The declaration of general applicability of collective agreements is an exceptional instrument.
With around 78,000 collective agreements currently in force, the collective bargaining partners have created a differentiated system of industrial relations. The declaration that collective agreements are generally binding is the exception in our German collective bargaining system, which is characterised by freedom of association and collective bargaining autonomy.
However, the constitutionally protected freedom of association and collective bargaining autonomy (links to the text Collective bargaining autonomy) includes not only the right to join a collective bargaining party - but also the right to stay out of such a coalition. For this reason, the AVE of collective agreements plays a special role in the German collective bargaining system. Not every sector and collective bargaining party is eligible for the AVE of collective agreements. The comparatively low number of collective agreements declared generally binding in relation to all applicable collective agreements documents their exceptional character (443 AVE in 2017, Federal Ministry of Labour 2017).
Dealing responsibly with the AVE
The AVE must be in the public interest
Collective bargaining committee as a control and formative bodyThe Federal Ministry of Labour (BMAS) can only declare a collective agreement to be generally binding in agreement with the collective bargaining committee at federal level (collective bargaining committee at the BMAS), which is made up of equal numbers of representatives of the employers' and employees' umbrella organisations, at the request of both parties to the collective agreement. In parallel, the competent Land authorities may, in agreement with the respective Land collective bargaining committee, declare collective agreements valid for their Land to be generally binding.
The collective bargaining committees exercise a control and formative function within the framework of the AVE procedure. When assessing whether an AVE appears to be in the "public interest", their members have a margin of appreciation. By taking into account the interests of the applicants and their members, of outsiders, but above all of the economy as a whole, the balance between positive and negative freedom of association is maintained, i.e. the freedom to join an employers' association or a trade union or to decide against such membership. In this way, the collective bargaining committees make an essential contribution to the preservation of collective bargaining autonomy. At the same time, the right of the central organisations of employers and employees to have a say in the AVE procedure underlines the neutrality of the state in the regulation of working conditions. The collective bargaining committees are thus an expression of the subsidiarity principle of the social market economy, according to which tasks should be performed at the level which is best able to do so.