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Scepticism and Union Backlash Mount Over Germany’s Labour Law Rewrite

SiterGedge by SiterGedge
July 6, 2026
in Industrial, Market Commentary
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Health insurers and economists are pushing back against a key element of Germany’s 34-point labour reform package — the planned requirement for a doctor’s note from the first day of illness. AOK executive Carola Reimann labelled the measure “symbolic politics” on 6 July, arguing that the electronic sick-note system (eAU), not the telephone-based alternative, is what has improved absenteeism tracking. The government wants to scrap phone-based sick notes altogether.

Data from the Barmer health fund shows telephone sick notes account for only 0.8 to 1.2 percent of all cases. Long-term illnesses lasting more than six weeks, by contrast, caused roughly 40 percent of all missed workdays in 2024. DIW economist Daniel Graeber stated on 5 July that a day-one certificate requirement does not statistically reduce absenteeism and could actually raise the number of days off.

The reform package, unveiled in early July, also includes extending the maximum duration of fixed-term employment contracts without a specific reason to 48 months. Unions and employee representatives have condemned this as a significant burden on workers. Christian Bäumler, deputy chair of the Christian Democratic Employees’ Association (CDA), warned on 6 July against creating unnecessary hurdles for employees. Germany’s National Association of Statutory Health Insurance Physicians estimates the new sick-note rule would trigger roughly 30 million additional doctor visits per year.

Chancellor Friedrich Merz defended the plans at a party conference in North Rhine-Westphalia on 5 July, pointing to the country’s high sickness absence rate and also announcing an action plan against abuse of social benefits. OECD comparisons for 2022 put Germany at 24.9 sick days per employee, though the figures are only partially comparable due to different reporting systems.

The package is flanked by a highly disputed cabinet decision on the 2027 federal budget. DGB deputy chair Stefan Körzell criticised planned cuts to social benefits and the trimming of the Climate and Transformation Fund. The budget envisions record investments of €117.5 billion while allocating €160 billion — around 25 percent of total spending — to defence. Körzell warned that by 2030, roughly 40 percent of the budget could be eaten up by defence and interest payments alone. While the wealthy are spared a wealth tax, average earners would see a tax relief of about €600. Unions are demanding a course correction, arguing the package disproportionately hurts employees and favours employers through deregulation.

Further opposition came from the Verdi union. Board member Sylvia Bühler warned on 5 July that planned cuts to hospital staffing levels, including a potential scrapping of the PPR 2.0 personnel measurement system and a cap on nursing budgets through 2028, endanger patient care. The Bundestag is expected to vote on related legislative changes this week.

Finance Minister Lars Klingbeil defended the new rules on 6 July, describing them as workable and noting that collective bargaining partners can deviate from the provisions. Health Minister Warken is currently examining the introduction of partial sick notes modelled on Nordic countries, an alternative proposed by DAK chief Andreas Storm.

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SiterGedge

SiterGedge

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