Powerful trade unions often are a thorn in the side of employers. But if a company tries to reduce the trade unions’ influence, it may violate the freedom of association under Article 9 section 3 of the German Constitution (Grundgesetz – GG). This was made clear in a recent ruling of the Labor Court (Arbeitsgericht) Gelsenkirchen (judgment of March 9, 2016 – 3 GA 3/16).

The ruling is of particular interest especially for multinational companies who have employees in Germany and are not familiar with this fundamental right.

Facts of the Case

The employer, a cleaning company, had interrogated their employees regarding their membership in a trade union. Then, the company sent out a circular letter to all employees, promising a one-time “employee loyalty premium” in the amount of EUR 50 to every employee who could demonstrate the termination of his membership in a trade union with a written confirmation.

Furthermore, the employer provided to all employees prepared termination letters in order to be submitted to the trade union. Notices were put up within the company, directing the employees’ attention to the prepared termination letters. From the company’s perspective, this was a counter-reaction to an advertising campaign by the trade union.

Injunctive Relief of Trade Union due to Infringement of Freedom of Association

The federal board of the trade union concerned filed for a cease and desist order by way of a preliminary injunction due to infringement of collective freedom of association under Article 9 section 3 German Constitution.

Legal Background – Freedom of Association under the German Constitution

Pursuant to Article 9 section 3 German Constitution, the right to form associations to safeguard and improve working and economic conditions shall be guaranteed to every individual and to every occupation or profession. Agreements that restrict or seek to impair this right shall be null and void and measures directed to this end shall be unlawful.

Labor Court Granted Injunctive Relief of the Trade Union

The Labor Court affirmed an injunctive relief of the union. The promise of an “employee loyalty premium” to be granted upon proof of a termination of the previous membership in a trade union affects the union’s freedom of association. According to the Labor Court, the company meant to create a financial incentive for employees to leave a union and thus affect the number of its members. The same applies for notes regarding prepared termination letters as well as for a – written or oral – request to resign from a trade union.

Even Asking Employees for Trade Union Membership Unlawful

The Labor Court held that even the interrogation of the employees concerning their potential trade union membership violates the union’s freedom of association. According to the Labor Court, this is due to the fact that the information demanded from the employees is likely to provide knowledge about the number of trade union members in the company as well as their precise distribution within the company. At the same time, the company’s action can be understood as a message to those employees taking into consideration joining the trade union.

In Accordance with Settled Case Law by Federal Labor Court

Pursuant to settled case law by the German Federal Labor Court (Bundesarbeitsgericht – BAG), employees who want to join a trade union must not be prevented from doing so by economic pressure: Whether or not they become a union member has to be in their free decision. If they are already a member of a trade union, the employer must not in any way induce employees to leave a union.

In this context, the BAG held that it is unlawful to make the hiring of an employee conditional on his resignation from a trade union (judgment of June 2, 1987 – 1 AZR 651/85) or to clarify at the outset that only non-union-members are to be recruited (judicial decision of March 28, 2000 – 1 ABR 16/99). In particular, the interrogation of employees by the employer regarding their trade union membership in connection with collective bargaining negotiations and upcoming industrial action constitutes a measure directed against the trade union’s collective freedom of association (judgment of November 18, 2014 – 1 AZR 257/13).

Practice Notes

Employers should refrain from any influence on employees regarding their trade union membership. The request to resign from a trade union constitutes a violation of the freedom of association under Article 9 section 3 German Constitution and an injunctive relief of the trade union – regardless of the promising of a financial incentive.

The provision of prepared termination letters concerning the resignation of employees from a trade union is likely to be deemed as such an influence. A violation of the Freedom of Association can already be constituted by asking employees for their trade union membership, if there are no legally permissible grounds for doing so.

In the event a court issues a cease and desist order, fines in a considerable amount may be ordered in case of its violation: The Labor Court Gelsenkirchen ordered a fine of up to EUR 250,000 for each case of violation, but at least EUR 4,000 in each individual case.