According to the findings of the WSI Works Council Survey 1999/2000, published in February 2001, about 22% of German establishments surveyed have taken advantage of the opportunity to diverge from collectively agreed provisions by using "opening clauses". In addition, about 15% of the establishments have contravened agreements in force to a greater or lesser extent. Nearly three-quarters of the works councillors surveyed considered that the overall trend towards a decentralisation of collective bargaining has either negative or ambiguous effects.
Since the beginning of the 1990s, the German system of collective bargaining has seen a continued process of decentralisation and flexibilisation. This process has a "regulated" and an "unregulated" dimension. The regulated dimension has found expression in the widespread introduction of "opening clauses" (Öffnungsklauseln) into branch-level agreements, which under certain conditions allow companies to diverge from collectively agreed standards, with the support of both trade unions and employers' associations (DE9709229F). In addition, there has been a second dimension of decentralisation, which might be called "unregulated" or even "unlawful" decentralisation. The latter refers to companies which more or less openly contravene collective agreements.
In February 2001, the Institute for Economic and Social Research within the Hans Böckler Foundation (Wirtschafts- und Sozialwissenschaftliches Institut in der Hans-Böckler-Stiftung, WSI) presented the results of its recent Works Council Survey 1999/2000, which gives a representative overview of industrial relations at establishment level (DE0102208F). A special evaluation of the WSI survey data provides current information on the use of opening clauses and breaches of collective agreements in Germany ("Betriebliche Interessenvertretung, Entgelt und Tarifpolitik", Reinhard Bispinck, in WSI-Mitteilungen Vol. 54, No. 2 (2001)). Moreover, the study gives an overview of works councillors' evaluation of the decentralisation of collective bargaining.
Use of opening clauses at establishment level
Although the introduction of opening clauses into sectoral collective agreements has become widespread in almost all important sectors, few data previously existed on the actual use of these clauses at establishment level. There were some data, for example, from the chemicals sector, which suggested a relatively low take-up of the existing opening clauses on working time and collectively agreed pay (DE9906202N).
The WSI Works Council Survey 1999/2000 provides, for the first time, representative data on the overall use of opening clauses in Germany - see table 1 below. It reveals that about three-quarters of the establishments surveyed do not use any opening clauses in order to diverge from collective agreements. While only 22% of the works councils declared that their establishments are currently using opening clauses, the figure is significantly higher in east Germany (30%) than in the east (20%).
The most widely used opening clauses are those which give the possibility of extending working time above the collectively agreed level (44% of the establishments using such clauses use this type), followed by opening clauses which allow a reduction of working time below the collectively agreed level with no compensation in pay for a limited period of time (25%). About one-fifth of the establishments using opening clauses also make use of the opportunity for "entrance wages" for special groups of newly hired employees such as those obtaining their first job or long-term unemployed people. While opening clauses on pay which allow for a reduction of either collectively agreed basic pay or annual bonuses are of less importance in west Germany, they still play an important role in the east. The same is true for the use of so-called "hardship clauses", which under certain conditions allow for divergences from collectively agreed provisions in order to avoid the bankruptcy of an establishment.
Table 1. The use of opening clauses at establishment level
| Establishments which do not use opening clauses | 75% | 77% | 67% |
| Establishments which use opening clauses | 22% | 20% | 30% |
| Establishments use opening clauses in following fields (in % of all establishments which use opening clauses): | . | . | . |
| Working time extension | 44% | 48% | 28% |
| Limited working time reduction | 25% | 27% | 19% |
| "Entrance wages" for newly hired employees | 20% | 21% | 16% |
| Reduction or postponement of annual bonuses | 14% | 11% | 27% |
| Postponement of collectively agreed pay increases | 12% | 10% | 21% |
| General "hardship clauses" | 8% | 3% | 28% |
| Reduction of collectively agreed pay | 6% | 4% | 11% |
| Reduction or postponement of holiday pay | 6% | 2% | 22% |
Source: WSI Works Council Survey 1999/2000.
