Draft bill: Compliance with Collective Bargaining Agreements

On 5 September 2024, Hubertus Heil, Federal Minister of Labour and Social Affairs, presented the draft bill of the German Act on Compliance with Collective Bargaining Agreements (Tariftreuegesetz), which is not particularly surprising. In terms of content, however, the draft raises some concerns, as some of the provisions infringe Constitutional and European law. From a company perspective, the key new regulations on the digital access rights of trade unions are noteworthy. If the draft bill passes into law, all companies will be affected. Katharina Schäffer and Jörn Kuhn briefly present the draft.

The draft of the Act on Compliance with Collective Bargaining Agreements stipulates, among other things, that public contracts with a value of €25,000 or more may only be awarded to companies that apply the collective bargaining agreements customary in the industry for the duration of the respective contractual relationship. When companies are commissioned, these companies - including subcontracted companies and personnel leasing companies - must undertake to comply with the relevant collective bargaining agreement. If it is unclear which of the competing collective bargaining agreements applies at the company, a newly established Clearing Entity will decide which collective bargaining agreement is representative in the industry and should be observed.

The legislator is pursuing the goal of increasing collective bargaining coverage in Germany and creating a standardised regulation on collective bargaining compliance at federal level. This is intended to ensure fair competition with companies bound by collective agreements as well as protect employee rights.

In addition to the mandatory application of collective agreements, binding working conditions can also be established by statutory instruments. The possibilities contained by the German Act on the Secondment of Employees (Arbeitnehmerentsende-Gesetz, AEntG) will be used to determine these binding working conditions.

Compliance with these requirements will be monitored by the Federal Collective Bargaining Agreement Compliance Monitoring Centre (Prüfstelle Bundestariftreue). The Centre will support the contracting authorities in monitoring compliance and will carry out independent checks. Violations can be penalised with civil law contractual penalties, extraordinary terminations and exclusion from future public procurement procedures.

A further change relates to the German Collective Agreements Act (Tarifvertragsgesetz, TVG), which allows trade unions a digital access right to companies. Companies must provide trade unions with employees' company e-mail addresses and enable access to internal communication channels.

However, there is also criticism of the new draft bill.There are concerns that procurement proceedings will become more complex and therefore more costly. In addition, restrictions on reorganisations could impair competitiveness, as a subsequent binding effect of the agreed collective agreements is planned in the event that operations are outsourced. There are also concerns regarding European and Constitutional law due to possible interference in collective bargaining autonomy as well as data protection concerns regarding the use of company e-mails by trade unions. Uncertainties remain that the planned compliance with standard industry collective bargaining agreements will not create an incentive to join trade unions and employers' associations.

In summary, the Act on Compliance with Collective Bargaining Agreements aims to strengthen collective bargaining coverage and fair competition, but lags somewhat behind in its currently envisaged implementation through the draft bill of 5 September, particularly in terms of feasibility and data protection. In addition, the draft raises considerable questions under European and Constitutional law.

Back to list