Collective Agreements : Germany

A distinction is made between two types of collective agreement. Wage and salary agreements regulate pay and in most cases are agreed for a year at a time. Framework or general agreements, which as a rule run for several years, regulate conditions of employment such as working hours, holidays, minimum notice, overtime rates, etc. There are also special collective agreements governing specific issues (such as vocational training, supplementary retirement benefits and protection against rationalization measures).

In principle, labor and management can negotiate freely; they must, however, abide by the constitution and the statutes. The statutory maximum weekly number of working hours is still 48, for example, but practically all Germans work less than 40 hours a week, and some only 35. Similarly, nearly all workers have a contractually guaranteed paid holiday of six weeks or more, while the law prescribes a minimum of 24 working days. Nearly all workers receive additional holiday money and a Christmas bonus on the basis of collective agreements. In many cases actual wages, salaries and other payments are considerably above collectively agreed rates.