Collective agreements are a central factor in shaping industrial relations in Germany. Collective bargaining autonomy is a fundamental pillar of the social market economy. To this end, the Basic Law grants the social partners an independent role protected by the constitution. Proposals to strengthen collective bargaining should therefore rely on the individual responsibility and expertise of the social partners. As a rule, state influence weakens collective bargaining.
According to current figures from the Institute for Employment Research of the Federal Employment Agency (IAB) on collective bargaining coverage in 2019, collective agreements were directly or indirectly applied in a total of 56% of all companies with 77% of all employees in 2019. The majority of employment relationships in Germany are shaped by collective agreements. 27% of establishments in Germany were directly bound by collective agreements and 52% of employment relationships were directly governed by an industry or company collective agreement. 29% of establishments stated that they were guided by an industry collective agreement. However, only slightly more than 15% of all active employees are members of a trade union.
Strengthening collective bargaining coverage is the task of the social partners themselves. The social partners must create incentives to join an association or trade union by means of modern collective bargaining regulations. The social partners need room for manoeuvre, which they can shape through collective agreements. Collective bargaining autonomy (internal link) must not be further restricted. Legally enforced collective bargaining does not strengthen collective bargaining and is contrary to the autonomy of the social partners.
BDA proposals to strengthen collective bargaining
Differentiation and opening clauses in collective agreements give companies additional flexibility to find company-specific and individual solutions. There are already individual collective agreements that follow this path; the instrument of opening clauses should be used more in collective bargaining practice and deepened.
Companies and workforces should be given the opportunity to select individual modules from an overall collective agreement and to apply only these modules (modular collective bargaining). The scope and complexity of collective agreements as a whole can act as a deterrent, especially for companies that are not yet covered by collective agreements. With modular collective bargaining, employers could adopt parts of a collective agreement that suit them. A company could, for example, apply the pay framework from a collective agreement (internal link) without having to adopt complex regulations on working time at the same time.
In order to increase the motivation for strengthening these flexible elements, consideration should be given to allowing the adoption of collectively agreed regulations at company level. To this end, the works councils should be given the right to adopt collectively agreed rules unchanged by agreement. This would not turn the works council into a company trade union, but would give it the right to adopt parts of existing regulations and to agree their validity with the employer. The right to determine the content of collective agreements would remain with the social partners.