This is only possible with a collective bargaining agreement The agreements that ensure fairness in the workplace

A regional collective bargaining agreement exists when IG Metall and the employers’ association conclude a collective bargaining agreement for an entire industry in a specific region (“region”), for example, for the metal and electrical industry in North Rhine-Westphalia. This collective bargaining agreement is typical of the collective bargaining landscape in Germany and is also referred to as an association or industry-wide collective bargaining agreement.

The regional collective bargaining agreement largely guarantees a level playing field for companies in the individual industries. It sets minimum standards and protects employees from wage dumping. The regional collective bargaining agreement is binding on all employers and employees in the respective industry and region who are covered by the agreement. However, it also has an indirect effect on companies not covered by the agreement, as these companies may, for example, refer to the regulated collective bargaining standards in their employment contracts.

Among the most important sector-wide collective bargaining agreements are:

Wage, Salary, and Compensation Collective Bargaining Agreements

These collective bargaining agreements regulate the levels of wages, salaries, and training allowances (compensation) in the form of pay scales. Their duration is limited because compensation is adjusted to reflect economic and productivity trends.

 

Framework Collective Bargaining Agreements on Compensation (ERA)

From wages and salaries to a uniform compensation system: With the Framework Agreements on Compensation (ERA), IG Metall and the employers’ associations established a set of rules in the metal and electrical industries in 2003 that abolished the traditional distinction between blue-collar and white-collar workers and standardized their compensation. Blue-collar and white-collar workers became “employees”—“remuneration” replaced the terms “wage” and “salary.” But it wasn’t just terminology that changed. ERA also stands for transparency in the pay structure and greater fairness. This is because pay is based on job duties rather than “seniority-based bonuses.” All employees are assigned to a pay grade according to the same rules. This means equal pay for comparable work tasks in development, production, and administration. The framework agreements describe the job characteristics for the individual pay grades as well as the criteria for the respective classification.

 

Framework Collective Bargaining Agreements

The framework collective bargaining agreement governs almost everything related to working conditions—such as working hours, vacation and vacation pay, leave of absence, premium pay, and hiring and termination conditions.

In addition, there are other regional collective bargaining agreements on specific topics, such as annual bonuses (Christmas bonus), company pension plans, partial retirement, and training.

If IG Metall negotiates a company collective bargaining agreement with a non-collective-agreement-bound company in which the employer commits to applying the sector-wide collective bargaining agreement, this constitutes a recognition collective bargaining agreement. Employees have the same collective bargaining entitlements as those stipulated in the corresponding regional collective bargaining agreement—provided they are union members. Recognition collective bargaining agreements do not constitute deviations from the regional collective bargaining agreement.

Also known as in-house or plant collective bargaining agreements. In a company collective bargaining agreement, the employer itself is a party to the agreement and negotiates it directly with the relevant union. The company is not bound by the regional collective bargaining agreement and is therefore not a member of an employers’ association. Employees are entitled to the benefits stipulated in the company collective bargaining agreement, provided they hold a membership card from the union that concluded the agreement. New collective bargaining agreements are also negotiated and agreed upon directly with the employer. As in industry-wide collective bargaining agreements, company collective bargaining agreements can regulate all working and compensation conditions. The best-known example of a company collective bargaining agreement is the plant-level collective bargaining agreement with Volkswagen.

If, for example, a company bound by a collective bargaining agreement is facing an economic crisis, it can seek to establish a company-specific collective bargaining agreement—such as one based on the “Pforzheim” Agreement —to secure the location and jobs of its workforce. In this case, the employer, together with the works council and IG Metall, can have the economic situation reviewed and decide that the company may temporarily deviate from the minimum standards set by the collective bargaining agreement. The agreed-upon provisions supplement the applicable regional collective bargaining agreement. The contracting parties are IG Metall and the respective employers’ association.