There are two legal mechanisms for extending the outcome of collective agreements to all employers in the same sector beyond the signatory parties, although the rules in this area have changed considerably in recent years, with the initial renewal mechanism almost entirely being replaced. Unlike other countries, there are no specific rules for trade union representation in Germany, but to be a party to an agreement, the union must be able to negotiate (“agreed”). Unions must not only fulfil more formal conditions, such as a Constitution that allows them to negotiate, but also show that they can be effective and put pressure on the other side, as evidenced by membership and organizational strength. In the past, the courts have found that some of the Christian CGB unions do not have this capacity and that the agreements they have signed are not valid. The best known example was the Christian temporary workers` union CGZP, which was unable to negotiate in December 2010. Opening clauses allowing the Works Council to negotiate less favourable regulations than those provided in the industry-level agreement to take into account the particular circumstances of their employer are seen as an important means of providing flexibility to the system. A well-known example was the Pforzheim contract signed in 2004 by IG Metall, which was later incorporated into a broader collective agreement on job security. This allows the Works Council to agree on reductions in working time and temporary wages in order to avoid redundancies. The scope Obligation to respect collective agreements According to the common law, Ford/A.U.E.F. , the courts found once that the collective agreements were not binding.
Second, the Industrial Relations Act, introduced by Robert Carr (Minister of Labour in Edward Heath`s office), provided in 1971 that collective agreements were binding, unless a written contractual clause indicated otherwise. Following the fall of the Heath government, the law was struck down to reflect the tradition of the British labour relations policy of legal abstention from labour disputes. Instead, collective bargaining at the inter-professional level between trade unions and employers` organisations remains at the centre of the definition of wages and conditions in Germany. Separate agreements between trade unions and some companies are less common, although there are some exceptions (for example. B the agreement on the Volkswagen car group) and that they are more common in the former GDR (see below). Inter-professional agreements are generally negotiated at the regional level and not at the national level. As a result, there are minor differences between regions. However, the main elements of the agreements, including the level of wage increases, will generally be the same in all regions. The main exception is the former GDR, where wages and/or negotiated conditions are even worse in some sectors than in the former Federal Republic of Germany, although the gap has closed over time. Wage specialists at the Economic and Social Institute (WSI), which regularly monitors developments, estimate that at the end of 2017, the average level of rates negotiated in the East was 97.5% in the West. While there were some sectors, such as banking or pressure, where there was no difference, there were others where the difference was still considerable.