Employers must prepare for increased collective bargaining agreement obligations, ensuring a proper balance between employer and employee needs in terms of working conditions and pay, an expert has said.
It comes as the Federal Ministry of Labor and Social Affairs introduced a draft bill on collective bargaining compliance (52 pages/528 KB PDF) on 22 July.
The draft law is part of a broader strategy by the German government to reverse the decline in collective bargaining coverage across Germany. Once covering around 75% of jobs in Germany, collective bargaining agreements now apply to only around 50% of the workforce. The new law seeks to counter this trend by requiring that companies awarded deferral public contracts adhere to sector-specific collective agreements. This obligation will also extend to subcontractors, ensuring that fair wages and working conditions are upheld throughout the supply chain.
The government has emphasised that collective bargaining agreements are a cornerstone of decent work and a functioning social partnership, balancing interests of employees and employers on an equal footing in a bid to reliability and security for both sides. The law is designed to promote fair competition and prevent ‘wage dumping’ in publicly funded projects.
Andreas Schöberle, employment law expert at Pinsent Masons, said: “The goal of the draft legislation is to strengthen declining collective bargaining coverage. This increases the amount of bureaucracy in companies,...
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