various points (e.g. with regard to working time or mobile work). In addition, the possibilities of "tariff evasion" in the case of company outsourcing are supposed to be limited.

Remuneration transparency

The coalition agreement also includes plans to close the so-called "gender pay gap", the wage gap between male and female employees. The government plans to improve the German Transparency in Wage Structures Act (Entgelttransparenzgesetz) and to strengthen its enforcement by anchoring the right to representative action. This means that employees would no longer have to assert their rights themselves, but could instead turn to associations.

Whistleblowing

The EU Whistleblower Directive, whose transposition deadline had already been expired on 17 December 2021, is to be transposed into German law in a "legally secure" manner. As the last draft of a "Whistleblower Protection Act" (read more about this here) already provided, whistleblowers are to be protected not only when reporting violations of EU law, but also when reporting violations of regulations or other significant misconduct, the disclosure of which is in the special public interest. Accordingly, the new government adheres to an overreaching implementation of the EU Directive.

Outlook

The federal government has planned a lot of changes in the field of employment law. It remains to be seen whether and how the various plans will actually be implemented during the legislative period. Since the Ministry of Labour remains in the hands of the SPD under the leadership of Labour Minister Hubertus Heil, it is to be expected that some projects that were not completed in the last legislative period will now be realised.