School of Business
University of Alberta
T6G 2R6 CANADA
The German Empire
The Weimar Republic
The Third Reich
The German Federal Republic
The Impact of Unification
changing nature of collective bargaining
Constitution Act Reform
collective agreements and works councils
The new coalition government
Pre-1914: The German Empire
IR were autocratic and paternalistic. The owner was a monarch who knew all his workers
and had an oversight over all aspects of production and marketing.
Otto von Bismarck (1815-1898) - Driven by a strong sense of power,
Bismarck entered politics in 1847. As a delegate to Prussia's first diet, he emerged as
one of the most rigid conservatives; at the outbreak of the Revolution of 1848 he rushed
to Berlin, urging King Frederick William IV to suppress the uprising. His advice was
ignored, but his loyalty was rewarded by his appointment in 1851 as Prussia's
representative to the German Confederation, a league of the 39 German states. At the
federal diet in Frankfurt, his main concern was to undermine Austria's supremacy and
demonstrate Prussia's equality. In 1859 he became ambassador to Russia, and in 1862 he was
posted to France.
1871 - The foundation of the German Empire. In 1871 the German Empire,
which included south Germany, superseded the North German Confederation, and the king of
Prussia became the German emperor. Bismarck became the first chancellor of Germany.
1875 - Social Democratic Party (SDP) is created.
1878-1890 - Bismarck's Anti-Socialist Laws. The Laws lasted for more than
10 years. They made all union activity illegal and outlaw the SDP. Bismarck wanted to ease
the pain, so he also introduced rudimentary program of social insurance (national accident
and health) and welfare (old-age pension) benefits (stick & carrot policy). In 1890,
Bismarck was dismissed and retired from politics.
Dominant unions of the time
The Social Democrat (Free) unions (ADGB); The unions' main concern was not the preparation of a
violent socialist revolution or fundamental socio-economic reforms, but a gradual
improvement of very meager wages and poor working conditions.
Hirsch-Duncker unions. These unions were founded in 1868 in
Germany by two liberals -- Max Hirsch and Franz Duncker -- who advocated
"the harmony of class interests," and pushed their trade
unions to serve the educational and mutual aid interests of the members.
The HD unions focused on self-help activities and favor peaceful
resolution of industrial disputes through conciliation and arbitration;
members signed declarations of non-support for SDP. Consequently, the HD
unions survived Bismarck's anti-socialist laws, but declined in
importance after 1890.
It should be noted, that most trade union activists emerged from the
period of illegality during the 1870s and '80s as staunch supporters of
SDP, accepting the party's Erfurt Program of
October 1891 which defined
the German Empire as a class state whose ultimate replacement by a
socialist commonwealth was the principal task of the party, to which
trade unionism was subordinated. In other words, the
politicization of the German Trade Unions occurred more than a hundred
1885 - BDI, the Federation of German Industries, is created by the conservative
industrialists from the big Ruhr combines. Nowadays, it comprises the business
associations of the entire industrial sector. In 1994, it consisted of 35 business
associations with provincial subdivisions and some 350 specialized industrial sub-units.
The main function of the BDI is the representation of the economic interests of the
1914-1930: The Weimar Republic
28 June - 28 July 1914 - A Serb nationalist killed the heir to the
throne of the Austro-Hungarian Empire. The Austro-Hungarian government handed over its
ultimatum to Serbia. The ultimatum included 10 demands, most of which had to do with the
suppression, with Austrian help, of anti-Austrian propaganda in Serbia. The Serbs agreed
to 8 of the demands. World War I broke on July 28, 1914.
Trade unionists and generals were confronting recalcitrant industrialists who were not
prepared to make concessions or conclude compromises for the sake of military victory.
This is the time when the working class was beginning to pressure the industrialists to be
given more important place in society.
Unions began to press their case for greater participation.
Negotiations through tripartite committees rather than compulsion seemed to be a more
promising way of securing the cooperation of both workers and unions.
