German Fixed-Term Contract Overhaul Faces Public Backlash as Poll Shows 54% Opposition
Published on 07/16/2026 at 23:24 | Redaktion boerse-global.de
A sweeping reform of Germany’s labour laws, set to double the maximum duration of fixed-term contracts without a specific reason, has drawn sharp public disapproval. A YouGov survey found 54% of respondents opposed the changes, with only 26% in favour. The government aims to raise the limit from two to four years for new hires taken on by 31 December 2030, and allow up to six contract renewals instead of the current three.
The reform package, agreed by the coalition committee in early July 2026, also lifts the so-called prior-employment ban. This restriction previously prevented employers from offering a fixed-term contract without a specific reason to someone who had already worked for them. Another change drops the written-form requirement for fixed-term agreements as of 1 January 2027, when the entire new rules are scheduled to take effect. The legislative process is expected to wrap up by the end of November 2026.
Alongside the contract changes, the federal cabinet approved a separate bill on 15 July 2026 to modernise labour-market support. A centrepiece is the “job-to-job trial”, which lets employees work for up to four weeks—or six in exceptional cases—with a potential new employer without first quitting their existing job. The same legislation pushes for more digitalisation at the Federal Employment Agency: applications for unemployment, short-time work or insolvency benefits will be primarily electronic, consultations via video will expand, and recipients of unemployment pay will no longer have to be physically present at their registered postal address.
The government expects big financial relief from cutting red tape. Scrapping special inspections for small electrical devices and eliminating up to 123,000 safety officers in small and medium-sized companies should save around 720 million euros annually. In professional training, the maximum subsidy for course fees rises from 15,000 to 18,000 euros.
Unions have hit back hard. The leaders of the German Trade Union Confederation (DGB) and the Verdi service union warned of a creeping precarisation of jobs and a weakening of employee rights. Public discontent extends beyond the labour reforms. According to the RTL/ntv Trendbarometer published on 15 July 2026, 82% of Germans are unhappy with the coalition’s overall performance. Chancellor Friedrich Merz recorded an 85% dissatisfaction rating, while Vice Chancellor Lars Klingbeil stood at 74%.
The cabinet’s second relief package on 15 July 2026 included several other measures. Digitalisation in healthcare is expected to deliver 445 million euros in savings. Truck driving bans will apply only on nationwide public holidays, cutting logistics costs by about 63.3 million euros. Electric cars will no longer need an environmental badge. All told, the government says the relief measures passed since November 2025 amount to 10.4 billion euros annually. Further steps are planned before the year ends, including a review of the obligation to issue receipts and the Buildings Type E Act to simplify construction.
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