Search
Contact
14.07.2017 | KPMG Law Insights

Collective Bargaining Unity Act – constitutional with restrictions

Collective Bargaining Unity Act – constitutional with restrictions

Pending status prolonged – improvements required – goal of legal certainty achieved only with limitations

The Federal Constitutional Court has declared the Collective Bargaining Unity Act to be fundamentally constitutional (ruling of July 11, 2017, Ref.: 1 BvR 1571/15). However, the issue of collective bargaining agreements remains in limbo for the time being, as the law needs to be amended in parts by the legislator. From the point of view of the smaller unions, which reject the law as a restriction of their constitutionally guaranteed freedom of association, this appears to be a setback; for the large unions and employers, it is a step forward. But much remains uncertain: the judges have passed the ball back to the labor courts.

The law was triggered by a 2010 ruling of the German Federal Labor Court (ruling of July 7, 2010, Ref.: 4 AZR 549/08), which abandoned the principle of collective bargaining unity (“one company – one collective agreement”). Politicians, employers and parts of the public feared power struggles, high wage demands and long strikes, especially on the part of smaller sectoral unions. Examples, particularly from the healthcare and transport sectors (Lufthansa, Deutsche Bahn), show that the fears were not entirely unrealistic.

In 2015, the legislature reacted with the Collective Bargaining Unity Act, which was intended to restore the old situation. In the event of conflicting collective agreements, only one collective agreement should apply in each company, namely the agreement of the trade union with the most members (Section 4a (2) Sentence 2 of the Collective Agreement Act). For smaller sectoral unions, such as those representing train drivers, doctors or pilots, this means an encroachment on their freedom to represent their members and negotiate collective agreements on their behalf. This creates a two-tier society among unions, where some can negotiate valid collective agreements but others cannot. It is obvious which union is more attractive to its members. Accordingly, the smaller unions felt that their freedom of association under Article 9 (3) of the Basic Law had been violated.

For the labor courts, the work is only just beginning

The ruling is a stage victory for the Federal Ministry of Labor and Social Affairs and the DGB trade unions. Overall, the principle of “one company – one collective agreement” has not been touched by the Federal Constitutional Court. This result had already been foreshadowed in the proceedings of the First Senate of the Federal Constitutional Court in January of this year. In the run-up to the proceedings, however, renowned legal experts had considered the legal fixation of the principle of collective bargaining unity to be unconstitutional. Many employers were therefore skeptical and did not apply the law. Lufthansa, for example, only ended its conflict with the Vereinigung Cockpit pilots’ union in March by reaching a collective agreement.

Are strikes by divisional unions now a thing of the past? In principle, according to the ruling of the Federal Constitutional Court, the collective agreement of the larger union supersedes the agreement of the smaller one – so strikes by unions with few members are unlikely for the time being.

Doh the judges have left a loophole open: The interests of the smaller union and its members must be sufficiently taken into account in the applicable collective bargaining agreement, namely “seriously” and “effectively.” However, the judges refrained from further specification. This is what the labor courts will have to deal with in the coming years. Until a robust body of case law is established, the judgment therefore creates legal certainty to a very limited extent at best.

Link to the ruling of the Federal Constitutional Court

 

Explore #more

03.10.2025 | Deal Notifications

KPMG Law and KPMG support the restructuring of Groupe CAT in Germany

KPMG Law Rechtsanwaltsgesellschaft (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised Groupe CAT on comprehensive restructuring measures with a cross-service team. Over a period of…

02.10.2025 | Deal Notifications

KPMG Law advises Epitype GmbH and MDG Molecular Diagnostics Group GmbH on the acquisition of significant assets of oncgnostics GmbH

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) provided comprehensive legal advice to Epitype GmbH, a company of the Dresden-based MDG Group, on the formation and subsequent…

02.10.2025 | In the media

KPMG Law Statement in ZEIT for entrepreneurs: We’ll take the 500 billion!

German construction companies are asking themselves: how quickly will the money come from the government? And they are worried that only the giants will benefit.…

01.10.2025 | KPMG Law Insights

Federal Network Agency reforms special network charges for industry and commerce

The Federal Network Agency is planning a fundamental reform of the special network charges for energy-intensive companies. Any change to the current privilege regime entails…

30.09.2025 | In the media

KPMG Law dominates the top 100 list of the new law firm monitor with eight lawyers

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) occupies an outstanding sixth place in the overall evaluation of the TOP 100 law firms in the current diruj…

29.09.2025 | KPMG Law Insights

MiSpeL draft: New funding for energy storage systems and charging points

On September 18, 2025, the Federal Network Agency published a draft for the “Market integration of storage systems and charging points” (MiSpeL for short). For…

29.09.2025 | KPMG Law Insights

Organizing the transformation and spin-off of corporate real estate with legal certainty

When real estate portfolios are to be transformed or spun off, the economic success depends heavily on the legal preparation. Complex legal issues often arise,…

25.09.2025 | KPMG Law Insights

MaGo update – roadmap for implementing the new requirements

On 14 July 2025, BaFin revised the circular “Minimum requirements for the business organization of insurance companies under Solvency II” (MaGo for SII-VU) and published…

25.09.2025 | KPMG Law Insights

Foundation register – launch to be postponed from 2026 to 2028

The reform of foundation law, which came into force in July 2023, created a nationwide foundation register based on the commercial register. This was actually

24.09.2025 | In the media

KPMG Law Statement in In-house Counsel: Leveraging potential

The role of the legal department in the company has changed significantly in recent years. Its importance is high. However, it is also increasingly becoming…

Contact

Dr. Stefan Middendorf

Partner
Duesseldorf Site Manager

Tersteegenstraße 19-23
40474 Düsseldorf

Tel.: +49 211 4155597316
smiddendorf@kpmg-law.com

Dr. Martin Trayer

Partner

THE SQUAIRE Am Flughafen
60549 Frankfurt am Main

Tel.: 49 69 951195565
mtrayer@kpmg-law.com

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll