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Germany

German Labor Minister Wants To Make Firing and Hiring Easier

The German government is seeking to revive its effort to work with unions and employers in its "Alliance for Jobs" initiative to spur employment, but a proposal to make layoffs easier is facing opposition from unions.

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Wolfgang Clement wants to make it easier for German companies to terminate employees

Germany's "super minister" for Economics and Labor, Wolfgang Clement of the Social Democrats (SPD), has sparked a war of words -- even within his own party -- by suggesting the country's strict labor laws be eased in order to encourage German companies to hire more workers.

Under current German law, it is difficult for companies with more than five employees to terminate workers -- especially those who are married or have children. Terminations are regulated by a series of complicated rules that discourage companies from paring staff, even in times of economic uncertainty.

But Clement now says job protection should be weakened in larger firms, too. "The rigid number limit is a problem," he said. "We need a solution. Above all we do hangs this question -- how do we create jobs?" On Friday, Clement proposed that worker protection should only be give to one out of two employees for companies with more than five workers.

Under the former conservative government of Chancellor Helmut Kohl, the worker protection law was loosened in 1996 for companies with up to 10 employees, but Schröder's government campaigned on the issue and reduced the exclusion to five employees after its election in 1998.

An obstacle for job growth?

Many employers agree with the need to change the law, saying that a company that can fire more easily will be quicker to hire.

"I think he has the right ideas," said Michael Rogowski, president of the Federation of German Industries. "From my talks with small and medium sized companies, I know that job protection legislation in its present form is an obstacle to boosting employment. So I would welcome any success Mr. Clement has in pushing through his reforms. But I fear he'll face stiff resistance."

And he has. The trade unions, led by the powerful metalworkers, have expressed fierce opposition to Clement. The head of the German Trade Union Federation, Michael Sommer, described Clement's proposal as "half-baked" and expressed his oppositions to changes in the law. He did say, however, his organization would be willing to work with German Chancellor Gerhard Schröder's "Alliance for Jobs" roundtable.

The head of powerful German construction industry union IG BAU, Klaus Wiesehügel, offered more pointed criticism. "I hope the SPD has remained socially conscious enough to stop these abstruse proposals," adding that Clement's statements led him to question the credibility of the Social Democrats' political platforms.

The German Employers' Association has also told Schröder it's is willing to take part in another Alliance for Jobs program -- and they would like to place the issue of job protection at the top of the agenda.

"These are individual positions, and they belong in a debate within the alliance," said Chancellor Schröder. "But I'd like to point out that it's about how we create the security, under altered conditions, that employees need."

On Tuesday, the chancellor held talks with unions to discuss recommissioning the Alliance for Jobs. The top-level roundtable group first convened in 1998 and has brought together employer associations, the government and trade unions. The group has discussed everything from wage negotiations to projects to spur job growth.