East German employers warn of the consequences of the Collective Bargaining Act

The employers' and business associations in Saxony, Saxony-Anhalt and Thuringia have sharply criticized the federal government's planned Collective Bargaining Act (BTTG). In a joint statement, the associations said that it would deeply interfere with the autonomy of collective bargaining, disadvantage medium-sized companies and jeopardize economic development in eastern Germany.

The law drafted by Federal Labour Minister Bärbel Bas (SPD) stipulates that companies must comply with collectively agreed working conditions - including pay, vacation entitlement and rest periods - for federal contracts worth 50,000 euros or more. Penalties will be imposed for violations. The cabinet is expected to decide on this on Wednesday.

An "attack on collective bargaining autonomy"

"Collective bargaining autonomy is not a wish list that can be controlled by the state, but a constitutionally protected principle," it says in a letter to Federal Chancellor Friedrich Merz (CDU), CDU/CSU parliamentary group leader Jens Spahn and the minister presidents of the three eastern German states. Anyone who wants economic diversity, fair competition and genuine social responsibility must treat all efficient companies equally - regardless of their collective bargaining coverage.

The President of the Employers' and Business Associations in Saxony-Anhalt (AWSA), Marco Langhof, spoke of an "open attack on collective bargaining autonomy" and a "declaration of economic bankruptcy". In eastern Germany in particular, this would put strong SMEs at a considerable disadvantage.

Low collective bargaining coverage in the east

The President of the Saxon Business Association (VSW), Jörg Brückner, called the plan a "state-organized collective bargaining compulsion". The state should then "logically also forego the tax money of the other companies". The law is an "economic selection program" with foreseeable consequences: fewer orders, jobs and tax revenues.

Hartmut Koch, President of the Thuringian Business Association (VWT), referred to the low level of collective bargaining coverage in the region: 16% in Saxony, 18% in Thuringia and 22% in Saxony-Anhalt. Many companies had broken away from collective bargaining "not out of irresponsibility, but out of economic necessity". The law ignores this reality and excludes many companies from the public market.

The associations are calling on the federal government to withdraw the draft and preserve collective bargaining autonomy.