EMPLOYMENT POLICY : GERMAN LAW ON PAYMENT FOR EMPLOYMENT AGENCIES MUST BE REVISED.

The Court of Justice of the European Communities has ruled against the German legislation on payment by member states to private-sector recruitment agencies (judgement of 11 January, C-208/05).

In 2002, Germany introduced a legislation encouraging private employment agencies to place persons receiving unemployment benefits or social aid. The FederalaEmployment Agency (Bundesagentur fur Arbeit) pays staff recruitment agencies for placing citizens on condition that the job found is in Germany. In this context, a private agency, Innovative Technology Center (ITC), agreed to find a job for Mr Halacz, unemployed at the time. And they were successful in finding a job for him in ... the Netherlands. The Federal Agency then refused to pay ITC the 1,000 it was due, on the grounds that the job found by ITC for the person seeking employment was not in Germany.

The Court ruled that this national...