German Government’s Labor Overhaul Faces Widespread Public Opposition, Poll Shows
Published on 07/07/2026 at 02:11 | Redaktion boerse-global.de
Germany's governing coalition is pressing ahead with a broad package of labour-market changes, but fresh survey data suggests the public remains deeply unconvinced. A poll conducted on 2 and 3 July 2026 among 6,200 adults found that 54% reject the planned extension of fixed-term contracts without a specific reason, with only 26% in favour.
The reform, still in draft form, also includes a significant loosening of dismissal protection for employees earning at least €177,450 a year. Instead of protracted litigation, standardized severance rules would apply—capped at twelve gross monthly salaries. Workers older than 55 with at least 20 years of service would be entitled to up to 18 or 20 months’ pay.
The new approach mirrors existing rules for risk-takers in the credit sector. Legal experts see it as an attempt to shorten expensive, multi-instance court cases common among senior management. Yet an employment-law specialist warned that the cap represents a major financial cut for high earners, whose cases often run through two tiers of appeal, making the risk calculation harder.
An employer-side lawyer questioned the reform’s real-world impact, noting that few staff fall into the income bracket. He also pointed to potential workarounds: companies and executives could negotiate longer notice periods to soften the restrictions.
Beyond the changes for top earners, the package allows fixed-term employment without a specific reason for up to 48 months—available for new hires until the end of 2030, with up to six renewals. A second measure would require employees to submit a medical certificate from the first day of sickness. Individual employers could deviate from this rule, but the option of a phone-based sick note would be abolished. Doctors’ representatives have criticised the shift as unnecessary bureaucracy.
Chancellor’s Office chief Thorsten Frei (CDU) defended the package on 5 July 2026, calling it a major step forward. He highlighted additional relief for families through adjustments to the basic tax allowance and child benefit. Economist Moritz Schularick described the package as a political success but cautioned it was no “game-changer” for the economy.
The reform has not yet become law. Experts advise employers to review existing contracts but to avoid making rash personnel decisions. The full package also includes tax incentives on severance payments and a commitment to cut red tape by €720 million annually.
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