Merz Sweeps Aside Union-Linked Flexibilisation in German Working-Time Overhaul
Published on 07/18/2026 at 04:53 | Redaktion boerse-global.de
Chancellor Friedrich Merz has rejected a draft of Germany’s planned working-time reform that tied greater flexibility to collective-bargaining agreements, insisting instead on broader leeway for companies without union pay deals. His intervention, announced in mid-July 2026, reshapes a proposal that Labour Minister Bärbel Bas had put forward just weeks earlier.
Bas’s June 2026 draft showed a reform closely tethered to Tarifverträge — sector-wide or company-level collective contracts. Merz now demands that the final bill, due in the autumn, cut that link. The chancellor wants non-unionised businesses to enjoy the same scope to depart from the eight-hour day as their unionised counterparts.
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Under the overhauled legislation, the current daily cap of eight hours will give way to a weekly ceiling. That brings German law into line with the EU’s Working Time Directive, which allows an average of 48 hours per week over a reference period. Employers will be able to vary daily shifts without immediately breaching the limit — as long as the weekly average holds.
The shift has drawn praise from employer bodies such as the German Confederation of Employers’ Associations (BDA) and the hotel and restaurant federation Dehoga, which argue that rigid daily rules are out of step with modern workloads. The German Trade Union Confederation (DGB) opposes the change. A recent poll found that 72% of employees still want a maximum of eight hours per day.
Staggered Rollout for Digital Time-Tracking
A core requirement of the reform is that all employers must digitally record the start, end and duration of their staff’s daily working hours. Records must be kept for two years. Trust-based working time (Vertrauensarbeitszeit) remains possible, but companies remain obliged to ensure that the new weekly limits are observed.
The transition periods vary by company size:
- One year after the law takes effect for large firms
- Two years for businesses with fewer than 250 employees
- Five years for businesses with fewer than 50 employees
Micro-enterprises with ten or fewer staff are exempt entirely. Collective agreements may also carve out further exceptions. In another change, the compensation period within which the 48-hour average must be met shortens from six months to four.
Employer Chief Warns Against Extra Bureaucracy
On 17 July, Employer President Jörg Brückner stressed the urgency of reform. Germany now logs roughly 1,300 hours of annual work per employee — one of the lowest rates in the OECD. Meanwhile, the part-time share of employment has more than doubled, from 16% in 2000 to 35% in 2025. High sick-leave rates and generous holiday entitlements further strain labour supply, Brückner said. He called for flexible hours but opposed what he described as unnecessary red tape, chiding the mandatory digital time-tracking requirement.
Broader Labour-Law Adjustments on the Table
The package also touches sick-leave rules: a general requirement for a doctor’s note from the first day of illness is under discussion. Currently employers can only demand one on a case-by-case basis.
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Fixed-term contracts without a substantive reason are set to be extended to a maximum of 48 months, with up to six renewals allowed within that period. That would widen the scope for temporary hiring beyond the current limits.
Legal experts are already advising businesses to prepare their internal processes. Germany’s Federal Labour Court ruled in 2022 that employers have a fundamental obligation to record working hours systematically. The coming legislation is meant to clarify and digitise that duty — a step that remains highly controversial among both employers and unions.
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