On the one hand, the Basic Law protects the freedom of individuals to form associations to safeguard working and economic conditions, to join such associations, or to leave them. This means, for example, that employees have the right to form trade unions, to join them, or to leave them. On the other hand, the coalition (trade union, employers’ association) itself is also protected in its existence, its organizational structure, and its activities, provided that these serve to promote working and economic conditions.
Examples:
- An employer cannot require an applicant to leave a trade union.
- A trade union may advertise trade union membership on the company notice board.
- A trade union may, among other things, promote strikes in violation of the employer’s property/possessions (BAG, judgment of November 20, 2018 – 1 AZR 189/17).
- However, an employer is not obliged to provide the union responsible for collective bargaining with the work email addresses of its employees for the purpose of recruiting members (BAG, judgment of January 28, 2025 – 1 AZR 33/24).
Parties to collective agreements can autonomously determine the working and economic conditions of their members in collective agreements. The state does not generally influence the content of collective agreements. See https://buse.de/blog/arbeitsrecht/bundesverfassungsgericht-bag-beachtet-tarifautonomie-nicht/ for more information. Collective agreements on general policy are not permitted.
Who can conclude collective agreements?
On the employer side, the parties to collective agreements are the employers’ associations. However, individual employers can also conclude collective agreements. On the employee side, only trade unions are parties to collective agreements. Collective agreements cannot be negotiated/concluded between the employer and
- the works council (instead, works agreements are concluded)
- the (individual) employees
- other initiatives
Not every employee representative body is a trade union. Trade unions are coalitions of employees that are entitled to negotiate collective agreements. The trade union must have set itself the statutory task of representing the interests of its members in their capacity as employees and must be willing to conclude collective agreements. The coalition must be freely formed, free of opponents, independent, organized on an inter-company basis, and recognize the applicable collective bargaining law as binding. There is a lack of independence from opponents if dependence on the employer is inherent and permanent in the structure of the employee association and the independent representation of interests of the collective bargaining party is seriously jeopardized by personal ties, organizational links, or substantial financial contributions. See https://www.haufe.de/personal/arbeitsrecht/gewerkschaft-gdl-will-arbeitgeber-ihrer-mitglieder-werden_76_596384.html
The employee association must have a minimum level of bargaining power, i.e., the ability to assert itself vis-à-vis the employer, and an efficient organization (social power). Social power can only be inferred from circumstantial evidence.
- Number of members – as organizational strength in relation to the geographical and professional area of organization chosen by the association itself – is of decisive importance in principle.
- If there are doubts as to whether the association has sufficient power to enforce its demands, this may also be indicated by the employee association’s long-standing participation in collective bargaining.
- Collective agreements concluded by the employee association within its statutory competence must exist to a significant extent and must be representative of the competence currently claimed by the employee association.
- It is sufficient for the employee association to have enforcement power and organizational capacity in at least a significant part of its self-chosen area of competence.
In addition to positive freedom of association, Article 9(3) of the Constitution also guarantees negative freedom of association. A collective agreement cannot, for example, stipulate that an employer may only hire union members.
What are collective agreements?
Collective agreements have a contractual and a normative part. The contractual part regulates the relationship between the parties to the collective agreement. It is generally irrelevant for employees. The normative part contains the legal norms that can regulate the content, conclusion, and termination of employment relationships as well as issues relating to company and works constitution law.
The parties to the collective agreement are obliged to comply with and implement the collective agreement. They must refrain from anything that could jeopardize the implementation of the collective agreement. They must inform their members about the collective agreements concluded and their contents and encourage their members to comply with the collective agreements. If a collective agreement is not terminated, the relative peace obligation prohibits industrial action relating to the contents of the collective agreement. The parties to the collective agreement may also agree on an absolute peace obligation, e.g. during collective bargaining.
The normative part of a collective agreement contains legal norms.
Examples:
- Fundamentals of the employment relationship (e.g., vacation entitlements, wages and salaries, continued payment of wages in the event of illness)
- Regulations on the conclusion of an employment contract (e.g., written form, reemployment commitments in the event of bad weather dismissals in the construction industry)
- Regulations on the termination of an employment contract (e.g., notice periods, exclusion of ordinary termination in the case of long-term employment)
Collective agreements may also contain company standards. These regulate operational issues.
Examples:
- Washrooms, company canteen (so-called social standards)
- Gate controls, smoking bans (so-called regulatory standards)
Works constitution standards are also possible. They regulate the order of the works constitution. Particularly noteworthy are collective agreements on deviating works/works council structures, Section 3 BetrVG.
