Decision of the Federal Labor Court on whether a Christian Union has collective bargaining authority increases legal uncertainty in the area of temporary employment

11.09.2019

The collective bargaining authority of an umbrella organization made up of various unions within the meaning of section 2(3) of the Collective Agreements Act (Tarifvertragsgesetz - TVG) presupposes that its organizational area coincides with that of its member unions (Federal Labor Court decision of 14 December 2010, 1 ABR 19/10).

Facts

The decision concerned an application from the trade union ver.di for a determination as to whether or not the Tarifgemeinschaft Christlicher Gewerkschaften für Zeitarbeit und Personal-Service- Agenturen (CGZP), a Christian union, had authority to engage in collective bargaining. The CGZP was established in December 2002. According to its bylaws, its sole task is to conclude collective agreements on behalf of the members of the unions that belong to it in the area of the commercial supply of personnel services. The areas of activity of its current member unions, Christliche Gewerkschaft Metall (CGM), Berufsgewerkschaft (GHV) and Gewerkschaft öffentlicher Dienst und Dienstleistungen (GÖD), are not, however, limited to the supply of personnel services but extend further.

Since the CGZP's bylaws were amended in 2009, its member unions have been permitted to conclude collective bargaining agreements with employers or employer associations in the temporary workers sector. The Berlin Labor Court held in its first instance decision that the CGZP had no authority to engage in collective bargaining because it did not have sufficient social might. The Berlin-Brandenburg Regional Labor Court agreed with this essentially, but attributed the CGZP's lack of collective bargaining authority to the 2009 amendment to its bylaws and the fact that, according to its bylaws, the CGZP's area of authority extended beyond those in the bylaws of its member unions.

Decision

The Federal Labor Court essentially confirmed the decision of the Berlin-Brandenburg Regional Labor Court and thus answered the question of whether or not the CGZP had authority to enter into collective bargaining agreements in the negative. The Federal Labor Court's reasoning was also based on the idea that, according to its bylaws, the CGZP's collective bargaining authority differed from that of the respective member unions belonging to it. On the one hand, the member unions had not completely conveyed their collective bargaining authority to the CGZP since their authority, according to their bylaws, extended beyond the area of temporary work in all cases.

On the other hand, the CGZP's authority extended beyond that of its member unions because they were not responsible for the entire area of the commercial supply of personnel services. Due to these circumstances the Federal Labor Court decided first of all that the CGZP, as an umbrella organization, could not derive collective bargaining authority for the area of authority set out in the bylaws from its member unions. The Federal Labor Court deliberately left open whether the individual member unions themselves had collective bargaining authority. The Court also declined to comment on the issue of the necessary social might of the CGZP.

Comment

The final rejection of the CGZP's collective bargaining authority by the Court has serious implications for the entire temporary workers sector. The associated invalidity of the collective bargaining agreements concluded by the CGZP will make it possible for many temporary workers to demand back pay equivalent to that received by comparable employees in the respective companies where they worked (cf. section 9 no. 2 of the Temporary Employment Act (Arbeitnehmer-überlassungsgesetz– AÜG)). This means that many temporary work agencies may find themselves exposed to massive demands for salary back payments.

The same applies to the resulting necessity for back payments of social security contributions. What is also problematic is the fact that the issue of social might and thus also the collective bargaining authority of the individual unions has been left open. Accordingly, there will continue to be enormous uncertainty as far as compliance with the equal pay principle contained in section 9 no. 2 of the Temporary Employment Act is concerned. The incorporation of collective bargaining agreements of CGZP or one of its member unions is currently inadvisable. In addition, the government and opposition have agreed, before the Hartz IV mediation committee, on a minimum wage for temporary workers, which will also apply in non-working periods, of probably at least € 7.60/per hour (in western Germany) and € 6.65/per hour (in eastern Germany).

GÖRG Newsletter

We inform you about current legal developments in the areas that are relevant to you.

Please subscribe to receive our newsletter.

We're using cookies to statistically monitor the usage of our website.

OK Deny tracking Privacy policy