Importantly, as early as the second half of the war, workers' committees had been
formed in number industries which tried to represent the interests of the workforce
vis-à-vis the management. Also, the so-called Revolutionary Shop Stewards'
had sprung up in a number of places. At the same time, the 1917 Russian revolution was
influencing radicals in Germany.
With the threat of a "revolution from below" increasing, employers
realized that it would be wiser to draw unions into politics, because they seemed to be
the only organizations which still had an influence over the workers in the factories.
October 22, 1918 Stinnes-Legien Agreement
(compare to the Swedish "Basic Agreement"
of 1938). Carl Legien was the ADGB leader and Hugo Stinnes was a prominent industrialist.
The employers recognized the right of association for all workers and promised to stop
supporting "yellow" unions (company unions).
Workers committees were to be formed in firms with more than 50 employees, and there
would be an arbitration system for the settlement of disputes.
November 1918 - The Weimar Republic was created. The Weimar
constitution did recognize the idea of factory councils.
February 1920 - the Works Councils Act This law required companies to
have an elected committee which was to act as the voice of employee interests. Paragraph
70 of the Act provided for one or two of the work councilors to sit on the company's
1918-1924 - ZAG (Central Labor Committee) institutionalized the union-employer
cooperation. Work community became the accepted antidote to the notion of class struggle.
1930-1945: The Third Reich
20 July, 1932 - The Social Democratic government of Prussia was
deposed by the Reich government. A year later Hitler became the Chancellor of Germany.
Historians generally agree that, even if major employers were not directly and openly
involved in the events that led to Hitler's coming to power, they contributed indirectly
to the destruction of the Weimar Republic by refusing to support it and link up with those
political forces that could have been rallied in the Republic's defense.
May 2, 1933 - Unions are banned.
January 20, 1934 - The Works Councils Act is annulled.
IV. The German Federal Republic
February 1947 - The CDU (Christian Democratic Union, one of the
conservative political parties in West Germany) approved the Ahlen Program, that
said, among other things:
Capitalist striving for profit and power can no longer constitute the essence and
objective of this social and economic renewal; it will have to be the well-being of our
nation. By adopting a cooperative economic order, the German people shall obtain an
economic and social constitution which is commensurate with the rights and dignity of man,
serves the spiritual and material reconstruction of our nation and secures peace at home
1947-1951 - Deconcentration the heavy industries.
December 1946 - The Dinkelbach Agreement is presented to the union leadership.
Heinrich Dinkelbach was an industrialist who supported the British deconcentration plan.
He was open to cooperation with unions.
1947 - The unions want parity codetermination but the employers would not
1949 - DGB (the German Federation of Trade Unions) is formed.
1949 - the Collective Bargaining Act guarantees free collective
bargaining. Only unions can negotiate collective agreement on behalf of workers.
1949/50 - BDA, the Confederation of German Employers'
Association, is created. It represents German employers in the field of social policy and
industrial relations to the government, the public and international organizations.
Unlike the BDI, it extends far beyond manufacturing industry, covering almost all
private-sector employers' associations. In 1995, the BDA consisted of 46 national
industry associations and 15 regional associations.
In the early 1950s, Chancellor Konrad Adenauer successfully pushed for the
1951 Codetermination Act in the mining and steel
industries in companies with more than 1,000 employees. This is true parity
codetermination that provides for a Labor Director. Employee representatives have a
veto over the appointment of the labor director who acts as a de facto representative of
the employees and their interests on the management board. In 1998, only about 30
companies in the west and fewer than 20 in the east were covered by this Act.
1952 Works Constitution Act Nonparity codetermination
in all public companies with more than 500 employees in industries other than mining and
steel. No provision for Labor Directors.
1966 - The Grand Coalition SDP/CSU/CDU (the CSU -- Christian Socialist Union --
is another conservative political party)
1967-1977 - Konzertierte Aktion, Concerted Action,
essential part of the German government efforts to maintain economic stability. The Action
was intended to achieve relative stability of prices and of income distribution, including
some sort of voluntary wage restraint, and steady economic growth.
