With a ruling handed down in June 2010, the German Federal Labour Court lifted the requirement for uniform collective agreements. The decision has, to date, led neither to more new occupational trade unions nor to increased labor disputes. Those are the findings of a recent RWI study commissioned by the Federal Ministry of Economics. Therefore, instead of returning to a legally defined system of uniform collective agreements, as demanded by the employer and worker organizations BDA and DGB, it is recommended that the system allowing for a plurality of collective agreements be given a chance to prove itself in practice. Excessive strikes could be avoided through amendments to laws governing labor conflicts.

The ruling lifting the requirement for uniform collective agreements (Tarifeinheit), which was handed down by the German Federal Labour Court (Bundesarbeitsgericht, BAG) in June 2010, has to date not led to any appreciable increase in the number of newly founded trade unions. Nor have labor conflicts become more frequent until now. Those are the findings of a recent study carried out by the Rhine-Westphalia Institute for Economic Research (RWI) on behalf of the German Federal Ministry of Economics and Technology (BMWi). With the ruling, the BAG had lifted the legal requirement for uniform collective agreements that had previously been in force. Since then, more than one collective agreement can simultaneously apply within one and the same company.

It can be expected that only few trade unions will be founded for individual occupational groups in the foreseeable future as well. While the German Confederation of Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) and the German Confederation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) had jointly called on legislators to intervene in favor of uniform agreements, RWI consequently judges such action to be currently unnecessary. The system allowing for a plurality of collective agreements should be given a chance to prove itself in practice, even if this results in restructuring of wage and salary schemes within companies.

No need for government intervention in collective agreement laws

Already prior to the lifting of uniform agreements, a number of trade unions had been founded for individual trades, including the Marburger Bund (MB) and the Union of Locomotive Engineers (Gewerkschaft der Lokomotivführer, GdL). This demonstrates that workers in certain sectors do, in fact, desire trade union representation in line with occupational boundaries. That is particularly the case among occupations that play a key role within their specific industrial sectors. The existence of these occupational trade unions also suggests that up to now the major unified trade unions apparently have not been able to fully address the increasing complexity of the working world, with its diversity of interests.

Any intervention by legislators, in the extreme case by prescribing uniform collective agreements, would have serious consequences for the system of collective agreements as well as for the outcomes of collective bargaining. The main problem in this connection is that collective agreements can hardly be settled by external observers who base their judgments on moral criteria. Depending on one’s perspective, solidarity and fairness within one company may be interpreted as both wage compression, in other words protection of the weak, and wage differentiation, i.e. an incentive for high performers. A compromise resulting in a consensus within one company will probably always require these two aspects to be in balance. Not legislators, but rather the employees themselves should implement their notion of fairness within a company: by applying social pressure in order to block wage demands, which they regard as unjustified, that are raised by the elite, but also by recognizing the fact that very rare skills and achievements justify an exceptional level of pay.

Amended labor conflict laws could prevent debilitating strikes

The BAG ruling might in the end result in both increased plurality of collective agreements as well as in major disruptions of the system of collective agreement and serious economic problems due to frequent labor disputes. If that is the case, the response should be amendments to laws governing labor disputes. Such changes could be made so as to interfere to only a limited extent with the trade unions’ freedom to take action. The RWI study presents a specific proposal in this regard, entailing two core aspects. First, collective bargaining within one company could be coordinated on the basis of rules of procedure, which raise no issues related to constitutional law. Second, the right to strike once a collective agreement has been reached should be limited so as to avoid any debilitating labor disputes.

The current strike by the Union of Locomotive Engineers (GdL) is no argument against a plurality of collective agreements. Rather, strikes are a natural part of collective bargaining disputes. The current strike does, however, show up the possible need for legislators to intervene in strike laws. Beyond this, the GdL should be aware of its responsibility for any negative consequences that might ensue, including private rail operators possibly being forced out of business, consequently reducing competition in long distance passenger and freight rail service.

For further information, please contact:
Dr. Ronald Bachmann, Tel.: +49 81 49-220, email
Sabine Weiler (Press Office), Tel.: +49 81 49-213, email