Germany Tightens Rules on Mediation Panels as Labour Reform Package Looms
Published on 07/24/2026 at 01:10 | Redaktion boerse-global.de
Employers and works councils in Germany must now prove they have made genuine efforts to negotiate before calling in a formal mediation panel, according to new guidance from two major legal associations. The Verband Deutscher Anwälte (VDA) and the Verband deutscher ArbeitsrechtsAnwälte (VDAA) issued statements clarifying that skipping preliminary talks is only permissible in narrow circumstances — such as when negotiations are clearly futile or one side is deliberately obstructing the process.
Obstruction is defined as refusing to engage in discussions, causing unreasonable delays, or setting unacceptable preconditions. Even when positions are completely deadlocked, the path to a mediation panel — known as an Einigungsstelle — remains open. In court proceedings to establish such a panel, judges do not assess the exact number of meetings held; they only determine whether the request to convene is manifestly unfounded.
The practical implications are already visible in the logistics sector. At Zalando’s Erfurt distribution centre, a social plan has been agreed ahead of the site’s planned closure at the end of September 2026. The company is also preparing a broader restructuring that could affect around 200 positions in Berlin. Management is pursuing termination agreements based on the principle of double voluntariness — meaning both sides must consent.
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Reform Package Reshapes Dismissal Protections
The dynamics of future negotiations could shift significantly under the reform package “Programm für Aufschwung und Beschäftigung,” unveiled on 2 July 2026. The federal government plans to simplify the dissolution of employment contracts for high earners starting 1 January 2027. Workers earning more than €177,450 annually would face reduced dismissal protection.
Other changes include extending fixed-term contracts without a specific reason to a maximum of 48 months until 31 December 2030, with up to six renewals permitted. The written-form requirement for fixed-term agreements is set to be scrapped on 1 January 2027. Experts such as Yann Coatanlem of the Ifo Institute advocate going further, proposing that the salary threshold for simplified dismissal protection be lowered to €101,400. Currently, the cost of terminating an employee in Germany is roughly 2.5 times their annual salary.
Collective Bargaining Push Meets Union Skepticism
On 22 July 2026, the federal cabinet approved a National Action Plan aimed at strengthening collective bargaining coverage, which has fallen to 49 percent across Germany. Measures include granting unions digital access rights to workplaces and allowing working time to be organised by weekly rather than daily maximums — provided this is regulated by collective agreement.
The German Trade Union Federation (DGB) has criticised the plan as unambitious. Chairwoman Yasmin Fahimi called for stronger provisions, such as ensuring collective agreements remain in force during restructuring. Meanwhile, a study by the Institute of the German Economy (IW) cautioned that higher collective bargaining coverage does not automatically lead to a higher wage share, as comparisons across European countries show.
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Stricter Sick Leave Rules on the Horizon
The reform package also targets everyday workplace practices. Plans include abolishing telephone-based sick notes and requiring employees to present a doctor’s certificate from the first day of illness. According to data from Pronova BKK, roughly 60 percent of employees have reported sick at least once while actually fit for work.
Changes to basic social security have also taken effect. Since 1 July 2026, job centres can bypass the previous conciliation procedure when disputes arise over cooperation plans. They may now impose participation obligations directly through administrative acts — unless valid reasons such as illness apply. However, compulsory medical treatment remains prohibited.
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