Collective bargaining agreement: Employers should pay attention to this

Collective agreements provide a reliable basis for regulating employment relationships clearly and fairly. Particularly when planning working hours, notice periods or special leave, a framework collective agreement ensures security and uniform standards.

In this article, we report on the working conditions governed by collective agreements, who is bound by them and what you as an employer should consider when dealing with this form of contract.

What is a collective agreement?

A framework collective agreement (MTV) is a collective bargaining agreement that supplements specific pay or wage agreements that exclusively regulate remuneration. While wage agreements are renegotiated at regular intervals, framework agreements are usually valid for several years or indefinitely.

The Collective Agreement Act (TVG) serves as the normative basis for all collective agreements in German labor law. The legislation establishes the fundamental autonomy of collective bargaining as a legal principle and creates the framework for collective bargaining agreements between the parties.

On the one side are the trade unions as representatives of the employees, on the other the employers’ associations. The aim is to create uniform and binding rules that avoid conflicts and clearly structure employment relationships.

What does the collective agreement regulate?

A general collective agreement covers numerous aspects of the employment relationship. Unlike agreements with individual employees, these provisions apply to entire industries or groups of companies.

Cessation and termination of the employment relationship

Collective agreements contain clear guidelines on employment contracts, fixed-term contracts and probationary periods. Companies must ensure that all new employment contracts comply with these standards. They also regulate notice periods. Interestingly, these periods may be shorter than the legal requirements set out in the German Civil Code (BGB § 622).

Collective agreements define precise framework conditions for the termination of employment relationships. These include both the deadlines to be observed and formal requirements for the termination process. Employers are responsible for strict compliance with these requirements and must fully document proper implementation.

Working hours and shift models

A central element in collective agreements is the detailed provisions on working time, e.g. binding upper limits for regular working hours, precise definitions for dealing with overtime and specific conditions for overtime pay.

In many sectors such as the healthcare there are special regulations for shift work, night work and weekend work, including the supplements to be paid.

Flexible working models such as working from home or mobile working can also be included in the collective agreement. These regulations have become increasingly important for companies and employees alike in recent years.

Vacation entitlement and special leave

A collective wage agreement can extend the statutory minimum leave of 24 working days. Shorter leave entitlements than those stipulated in the Federal Leave Act (BUrlG § 3) are not permitted.

Many collective agreements contain specific provisions for extraordinary leave entitlements. They grant employees additional paid days off outside the regular vacation quota in the event of significant life events such as marriage, a new addition to the family or bereavement within the family.

Who are covered by collective agreements?

Binding to a collective agreement is not automatic for every company, but is based on specific legal constellations:

• Official declaration of general applicability: The Federal Ministry of Labor and Social Affairs has the authority to make a collective agreement binding for an entire industry or region by means of a declaration of general applicability. This measure extends the scope of application beyond the original parties to the collective agreement.
• Association membership as a binding criterion: Companies with active membership of an employers’ association are automatically subject to the negotiated collective agreements. At the same time, employees with trade union membership benefit from the enforceability of collective agreements.
• Implementation in employment contracts: Even without belonging to an association, companies can establish the validity of a framework collective agreement by making explicit reference to it in the employment contract. This self-imposed obligation remains effective for the duration of the employment relationship and cannot be changed unilaterally.

Once established, a collective agreement creates clear and uniform conditions for all parties involved.

By the way: With Teamhero, you can record collective agreements and all other contracts and employee documents. employee documents systematically. The software documents the status of each document, automatically recognizes missing evidence and requests expiring documents in good time if necessary.

What are the obligations for employers?

Clear guidelines apply to companies that are bound by a collective agreement.

A central obligation of employers includes making the complete collective agreement permanently available at the workplace, either as a digital document or as a physical copy. All employees have an unrestricted right to inspect the collective agreement regulations.

Another element in numerous collective agreements is the defined preclusive periods. They precisely define the period of time within which employees must formally claim their entitlements from the employer. The standard period is six months after the due date. Failure to meet this deadline results in an irrevocable loss of rights and the claims concerned expire permanently.

Advantages and disadvantages of collective agreements

A framework collective agreement brings both advantages and restrictions for companies.

The advantages include legal certainty. Uniform regulations minimize the risk of labor law conflicts and make it easier to comply with legal requirements. At the same time, an attractive collective agreement increases the company’s attractiveness as an employer. Particularly in sectors with a shortage of skilled workers, collectively agreed working conditions can be an important advantage in the competition for qualified employees.

On the other hand, collective agreements restrict operational flexibility. Companies are bound by the specifications and can only make individual agreements within the specified framework. In addition, compliance with and documentation of the collective agreement provisions requires increased administrative effort.

Conclusion: Collective agreements as the basis for regulated employment relationships

Collective agreements create clear and binding working conditions for entire sectors. They offer employees protection and employers legal certainty. However, collective agreements can increase the administrative burden, especially in companies with many employees. Fortunately, smart HR software such as Teamhero automates complex processes, creates an overview and makes it child’s play to comply with collective agreements.