Collective bargaining

Collective bargaining is at the heart of BDA’s work as the central organisation representing employer federations. While it does not conclude collective agreements itself, it serves as a platform and catalyst for its sectoral and regional members via the main characteristics of collective bargaining policy.

In Germany, remuneration and working times are negotiated autonomously by the social partners, in other words without state influence. An essential condition for autonomous collective bargaining is the freedom of association enshrined in the basic law, i.e. “the right to establish associations to maintain and promote work and economic conditions” (article 9.3). An element of freedom of association is that membership of these employer federations is voluntary.

The social partners in Germany largely decide the level and trajectory of labour costs, accounting for more than 70% of national income. Despite what many people assert, pay agreements are applicable in full or in large part to a very substantial proportion of work relationships – around 80%. Altogether, around 68,000 collective agreements are in place and around 5,000 agreements are newly concluded each year. The sectoral collective agreement provides a reliable framework for work relationships. It relieves industrial relations from conflicts and saves companies a considerable amount of individual effort in the shaping of working conditions.

A statutory minimum wage encroaches on autonomous collective bargaining

BDA works against state intervention in the autonomy of social partners, in particular in the form of minimum wages decreed by statute. Determination of minimum working conditions must continue to be left in first instance to the social partners in the framework of autonomous social dialogue as protected by the constitution.

BDA argues that a modernised sectoral collective agreement should continue to perform its regulatory function in the shaping of working conditions in companies into the future, but that it should be further developed through targeted reforms to the benefit of margins for manoeuvre in individual businesses.

The sectoral collective agreement must be an agreement on genuine economic minimum conditions for companies and have a benefit for businesses. It should match the necessary room for flexibility to technical and economic changes on the one hand and described reliable income perspectives on the other. The collective agreement secures peace internally and externally.

The condition for BDA’s work on collective agreements is observation and analysis of the macroeconomic situation as well as negotiated developments in the individual sectors. BDA keeps a collective bargaining archive and data base to support member federations – in particular in their collective negotiations – in which it stores and evaluates essential conditions of agreements. In BDA’s committees, primarily in the “Pay and Collective Bargaining Committee”, representatives of member federations discuss the scope for distribution and other content as well as further developments in the collective bargaining landscape.