Collective agreements may also contain provisions on joint facilities, e.g., social security or pension funds.
Legal norms of a collective agreement are directly and mandatorily applicable if both parties are bound by the collective agreement, § 4 (1) sentence 1 TVG. The members of the parties to the collective agreement and the employer who is itself a party to the collective agreement are bound by the collective agreement, § 3 (1) TVG. Collective agreements may not violate higher-ranking law, e.g., Section 622(4) BGB; Section 13 BUrlG; Section 12 EFZG; Section 7 ArbZG.
The direct and mandatory effect means that no further implementation steps are required (e.g., no consent from/agreement with employees). Deviating provisions are not permitted unless the collective agreement allows deviations or the principle of favorability applies. Employees cannot waive rights under a collective agreement, Section 4 (4) TVG. After the collective agreement expires, legal norms continue to apply directly but are no longer mandatory until they are replaced by another agreement (after-effect, § 4 (5) TVG).
Collective bargaining coverage and validity of a collective agreement
The direct and mandatory legal effect of a collective agreement requires mutual collective bargaining coverage. Members of the parties to the collective agreement are bound by the collective agreement. Individual employers who are themselves parties to the collective agreement are also bound by the collective agreement. The collective agreement remains binding even if the employer leaves the trade union or employers’ association until the collective agreement expires, Section 3 (3) TVG, whereby an amendment to the collective agreement is sufficient for this purpose. The statutes of an employers’ association may provide for the employer to be a member of the association on a case-by-case basis, so that a member is not bound by the collective agreement. Company standards and standards under works constitution law only require the employer to be bound by the collective agreement.
A specific collective agreement also applies directly and mandatorily if it is generally binding, Section 5 TVG. Generally binding collective agreements apply to all employment relationships to which the employment relationship is covered (industry, region, workplace), regardless of whether the parties to the employment contract are bound by the collective agreement.
A specific collective agreement may also be applicable on the basis of a reference in an employment contract. The reference to a collective agreement does not (alone) have the effect pursuant to § 4 (1) TVG (i.e., no normative effect).
Note
If the entire collective agreement is referenced, the labor courts do not review the content of these provisions (“AGB review”), as collective agreements contain legal norms and these are not deviated from if they are referenced in full.
Legal norms of a collective agreement become part of the employment relationship in the event of a transfer of undertakings, Section 613a (1) sentence 2 BGB. However, they remain collective norms. A statutory amendment freeze applies for one year. There is no transformation into employment contracts if the acquirer of the business has collective agreements on the same subject matter, Section 613a (1) sentence 3 BGB.
An employer may be bound by several collective agreements. A case of competing collective agreements exists if the employer and employee are bound by two collective agreements. This can occur, for example, if there is an in-house collective agreement and an industry-wide collective agreement is declared generally binding. A plurality of collective agreements exists if only the employer is bound by two collective agreements, but the employees are each bound by only one collective agreement.
Competition between collective agreements is resolved in accordance with § 4a TVG (Collective Bargaining Act) according to the majority principle. An exception to this applies if an in-house collective agreement and a generally binding collective agreement compete with each other. In this case, the more specific collective agreement applies. The resolution of collective bargaining plurality is (also) governed by the majority principle in accordance with Section 4a TVG. Insofar as the areas of application of collective agreements of different trade unions that are not identical in content overlap, only the legal norms of the collective agreement of the trade union that has the most members in an employment relationship in the company at the time of the most recently concluded conflicting collective agreement are applicable in the company. Section 4a (2) sentence 1 TVG stipulates that the employer may be bound by several collective agreements pursuant to Section 3 TVG. The principle of collective bargaining unity only applies subsidiarily in this respect if the trade unions are unable to reach an autonomous agreement. Collective agreements may also be concluded if they are subsequently superseded by the conflict rule in § 4a (2) sentence 2 TVG (BVerfG, judgment of July 11, 2017 – 1 BvR 1571/15, 1 BvR 1588/15, 1 BvR 2883/15, 1 BvR 1043/16, 1 BvR 1477/16, NZA 2017, 915)
Principle of favorability
Provisions that are more favorable to employees take precedence over legal norms in collective agreements, Section 4 (3) TVG. The comparison of favorable provisions is carried out in relation to the individual employment relationship, i.e., on an individual basis. A comparison of subject groups is necessary for the comparison of favorable provisions. Provisions in the collective agreement and the deviating agreement must, according to common understanding, relate to the same subject matter (no cherry picking).