1969-1982 - SDP is in power.
1982-1998 - The CDU with Chancellor Kohl are in power.
1969-1971 - A wave of strikes
1972 Works Constitution Act - Legislates works councils in any firm with more
than 5 employees. The employees have to ask for a works council in order
to get one. Where works councils exist, prior to the execution of any operational
change, management is obliged to attempt to come to an agreement with the Works
Council on the Reconciliation of Interests and Social plan.
1976 Codetermination Act
- Parity codetermination in
all public companies with more than 2,000 employees. The Law covers all industries outside
the mining, steel and iron industries. It provides for a Labor Director. In 1998, about
750 companies were covered by this Act.
The Impact of Unification
November 9, 1989 - the Berlin Wall is brought down.
October 3, 1990 - the former German Democratic
Republic (DDR) becomes part of the Federal Republic of Germany (BRD).
Unemployment grows from 6.9% in 1990, to 12.6% in 1997
Since 1989, the eastern German economy has lost about 2.5 million
jobs in manufacturing, 800,000 in agriculture, and 700,000 in public administration; only
the private service sector has grown (by 500,000 jobs).
November 1995 -
fÜr Arbeit, Alliance for
Jobs, is proposed by the unions. They offer to abandon their traditional demand
for productivity-based wage increases in exchange for increased employment and training
May 22, 1997 - the Federal Government, trade and
employers' association, and trade unions agree on an Employment Alliance
entitled The Joint Imitative for more Jobs in Eastern Germany (see more on
Alliance for Jobs)
- In collective bargaining, the bargaining partners will provide for special regulations regarding small and medium-sized enterprises, employment pacts, the taking-on of vocational trainees, the creation of part-time jobs, and long-term policies such as profit-sharing plans in order to
stabilize labour costs.
The social partners will increasingly make use of more flexible working time arrangements, such as working time accounts. In addition, they will support the integration of long-term unemployed people and of new and re-entrants into the labour market, through special regulations.
The agreement requires that collective bargaining policy, especially wage bargaining, pay due regard to employment, and to the particular economic and commercial circumstances of the individual firm. This will be achieved by the reform of the existing industry-level collective bargaining system.
Additionally, under that agreement, the bargaining partners have agreed to establish practicable and effective "hardship clauses." Hardship clauses were included for the first time in a 1993 collective agreement between employers' associations and IG Metall trade union. The agreement was signed for the east German metalworking industry. Under certain conditions, this allows companies to pay their employees below the minimum wage set by the collective agreement for a limited period of time.
Number of Applications for a Case of
in the East German Metal Industry
Cases of hardship
|1. Failed cases of hardship
|2. Refused cases of hardship
|3. Agreed cases of hardship
Note: From 1993 - 1995 all cases are covered; for
1996 only a limited number of cases are covered.
: Hickel and Kurtzke 1997
October 1997 - a wave of trade union mergers.
The number of DGB affiliates drops from 15 to 11 unions.
German DGB affiliated trade unions, 1991-6
|Deutscher Gewerkschaftsbund (DGB)
|Gewerkschaft Textil-Bekleidung (GTB)
|Gewerkschaft Holz und Kunststoff (GHK)
|IG Metall (after mergers)
|Gewerkschaft Öffentlicher Dienst, Transport, Verkehr
|IG Chemie-Papier-Keramik (IGCPK)
|IG Bergbau und Energie (IG BE)
|IG Bergbau, Chemie, Energie (IG BCE)
|Deutsche Postgewerkschaft (DPG)
|Gewerkschaft Handel, Banken Versicherungen (HBV)
|Gewerkschaft der Eisenbahner Deutschlands (GdED)
|Gewerkschaft Nahrung-Genuss-Gaststätten (NGG)
|Gewerkschaft Erziehung und Wissenschaft (GEW)
|Gewerkschaft der Polizei (GdP)
* Merger of
IG Bau-Steine-Erden (IG BSE) and Gewerkschaft Gartenbau-, Land- und Forstwirtschaft (GGLF)
at the beginning of 1996.
