Collective bargaining agreements with location guarantees are constitutional

Ford employees in Saarlouis protest against the planned closure of the plant

Unions are attempting to influence location and employment issues with future collective agreements.

(Photo: dpa)

Berlin The news came as a shock on Tuesday: The Ford location in Saarlouis, which currently has 4,600 employees, is to be liquidated. “Instead of working together with the workforce to secure the location, the management has put its hands on its lap,” criticized the head of the IG Metall district center, Jörg Köhlinger. Now an entire region is in danger of being sidelined.

So that something like that doesn’t happen, she had IG Metal fought in the past collective bargaining round to be able to conclude so-called “collective wage agreements for the future”. The aim is, in times of transformation, where, for example, hundreds of thousands of jobs are at stake due to the move away from the combustion enginelocations and jobs.

According to the union, employers and employee representatives should work together to find new business models and future-proof products or organize any necessary retraining for employees.

There are now several of these agreements, for example with the Canadian-Austrian automotive supplier Magna. There, both sides had agreed in April that at least 50 million euros would be invested in expanding the Salzgitter site into a lead plant for axles and coatings. There is a location and job guarantee for all employees until the end of 2025.

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Employers have long argued Only the management has to decide about location and employment issues, the “future collective agreements” are therefore an attack on entrepreneurial freedom. In order to refute these accusations, the Hugo Sinzheimer Institute for Labor and Social Law (HSI), which belongs to the Hans Böckler Foundation, which is close to the trade union, commissioned the legal experts Monika Schlachter, Thomas Klein and Daniel Klocke to write an expert opinion.

Consider impacts beyond the organization as well

In its more than 200-page expertise, which is available to the Handelsblatt, the trio comes to the conclusion that future collective agreements or corresponding company agreements are definitely compatible with the Basic Law. The constitution guarantees collective bargaining, i.e. the right of employers and trade unions to regulate their affairs themselves with collective agreements without state interference.

At the same time, however, professional freedom and thus also entrepreneurial freedom are anchored in the Basic Law. However, they can be restricted under certain circumstances, the authors write. That’s how it is Federal Constitutional Court already decided at the end of the 1970s that when exercising entrepreneurial freedom, the effects that go beyond the company must also be taken into account. In case of ford in Saarlouis, for example, the effects for the Saarland, which is largely dependent on the car and supplier industry.

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It is often suggested that the trade unions want to take over the management of the company with collective agreements to secure the location or that they want to take away any entrepreneurial decision-making leeway, the report goes on to say. But that is not the case.

The approval of a location guarantee or an outsourcing waiver in a collective agreement is an individual, free decision of an entrepreneur. “Collective agreement regulations on location, outsourcing and investment issues do not lead to a significant impairment of entrepreneurial freedom per se, but initially only provide a framework on the basis of which further decisions are to be made,” write Klein, Klocke and Schlachter.

The economic existence of the company must not be jeopardized

Entrepreneurial freedom would only be impermissibly restricted if the framework conditions agreed in the future collective agreement destroyed any economically viable business concept. The agreements must not go so far that the existence of the company is endangered.

The director of the Institute for Labor Law and Social Security Law at the University of Bonn, Gregor Thüsing, also considers future collective agreements to be constitutional, but sees limits: An exclusion of dismissals can be agreed, because this is about the economic consequences of a business decision for the employee , Thüsing told the Handelsblatt.

“An exclusion of site closures or a ban on outsourcing – come what may – that is not possible.” The responsibility of the company cannot simply be delegated to the parties to the collective agreement. “The limit of permissible local collective agreements is not just a question smarter tariff policybut also a legal one.”

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