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The British Embassy in Germany has committed to taking the lead in discussions between The Association of Professional Staffing Companies (APSCo) and German governmental institutions over proposed changes to the Labour Leasing Act. The proposed reforms have been met with strong opposition from the international professional recruitment sector since draft legislation was outlined in November last year. Initially the impact on placing contractors in Germany was not obvious, however this link is direct and potentially very damaging to freelance contractors and the recruiters who place them.

Tremayne Elson, managing director of APSCo Germany, and Carlos Frischmuth, Head of Hays Berlin, met with senior officials at the British Embassy to discuss the proposed changes. Both representatives voiced their intent to apply pressure to German authorities to reconsider, given the possible ramifications of such a reform. Minster Nahles of the German Ministry for Labour & Social Affairs has already been forced to redraft certain clauses, a revised draft bill is imminent. We will be going through it in great detail.

The changes will impose restrictions on the Arbeitnehmerüberlassungsgesetz (AüG) licence which allows companies to ‘lease’ temporary labour. However by widening the definition of a work relationship under proposed reforms, freelancers or contractors will now be directly affected by what is on the surface staff leasing legislation. APSCo emphasised the direct effect the changes will have on UK based recruitment firms placing contractors in Germany. As well as the potential infringement of the EU Service Liberalisation Policy if the legislation is adopted in its current form.

Outlining the implications of proposed reforms Tremayne Elson, Managing Director of APSCo Germany comments;

“We are already experiencing a reflex reaction to the proposal, which will be incredibly detrimental to the recruitment profession in Germany and the economy as a whole. End clients will be keen to mitigate themselves from potential risk, and we have already seen one German multinational terminate 180 freelancer contracts in response to the proposals.”

“The potential reclassification of more freelance contractors as employees will have an incredibly negative impact on the supply of professional talent in Germany. With an ageing workforce, specialist contractors are an important resource to countless sectors, and such reforms are likely to drive these vital professionals into other European markets. What constitutes ‘temporary’ is not clearly defined for staff leasing purposes, under the changes any staff leased over 18 months with a single client will be deemed to have an employment relationship. This is a backwards step for all forms of flexible working”

Commenting on the most recent developments, Samantha Hurley, Head of External Relations at APSCo said;

“These reforms will be detrimental not only to UK recruitment agencies placing contractors within Germany, but also to the growth of the German economy. It is clear that these proposals were made with inadequate consultation and little consideration of the potential implications for overseas contractors.”

“We are incredibly pleased that the British Embassy will be supporting our discussions with the German Government, and alongside Hays, we will engage with German authorities to voice the opinions and support the best interests of the international recruitment profession.”

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