Germany: Federal Labor Court cancels the principle of “tariff unity” in businesses

Several rival agreements can now co-exist. Reviewing its case law, the Federal Labor Court rejected, in its decree (Ref. 10 AS 2/10 and 10 AS 3/10) the principle of “tariff unity,” which used to ban the presence of contradictory collective agreement for a single group of employees within a company. Thus, the BAG ruled that a collective agreement signed for an employee remained valid even if there was a majority collective agreement within the company and that it couldn’t be avoided in the name of “tariff unity.” “There is no higher principle imposing the application of single tariff rules for different jobs of the same kind within a company,” the Court pointed out. In this case, the BAG was referred to by a hospital doctor, member of the small doctors’ union, Marburger Bund. He was calling for a €628.76 holiday bonus for October 2005 by virtue of an agreement signed by the majority union, Ver.di, and by the Marburger Bund union. Yet, this joint agreement expired in October 2005 and was replaced by another collective agreement, signed by Ver.di only. For its part, Marburger Bund opened other negotiations to obtain a separate agreement. In the name of “tariff unity,” the company refused to pay the bonus to the doctor concerned. As for the case of Emmely, the cashier (see our dispatch No. 100469), the amount of the controversial bonus was secondary. The federal Court was ruling on the principle of “tariff unity” itself. In January, the 4th Chamber of the BAG announced that it intended to cancel this principle and asked for the 10th Chamber’s opinion, since it is also competent in terms of collective bargaining (see our dispatch No. 100100). Drawing from the arguments of the 4th Chamber, the 10th Chamber has ruled in favor of small corporatist unions.