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Germany

Germany's Temp Work Plan Faces Challenge

The government's plan to promote temporary work for its close to four million unemployed is facing considerable criticism in parliament. Critics say the current bill would make it harder for companies to hire new people.

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The government wants fewer people to have to take a number at their local employment offices

When it released its report in September, an independent commission appointed by the government and led by Volkswagen executive Peter Hartz borrowed generously from temporary work success stories in the United Kingdom and Holland, where temp jobs have helped reduce unemployment rolls. A key provision of the Hartz Plan called on the government to effectively turn its 181 local employment offices into temp agencies.

But in a country where the idea of a legally protected lifetime job is practically hardwired into the social code, temporary work has long been viewed as anathema. Temporary workers make up less than 1 percent of the workforce here compared to 3.7 and 4.5 percent in the U.K. and Holland respectively. With close to four million unemployed, the government believes temporary jobs may be the best solution for the long-term jobless.

Nonetheless, the concept still has its share of critics, and their voices threatened to overshadow a debate on the Hartz legislation in parliament on Thursday. Though the bill does call for a loosening of Germany's strict labor laws in order to better accommodate temporary work, critics say it adds fresh barriers.

"Thousands of jobs will be threatened"

Currently, temporary work contracts are limited to two years under German labor law. A company is prohibited from extending a second contract to the same worker without offering them a legally protected permanent position. The new law would lift both of those restrictions, allowing companies to create a more flexible workforce.

But critics say the bill lacks the teeth of temporary work programs in Holland and Britain -- where labor costs for temps can be as much as 30 percent less than those of full-time employees -- because it would require temp workers to be paid wages equal to those of staff employees. The only exception is for the longterm unemployed, whom companies could pay lower wages for the first six weeks of their employment.

Dieter Hundt, the head of the German Employer's Association, said he feared the Hartz legislation will further exacerbate the country's high unemployment. "If additional barriers to employment are established, tens of thousands of jobs will be threatened," he said on Thursday. "It just shows one more time the government's unwillingness to recognize the explosiveness of the situation."

"The unions have prevailed"

Members of parliament from the opposition Christian Democratic Union have also taken aim at the legislation. According to the party's spokesman on labor issues, Karl-Josef Laumann, the Christian Democrats are planning to introduce their own version of the bill next week, which would only require employers to give temp workers equivalent pay after 12 months on the same job. Without that change, Laumann said he doubted the government's plan for temporary work would have the desired effect.

The deputy of the Christian Democrats' parliamentary group, Friedrich Merz, lamented: "There is practically nothing left of the Hartz Commission's plan for temporary work. The unions have fully prevailed with their demand of 'equal pay for equal work'."

Others, including German Confederation of Small Business and Skilled Crafts head Hans-Eberhard Schleyer, warned that the government's temporary work plan would be financially "unattractive" to many companies because the limitations imposed by the government, as well as the added bureaucracy, would make it too expensive for many companies.

But Chancellor Gerhard Schröder and his red-green government are hoping to pass the Hartz legislation -- a key campaign pledge -- by the end of next week.

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