Strikes
The freedom of action of coalitions protected by Art. 9 (3) of the constitution extends to all coalition-specific conduct, in particular to industrial action aimed at concluding collective agreements. The most important industrial action taken by trade unions is the strike. Trade unions may also develop and use alternative forms of industrial action. Flash mob actions accompanying strikes may therefore be permissible as a means of industrial action (BAG, judgment of September 22, 2009 – 1 AZR 972/08). Collective sick leave (“go sick”), workplace blockades, and workplace occupations are not permissible. Employers have lockouts as a means of industrial action.
There is no legal regulation governing industrial action. Strikes serve to introduce a collective agreement or amendments thereto. Political objectives (e.g., protests against the austerity policy of a federal state) are therefore not legitimate strike objectives. A strike is supported and decided upon by a trade union. Trade unions may call for a strike to force negotiations and the conclusion of a collective agreement. The right to strike exists regardless of who originally took the initiative to conclude a collective agreement.
A strike must be suitable for achieving the objective (= conclusion of a collective agreement). A means of industrial action is suitable if its use can promote the achievement of the objective of the industrial action. The trade union has a prerogative of assessment in this regard (the trade union has very broad discretion). This condition will almost always be met.
A strike must be necessary. According to the union’s assessment, no less severe means must be available to achieve the desired goal. Here, too, the union has a very wide margin of discretion. A strike is disproportionate if the employer has already made the concessions demanded.
The strike must be objectively reasonable/proportionate (proportionality in the narrow sense). A means of industrial action is proportionate in the narrow sense if, after sufficient consideration of the freedom of action guaranteed by fundamental rights, it appears appropriate to achieve the desired objective of the industrial action, taking into account the legal positions of those directly or indirectly affected by the industrial action. A means of industrial action is only disproportionate if, even taking this context into account, it constitutes an unreasonable impairment of opposing legal positions that are also protected by constitutional law. It is precisely the nature of industrial action to exert pressure to achieve a legitimate goal by inflicting economic disadvantages. Maintenance and emergency work must also be carried out during strikes. This may require emergency service regulations.
Strikes normally take place outside the workplace. The employer is not required to make its property available for strike purposes. However, a trade union may be entitled to strike on company premises (BAG, judgment of November 20, 2018 – 1 AZR 189/17).
The trade union must decide to strike and inform the employer of this decision. Whether internal rules on decision-making are complied with is irrelevant to the admissibility of a strike. Making the strike decision available to the employer is sufficient for “announcing” it. A strike is usually preceded by a ballot of union members; however, the absence of such a ballot does not affect the admissibility of a strike.
Employees of the company affected by the strike are allowed to strike. Membership of the union that called the strike is not required. Even employees who are members of another union are allowed to join the strike. Trainees at the company affected by the strike are also allowed to take part in the strike. The right to strike exists in particular if the collective agreement sought also contains provisions for trainees.
The employer may not use temporary workers as strike breakers, Section 11 (5) sentence 1 AÜG. Temporary workers are not obliged to work for a hirer affected by industrial action, Section 11 (5) sentence 2 AÜG.
Defensive measures available to employers against a strike
The employer may withhold remuneration during the employee’s participation in the strike. This applies equally to lawful and unlawful strikes. This also includes continued payment of remuneration in the event of illness if the employee falls ill during the strike or participates in the strike despite being ill.
An employee may, in principle, be given a warning for participating in an unlawful strike. However, employees may generally rely on the lawfulness of a strike called by the trade union and are therefore not in breach of their employment contract. Employees must notify their employer that they are going on strike. If an employee simply stays at home, the employer cannot tell whether the employee is on strike or absent without excuse.
The employer can try to get a temporary injunction from the labor court to stop an announced illegal strike. It’s also possible to claim damages from a union for an illegal strike.
Lockouts and other industrial action by employers
The “classic” industrial action on the employer’s side is a lockout. However, lockouts are hardly ever used (anymore). A lockout means the general refusal to allow work to be performed and the refusal to pay wages as a means of exerting collective pressure to achieve a collective bargaining goal.
Instead of a lockout, the employer can shut down operations within the time frame and geographical area of the strike. Such a suspension of operations means that even employees who are willing to work lose their entitlement to wages. Non-striking outsiders who are willing to work are included in the risk community of the employees involved in the strike. Such shutdowns are only permissible within the framework set by the strike call in terms of content and time.
More important in practice is the possibility for the employer to pay strike-breaking bonuses. These bonuses must be paid to all employees without distinction and not exclusively to union members.
