European Trade Union Institute, ETUI.

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Industrial relations in Germany - background summary

  • There are estimated to be around 7.4 million trade union members in Germany, which is around 18% of the workforce and appears to rising.
  • The main trade union confederation in Germany is the DGB (Deutscher Gewerkschaftbund). Its member unions have just over 6 million members, as at December 2015
  • There are two other confederations: the dbb, which organises public sector workers and has around 1.3 million members, and the Christian confederation, CGB, which has around 280,000 members. The majority of the dbb’s members have civil servant status (Beamte) and their pay and conditions are not bargained but set by law. Around a third of its members are workers with normal employment status whose pay and conditions are negotiated. The CGB has 14 member unions.
  • Trade unions in Germany have traditionally been organised along industry lines, although mergers in recent years have blurred this somewhat.
  • The two largest trade unions in Germany are the metalworking union IG Metall, with around 2.7 million members as at December 2015, and the services union Ver.di, with around 2 million members as at December 2015. Ver.di was created in 2001 out of a merger of five unions The chemical and energy workers’ union IG BCE is the third largest union with around 650,000 members.
  • In addition, there are a number of autonomous trade unions that organise members in certain occupations, such as the Marburger Bund, which organises hospital doctors and Cockpit, which organises airline pilots.
  • Collective bargaining in Germany predominantly takes place at sectoral level between sectoral trade unions and employer organisations. There are some exceptions to this, such as the carmaker Volkswagen, which negotiates its own collective agreement with the trade union IG Metall.
  • Sectoral agreements are usually concluded at regional level, which means that there may be some regional variation. Bargaining usually follows a pattern, with one region taking the lead.
  • The pay provisions of collective agreements usually cover one or two years. Other provisions run for longer periods.
  • In terms of coverage by collective agreement, the Institute for Employment Research (IAB) of the Federal Employment Agency notes that for 2015, 59% of employees in the west are covered by a collective agreement (51% at sectoral level and 8% at company level). Coverage is lower in the east, at 49% (37% at sectoral level and 12% at company level).
  • Coverage by collective agreement has been declining over the past few decades, and particularly since the unification of Germany: coverage in the east has always been lower than that in the west. According to the IAB, coverage by sectoral agreement in the west has declined from 70% in 1996 to 53% in 2014 and in the east from 56% to 36%. Nevertheless, half of employees not covered by collective agreements state that their employer takes account of them when setting terms and conditions, thus widening the overall influence of collective agreements.
  • Under the Works Constitution Act (Betriebsverfassungsgesetz), works councils can be established in all workplaces with at least five employees. However, in practice, many smaller workplaces do not have a works council. The IAB notes that in 2013, only 9% of all eligible workplaces actually had a works council in the west and 10% in the east, although these covered 43% of all employees in the west and 35% in the east. A majority of larger workplaces of over 500 employees have a works council. The number of works council members increases according to establishment size.
  • The works council has the right to be informed and consulted about a number of issues connected to the workplace, such as economic and employment-related issues, and can engage with the employer and make proposals. It also has some codetermination rights which means that decisions cannot be taken against the wishes of the works council. Codetermination rights cover areas such as the organisation of working time, start and finish times, overtime, short-time working, paid holidays, methods of payment, the setting of bonuses and targets and the organisation of canteens and sports facilities. If an agreement cannot be reached, the issue is passed to an arbitration committee, comprising employer and works council representatives and a neutral chair.
  • Works councils are not involved in collective bargaining over pay or working time, which is the prerogative of trade unions. Nevertheless, works councils have been involved to a greater extent in the implementation of opening clauses, which are clauses in a sectoral collective agreement that allow works councils to negotiate, under specified conditions, company arrangements that are less favourable than the terms in the sectoral agreement.
  • German industrial relations is characterised by dual channels of representation. Trade unions negotiate collective agreements, while works councils have a representation role in the workplace. Although works councils are not officially trade union bodies, in practice, most works councils are dominated by trade unions: around 75% of all works council members are a trade union member, with some sectoral variation.
  • The most recent study, from the Hans Böckler Foundation, shows that in works councils elections in 2014, there was a high turnout – 79% of the workforce in companies with a works council voted. Two-thirds of works council members were re-elected, of whom a large majority (around 75%) were also union members.
  • By law, employee representatives have a right to sit on the supervisory board of large companies. They have the right to one-third of the seats in companies with between 500 and 2,000 employees, and half of the seats in companies with more than 2,000 employees. Where they have one half of the seats, one third of the employee delegation is reserved for trade union nominees, which are as a rule full-time trade union officials. However, the chair is always a company shareholder representative and can cast a deciding vote in the event of a tie.
  • The exception to this is companies in the coal, iron and steel industries, where the board is made up of equal numbers of employee and shareholder representatives, with one neutral member.