Wage Agreement Germany

In 2017, about 1.4 million jobs were paid at the national minimum wage. They accounted for about 3.0% of all jobs in West Germany and 6.0% in East Germany. [8] The figures are expressed in terms of jobs and not workers, as many people who receive the national minimum wage work very few hours and may have multiple jobs. Opening clauses, which allow the works council to negotiate agreements that are less favourable than those provided for in the inter-trade agreement, in order to take account of the specific situation of its employer, are considered an important means of making the system more flexible. A well-known example is the Pforzheim agreement signed by IG Metall in 2004, which was later incorporated into a more general collective agreement aimed at securing jobs. In this way, the works council can agree on time and salary reductions in order to avoid redundancies. The IAB figures also provide information on the share of enterprises and the share of employees. These show that 25% of jobs are covered by sectoral agreements and 2% by company agreements. These numbers are lower than those of workers, as larger jobs are more likely to be covered by collective bargaining than smaller ones. In West Germany, only 22% of enterprises with up to nine employees are covered by collective agreements, either at sectoral or enterprise level, compared with 80% of enterprises employing 500 or more people. The parallel figures for East Germany are 13% (up to nine employees) and 76% (500 and over).

Negotiations usually take place between trade unions and employers` organisations. Agreements are legally binding on union members (normally for all workers in practice) and on the members of employers` organisations who sign them. Unlike other countries, there are no specific rules on union representation in Germany, but to be a party to an agreement, the union must be able to negotiate (negotiate). In addition to more formal conditions such as a constitution that allows them to negotiate, unions must also show that they can be effective and put pressure on the other party, as shown by the members and the organizational force. In the past, the courts have concluded that some of the Christian CGB unions do not have this capacity and that the agreements they have signed are invalid. The best-known example of this is the Christian temporary workers` union, CGZP, which proved unable to negotiate in December 2010. Due to the persistent pressure of the trade unions, Germany has been in force since the 1st. On 1 January 2015, a minimum wage, although sector-level collective agreements that pay less than the minimum wage were valid until 1 January 2017.

These conventions set minimum standards for the essential conditions of employment and income. This implies, among other things, that wages and wages can be agreed directly by the company with its employees in two ways. Either the collective agreement concluded with a trade union is applied, or individual employment contracts are concluded with individual workers. Payment agreements may be concluded with the works council if no collective agreement is signed. . . .

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