Protests Mount as German Coalition’s 34-Point Labour Plan Targets Fixed-Term Caps and Sick-Note Rules

Union leaders and works councils are mobilising against a sweeping reform package approved on 2 July by Germany’s governing CDU/CSU and SPD coalition. The 34-point programme, designed to shake up hiring practices and workplace rights, extends fixed-term contracts without cause to 48 months, scraps the telephone sick-note system from day one, and makes it easier for employers to dismiss high earners against a severance payment.

Under the new rules, companies will be able to offer up to six renewals of fixed-term contracts without needing a reason, and from 1 January 2027 the requirement for a written contract for such agreements will be abolished. At the same time, the phone-based procedure for reporting sick will be eliminated: workers will have to present a medical certificate from the first day of absence. High earners earning roughly €15,000 a month or more — 1.75 times the pension-insurance contribution ceiling — will become easier to fire from January 2027, provided the employer pays a severance package.

The financial framework for minijobs will also shift: the flat employer tax rate rises from 2% to 5%, while tax-free supplements for work on Sundays and public holidays will be allowed up to an hourly wage of €75.

AI Co-Determination and a Tight Deadline

A central piece of the overhaul concerns the introduction of artificial intelligence in workplaces. The coalition has given unions and employer associations until October to submit proposals on how co-determination rights should function when AI is deployed. The reform also lowers the threshold for tax-free bonuses for shift and weekend work.

Meanwhile, recent court rulings are reinforcing the scope of works council authority. The Berlin-Brandenburg Labour Court (LAG) confirmed in April that a foreign airline based in Malta must involve the works council when setting shift schedules at Berlin’s BER airport; the Federal Labour Court had already upheld the council’s eligibility in May. The Düsseldorf Labour Court clarified that participation rights in restructuring only apply once a works council has been elected, and that employers must negotiate as long as alternatives to the planned changes still exist and no irreversible implementation has begun. In a separate decision, the Rhineland-Palatinate Labour Court limited employers’ obligation to pay for works council members’ training: it applies only to courses imparting basic knowledge, not to specialised seminars on narrow individual-law topics.

Unions Condemn ‘Bureaucratic Harassment’ and Plan Rallies

Reaction from labour groups has been fierce. DGB chairwoman Yasmin Fahimi welcomed the package’s signals for employment and growth, as well as planned tax relief, but sharply criticised the extension of fixed-term contracts without cause and the abolition of telephone sick notes. The DGB branch in Duisburg called for a demonstration today under the banner “Ruhrpott-Rebellion”. The IG Metall chapter in the Märkisch district announced a rally in Lüdenscheid on 18 July, denouncing the new attestation requirements as bureaucratic gimmicks.

The Association of German Managers (ULA) also voiced opposition, specifically targeting the relaxed dismissal protection for high earners, which it said lacks adequate social compensation.

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