No more multiclass workplace society

Outsourcing is now practiced in more than two-thirds of companies and the trend continues. Since 2012, the outsourcing of work based on employment contracts has more than doubled. This is what the 4,061 works council members who took part in our study on employment contracts say.

Worse working conditions

Employment contracts significantly worsen the situation of employees in the company. As there are rarely collective agreements in contracting companies and the works councils of parent companies have their hands tied, the workers concerned are usually hired under poorer working conditions and wages. On the other hand, the company earns additional profits that it can achieve at the expense of its employees.

A multiclass society is developing in companies. In the areas of industrial logistics, development and industrial services alone, which include machine maintenance, repair and technical cleaning, companies have outsourced and outsourced more than 100,000 jobs. Employees of external companies are less paid, have fewer holidays, often do not have a pension, and sometimes even have to pay higher prices in the company’s canteen. When it comes to salary, this could mean almost half the salary for a single worker in euros and cents: One Material a supplier in an automotive company receives EUR 15.90 as a permanent employee. On the other hand, the hourly wage of an external material supplier in a company that is not bound by a collective agreement is at the minimum wage of EUR 8.50.

Outsourcing of classic production works

But that’s not all: outsourcing also means a loss of collective bargaining and co-determination. Until now, works councils had their hands tied, despite the fact that employees of contractors work on the premises of the parent company. Only five percent of companies have work contracts in this area.

Outsourcing is used both in production and in the intellectual sector. The work of dozens of third-party companies and suppliers is now under the car’s hood. “Service contracts are becoming a huge threat to the employees of contracting companies,” explains Christiane Benner, Member of the Executive Board of IG Metall. The abuse of employment contracts means that “the workforce is divided into employees of different classes,” says Benner. Permanent employees and employees of contract companies are afraid of further outsourcing to even cheaper companies.

More works councils are needed

In the past, employment contracts were mainly used by companies to carry out special tasks, such as running a canteen or painting a factory building. But in the meantime, it is no longer just about outsourcing activities and tasks that the manufacturer is not able to master himself. According to the works councils, it is increasingly interfering in the value chain and outsourcing classic production work.

This trend must be countered by improving codecision rights. At the same time, collective agreements are necessary to protect contract workers. That is why we want to push through collective agreements to improve income and working conditions in these areas. Even more contractors require the election of works councils. We are assertive, above all, when we can also count on many members in contracting companies. In this way, we can create the necessary pressure for a good and lasting representation of interests.

We demand from the legislator

  • Clear criteria to better distinguish between employment contracts and temporary and self-employment. The employer must inform the works council of the contract staff and the contracted company. Employee representatives need to know whether there is a works council in the contracting company and which collective agreements apply there.
  • Better information and representation rights for works councils for the company’s contract staff
  • Better rights for employee representatives to outsource. Because until now employee representatives have been powerless to use employment contracts, even though this directly affects the interests of the core workforce. It is imperative that the employer talks to the works council about outsourcing as part of personnel planning and to achieve a balance of interests.

(from left) Christiane Benner, Jörg Hofmann

Nationwide campaign day on September 24

Now is the time to put more pressure on policymakers and businesses. For this reason, the chairmen of groups and general works councils of the automotive industry and suppliers will define their demands in an appeal to politicians.

On September 24, we will highlight problems and demands in almost all German automotive industry locations in Germany with rallies and visible actions. Everyone comes – be it regular workers, temporary workers or workers with a contract of employment. On this day, we want to establish a powerful sign.

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