15. January 2016

Employment conditions: With or without a collective bargaining agreement

In principle, work time and its remuneration (basic pay) in Germany can be regulated only by way of collective bargaining agreement or by individual agreement. Hence, there are two different ways of regulating employment conditions that form the basis for employment contracts in a company.

Employment contracts with collective bargaining agreement

Represented by an employers’ association like bayme vbm, employers negotiate the industry-wide collective agreement with the trade unions. A company may accept this agreement or enter into a separate internal company agreement, for instance with IG Metall, the metalworkers’ trade union. The employment contract with the individual employee must not conflict with applicable collective agreements.

Arrangements that deviate from these provisions are admissible if permitted by the collective bargaining agreement or if they include changes in favor of the employee. An employee who is a member of a trade union cannot effectively relinquish entitlements he or she has been granted by the collective agreement. We provide our members with advice and support in all of these matters.

Employment contracts without collective bargaining agreement

In companies without collective agreement coverage, employers and employees are free to agree upon employment conditions, provided the legally admissible limitations set by law are taken into account. Care must be taken to ensure that certain employee protection provisions are not circumvented (e. g. protection against dismissal, working hours, part-time employment and fixed-term employment).

If a company has a works council, certain aspects of the working conditions in the company, e.g. systems covering working hours, can only be agreed upon with the works council. bayme vbm provides advice on working conditions.