After years of fruitless attempts to clean up the German meat industry, politicians have come together behind a set of reforms that experts say could mark a paradigm shift for the sector. At the heart of the proposal presented by Labor Minister Hubertus Heil is a ban on the use of subcontractors that have been blamed for fostering unsafe and exploitative conditions throughout slaughterhouses.

For decades, German meat processors have cut costs by employing thousands of workers from low-wage countries such as Romania, Bulgaria and Poland. Instead of hiring the workers directly, the companies often rely on opaque, multilayered networks of subcontracted firms; a practice critics say has long allowed them to skirt responsibility for workplace conditions. 

Referred to as a form of "mordern slavery" these conditions helped Germany's slaughterhouses become coronavirus hotspots. 

Looking for loopholes

Minister Heil's proposal, expected to be released in full by the end of July, would ban the use of such types of work contracts, known as Werkverträge, and require slaughterhouses to employ core workers directly.

Gerhard Bosch, a professor at the Institute for Work, Skills and Training at the University of Duisburg-Essen, described the proposal as a "paradigm shift" for the meat industry. But he fears it won't put an end to exploitation of migrant workers.

Meat companies already appear to be looking for — and finding — loopholes in the rules. Tönnies has vowed to employ 1,000 workers directly by September. But the company is facing backlash after creating 15 subsidiary companies to employ those workers.

Bosch said the subsidiaries could be used to divide workers and stamp out attempts at collective bargaining. Workers could be divided by nationality or job, he said, allowing for disparities in between the subsidiaries. 

"What Tönnies is clearly trying to avoid is any unionization," he said. "It will be the same unchanged work organization, on the assembly line there will be different companies."

Same conditions, different industry 

The practice of using subcontracted migrant workers to cut labor costs isn't confined to meat slaughtering. It's widespread in construction, parcel delivery, and even on German strawberry farms. 

Germany is one of the largest destinations for other EU workers. In 2018, Germany received around 430,000 so-called posted workers who come to the country for temporary work, according to a study commissioned by the European Commission

The construction industry is where many of those workers end up. Last year, around 100,000 posted workers, mostly from Poland and other Eastern European countries, were employed in construction.

Like in the meat industry, German construction companies often use complicated webs of subcontractors to evade labor laws. Workers complain of long days, missing pay, and high deductions for housing, tools and work clothes that bring their pay below the legal minimum. 

Postal work, too, has been rife with exploitation of migrant workers. In February 2019, 3,000 customs officers raided subcontractors used by German parcel services such as DHL and Hermes. They discovered a multitude of violations. Some delivery drivers didn't have licenses, and about a third of subcontracted employees were being paid less than minimum wage. 

German Parliament responded with a law that makes parcel companies liable if their subcontractors fail to pay social contributions or minimum wage to workers. Similar laws already cover the construction and meat industries, but have failed to put an end to exploitative conditions. 

Bringing down the housing scam 

Bosch blames a lack of government oversight and weak union representation for migrant workers for the continued flouting of German labor laws. 

Many migrant workers don't speak German, have little understanding of their rights, and are afraid to raise concerns about conditions for fear of losing their job or housing. 

 "At the margin, these are foreigners who do not know their rights," he said. Bosch believes stricter restrictions on the use of subcontractors in other Industries would help. 

But many politicians, including Katja Mast, vice chair of the Social Democrat's parliamentary group, argue a broader ban isn't feasible.

"We do not fight against working contracts in general, but we fight against the abuse of working contracts in order to create a second class of workers," she said. 

Mast instead favors strengthening rules around housing setups that are often arranged for migrant workers by employers.

Ruxandra Empen, a specialist in labor market policy for the German Trade Union Confederation (DGB), said workers are often overcharged for housing and face the constant fear of expulsion from the apartments if they lose their jobs.

"Workers are inclined to accept housing offers but there are many disadvantages," she said. "A lot of the housing is substandard, the rent prices are pretty high. It's a way to circumvent minimum wages."

DGB's proposal: cap the cost of employer-provided housing and task government authorities with enforcing those conditions.