Germany's new Labor Minister Alexander Schweitzer of the Social Democratic Party (SPD) has proposed expanding fixed-term contracts and weakening dismissal protection for high earners, drawing criticism from unions.
The draft law, seen by the German Press Agency, would allow fixed-term contracts without specific reason for hires until the end of 2030. Up to four years total duration with a maximum of six extensions would be permitted, and exceptions to the ban on consecutive fixed-term contracts would be possible. Fixed-term contracts are typically concluded for career entrants.
The plan also loosens dismissal protection for employees earning nearly €180,000 annually. They would be treated like senior executives, for whom a severance payment without justification suffices upon dismissal. According to expert estimates, the rule affects only about 0.27 percent of employees.
Changes to working time law would allow public libraries to employ staff for up to six hours on Sundays and holidays. Bakeries and confectioneries could keep employees working longer on Sundays and holidays when producing goods for that day.
Employers welcomed the draft. Steffen Kampeter, chief executive of the Confederation of German Employers' Associations (BDA), called it a "positive signal" and said it showed the Federal Ministry of Labor was taking action. He urged further reforms, including to the Working Time Act.
Unions warned of the consequences. Frank Werneke, chairman of the Verdi union, called the plans a "disappointment and also a danger for many employees," saying many young workers would have to work twice as long in insecure conditions. Anja Piel, a board member of the German Trade Union Confederation (DGB), said: "The expansion of fixed-term contracts without specific reason, Sunday work and the loosening of dismissal protection are not needed."
The 32-page draft states as its central goal: "These adjustments are intended to make it easier for companies to hire employees." The law implements decisions by coalition leaders from July, when the Union and SPD sought to "get Germany going again" during the economic slump, Chancellor Friedrich Merz of the Christian Democratic Union (CDU) said at the time.
Schweitzer, who took office in October from his predecessor, the resigned Bärbel Bas (SPD), will now have the draft discussed in the government. It is to be approved by the cabinet in December and then by the Bundestag, the German parliament. The changes are to take effect at the beginning of 2027.
The draft also strengthens employee co-determination in certain large companies. It targets the "abusive use" of the European Company (SE) legal form. Five of six large SEs lack parity co-determination, affecting 480,000 employees.
