An NGG assessment 2 years after the ban on subcontracting
For several decades, the German meat industry with its 160.000 workers has been renowned for a steady decline in labour standards, industrial relations and wages, predominantly due to companies outsourcing their core activities to subcontractors, including slaughtering, animal cutting and meat processing.
Through subcontracting, meat companies managed to escape their responsibility for the workers. Throughout the decades this has led to the deliberate undermining of labour standards, the dismantling of collectively negotiated wages and established collective bargaining relationships, the breaking of maximum working hours, massive violations of occupational health and safety and co-determination rights.
As a result, Germany developed into a low-cost meat production country: an enormous concentration of large slaughterhouses and meat processing plants smashing the smaller, often municipal, slaughterhouses. Germany’s neighbouring countries started to close their own slaughterhouses due to the unfair competition and the pressure on working conditions and wages, while capacities in Germany continued to build up. Quite a few foreign slaughter and processing groups took over or built-up sites in Germany. The German subcontracting system triggered a downward spiral that led to the deterioration of working conditions for many thousands of workers, not only in Germany but across Europe. All attempts by German policy-makers to address the grievances with legal regulations had failed.
For decades now the Trade union NGG has called for increased inspections and tough measures to crack down on the industry. With the unfolding of the COVID19 pandemic, the numerous infections among workers in German slaughterhouses in Spring 2020 have drawn the attention of a wider public and shifted the political focus to the working and living conditions in the industry. In spring 2020, there was finally enough political pressure on the issue for the federal government to launch a package of legal measures: the Labour Protection Control Law for the meat industry (ASKG – Arbeitsschutzkontrollgesetz) whose core was the complete ban on subcontracting in the industry. This applies to the core area of the company’s activities – i.e. the slaughtering, cutting or further processing of meat. In other departments of the company, such as packaging, logistics, transport, etc., work may continue to be carried out through service contracts. In addition, the law provides for a complete ban on the use of temporary agency work in the areas of “slaughtering and cutting”. Companies in the meat processing sector are still allowed to use temporary agency work within narrow limits – max. 8% of the annual workload – under the conditions of equal pay and equal treatment from the first day and only for companies covered by collective agreements. This exception to the ban on temporary agency work is limited to three years, and in 2024 the use of temporary agency work in processing will also be prohibited.
The ASKG also foresees electronic registration of working time which makes maximum working hours and rest periods for workers enforceable and controllable by state authorities. The penalties for companies in the event of infringements of occupational health and safety laws have been significantly increased.
The question of improving the living conditions in housing was not conclusively regulated in the ASKG; further formulations are still necessary here, which also depend heavily on the implementation and controls of the individual German regions,
The ASKG is probably the toughest legal intervention in recent years aimed at re-regulating a German industrial sector. Within a short period of time, the core of the exploitation system, the outsourcing to barely controlled subcontracting companies, was eradicated leading to direct employment and a gradual return of companies’ responsibility for their workforce.
At the same time, this change has massively strengthened the position of the works councils, as they can now represent the interests of the entire workforce and exercise control and supervision throughout the company.
In parallel to the new legal regulation, NGG succeeded in concluding a nationwide collective agreement with the employers’ side on an industry specific minimum wage in June 2021, after tough negotiations and industrial action. This started at 11 €/hour and rising to 12.30 €/hour. The industry specific minimum wage has been declared generally binding and became obligatory for the entire industry with its 160.000 employees.
In Summer 2023, the German government will carry out an evaluation of the of the ASKG. In January 2023, two years after the law came into force, we can already draw a positive balance of the new regulations.
- About 35,000 subcontracted workers were hired directly by the companies, and the service companies were completely taken over and dissolved.
- Thanks to digital working time recording, massive working time violations, with working hours of up to 16 hours a day, no longer occur.
- According to our findings, temporary agency work does not seem to be used by meat processing companies to the extent initially claimed by the meat lobby.
- It is indispensable for the implementation of the provisions of the new law to increase the control pressure on the companies in the sector. To this end, the staffing possibilities of the state supervisory authorities must be significantly expanded.
Although the situation has overall improved, many problematic aspects still persist in the sector. These have little to do with the objective and the tightening of the regulations by the ASKG, but rather with the lack of implementation, the still uncompleted transformation processes, and the replacement of the former subcontracting companies in entities dealing with recruiting, accommodation and other activities. It is problematic, for example, that workers of the former subcontracting companies who were employed in foreman functions continue to carry out their activities in the German companies where they are now employed. As a result, authoritarian manners, harassment, verbal violence or activities still persist. It is also problematic that the recruitment of workers, mainly in Eastern European countries, continues to be organised by the former subcontracting companies for the German companies.
The overall balance from the perspective of the NGG trade union is positive, the basic structure of the former business model – subcontracting – has been banned and the situation of foreign workers in the industry has improved in terms of occupational health and safety, trade union membership and works council presence.
Since the law came into force, the NGG trade union has been in a better position to improve the working conditions and pay of workers through collective agreements. The reconstruction of collective bargaining structures is only just beginning, as there has been a decades-long decline in collective bargaining structures due to the exploitative system.
The German example shows us that consistent re-regulation of the industry is indeed possible; it does not lead to stalling or delocalisation of the industry and improves people’s living and working conditions.
Time seems ripe now to tackle unregulated business practices and exploitative systems in the meat industry in other European countries, through closer exchange and networking of trade unions, as well as new binding measures at EU level, as called for by EFFAT.
Freddy Adjan (Vice Chairman)
Hamburg, January 2023