Collective bargaining agreements

On 11 December 2014, the German federal government approved a ‘one company, one collective agreement’ law.  This means that only one collective bargaining agreement can be applied to an employment relationship or within a company.

Under German law collective bargaining agreements are concluded between the employer (or employers' association) and a trade union. They mostly regulate wages, working times etc, with the agreed terms then applying to all employees and employers covered by the agreement.  In 2010, German labour courts changed their longstanding approach to conflicting collective agreements by allowing different collective bargaining agreements to apply to different employees within the same company. This benefited, in particular, small ‘niche’ trade unions within specific professional groups, as their collective bargaining agreements applied in addition to the collective bargaining agreements of the big trade unions, enabling them to call a strike to enforce their members’ rights. However, as a result of this many Germans had the impression of a nation on permanent strike, particularly in the past year with strikes by train drivers and pilots. 

Under the new ‘one company, one collective agreement’ law, there can only be one applicable collective bargaining agreement.  If competing trade unions of a company cannot agree which collective bargaining agreement is to apply, the applicable agreement will be that of the union with the most members employed by the company at the time the agreement is concluded.

Not surprisingly, this scheme has been criticised by smaller trade unions who, fearing that it diminishes their influence and right to strike, argue that the law is unconstitutional. The counter-argument raised by some of the larger trade unions is that powerful professional groups, such as train drivers, pilots or physicians, should not be able to pursue their interests without regard to other employees.

The law will come into force this summer, at the earliest. It will affect new collective bargaining agreements only, the status quo being preserved for those that already exist.