1998 - The results of Germany's 1998 works council elections clearly
indicate the high level of employee acceptance of works councillors as their
representatives, and of the "works constitution" system as a whole. Despite
losses, the DGB remained by far the most influential of the trade union confederations,
with 62% of works councillors and 73% of works council chairs affiliated to its member
unions. However, the results also confirm the trend away from union towards non-union
representation within works councils.
Results of works council elections
1975-1998 (in %)
*DGB (Deutscher Gewerkschaftsbund) -
Grman Trade Union Federation
**DAG (Deutsche Angestelltengewerkschaft) - German
Union for Salaried Employees
***CGB (Christliche Gewerkschaftsbund) - Christian
Federation of Trade Unions
****ULA (Union der leitenden Angestellten) -
Confederation of Executives
The Schroeder Era
26, 1998 -- Gerhard Schroeder (SPD) is elected Chancellor of Germany.
He creates a coalition government with the Greens.
- After an initial boost by German unification, aggregate trade union membership in Germany fell by almost 3.5 million between 1991 and 1998. Only one of the four main trade union
organizations has been able to increase membership since 1991, while union density reached a record low of 32% in 1998.
Membership of German trade unions (millions), 1991-1998
- DGB - the German Federation of Trade Unions (Deutscher Gewerkschaftsbund)
- DBB - the German Federation of Career Public Servants (Deutscher Beamtenbund)
- DAG - the German White-Collar Workers' Union (Deutsche Angestellten-Gewerkschaft)
- CGB - the Christian Trade Union Federation of Germany (Christlicher Gewerkschaftsbund)
Trade union density, 1991-1998
||Total union membership
|No. of employees
During the 1990s, the trade union membership gains due to German unification have been almost completely eroded. This has not only been due to falling employment, but also reflects deeper problems for unions in adapting to the structural change in the economy, in particular the growing importance of services. While unions are quite strong among men, in manufacturing industry and in the public sector, they have problems in
organizing women, white-collar employees, young workers, part-time workers and private service sector employees. In other words, the composition of union membership no longer mirrors the composition of the workforce in Germany.
The calculated union density of 32.2% in 1998 even understates unions' problems. This rate is inflated by including non-working members such as unemployed or retired persons in the numerator (union membership), but not in the denominator (total employment). If these members are excluded, just about one
in four employees in Germany is now a union member. Since the structural change in the economy continues, union membership and density can be expected to fall further unless unions manage to become more attractive to the individualistic employees in the growing private service sector. (Claus Schnabel, IW Köln)
Read the source for the full discussion.
- Chancellor Gerhard Schroeder and The British prime minister, Tony Blair, co-signed a document called
Europe: The third way/Die Neue
The following is taken as is from
First of all, the paper states that, following the abandonment of the world view represented by the dogmas of left and right, fundamental social democratic values remain - fairness and social justice, liberty and equality of opportunity, solidarity and responsibility to others. The paper goes on to
emphasize the role of enterprise and of the markets, which need to be "complemented and improved by political action, not hampered by it". Drawing on the experience of the past, social democrats ought to change old approaches and traditional policy instruments in areas such as the concept of social justice, the role of the state, the balance between individualism and collectivism, and entrepreneurial spirit. The promotion of social justice, states the paper, has sometimes been confused with the imposition of equality of outcome, resulting in the neglect of the importance of rewarding effort and responsibility. Social democrats should also refrain from the idea that achieving social justice is necessarily associated with ever higher levels of public spending regardless of what this achieves or the impact of the taxes required to fund it on competitiveness, employment and living standards. Furthermore, the belief that the state should address damaging market failures has all too often led to a disproportionate expansion of the government's reach and of the bureaucracy that goes with it, distorting the balance between the individual and the collective. Values that are important to citizens, such as personal achievement and success, entrepreneurial spirit, individual responsibility and community spirit, have too often been subordinated to universal social safeguards.
