Frank Schröder

Frank Schröder
Director, Head of Marketing & Communications

Büro Dusseldorf
+49 211 6901-1200

Impeding the applicability of collective agreements is inadmissible

Labor Law

Union members automatically have rights and remedies under a collective agreement if the employer is also bound by the respective collective agreement.

If both parties of an employment agreement are bound to a collective agreement, it is not possible to effectively agree that claims arising from the collective agreement shall only exist if the contracting parties also implement a rate structure in individual agreements by means of a reference clause. This was decided by the German Federal Labour Court (BAG) on 13 May 2020 (4 AZR 489/19).

Thus, the BAG has admitted the claim of an employee from Hesse who is a member of the IG Metall union. Initially the employer was not bound by a collective agreement but concluded a covering agreement as well as a framework salary agreement with this union in 2015. The collective agreements stipulate that corresponding claims require a reference clause in the employment contract. This was literally pre-formulated with the introductory wording “The reference clause reads as follows”. All employees, including the claimant, were offered new employment contracts with the respective reference clause. However, at the same time the new employment contracts also included other amendments. Even though the claimant signed the new employment contract she crossed out all clauses that from her point of view would have led to poorer working conditions before actually signing the contact. In the filed claim she has now claimed the higher salary resulting from the framework salary agreement.

Even so the BAG has agreed on the employer’s point of view that factually the claimant has not accepted the new employment contract due to the clauses she has crossed out. However, a new employment contract was not necessary in the first place. According to art. 4 sec. 1 German Collective Agreement Act (TVG) the fact that both parties of an employment contract are mutually bound to a collective agreement is sufficient for the applicability of the collective agreement. It is inadmissible to hinge claims arising from a collective agreement to additional individual contractual implementation measures.

Practical Tip

In the past respective clauses in collective agreements were used to tempt employees to sign employment contracts with new content during the existing employment relationship by enticing the effectiveness of better standards resulting from the collective agreement. In particular this made it possible to adapt clauses in employment contracts that no longer met the constantly changing labour law requirements. As employees are not obliged to agree to subsequent contractual changes a favourable incentive was very welcome. In future such favourable incentives must be sought elsewhere.