Minimum wages extended to workers in six sectors under Posted Workers Act

Dribbusch, Heiner

Přehled

Článek

Minimum wages extended to workers in six sectors under Posted Workers Act

Publikováno: 11 November 2007

On 17 September 2007, a committee on collective agreements (/Tarifausschuss/) within the Federal Ministry of Labour and Social Affaires (Bundesministerium für Arbeit und Soziales, BMAS [1]) declared the collective agreement on minimum wages in the electrical trades as generally binding according to provisions under the Posted Workers Act (/Arbeitnehmerentsendegesetz/, AEntG [2]).[1] http://www.bmas.de/portal/16702/startseite.html[2] http://www.bund.de/nn_176688/DE/WuW/A-Z/A-wie-Ausschreibungen/Arbeit/Arbeitsrecht/Arbeitsrecht-knoten.html__nnn=true

In September 2007, the collective agreement on minimum wages in the electrical trades was declared as generally binding according to provisions under the Posted Workers Act. Together with this new agreement which covers some 300,000 employees, some 1.4 million workers in six sectors of the economy are now covered by minimum wages provided for under this act. Wages apply to all workers employed in the industries concerned regardless of their employer’s country of origin.

On 17 September 2007, a committee on collective agreements (Tarifausschuss) within the Federal Ministry of Labour and Social Affaires (Bundesministerium für Arbeit und Soziales, BMAS) declared the collective agreement on minimum wages in the electrical trades as generally binding according to provisions under the Posted Workers Act (Arbeitnehmerentsendegesetz, AEntG).

The collective agreement in the electrical trades was concluded between the German Metalworkers’ Union (Industriegewerkschaft Metall, IG Metall) and the German Association of Electrical and IT Installation Enterprises (Zentralverband der Deutschen Elektro- und Informationstechnischen Handwerke, ZVEH) and covers about 300,000 workers in the electrical trades when they are working away from the establishments where they are employed, for example, on construction sites. The collective agreement sets different minimum wages for eastern Germany, including Berlin, and western Germany (Table 1).

**Table 1: Minimum wages in electrical trades, 2007–2010 (€)**
This table shows the minimum wages in electrical trades declared as generally binding under the Posted Workers Act, covering the years 2007–2010.
	From September 2007	From January 2008	From January 2009	From January 2010
Eastern Germany	7.70	7.90	8.05	8.20
Western Germany	9.20	9.40	9.55	9.60

Source: WSI-Tarifarchiv, 2007

The extension of the collective agreement to the whole sector implies that wage rates set by other collective agreements which, for example, were concluded by affiliates of the Christian Federation of Trade Unions (Christlicher Gewerkschaftsbund, CGB) and which undercut the minimum rates agreed between IG Metall and ZVEH are now void.

The bargaining parties in electrical trades welcomed the extension of the minimum wages under the Posted Workers Act. The Deputy Chair of IG Metall, Berthold Huber, stated that this would help to prevent wage dumping. The Vice-President of ZVEH, Gerd Peters, was extremely satisfied that ‘a good tradition could finally be continued’ as minimum wages had been agreed before in the sector between 1997 and 2003.

Six sectors covered

According to an overview (in German) published by the the Collective Agreement Archive (Tarifarchiv) of the Institute of Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans Böckler Foundation (Hans-Böckler-Stiftung, HBS), 1.4 million workers in six sectors are now covered by minimum wages under the provisions of the Posted Workers Act.

The other sectors – except electrical trades – are related in some way to the construction sector and building trades. The largest sector is the construction industry (Bauhauptgewerbe) where different scales of minimum wages have been agreed: Scale 1 for unskilled workers and Scale 2 for skilled workers. A similar distinction is made in the painting trades (Maler und Lackiererhandwerk) and in the demolition industry (Abbruch und Abwrackgewerbe), while the building cleaning sector (Gebäudereinigerhandwerk) and the roofing trade (Dachdeckerhandwerk) only agreed on minimum wages for the lowest pay grades (see Tables 2–6).

**Table 2: Minimum wages in construction sector, 2007–2008 (€)**
This table shows the minimum wages in the construction sector declared as generally binding under the Posted Workers Act, covering the years 2007–2008.
	Scale	From September 2007	From September 2008
Eastern Germany	Scale 1	9.00	Not yet agreed
Eastern Germany	Scale 2	9.80	Not yet agreed
Western Germany	Scale 1	10.40	10.70
Western Germany	Scale 2	12.50	12.85(12.70 in West Berlin)

Source: WSI-Tarifarchiv, 2007

**Table 3: Minimum wages in building cleaning sector, 2007–2008 (€)**
This table shows the minimum wages in the building cleaning sector declared as generally binding under the Posted Workers Act, covering the years 2007–2008.
	Scale	From July 2007	From January 2008
Eastern Germany	Lowest pay scale	6.36	6.58
Western Germany	Lowest pay scale	7.87	8.15

Source: WSI-Tarifarchiv, 2007

**Table 4: Minimum wages in painting trades, 2007–2008 (€)**
This table shows the minimum wages in the painting trades declared as generally binding under the Posted Workers Act, covering the years 2007–2008.
	Scale	From April 2005
Eastern Germany	Unskilled workers	7.15
Eastern Germany	Skilled workers	9.37
Western Germany	Unskilled workers	7.85
Western Germany	Skilled workers	10.73

Source: WSI-Tarifarchiv, 2007

**Table 5: Minimum wages in demolition industry, since September 2005 (€)**
The table shows the minimum wages in the demolition industry declared as generally binding under the Posted Workers Act since September 2005.
	Scale	From September 2005
Eastern Germany	Unskilled workers	8.80
Eastern Germany	Skilled workers	9.80
Western Germany	Unskilled workers	9.49
Western Germany	Skilled workers	11.60

Source: WSI-Tarifarchiv, 2007

**Table 6: Minimum wages in the roofing trade, 2006–2009 (€)**
This table shows the minimum wages in the demolition industry declared as generally binding under the Posted Workers Act, covering the years 2006–2009.
	From January 2006	From January 2008	From January 2009
Workers (Germany)	10.00	10.20	10.40

Source: WSI-Tarifarchiv, 2006

Legal background

The Posted Workers Act of 1996 provides the workers concerned with the protection of German statutory minimum standards in areas such as working time, paid leave, health and safety, maternity and equal treatment. Furthermore, the law stipulates that posted workers should be covered by the same minimum collectively agreed pay rates and collectively agreed provisions on paid holidays as German workers are. This objective is accomplished by way of the extension of collective agreements. Such an extension applies the terms and conditions of a collective agreement to those workers who are not covered by any agreement because they are either not members of the signatory trade union or their employer is not a member of the employer organisation which is party to the agreement.

Amendments to act

After the adoption of Council Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, the German government modified certain details of the act. The most important legislative alterations came into force on 1 January 1999 with the revision of the law by the then social democratic-green coalition government (DE9901291N). At the time, the Posted Workers Act was extended for an unlimited period and a significant increase in fines was introduced for employers in breach of the law. Furthermore, a new provision was added to the act, which makes user companies responsible when their subcontractors contravene collectively agreed standards. The most controversial alteration, however, was that the amendments to the act enabled BMAS to declare wages and working conditions to be generally binding by a ministerial directive. This effectively allows the circumvention of the requirement of section 5 of the Collective Agreements Act (Tarifvertragsgesetz) (DE9905200F) which stipulates that a ‘committee on orders imposing extensions’, consisting of three trade union and three employer representatives from different sectors of the economy, must approve the extension of a collective agreement by a majority of at least four votes.

The latter amendment was introduced in light of a major controversy on the employers’ side about the extension of collectively agreed minimum pay rates in the construction sector, which began immediately after the Posted Workers Act came into force in 1996. Further amendments to the Posted Workers Act came into force on 1 January 2003 in relation to temporary agency workers in the construction sector.

Since then a number of other sectors and service industries have been included in the Posted Workers Act, the latest being electrical trades.

Commentary

A lively public debate on minimum wages is currently ongoing in Germany. So far, no agreement has been reached within the coalition government of the conservative Christian Democratic Party (Christlich Demokratische Union, CDU), its Bavarian associate party, the Christian Social Union (Christlich-Soziale Union, CSU), and the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) on whether or not to introduce a statutory national minimum wage in Germany. However, some consensus is evident when it comes to introducing minimum wages in some sectors by way of including those in the Posted Workers Act. The sectors most likely to be covered by the act in the foreseeable future are mail delivery services and temporary agencies.

Heiner Dribbusch, Institute of Economic and Social Research, WSI

Eurofound doporučuje citovat tuto publikaci následujícím způsobem.

Eurofound (2007), Minimum wages extended to workers in six sectors under Posted Workers Act, article.