Federal government: Schweitzer wants to reform labor law

Berlin. The federal government wants to make it easier to limit employment relationships with a new law. In addition, the draft law by Labor Minister Alexander Schweitzer (SPD) would allow bakeries to work longer on Sundays. The reform of labor law should also loosen protection against dismissal for high earners. The draft is available to the German Press Agency; the “Süddeutsche Zeitung” first reported.

“These adjustments are primarily intended to make it easier for companies to hire employees,” says the 32-page draft. The law is intended to implement decisions made by the coalition leaders of the Union and SPD in July. The aim is to revive the economy, which has been burdened by international crises and conflicts. The draft is now being discussed in the government and is expected to be approved in the cabinet in December and then in the Bundestag. The changes are scheduled to come into force at the beginning of 2027.

The possibility of job limitations without an objective reason is to be expanded, namely for hires until December 31, 2030. “Up to this total period of four years, a maximum of six extensions should be permitted,” says the draft. There should be exceptions to the current ban on such a time limit following another. Fixed-term contracts are typically concluded for young professionals.

Changes to the Working Hours Act affect public libraries and bakeries and pastry shops. In the future, libraries should be able to employ staff for up to six hours on Sundays and public holidays. Bakeries and pastry shops should be able to employ workers longer on Sundays and public holidays than before when it comes to producing and delivering goods that are sold on the same day.

Protection against dismissal for employees with an annual income of just under 180,000 euros is to be restricted. They should be treated the same as senior employees for whom a severance payment without justification is sufficient in the event of termination. According to experts, the planned regulation only affects around 0.27 percent of employees.

In addition, the co-determination of employee representatives in certain large companies is to be strengthened. According to the draft, this is aimed at “misuse” of the legal form of the European stock corporation (SE). Five out of six large SEs have no equal co-determination, affecting 480,000 employees.

At the beginning of July, after weeks of preparation, the coalition committee under Chancellor Friedrich Merz (CDU) agreed on a reform package to lead Germany out of the economic crisis. In the most recent quarter, the German economy grew surprisingly slightly.

Further reforms are planned by the government, including broader changes to working hours. In principle, the eight-hour day should be made more flexible with a maximum weekly working time, as the Union and SPD had already announced in their coalition agreement.

After the top meeting in July, Merz declared: "We want to get Germany afloat again. Now it is clear that this is possible." The biggest planned social reform is currently changes to the statutory pension, including restrictions on early retirement and a further increase in the retirement age. According to recent announcements from Merz, there should be a cabinet discussion on this by Christmas. In addition, the government wants to present key points for the planned new pension capital column, which is to be formed by law in the new year.