Act on Uniformity of Collective Agreements (Tarifeinheitsgesetz) in most parts compatible with the German Constitution (Grundgesetz, GG)

The constitutionality of the Act on Uniformity of Collective Agreements has been a widely debated issue since it came into force in July 2015. Just recently – on 11 July 2017 – the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) confirmed that the provisions of this Act are compatible with the German Constitution for the most part (docket-numbers: 1 BvR 1571/15, 1 BvR 1477/16, 1 BvR 1043/16, 1 BvR 2883/15, 1 BvR 1588/15).

The Act prescribes that in case of a conflict due to several collective bargaining agreements (CBA) being applicable in one operation (Betrieb) the CBA of the trade union which has fewer members in the company is supplanted. The union whose CBA is supplanted has the right to adopt the CBA of the union which organizes the majority of the employees in the company (Nachzeichnung). To determine which union organizes the majority, the Act provides for court proceedings.

Trade unions organizing specific professions (Berufsgruppengewerkschaften) and sectoral trade unions issued constitutional complaints against the Act claiming a violation of their right to freedom of association (Koaltionsfreiheit) pursuant to art. 9 para. 3 German Constitution.

The Court ruled that the Act’s provisions are for the most part compatible with the Constitution even though it found the provision on supplanting a CBA in case of a conflict to interfere with the right to freedom of association. Regarding any matters resulting from the application of the Act that have not been resolved yet, the court held, that it is for the regular courts to decide about those matters in detail.

However, the Court found the Act to be disproportionate to the extent that it lacks precautions ensuring that the interests of members of particular professional groups or sectors are not unilaterally neglected when existing CBAs are supplanted. In this respect, the legislature has to remedy the situation. Until the Act is recast, a CBA may only be supplanted if it is demonstrated in a plausible manner that the majority trade union has seriously and effectively considered the interest of members of the minority trade union within its CBA. Other than that, the Act remains applicable and new provisions have to be enacted by 31 December 2018.

In parts the decision was not adopted unanimously, as two members of the Court submitted a separate opinion, stating that the legislature’s mean of supplanting a concluded CBA is too severe and criticizing the decision to delegate the regulation of fundamental rights issues to the regular courts.

Even though the judgement appears to be a big swing against small trade unions, their existence seems not to be at risk, as the Court emphasized that the Act does not interfere with the small unions’ right to strike. However, the ruling has encountered much criticism among experts especially with regards to leaving it up to the regular courts to decide about fundamental matters that arise from the application of the Act. It will most likely take several years and a significant number of legal disputes, putting further strain on the labor jurisdiction, to finally provide the legal certainty that was initially expected to come with this judgment.