Germany: Act on Collective Bargaining Unity in Force

Map and Gavel

In 2010, Germany’s Federal Labor Court (Bundesarbeitsgericht) abolished the principle of collective bargaining unity, commonly referred to as “Tarifeinheit” (“One business, one collective agreement”). As a consequence, since then it has been possible that two different collective bargaining agreements applied for the same group of employees within the same operation. This ruling is supposed to be the major reasons why there have been more strikes in the last couple of months in Germany than ever before.

The Act on Collective Bargaining Unity (Tarifeinheitsgesetz) which entered into force in the summer of 2015 is meant to avoid such a conflict of collective agreements in the future. Under the Act, in the case of a clash of collective agreements, only the collective agreement of the trade union will apply in the operation which has the largest number of members at the time the conflicting collective agreement is concluded. The majority rule is meant to ensure that the collective agreement with the highest level of acceptance among the employees applies.

Minority trade unions that do not participate in the collective bargaining of the major trade union enjoy a right to be heard by the employer. They can express their views and claims in the course of this hearing. The employer is obliged to make public the commencement of the collective bargaining process in good time. If the minority trade unions’ right to be heard is breached, they may apply for a court decision. In addition, minority trade unions have a right to sign corresponding collective bargaining agreements. They can request that the employer or the competent employer’s federation enters into an identical collective agreement with them.

In case of a dispute regarding the applicable collective agreement, the labor court decides which collective agreement applies. The decision of the labor court is binding vis-à-vis third parties. Employers must publish final court decisions and collective agreements applicable in the operation (e.g. on a bulletin board or the Intranet).

Though the Act expressly states that it does not intend to change the law on industrial action in any way, strikes by minority trade unions could be held to be illegal because their collective agreements could not prevail because of the new majority rule. This is one of the reasons why some legal scholars consider the Act not to be in line with the trade union freedom guaranteed by the German Constitution. Some of the small trade unions, considering the Act to be an existential threat, filed constitutional complaints immediately after the Act being published in the Federal Law Gazette and applied for interim injunctions.

Just recently, on October 6, 2015, the Federal Constitutional Court rejected the motions for interim injunction. The court considered it unforeseeable that the small trade union would suffer serious disadvantages in case of a continued application of the Act until the court has ruled on the action in the main proceedings. Anyway, this is in no way a confirmation of the constitutionality of the Act. Employers will have to come to terms with the Act on Collective Bargaining Unity until the Federal Constitutional Court has ruled on the action in the main proceedings which will probably be by end of 2016.