Germany’s influential industrial sector is escalating its critique of existing labour laws, advocating for significant reforms deemed necessary to bolster the nation’s economic competitiveness amidst a deepening economic downturn. Martin Herrenknecht, CEO of Herrenknecht AG, a globally recognized tunneling specialist, has joined a chorus of voices, spearheaded previously by Trumpf CEO Nicola Leibinger-Kammüller, calling for an overhaul of worker protections and a shift towards a more flexible, employer-friendly regulatory environment.
Herrenknecht’s most pointed suggestion involves loosening Germany’s stringent dismissal protection law (Kündigungsschutzgesetz), arguing that its rigidity is a growing impediment to industrial restructuring in a climate of widespread job cuts. “In times like these, where industries are shedding jobs en masse, the current law is simply incompatible” he stated in an interview with the Handelsblatt.
His proposals extend beyond employment termination laws, tackling issues surrounding sick leave and public holidays. Herrenknecht proposes abolishing the mandated three-day waiting period for sick pay and reducing the duration of sickness benefits from six to three weeks, mirroring practices observed in other nations. He also echoed Leibinger-Kammüller’s earlier suggestion to eliminate Easter Monday as a public holiday as a means of increasing productivity.
The veteran entrepreneur, whose company employs roughly 5,000 individuals across 70 international locations, justifies his proposals by contrasting Germany’s comparatively rigid labour regulations with the greater flexibility observed in global competitors. He frames initiatives like the recently popularized four-day workweek and early retirement schemes as direct consequences of this inflexibility.
Furthermore, Herrenknecht stressed the need to incentivise higher performance by advocating for tax exemptions on overtime hours for employees working more than 40 hours per week. This move aims to directly reward increased labour output and, according to Herrenknecht, address a perceived disconnect between effort and reward within the German system.
The increasing willingness of prominent industrial leaders to publicly challenge established labour practices signals a growing anxiety regarding Germany’s economic trajectory and the perceived need for disruptive reforms to maintain its position in the global market. While proponents argue such changes are vital for competitiveness, critics warn of potential exacerbation of existing inequalities and a weakening of vital worker protections. The debate is sure to invigorate an already tense political landscape and necessitates careful consideration of the potential ramifications for both employers and employees.