New law on equal treatment hampers economic recovery in Germany

Initial findings of the lawyers' association CONSULEGIS verify competitive setback for the German economy

Baden-Baden, 14 October 2006

The general “equal treatment” law (Allgemeines Gleichbehandlungsgesetz or AGG) in effect in Germany since August has already led to a substantial dip in confidence among German firms before the end of the three-month transitional period since it took effect.

A spokesperson for the global association of some 2,000 law-firm members, CONSULEGIS, explained this in a statement released today. Thus the German chapter of CONSULEGIS calls upon lawmakers in Berlin to "amend the equal-treatment law immediately and lower its goals to the level set by the appropriate and balanced requirements of the European Union's legislative guidelines." These guidelines forbid discrimination based on race, ethnic origin, or gender.

Hence, according to confidential enterprise data, new job openings, for instance, were not advertised for the time being. The cause: firms fears that descriptions of sectors in which they have job openings or job skill profiles affected by the new requirements could bring incalculable risks in light of the equal-treatment law if the law is interpreted narrowly. Wherever possible, outsourcing of jobs to neigh-boring countries is also under study in specific sectors.

The German chapter of CONSULEGIS EEIG - an international association of leading independent business lawyers - spelled out its concerns in a statement.

"The German equal-treatment law goes far beyond EU requirements and guide-lines set by neighboring countries, and the law's current broad scope raises doubts over the content regulated,” the statement said. “This not only leads to overregulation in Germany. It produces another layer of excessive bureaucracy at the administrative level. Countless cries for help and the trends in advisory assignments from the clientele of German CONSULEGIS law firms also confirm insecurity and concerns about cost-laden overreactions. Hence the general equal-treatment law hampers the start of economic recovery in Germany and the creation of new jobs related to it. Therefore, regulations passed by German law-makers that exceed the goals of EU legal guidelines also lead to a further com-petitive setback for Germany's business community".

Moreover, the German CONSULEGIS chapter insists that permitting a suit against an association unforeseen by the EU poses a unnecessary as well as questionable back-door limitation on the freedom of legal contracts under civil law. This could place a burden on German enterprises as well as cause a harm-ful disruption of the relationship between employers and employees. Thus it could result in a competitive hardship for German business.

For the German Chapter:

Harald Nickel
NICKEL Rechtsanwälte
D-63452 Hanau / Germany
nickel@nickelonline.de