The paper goes on to state that the politics of the New Centre (Germany) and Third Way (UK) are about addressing the concerns of people who live in and cope with societies undergoing rapid change - both winners and losers. In this newly emerging world, people want politicians who approach issues without ideological preconceptions and who, applying their values and principles, search for practical solutions to their problems through honest, well-constructed and pragmatic policies. Voters who in their daily lives have to display initiative and adaptability in the face of economic and social change expect the same from their governments and their politicians.
-- Chancellor Gerhard Schroeder's Social Democratic Party (SPD) loses state elections in Saarland, Brandenburg, Saxony, Hesse, North Rhein Westphalia, and Thuringen. The SPD also loses two municipal elections in Dortmund, Cologne, and Berlin. (In June 1999, the SPD lost the EU Parliament elections.)
Take a look at a
on the deteriorating labor-government relationship since Schroeder's rise to power in September 1998.
Alliance for Jobs
In November '95, the giant German metalworkers' union IG Metall signaled a notable change of course with its call for an
'Alliance for Jobs.'
The essence of this initiative is
The Alliance was established
in December 1998 as a new permanent tripartite arrangement at national level, including various working groups on specific topics as well as regular top-level talks between the leading representatives of all three
- In the 1997 bargaining round, IG Metall agreed to accept a wage increase no higher than the inflation rate;
- In return for this moderation, employers accepted a binding commitment to create 110,000 new jobs a year for the next three years, with a tenth of these reserved for long-term unemployed;
- The government abandoned plans to cut welfare benefits, and agree to fund additional apprenticeships;
- In addition, the union allowed new recruits to be taken on at lower pay than existing employees -- a proposal which it had previously strongly resisted
- The first initiative for a national "alliance for jobs" failed under the old Conservative/Liberal government in 1996. The new red-green coalition
has made a second attempt, aiming to establish a new permanent tripartite institution at national level.
- Trade unions and employers are responsible for an employment-oriented collective bargaining policy and organization of work, which fulfils the company's need for flexibility and the employees' wish for "time sovereignty;"
- Companies are responsible for improving innovation and investment and increasing the number of training places, in order to guarantee every young person a vocational training place; and
- The government is responsible for creating the framework conditions for sustainable growth and employment by reforming the tax system, decreasing social security contributions, modernizing public services and launching a new "innovation offensive" in training, research and sciences.
- On 6 July of 1999, leading representatives of the federal government, trade unions and employers' associations met
officially for the third round of top-level talks within the framework of the Alliance for Jobs, Training and Competitiveness (Bündnis für Arbeit, Ausbildung und Wettbewerbsfähigkeit).
The meeting was chaired by the Federal Chancellor, Gerhard Schröder.
In their joint declaration, DGB and BDA agree on the goal of a "substantial and sustainable reduction of
unemployment." Since there is "no panacea" for the creation of new employment, various initiatives are necessary including "structural reforms in the fields of collective bargaining, social and tax policy as well as new innovations and investments and an improvement of vocational and continued training". In order to create a "new political and social consensus" on these initiatives, DGB and BDA want "to give a new impetus to the Alliance for jobs".
Regarding collective bargaining policy, DGB and BDA have agreed on the following goals:
and collectively agreed "corridors" in order to allow more company-related rules.
- a "collective bargaining policy which is reliable in the medium and long term", and which gives companies a stable basis for the planning of their business;
- "a differentiated and flexible working time policy and a different distribution of work", including
- "an employment-creating reduction of overtime",
- the use of working time "corridors" and annualized working time arrangements as well as yearly and/or life-long working time accounts,
- the creation of more part-time work and the development of new models to make such work more attractive,
- an improved utilization of partial retirement
- the improvement of company-related pension schemes;
- the priority use of "increases in productivity for employment promotion";
- the promotion of performance-related payments;
- a continuation of the reform of branch-level collective bargaining system, with an extension of
Read more: I,
Fighting Unemployment Using Collective Bargaining
Collective Bargaining Fund.
