August 08, 2017

Federal Constitutional Court upholds “Principle of One Collective Agreement per Establishment”

Under German Labour Law more than one trade union can seek collective negotiations with an employer or employers’ association. The implementation has been limited though to one collective agreement of one trade union per establishment for decades to avoid inconsistencies and divisions. However, this principle has been overthrown by the Federal Labour Court (Bundesarbeitsgericht) in 2010.

In 2015, the “Law Governing the Principle of One Collective Agreement per Establishment” (Tarifeinheitsgesetz) has been adopted. A law determining that in case there are two collective agreements overlapping in one establishment, only the agreement concluded by the trade union with the larger number of members employed at the establishment is applicable.

Several smaller trade unions submitted this new law to the Federal Constitutional Court (Bundesverfassungsgericht), claiming a violation of their fundamental rights. On July 11, 2017 the Federal Constitutional Court has ruled that the law is basically in compliance with the German Constitution (Grundgesetz). However, according to the court, the law does not sufficiently ensure that the concerns of members of the smaller trade unions are taken into account. Therefore, it is unconstitutional in this respect.

The court obliges the legislator to change the law accordingly until December 31, 2018. Until then, the law in its current form will continue to be in force with the amendment that a majority agreement can only supersede a minority agreement if the concerns of the minority are considered adequately.

The Bavarian Industry Association (vbw) welcomes the decision of the court. The “Principle of One Collective Agreement per Establishment” is essential to strengthen the pacifying effect of collective agreements.


Julius Jacoby

Arbeitsrecht, Wirtschaftsrecht, Internationales Recht

Julius Jacoby