BEERG Newsletter - Germany: The labor relations agenda of the new coalition government

Gerlind Wisskirchen [email protected] writes: Angela Merkel has been Chancellor in Christian Democrat-led governments in Germany for the past 16 years. Within the next few days her time in office will come to an end and she will be replaced by Olaf Scholz, a Social Democrat. 

Scholz will lead a three-party coalition of the left-of-centre Greens, the pro-business Free Democrats, with his own Social Democrats being the biggest party of the three. Over the past few weeks the three parties have negotiated a 177-page program for government.

The three parties have acknowledged their differences but said they had found enough common ground to push forward with plans to get Covid19 under control, increase the minimum wage and put Germany on a path to quit coal and expand renewable energy to 80 percent by 2030.

“We are united in a belief in progress and that politics can do good,” Mr. Scholz said in a joint news conference. “We are united in the will to make the country better, to move it forward and to keep it together.”

With the Social Democrats as the lead party, it is not surprising that the new government will have a markedly different labour relations agenda from the outgoing, conservative Christian Democrats. Especially as the current Minister for Labour, Hubertus Heil, a Social Democrat will remain in place. Heil was often frustrated in what he wanted to do by opposition from the majority Christian Democrats in Merkel’s Christian Democrat/Social Democrat coalition. Now he can set his own pace.

What can we expect? 

• The minimum wage will be hiked to €12 hour from the present €9.60.
• Works councils should be able to decide for themselves whether they work in analogue (F2F) or digital form; there is however no mentioning whether the employer and the works council can meet digitally for negotiations and the likes.
• Within the framework of the constitutionally required standards, a pilot project will start to test online works council elections.
• Trade unions will get a digital access right laid down in the law; many might remember the Adidas case, where the IG BCE union wanted to get hold of the employees’ e-mail addresses; once the law is written down, unions will be able to demand contact data of employees and use the company’s digital spaces to advertise themselves.
• Expanding co-determination rights by strengthening the establishment of supervisory boards especially in the legal form of an SE: growth of SE companies should no longer lead to complete avoidance of co-determination (freezing effect). The group attribution from the Co-Determination Act is to be transferred to the One-Third Participation Act if there is de facto real control. This could lead to many SE’s obliged to elect a supervisory board with employee representatives on the board.

All of which can be summarized as:

1. Digitization of the work of work’s councils (but not necessarily of meetings with management)
2. More rights for employee representatives

It is also likely that the new government will be more supportive of EU Commission employment and labour legislative initiatives than was the Merkel government.

From BEERG Newsletter No 39 2021 – Dec 2