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Latest developments on labor market policy and labor law

Labor law has a significant influence on operational practice and plays a decisive role in the relationship between employers and employees. However, for many small and medium-sized companies in particular, it is often a challenge to keep track of the continuous changes in labor law.

In order to present the latest developments on labor market policy and labor law for the mechanical and plant engineering sector in North Rhine-Westphalia, ProduktionNRW organized a virtual information event on October 10, 2023. The focus was in particular on the new Skilled Workers Immigration Act as well as current case law in labor law that could have a potential impact on the industry.

Labor market policy: the new skilled labor immigration law

First, Fabian Seus, attorney at VDMA Law and head of the Competence Center Labor Market, presented the new skilled labor immigration law. This area has been in urgent need of political measures, as the number of vacancies in the mechanical and plant engineering sector also remains at a high level. Despite the looming recession, more than half of the companies still plan to expand their workforce in 2023. However, it remains uncertain whether these plans can be implemented in view of the existing shortage of skilled workers.

Federal policymakers view skilled labor immigration as part of the solution, and on Aug. 18 and Aug. 31, respectively, they passed the Law and Ordinance on the Further Development of Skilled Labor Immigration. Under the new procedure, skilled workers have access to the German labor market in three ways:

  • Qualification: as before, this includes the EU Blue Card, which offers favorable conditions for national residence permits for skilled workers with recognized qualifications.
  • Experience: Those who have at least two years of professional experience and a vocational qualification recognized by the state in their country of origin can immigrate as workers.
  • Potential: Another new feature is an opportunity card for job-seeking, which is based on a points system (such as qualifications, language skills or professional experience) and is aimed at people who do not yet have a work contract in Germany.

Cooperation with the embassies and consulates in the destination countries has proved to be a particular problem to date, as the processing of corresponding applications has regularly been subject to considerable delays. The new law is intended to make the processes less bureaucratic and faster.

Current judgments on labor law

Dr. Christian Hess, attorney at law at VDMA Recht, then turned his attention to labor law rulings. Although only a few landmark rulings have been published in the past, some rulings are nevertheless likely to have a significant impact on the mechanical and plant engineering sector. Two rulings in particular are worthy of mention.

On February 16, 2023, the German Federal Labor Court (BAG) issued a ruling on equal pay for men and women. According to this ruling, a woman is entitled to equal pay for equal work or work of equal value if the employer pays male colleagues a higher salary because of their gender. Even if the male colleague has achieved a higher salary through negotiations and the employer has complied with this demand, this does not change the obligation to pay equal wages. The impact of this ruling on individual, non-tariff salary negotiations is still unclear and requires further observation.

The ruling of the Higher Labor Court (LAG) of Hamm (March 16, 2023) on the partial termination of a home office agreement was also surprising. Many companies that have sent their employees to the home office in whole or in part in recent years or have allowed them to work from home are having difficulty getting them back into the office. With the decision of the LAG Hamm, it is permissible under certain circumstances to unilaterally withdraw the possibility for employees to work from home by means of partial termination. This strengthens the position of employers. However, it remains to be seen whether higher instances will deal with this ruling in the future.

During the subsequent discussion, individual legal rulings were commented on from the perspective of the companies. It became clear that the systematic preparation of the most important innovations is helpful in preparing the mechanical and plant engineering sector in North Rhine-Westphalia for possible changes.

Further information on the subject of skilled labor immigration:

The event was offered by ProduktionNRW. ProduktionNRW is the competence network for mechanical engineering and production technology in North Rhine-Westphalia and is run by VDMA NRW. ProduktionNRW sees itself as a platform for networking, informing and marketing companies, institutions and networks among themselves and along the value chain. Significant parts of the services provided by ProduktionNRW are funded by the European Regional Development Fund (ERDF).