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29 September 2017

Germany: Act on Collective Agreement Unity is compatible with the constitution

Germany’s federal constitutional court has ruled that a controversial law about collective wage agreements is compatible with the constitution. The Act on Collective Agreement Unity (the so-called Tarifeinheitsgesetz) decrees that if there are competing collective wage agreements within one firm, the agreement between the employer and the trade union with the largest membership applies. With this Law, introduced in 2015, the federal government sought to prevent power struggles between different trade unions in which strikes were called by one subgroup of employees to the detriment of the wider labour force.

It has been argued that small unions have gained a disproportionate amount of influence, in recent years. This development is seen as a direct consequence of 2010 Federal Labour Court rulings , which put an end to the principle of Unitarian Bargaining (Tarifeinheit), a tradition that had existed for over 60 years. These rulings gave more rights to small unions to contest the established system, which had only one agreement for a given company. Several DGB trade unions were worried that professional groups, which stood to benefit the most from strikes, could abandon the principle of solidarity. Employers, for their part, feared that companies would face permanent turmoil, because individual collective bargaining agreements could constantly be expiring.

Against this background, the coalition government initiated a new Act that came into force as of 10 July 2015. The Act states that if two non-identical collective agreements from different unions in the same establishment conflict, the collective agreement of the trade union with the largest membership in the establishment will apply. Immediately after this Act was passed, several smaller unions, together with the DGB services trade union and ver.di,  filed a constitutional complaint.

In its verdict, the federal constitutional court declares that the Act does conform to the constitution. In a press statement it is said that:

The interpretation and application of the Act, however, must be in conformity with the autonomy of collective bargaining (Tarifautonomie) which is protected as a fundamental right under Art. 9(3) of the Basic Law (Grundgesetz – GG). It is for the regular courts to decide in detail those matters that are yet unresolved. The Act is incompatible with the Constitution only to the extent that it lacks precautions ensuring that the interests of members of particular professional groups or sectors are not neglected one-sidedly when existing collective agreements are supplanted.

In cases where collective agreements conflict in the same company the agreement between the employer and the trade union with the largest membership applies. However, a collective agreement of a minority union may only be rejected, according to the court, if the trade union with majority of employees in the company has seriously and effectively considered the interests of members of the minority trade union, within the affirmed collective agreement. Thus, the larger union, which has signed the recognised agreement, must show that it has plausibly, considered the interests of their fellow workers who belong to smaller trade unions. 

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