In October 1999, the German metalworkers' union IG Metall and the Federal Ministry of Labour agreed in principle on a new concept for early retirement at the age of 60. Wanting to give older employees the opportunity for early retirement without loss of pension rights, IG Metall proposes the creation of a "collective bargaining fund" which would make additional contributions to the statutory pension scheme for workers who have taken early retirement. As the government has rejected making a direct financial contribution, the bargaining fund would be financed by employers and employees. Employers' associations, however, have already refused to participate in such a system.
Early and Partial Retirement.
Furthermore, in 1996 the government replaced existing provisions on early retirement with a new partial retirement law (Altersteilzeitgesetz) which allows employees to work part-time (50% of normal hours) from the age of 55, while receiving at least 70% of their former income. In addition, various collective agreements were signed
which further improved the payments to 80%-85% of their former income for employees taking partial retirement. The Federal Employment Service (Bundesanstalt für Arbeit) estimates that since the introduction of the new partial retirement law in 1996, around 100,000 employees have made use of the scheme. (Also here.)
Hardship Clauses. As
stated above, under certain conditions, this allows companies (in former east Germany) with immense economic problems to pay their employees below the minimum wage set by the collective agreement for a limited period of time.
Works Constitution Act
Reform - July 28, '01
In June 2001, the lower house of the German Bundestag
approved a reform of the Works Constitution Act. Almost 30 years after the last
major overhaul of the law on works councils, the government now aims to adjust
numerous provisions to the changed business environment and in particular seeks
to give works councils a say in areas such as training, employment security,
protection of the environment and fighting xenophobia and racism at the
workplace. Besides several provisions which seek to streamline the procedure for
the election of works councils and increase their size, the new Act will also
improve the representation of women. While trade unions mainly welcomed the new
law, employers' associations highlighted major concerns.
The principal changes introduced under the new Act are (this
section is based on, Addison, John T., Bellman, Lutz, Schnabel, Claus, and
Wagner, Joachim. 2004. "The Reform of the German Works Constitution Act: A
Critical Assessment." Industrial Relations, 43: 392-420):
The character of the works councils becomes more diverse.
For example, divisional works councils can be introduced for special product
or business units, or joint works councils can be set up across several
In establishments employing between 5 and 50 employees,
the voting procedure for setting up a works council is simplified. The
new procedure has two stages: the nomination of candidates by an electoral
board, followed 1 week later by another works meeting in which the works
council is elected directly in a secret ballot of all employees present. In
larger establishments with 51 to 100 employees, the two sides can decide
voluntarily to use the new simplified procedures.
The size of the works council is increased via a
reduction in the employment thresholds used to determine the number of
Employers are now required to make provisions for a
full-time works councilor in establishments with 200 or more employees
instead of 300 employees as before.
The influence of the works council in matters of
employment production and the training of the workforce is strengthened. The
works council may no initiate and codetermine vocational training measures
with respect to employees whose qualifications are likely to be rendered
The employer has to furnish the works council at his/her
expense with access to modern information and communications equipment, such
as the Internet and e-mail. Moreover, the works council is entitled to
consult with internal and external experts and can delegate some of its
tasks to working groups in establishments with more than 100 employees.
An equality quota mandates that the gender that is in the
minority at the establishment be represented on the works council at least
in proportion to its employment share.
The legislation grants codetermination rights to the
works council on environmental protection issues and equips it with the
means to combat racism in the workplace through an extension of its power to
withhold consent in matters of the engagement and transfer of personnel.
