Germany's Labour Overhaul Sparks Union Warnings as 40% of Workers Doubt Reaching Retirement

The finding comes from a DGB union survey of 28,000 employees, which also reveals that in physically and psychologically demanding fields such as nursing, manual trades and construction, the share exceeds 50 percent. The figures underscore widespread anxiety just as the federal government rolls out a sweeping labour-market package that critics argue will erode job security even further.

At the heart of the package, approved by the black-red coalition in early July, is a plan to extend fixed-term contracts without cause to up to four years from January 2027, with as many as six renewals allowed. Currently the ceiling is two years. The move has drawn sharp public opposition: a recent poll found 54 percent of respondents against the change. The same legislative bundle provides for annual tax relief worth €10 billion and a minimum-wage increase to €14.60 in 2027.

Sick-Note Rules Tighten, Doctors Push Back

Alongside the contract changes, the government is tightening rules on sick leave. Employees will be required to present a medical certificate of incapacity to work (AU) from the first day of illness, ending the current option of a telephone-based sick note. Stiffer penalties for fraudulent certificates will also apply. The German Association of General Practitioners has criticised the plan as counterproductive, warning it will increase pressure on surgeries without improving workplace discipline.

While German authorities tighten sick?note rules, UK employers face their own compliance challenges around health and safety documentation. A free toolkit provides ready?to?use risk assessments, checklists and templates to help you stay compliant with UK regulations. Over 37,000 British companies already rely on it. Download the free Health & Safety Toolkit

Ministry Accused of Favouritism, Job Centres Overwhelmed

Internal practices inside government departments have also become a flashpoint. At a staff meeting in mid-July, employees of the Defence Ministry alleged that officials under Minister Boris Pistorius were privileging Social Democratic Party (SPD) members when awarding promotions. The ministry denied the accusations.

Staff at the Leipzig Job Centre, a federal agency, report severe overload and rising workplace violence, pointing to a broader strain on social administration. The number of proceedings for misuse of social benefits climbed by 6.8 percent in 2025 to over 133,000 cases. The Christian Democratic Union (CDU) is calling for tougher measures, including improved data-sharing between agencies and a work obligation for recipients of the Bürgergeld basic income.

Unions Threaten Resistance as Tariff Talks Collapse

DGB chairwoman Yasmin Fahimi has drawn a red line around the eight-hour workday, warning of conflict if the government moves to dilute the Working Time Act. Employers’ president Rainer Dulger, by contrast, is demanding further reforms, including the reintroduction of waiting days for sick pay.

The political tension is spilling into collective bargaining. In mid-July, retail associations in several states — including Bavaria, Rhineland-Palatinate and Berlin-Brandenburg — broke off talks with the Verdi union. The HDE retail federation is calling for a cap on ancillary wage costs at 40 percent, citing rising expenses.

As debates over working time rules continue, UK employers should review their obligations under the Health & Safety at Work Act 1974. A free toolkit includes nine practical tools, from risk assessments to director liability guides, to help you stay compliant and avoid penalties. Get the free Health & Safety at Work Act 1974 Toolkit

In the industrial sector, the standoff at Volkswagen is escalating. Disputes between management and the works council over job preservation have stalled negotiations affecting roughly 100,000 employees. According to reports, two additional plants could face closure over the longer term. While the SPD leadership signals a willingness to reform, resistance is growing inside its own parliamentary group and among the party base against any cuts to the social safety net.

en | boerse | 69769872 |