Observation (CEACR) - adopted 1992, published 79th ILC session (1992)

Employment Policy Convention, 1964 (No. 122) - Germany (Ratification: 1971)

1. The Committee takes note of the Government's report concerning the application of the Convention in the western Länder during the period ending June 1990. It also notes the communication of the German Trade Union Confederation (DGB) dated 10 July 1991, and the comments communicated on 12 December 1991 by the Government on the points raised.

2. The Committee notes that in conjunction with sustained growth in economic activity, employment growth exceeded the growth of the active population during the period under consideration, with the result that the unemployment rate dropped from 6.2 per cent in 1988 to 5.6 per cent in 1989 and 5.1 per cent in 1990, according to the OECD standardised rates. Unemployment among young people continued to decline but long-term unemployment still accounts for a large proportion of total unemployment. The OECD reports and surveys also show a considerable disparity in the situation and trends of employment between the western Länder and the new Länder. The Committee points out in this connection that the Government's next report should enable it to ascertain fully the manner in which the Convention is applied in the country as a whole.

3. The Committee notes that, according to the Government, the improvement in the employment situation reflects an effective economic policy geared to encouraging private sector investment and reorganising public finance. In its report, the Government describes the measures implemented as part of the overall tax reform that have reduced company and individual tax with a view to encouraging investment and demand, thereby creating the conditions for steady growth and job generation. The DGB considers that the economic performance is largely due to the favourable position of the trade balance and the balance of payments, which is a result of external factors such as the drop in oil prices or high external demand. The DGB also indicates that despite the reforms referred to by the Government, fiscal pressure has dropped only slightly and that following the accession of the new Länder, it has been decided that there will be new tax increases. The Committee would be grateful if the Government would continue to provide information on the way in which the objectives of its overall economic policy contribute to the promotion of employment.

4. The Government considers that active labour market policy measures have made a considerable contribution to reducing unemployment. In this connection, it refers to the increase in the number of participants in continuous training programmes and the implementation of special programmes to integrate into the labour market categories of persons experiencing particular difficulties such as, in particular, the long-term unemployed. In the view of the DGB, however, expenditure on job creation has been reduced whereas the objectives planned have not been fulfilled. The Committee notes that, according to the Government, the Federal Employment Institute still has the resources necessary for the performance of its functions and there is no plan to reduce them, as can be seen from the regular increase in its budget.

5. With reference to its previous comments, the Committee notes that following several studies concerning the effect on employment of the provisions of the Employment Promotion Act of 1985 relating to fixed-term contracts, these provisions have been extended by the Act of 22 December 1989 until 31 December 1995. According to the Government, the various studies show that fixed-term contracts have enabled new jobs to be created without affecting the employment conditions of the workers concerned and, in most cases, have led to permanent employment. The DGB, however, considers that this type of contract has been used by employers to extend trial periods and to facilitate smoother adjustment to fluctuations in production, rather than to create new jobs. The provisions of this Act, by favouring the trend towards thinning out the number of regular staff employed, without encouraging new recruitment, have only had the effect of increasing the precariousness of employment. In view of the disparities between the two assessments, the Committee would be grateful if in its next report, the Government would provide all relevant extracts of the surveys referred to and to state the measures adopted to ensure that the implementation of the provisions concerning fixed-term contracts has no unfavourable effects on the employment conditions of the workers concerned.