New Coalition Government
Elections were held on
18 September, 2005. On November 11, 2005, the
conservative CDU/CSU and the social democratic SPD reached a deal to form a new
government in Germany. The coalition agreement includes an increase in the VAT
rate from 16% to 19%, a range of austerity measures affecting the social
security system - including raising the retirement age from 65 to 67 - and a
relaxation of the statutory protection against dismissal.
On November 21, 2005, Angela
Merkel, leader of the Christian Democrats (CDU), was sworn in as Germany's first
Read more on the Coalition Government.
Decentralization of Collective
In June 2005, Germany's Institute for
Economic and Social Research (WSI) presented the first results of its fourth
works and staff council survey, which - among other matters - explores the
spread of 'on-top payments' and profit-sharing and the attitudes of works
councils towards the decentralization of collective bargaining. Against the
background of continuing discussions about the decentralization of collective
bargaining after the general election in September 2005, the results confirm the
findings from the previous survey in 2002 that a majority of members of works
councils do not want a further decentralization of bargaining.
context of increasing decentralization of collective bargaining, the number of
collectively agreed 'opening clauses' allowing deviation from sectoral
collective agreements has increased. About 75% of establishments covered by
collective bargaining make use of one or more opening clauses. By far the most
important area of application is that of flexible working time arrangements, as
reported by over two-thirds of all works councils in establishments with
operational clauses of this kind. Among establishments with operational
opening clauses, 35% use them to extend working time. When it comes to pay
issues, however, the collectively negotiated provisions at sectoral level enjoy
clear priority (in particular in the area of collectively agreed basic pay), and
deviations at company level based on opening clauses are still seen only in a
small minority of cases. This overall picture has not much changed since the
last survey in 2002.
Read the full discussion of the survey
Union Membership Continues to Decline
Since 1991, when trade union membership was boosted because of
gains due to German unification, membership of DGB has been in continuous
decline. The 2004 figures are a setback to hopes that this decline might slow
down. According to the latest figures from the Confederation of German Trade
Unions (DGB), the membership of its affiliated trade unions dropped by nearly 5%
in 2004 to stand at 7.01 million. Not only has membership continued to decline
but DGB also faces the problem of an ageing membership and particular
difficulties addressing young workers and employees in sectors with a weak trade
union presence. To tackle this situation, DGB and its affiliates have decided to
intensify their organizing and recruitment efforts.
One reason for this decline is the loss of jobs in sectors where trade unions
are well represented. Workforce reductions, outsourcing and privatization have
negatively affected the unions' membership strongholds in the traditional
industries and the public sector. Trade unions find it difficult to compensate
for these losses by expanding into other sectors, especially in private sector
services where the predominance of small businesses make it difficult to
establish an organized workplace presence, e.g. by way of setting up a works
Here is the full record of the survey.
Collective Agreements and Works Councils
In July 2005, the Institute for Employment Research (IAB) of the Federal
Employment Agency published new data on bargaining coverage and the distribution
of works councils, based on a representative sample of German establishments. It
finds that 43% of establishments in western Germany and 23% of establishments in
eastern Germany were covered by a collective agreement in 2004. These
establishments covered 68% of employees in western Germany and about 53% in
eastern Germany. In 2004, about 10% of establishments in both parts of Germany
had a works council. These establishments represented 47% of employees in
western Germany and 38% of employees in the east.
The data highlights two important pillars of the German industrial relations
system - sectoral collective bargaining and works councils. The data show that
the sectoral collective agreement remains the predominant type of collective
agreement and that, even in eastern Germany, company-level collective agreements
are to be found in only a relatively small minority of establishments.
Bargaining coverage of employees remained in 2004 at a comparatively high level,
although the picture looks different in eastern Germany. A similar picture is
found by looking at the coverage rates of works councils. Here it is
particularly the small establishments that are hardly touched by institutional
employee representation. A remedy to this would be additional institutional
support for the establishment of works councils, especially in small
enterprises. Such a reform of the Works Constitution Act, however, is not
currently on the political agenda.
Read the full record of the survey
A very good source on the evolution of codetermination