Germany’s Top Earners Targeted in Push for Diluted Labor Laws
Germany’s Top Earners Targeted in Push for Diluted Labor Laws

Germany’s Top Earners Targeted in Push for Diluted Labor Laws

Germany’s Top Earners Targeted in Push for Diluted Labor Laws

Germany’s business heartland has begun moves to loosen the country’s strict labor laws for high earners, aiming to boost competitiveness but putting it on a collision course with powerful labor unions.
The finance ministry of the state of Hesse—home to some of Germany’s largest corporations and its financial capital Frankfurt—is working “vigorously” on employment law reform for top earners across all industries, it said in a statement, Reuters reported.
The plan is aimed at smoothing the system of time-consuming and costly settlements when companies fire senior staff, requiring contracts for elite workers to include agreed settlements in the event of early termination.
The effort is an expansion of a previous proposal that focused on the banking sector as financial businesses began last year to consider relocating staff from Britain when it leaves the European Union. Proponents of the new proposal for all industries say it is more in line with Germany’s constitution.
In the decades following World War II, laws protecting workers have helped to stabilize the German economy, but critics say they have also dragged on growth.
“There are a lot of people who need protection, and we should grant that protection in labor markets,” said Markus Becker-Melching at the Germany banking association. “But there are others who don’t and we need to ensure that the German labor market remains competitive internationally.”
The renewed push in Europe’s largest economy is partly a response to French reforms pushed through by President Emmanuel Macron to make its jobs market more flexible. However, the German proposals face opposition from powerful trade unions that fear a domino effect that would erode protection for the broader workforce.
“This could quickly lead to demands for other concessions from employers, and there is the fear of a general loosening of dismissal protection to other groups of workers,” said Jan Duscheck, an official in the Verdi trade union and a labor representative on Deutsche Bank’s supervisory board.
The Association of Foreign Banks in Germany, members of which include Goldman Sachs, Bank of America and Morgan Stanley, pitched their proposal to the Hesse government this month.
The foreign banks’ proposal is for high-earning employees to have pre-determined termination settlements written into their contracts, suggesting a salary starting point of either €200,000 ($247,940) or €300,000.
Under the current system, employee dismissal disputes can result in costly court cases lasting at least six months, said labor law specialist Jens Jensen, who is advising the foreign banking association.

Short URL : https://goo.gl/iWsZD9
  1. https://goo.gl/uasvZg
  • https://goo.gl/cmkTKo
  • https://goo.gl/Qo8r2B
  • https://goo.gl/8DasMM
  • https://goo.gl/DcqoCq

You can also read ...

Capital Economics forecasts Turkey’s GDP growth will fall to 3.5% in 2018 from 7.4% in 2017.
Expectations for Turkey's end-2018 inflation rate rose from 12...
Trump Tactics Sabotaging US Economy, Markets
Wall Street could be making a costly mistake. According to...
File photo of finance ministers and central bankers from the G20 nations.
Global economic growth is poised to pick up this year, though...
Apple Watch Smells Losses
The latest round of US tariffs on $200 billion of Chinese...
Italian Bonds, Stocks Fall
Italian bond yields rose and equities sold off on Friday after...
Technology Can Help Workers From the Informality Trap
Technology and what it will do to change how people work is...
Moody’s Warns Philippines of Downside Risk
Debt watcher Moody’s Investors Service on Friday said the...
A weaker yuan remains a source of risk for global currency markets.
The Chinese yuan slid to its lowest in more than a year on...

Add new comment

Read our comment policy before posting your viewpoints