Observation (CEACR) - adopted 1995, published 82nd ILC session (1995)

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

1. The Committee notes the Government's full and detailed report for the period ending June 1994 containing valuable information on the matters that it raised in its previous observation. With reference to its previous comments, in which it hoped that the report would enable it to assess the manner in which the Convention is applied throughout the country, the Committee notes that, according to the Government, the difference in the development of the economy and of employment in the two parts of the country and the nature of the various measures required continue to justify a distinction between the former and new Länder for each of the points dealt with in the report.

2. The Government states that the reporting period coincided with a time of world recession which has had a negative impact on economic activity and employment. In this context, the continued growth of the active population combined with the ending of the stimulus produced by unification resulted in the Western part of the country experiencing a marked rise in the unemployment rate, which rose to above 8 per cent in June 1994, compared with 5.9 per cent in 1992. In the new Eastern Länder, the reduction in employment slowed down and almost came to a stop as a result of the strong recovery, with the unemployment rate stabilizing at around 15 per cent of the active population by the end of the period.

3. The Committee notes with interest the explanations provided by the Government on certain aspects of the economic policy pursued in recent years, particularly as regards the pursual of employment objectives and its conception of the "social market economy". The Government states that its policy consists mainly of giving free rein in so far as possible to market forces, combined with measures to attenuate social cost, particularly in relation to the high levels of unemployment in the new Länder. It considers that the decision to undertake monetary union was inevitable, despite the risk to employment of the brutal exposure of the poorly competitive economies of these Länder to the market. In the Government's opinion, experience has shown the soundness of this "shock therapy", accompanied by massive transfers of income and capital. The industrial restructuring which took place as a result of privatization has preserved many jobs and, since 1993, led to a significant economic recovery in the Eastern Länder, where labour productivity should rapidly reach the same level as in the Western part of the country. There may also have been a slight increase in employment, although the Government does not yet appear to be in a position to quantify it.

4. The Government provides substantial information on the active labour market measures which continued to be an essential component of its employment policy during the reporting period, particularly in the context of the accelerated transition to a market economy by the Eastern part of the country. The Government emphasizes that certain characteristics of the German labour market, such as the maintenance of the unemployment rate for young persons below the general level, in the East as well as the West, and the fact that it has been possible to contain long-term unemployment, are a direct result of the measures implemented, the scope of which was increased in proportion to the problems. The proportion of the budget allocated to the financing of active measures represented 29 per cent of total expenditure in 1993 in the Western part and 69 per cent in the new Länder. However, the Government considers that, in the new Länder, time will still be needed for the adaptation of the active population to new jobs, despite the unprecedented scope of the retraining measures adopted, combined with measures to reduce the supply of labour, including early retirement.

5. The Committee also notes the provisions of the Employment Promotion Act of 1994, which tend to encourage the development of part-time work. In this respect, the Government may consider it useful to refer to the relevant provisions of the instruments on part-time work adopted by the International Labour Conference in 1994. The Committee also notes that the provisions facilitating recruitment for a fixed period as a means of promoting employment have been extended by the above Act until the year 2000. With reference to its previous observation, the Committee would be grateful if the Government would indicate whether measures have been taken or are envisaged to promote the transformation of fixed-term contracts concluded under these provisions into contracts without limit of time. It recalls in this respect that it is the responsibility of States parties to the Convention to ensure that the employment promotion measures that they adopt are not diverted from their objective, which should be to promote the lasting integration of their beneficiaries into employment.

6. With the development of part-time work, the Government intends to promote, in more general terms, measures and initiatives designed to improve the distribution of the volume of work. This goal is a result of its analysis that the objective of full employment cannot be achieved in the foreseeable future, even with a reasonable level of economic growth. The Committee hopes that the Government will soon be in a position to report an improvement in the employment situation throughout the country and requests it to continue supplying detailed information on all the measures that are taken or envisaged "within the framework of a coordinated economic and social policy" with a view to promoting "as a major goal" full, productive and freely chosen employment, in accordance with Articles 1 and 2 of the Convention. It would also be grateful if the next report contained more detailed and substantial information on the application of Article 3, concerning the manner in which consultations are held with the social partners on employment policy in the former and new Länder.