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Business

New law aims to curb rogue unions

Last year, Germans were inconvenienced by strikes called by niche unions insisting on separate wage settlements in big companies. The Bundestag is considering a new law that would limit unions to one negotiating partner.

On Thursday (06.03.2015), the draft of a new German law on collective bargaining gets its first reading in parliament. The government wants to constrain the power of smaller unions, such as those representing train drivers, pilots or air traffic controllers.

In recent years, niche unions in key sectors have shown themselves able to exert disproportionate power, despite their small membership. In the event of a strike, they can paralyze half the country.

Previously in Germany, the operating principle was: one company, one union. Together with the principle of freedom of association and collective bargaining, it was a pillar of the postwar West German economy.

This came as a reaction to the experience of unions under the Nazi dictatorship. It had been all too easy for the regime to smash the German trade union movement, which had been highly fragmented.

Economic miracle

The postwar system was meant to reduce that vulnerability by creating large, strong unions. But this also meant Germany had fewer strike days than most countries.

In other countries, a big company like the national railway might see strikes first by train drivers, then conductors, then engineers. In Germany, by contrast, the economic losses caused by strikes were kept within bearable limits.

However, a 2010 decision by the Federal Labor Court declared this approach to be unconstitutional, since it contravened the right to free association. Since then, competing unions drawing members from the same group of employees within the same company - for example, train conductors at the German national railway, Deutsche Bahn, who belong to two different unions - have been able to demand different collective agreements.

The result: An uptick in strike days, pilots paralyzing air traffic and train drivers making life difficult for millions of commuters and long-distance travelers.

Klaus Weselsky (Photo: REUTERS/Kai Pfaffenbach)

Klaus Weselsky, hardline chief of the GDL train drivers' union, made himself unpopular with commuters last year by calling repeated strikes

Joint negotiations

For Labor Minister Andrea Nahles, a Social Democrat, this state of affairs was intolerable. She set out to defuse it with a new law on single bargaining units. Under this, workers will still be able to join different unions, but unions will be encouraged to join forces in bargaining with management for a collective agreement covering the same classification of workers.

Competing unions can choose to form a collective bargaining unit, or a union can choose to accept a collective agreement arrived at by a rival union.

If two unions disagree on the terms of a collective agreement, the new law foresees a majoritarian approach: The collective agreement of the union with the most members in the company covered by the agreement will apply. The right to strike would be indirectly affected: Labor judges could deem a strike unlawful if the striking union had no majority in the affected workplace.

An attack on the right to strike?

But the opposition in parliament is critical. The Left Party, the successor to the East German communists, cites a report from the parliamentary research unit that suggests the proposed legislation would unlawfully interfere with freedom of association.

Germany's constitution says that employees and employers have the right to join together in organizations such as trade unions to protect their interests. Although constraints on this right are possible, they have to be sufficiently justified.

But the report said the reasons given in the draft law are insufficient to justify such constraints, casting doubt on whether the law, as written, would be constitutional.

The Left Party also said the distinction between majority and minority unions would create two classes of unions: majority unions with a right to strike, and smaller unions that are at best able to rubber-stamp the results of the larger union's bargaining.

German Constitutional Court in Karlsruhe (Photo: Uli Deck/dpa)

The German Constitutional Court in Karlsruhe will likely have to review the law once it has been passed.

German unions are split on the issue

The Confederation of German Trade Unions (DGB), to which most of the country's big unions belong, has been very reserved in its stance on the issue. Many DGB member unions want a return to the good old days of one company, one union. The powerful metalworkers' union, IG Metall, publicly welcomed the bill.

However, three other DGB members - service union Verdi, teachers' union GEW and foodservice union NGG - publicly rejected it.

If, as expected, the bill becomes law in mid-year, it will almost certainly face a challeng before the Federal Constitutional Court in Karlsruhe.

"The day after it enters into force, we'll bring it to Karlsruhe," said Klaus Dauderstädt, head of the German Civil Service Federation (DBB) - a non-DGB union.

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