The employers' association and the metalworkers' union IG Metall agreed on 19 May 2012 on a new collective agreement for the metal and electrical industry in the pilot district of Baden-Württemberg. The wage agreement is to be assumed at a national level and provides in particular for a retroactive wage increase as per 1 May 2012 of 4.3% with a term of 13 months.

However, it is the provisions on temporary agency workers contained in the pilot wage agreement that are worthy of particular mention. Pursuant to the new collective agreement, temporary agency workers may only be employed at the same business for a period of 18 months without further limitation. After such time, the hiring company must examine the possibility of employing the temporary agency in an indefinite employment relationship. After 24 months, the hiring firm is even obliged to make an offer to take on the worker. The collective agreement itself does not stipulate the time as of which these periods regulated therein t are to be calculated, i.e. whether insofar they are to be calculated as of the time of first hiring the temporary agency worker at the business or as of the time of the wage agreement. Hence, this remains unclear.

Pursuant to the collective agreement, there shall only be an exception to the obligation to take on the temporary agency work if material reasons, e.g. project work or representation of absent employees – justify a lengthier term of employment at the hiring firm.

Companies can deviate from these basic rules without the consent of the parties to the collective agreement if they have the approval of their works council, i.e. in such case a voluntary shop agreement would suppress the collectively agreed provisions. Such voluntary shop agreement can regulate the following points concerning the use of temporary agency workers in the business: designated purposes of the use of temporary agency workers, areas in which they are to be used, volumes of temporary work, amount of remuneration of temporary agency workers, which shall be agreed in personnel leasing contracts, maximum hiring term and provisions on taking on temporary agency workers on a permanent employment basis.

If the hiring firm already has a shop agreement on the use of temporary workers prior to the conclusion of the collective agreement, this will continue to apply and have precedence over the new collective regulation. However, as in all other cases, the existing shop agreement can naturally also be terminated to the agreed date.

Although the aforementioned provisions initially only relate to a pilot wage agreement for the metal and electrical industry in the district of Baden-Württemberg, since this is to be assumed nationally, however, hiring firms in this branch in other districts should as a precautionary measure examine their existing provisions on temporary agency work and, where necessary, take this opportunity to conclude a voluntary shop agreement on the subject of temporary agency work with their works council.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.