Collective Bargaining

Collective bargaining is one of the main issues of BDA’s work as the head confederation of German private employers’ associations. BDA does not conclude collective agreements itself, but rather serves as a platform and catalyst for its sectoral and regional member federations regarding all questions of collective bargaining.

In Germany, remuneration and working hours are negotiated autonomously by the social partners, meaning that employers and employers’ associations and trade unions negotiate without state influence. An essential condition for autonomous collective bargaining is the freedom of association enshrined in the Basic Law for the Federal Republic of Germany (Grundgesetz / GG), “the right to establish associations to maintain and promote work and economic conditions” (article 9.3 GG). One key element of freedom of association is voluntary membership in employers’ federations as well as in trade unions. Every employer and employee is free to decide for or against the binding of collective agreements (positive and negative freedom of association).

The collective agreement provides a reliable framework for relationships between employers and employees. It protects industrial relations from conflicts and saves companies a considerable amount of individual effort in shaping working conditions. Thus, the collective agreement secures peace internally and externally.

The social partners in Germany largely determine the level and trajectory of labour costs, which account for more than 70% of national income. Collective agreements are applicable in full or in majority to a substantial proportion of labour relationships – around 80%. Alltogether, around 73,000 collective agreements are in place and around 5,000 new agreements are concluded each year.

Differentiated and flexible collective bargaining instead of state intervention in social partners’ autonomy

BDA opposes state intervention in the social partners’ autonomy in various areas of action including minimum working conditions. Determination of minimum working conditions must remain with social partners framed by autonomous social dialogue as protected by the GG.

BDA argues that a modernised sectoral collective agreement should not only continue to perform its regulatory function in the shaping of working conditions in companies into the future, but also be further developed through targeted reforms to widen individual businesses’ margins for manoeuvre. The sectoral collective agreement must be a contract on genuine economic minimum conditions for companies. It should enable flexibility in responding to technical and economic changes on the one hand and must describe reliable income perspectives on the other.

BDA services for its member federations regarding collective bargaining

BDA’s main task concerning collective agreements is observing and analysing the macro-economic situation as well as developments in different sectors regarding bargaining policy. In its Collective Bargaining Service (TarifService) BDA provides an Collective Bargaining Archive containing collective agreements and analyses essential conditions of these agreements to support its member associations – in particular in their collective negotiations. In BDA’s committees, primarily the Pay Policy and Collective Bargaining Committee of BDA, representatives of the BDA's member federations discuss the scope for distribution and other content as well as further developments in the collective bargaining landscape.