Federal Labor Court: No “equal pay” in temporary work

Status: 05/31/2023 7:06 p.m

Temporary workers are usually paid less than regular employees. On average, it is 600 euros less per month. Less money for the same work – there is no legal objection to this, the Federal Labor Court ruled.

By Ann-Kathrin Jeske, ARD legal department

For the more than 800,000 temporary employees in Germany, the judgment of the Federal Labor Court is not good news. Because the court decided: From the so-called “equal pay” principle, that equal pay must be paid for equal work, an exception may be made in temporary work.

The court ruled that temporary workers are allowed to earn less money than the permanent workforce.

9 euros per hour instead of 13 euros

A temporary worker from Bavaria who worked for the fashion company H&M for several months in 2017 had complained. She denounced that with an hourly wage of around 9 euros, she earned about a third less than the permanent employees, who received more than 13 euros.

Together with the DGB legal protection, she went through the instances and demanded this wage difference. But without success. So she doesn’t get the difference of more than four euros an hour.

Lower wages must be regulated in the collective agreement

The Federal Labor Court declared today that the principle of equal pay for equal work in temporary work may be deviated from. And that is when this lower wage is regulated in a collective agreement. A loophole in European law, which Germany uses, makes this possible: In principle, “equal pay” applies. When temporary employment agencies conclude collective agreements with unions, they can still be paid less.

This has been the practice in Germany for years. With the result that the collective agreement is nowhere as high as in temporary work – it is 98 percent. No wonder, because only through these collective agreements are temporary work agencies allowed to pay their employees less. Without the collective agreements, “equal pay” would apply from the first day of work.

ECJ judgment as a default

The Federal Labor Court has nothing to complain about. When making their decision, the judges had to take into account a ruling by the European Court of Justice. He had the case on the table in December last year because the Federal Labor Court had submitted it.

At the time, the ECJ said that temporary and permanent employees must all in all be equally protected. Temporary employees may be paid less. If that’s the case, they must be compensated for it – for example, significantly more vacation.

Temporary workers may be paid less than their colleagues – but they must be compensated.

Time between assignments is also paid for

The Federal Labor Court now had to clarify what this means for German law. The plaintiff and the DGB legal protection insisted that no compensation was provided for in the collective agreements for the lower pay.

The judges agreed, though. But they saw the balance somewhere else, namely in the law. Unlike in other EU countries, temporary workers in Germany are paid in the time between two work assignments, i.e. even when they are free. This is stipulated by law. From the point of view of the Federal Labor Court, this payment compensates for the lower wages during non-operational times.

Plaintiff attorney Rudolf Buschmann admitted that he had hoped for more after the ECJ ruling. “It’s a defeat, let’s wait and see what that means overall,” said Buschmann. He could not understand the argument of the Federal Labor Court. After all, regular employees also get their wages when there is nothing to do.

Unions in a difficult role

The decision, so much is clear, has an effect beyond the individual case. Other temporary workers should now have just as bad chances of suing for a higher wage.

The employers were satisfied. They want to continue to conclude collective agreements, as Martin Dreyer from the interest group of German temporary employment agencies IGZ explained.

The trade unions are now in a difficult role. They had to put up with the question from the judge of the Federal Labor Court, Rüdiger Linck, as to why they were signing collective agreements at all, which made lower pay possible in the first place. Without the collective agreements, “equal pay” would eventually apply.

There was no answer. There was no reaction from the unions to the verdict today. You are currently in collective bargaining with the temporary employment agencies. Above all, it is about an inflation premium for temporary workers who do not want to pay the temporary work agency. It doesn’t look like they’re rethinking collective bargaining.

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