Labor investigation Deutsche Post's Second-Class System

A subsidiary of German postal giant Deutsche Post is being investigated by customs officials on suspicion of illegally providing temporary labor to its parent, meaning that some staff were underpaid.
Deutsche Post, headquartered in Bonn, has allegedly been flouting labor laws.

The job ad sounded enticing. “Deutsche Post seeking salespeople for e-post products.” Lukas Höfer (not his real name) decided to apply. He had spent years working as a salesman for a medium-sized company. Now he wanted to take a step up and work for the German postal and logistics group.

Mr. Höfer bought a smart gray suit for his interview. After all, it was his first time applying for a job with a blue-chip company. He arrived at the headquarters, an impressive glass tower that dominates the skyline of the former West German capital Bonn. The elevator that whooshed him to his meeting was the fastest he’d ever been in. As he looked down over the roofs and the Rhine valley, he thought this would be a great place to work.

His hosts confirmed that impression. Two people from Deutsche Post’s personnel department greeted him and told him during the interview that he had excellent chances of promotion if he did a good job. Shortly afterwards, he received a letter telling him he’d got the job. But he noticed that it didn’t come from Deutsche Post. It came from the Siegfried Vögele Institute (SVI).

Mr. Höfer was surprised. An institute? He checked it out on the Internet and found that the institute for dialogue marketing was a wholly owned subsidiary of Deutsche Post. The Deutsche Post logo at the top of the job contract reassured him. Mr. Höfer put his doubts out of his mind and signed. That was a mistake, and one for which he was to pay dearly.

They found that their own contracts stipulated longer working hours, less vacation time and, by their estimates, less pay than the Deutsche Post contract would entitle them to.

It’s clear now that Mr. Höfer’s employment contract will also have consequences for Deutsche Post. Mr. Höfer and other colleagues work for Deutsche Post in practice, but on paper they’re employed by SVI. Labor lawyers suspect that the job is a temporary working arrangement.

“If a company subsidiary hires out even just one employee to the parent company on a steady basis, the subsidiary needs authorization for the provision of temporary workers,” said Wolfgang Däubler, professor of labor and business law at the University of Bremen. SVI doesn’t have that permission, according to the Federal Labor Agency.

Mr. Höfer signed his contract in 2014 and his entire working experience led him to believe he was working for Deutsche Post. He got a Deutsche Post business card and e-mail address. When he drove out to see clients, the number plate on his company car bore the letters BN-PY used on Deutsche Post vehicles. He told clients about the benefits of the E-Post letter, a high-security system for transmitting written correspondence. When he wanted to take vacation or got sick, he contacted his Deutsche Post team leader. He was a Deutsche Post guy. Or so he thought.

But then one day he chatted with colleagues about pay. And the longer the conversation went on, the more astonished he became. What were those numbers they were talking about?

He and some other SVI employees got hold of the labor contract of their Deutsche Post colleagues and couldn’t believe their eyes. They found that their own contracts stipulated longer working hours, less vacation time and, by their estimates, less pay than the Deutsche Post contract would entitle them to. The deeper Mr. Höfer and his colleagues delved, the more certain they became that they were in a two-class company. The inequality caused unrest and some employees quit the institute.

Then in early 2016, SVI’s headquarters in Königstein, in the western state of Hesse, got a visit from custom officers from the town of Giessen who went on to launch a formal investigation into SVI managers on suspicion of the forbidden, commercial provision of temporary workers.

The customs authority declined to comment on the case, citing tax confidentiality rules. SVI also declined to comment. Asked about the claims of a two-class system and the customs probe, the company referred Handelsblatt to the parent company which gave the following statement: “It is true that the Giessen customs office is currently investigating accusations against the Siegfried Vögele Institut relating to possible irregularities in connection with the employment arrangements of some employees. We are supporting the office and have provided all necessary information to clarify the facts.”

What penalties could Deutsche Post and its subsidiary now face? Mr. Däubler, the labor expert, said that if the suspicion of the unauthorized provision of temporary labor is confirmed, employees like Mr. Höfer would have to be directly employed at Deutsche Post and would be entitled to back pay amounting to the wage shortfall they suffered over the previous three years.

That’s not the only cost Deutsche Post may face. If the customs authority establishes wrongdoing, it could fine SVI and in this case may also launch criminal proceedings because in paying reduced salaries, it would also have withheld part of the social contributions it should have been paying. That’s a crime.

Lukas Höfer, meanwhile, has abandoned his dream of a career at Deutsche Post. He wants to leave SVI and is looking for a new job. One thing’s for sure: he’ll never sign another job contract that strikes him as suspicious.

 

Massimo Bognanni is an investigative reporter with Handelsblatt. To contact the author: [email protected]