Fragmenting labour: Temporary agency workers in German manufacturing.

The increasing reliance on temporary agency workers by large German manufacturers has changed industrial relations, reported Hajo Holst, Associate Professor at the University of Jena, to the transnational labour projectat the Centre for Advanced Study in Oslo. Large car manufacturers, for example, have used temporary agency workers to secure short-term profits and to bypass statutory dismissal protection. Trade unions and workers, on the other hand, have increasingly come under pressure as a result.

The offensive by capital
Traditionally, temporary agency work was highly regulated in Germany and mainly used by companies to respond flexibly to short-term challenges in the production process. It was the 2003 change in legislation by a coalition government of Social Democrats and the Green Party deregulating temporary agency work, which facilitated the change in employers’ strategy. Now, several key companies have moved towards employing a significant number of their workers through temporary work agencies in order to be able to respond flexibly to changes in the economy and, thereby, to secure their short-term financial profits. Unsurprisingly, from 2003 until 2007, temporary agency work was the largest sector of employment growth, while it then became the largest sector of dismissals in the global economic crisis from 2007 onward. The risks of economic recession have been passed from employers to workers.
To date, only four per cent of the overall German workforce are temporary agency workers. However, the fact that there are between 10 to 20 per cent temporary agency workers of the overall workforce in large manufacturing companies such as Mercedes or BMW signifies the overall importance of this type of workers for German industrial relations. The most drastic example of the use of temporary agency workers is the brand new BMW plant in Leipzig in East Germany, where 40 per cent of the workforce is made up of temporary agency workers.
Photo by International Transport Forum

The increasing use of temporary agency workers has drastic implications for workers and trade unions. First, being a temporary agency worker becomes less and less a route into permanent employment. Companies have to some extent stopped employing directly new workers themselves. Second, the fact that temporary agency workers are employed on lower salaries than their colleagues, although they are doing the same jobs, and that they face the constant threat of dismissal, should there be an economic recession, has a disciplining effect on permanent workers. The latter know that should they become unemployed, the only way back into employment may be as a temporary agency worker on less good conditions. This will affect their position on whether to criticise management and, unsurprisingly, it has become more difficult for trade unions to organise strike action.

The response by labour
Capital’s structural power vis-à-vis labour has dramatically increased since the early 1970s and the onset of globalisation. The BMW plant in Leipzig is again a good example here. When negotiating with the trade union about the use of temporary agency workers, BMW made clear that unless it gets its way it will build the plant in Slovakia instead. Considering the high-level of unemployment in East Germany, the works council of BMW felt that it had no alternative but to accept the level of 40 per cent of temporary agency workers.
Photo by IG Metall

And yet, structural power by capital is not enough to explain the works council’s acceptance. Rather, we need to see this decision against the background of German trade unions’ wider self-understanding of their role in the German economy. In many respects, they consider themselves to be the better ‘managers’ of the workforce and feel that they are co-responsible for the success of individual companies. Hence, it is difficult to think about more radical alternatives to companies’ cost-cutting strategies outside the ‘common sense’ economic understanding.

Workers themselves are ambivalent about their own situation, Hajo Holst reported. On the one hand, permanently employed workers regard temporary agency workers as a guarantee for their own jobs. In times of crisis, it is the latter who are made redundant. On the other hand, however, there is still a feeling of injustice about the fact that their co-workers do the same jobs for less money and under the constant risk of unemployment. Perhaps it is this ambivalence, which provides the seeds for an alternative trade union strategy based on solidarity? Equally, important, manufacturing workers are often high-skilled and cannot be replaced that easily. The power of workers in production should not be underestimated by trade unions.
Photo by IG Metall

Clearly, the first precondition for a more active trade union position is to drop this idea of co-responsibility for company performance. Is this perhaps the time to re-politicise German trade unions and the process of collective bargaining? The continuing sense of injustice and solidarity amongst workers as well as the fact that highly-skilled workers cannot only not be replaced easily, but often know better how to run the production process itself may provide the basis for a more radical position against capital.

Key publications by Hajo Holst related to his presentation:

Holst, Hajo/Nachtwey, Oliver/Dörre, Klaus (2010) ‘The Strategic Use of Temporary Agency Work — Functional Change of a Non-standard Form of Employment’, International Journal of Action Research, 6(1), 108-38.

Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK
Personal website:

28 October 2013