Breaches of collective agreements at establishment level
Besides the legal means of diverging from collective agreements through the use of opening clauses, there is also an illegal means whereby establishments simply breach collective agreements in force. According to the WSI Works Council Survey, about 15% of the works councils declared that the establishment contravened collective agreements either sometimes (11%) or often (4%) - see table 2 below. The number of breaches is particularly high in east Germany, where more than a quarter of the establishments contravene agreements in force. The highest number of offences can be found in the area of collectively agreed basic pay (58% of all breaches), followed by working time policy (40%). Since it might sometimes be difficult for works councils to declare that their establishment contravenes collective agreements, there might be a unknown number of additional cases which in total would indicate an even higher number of breaches.
Table 2. Breaches of collective agreements
| Establishments do not contravene collective agreements | 85% | 87% | 74% |
| Establishments sometimes contravene collective agreements | 11% | 9% | 20% |
| Establishments often contravene collective agreements | 4% | 3% | 6% |
| Establishments contravene collective agreements in following fields (in % of all establishments which contravene collective agreements): | . | . | . |
| Basic pay | 58% | 61% | 50% |
| Working time | 40% | 44% | 27% |
| Additional bonuses | 27% | 25% | 30% |
| Annual bonuses | 25% | 21% | 37% |
Source: WSI Works Council Survey 1999/2000.
Works councillors' evaluation of decentralisation of bargaining
Asked for their evaluation of decentralisation of collective bargaining, nearly three-quarters of works councillors surveyed considered that it has either negative or ambiguous effects - see table 3 below. Only 10% of the works councillors were in favour of decentralisation, while about 13% said that the effects of decentralisation are "difficult to evaluate". The results of the WSI Works Council Survey 1999/2000 confirm the results of an earlier 1997/8 survey (DE9902292N) and thereby supply evidence of persistently strong scepticism over decentralisation of collective bargaining among works councillors.
Table 3. Works councillors' evaluation of decentralisation of collective bargaining
| Positive | 10% | 12% |
| Ambiguous | 33% | 40% |
| Negative | 39% | 37% |
| Difficult to evaluate | 13% | 12% |
Source: WSI Works Council Surveys 1997/8 and 1999/2000.
This scepticism has been further demonstrated by the fact that nearly three-quarters of the works councillors think that decentralisation of collective bargaining "strengthens the position of the employers" - see table 4 below. More than half of the works councillors criticised the fact that decentralisation "leads to different work and pay conditions for employees covered by the same collective agreement" while only a quarter said that it "takes better into account the different conditions at establishment level". About 19% of the works councillors questioned in the survey, however, welcomed the decentralisation of collective bargaining because they see it as an opportunity to increase their influence and to achieve regulations which better fit the specific needs of the company. By contrast, 30% said explicitly that "the decentralisation does not give the works councils an effective influence."
Table 4. Results of decentralisation of collective bargaining in the view of works councillors
| ... strengthens the position of the employers | 72% |
| ... leads to different work and pay conditions for employees covered by the same collective agreement | 54% |
| ... does not give the works councils an effective influence | 30% |
| ... takes better into account the different conditions at establishment level | 25% |
| ... improves the opportunities for works councils to influence work and pay conditions | 19% |
| ... other | 6% |
Source: WSI Works Council Survey 1999/2000.
Commentary
The findings of the recent WSI Works Council Survey show that there is a significant tendency towards decentralisation of collective bargaining in Germany, which is supported by the widespread use of opening clauses at establishment level as well as by the significant number of breaches of collective agreements in force. On the other hand, the WSI survey also makes clear that the overwhelming majority of establishments still neither use opening clauses nor contravene collective agreements. The latter fact makes clear that there is still a relatively high degree of stability within the German system of collective bargaining.
For the majority of the works councils, however, the existing tendencies towards decentralisation of bargaining represent more of a threat than an opportunity. Against the present background of persistently high unemployment and increased competition, they feel that the decentralisation of collective bargaining has diminished their bargaining power at company level. As other, more qualitative, studies indicate, branch-level collective agreements have a certain "relief function" (Entlastungsfunktion) which makes it easier for works councillors to reject employers' demands for a reduction of social and employment standards (DE9802248F). The decentralisation of collective bargaining, therefore, also reflects a shift in power relations between employers on the on hand and works councils and trade unions on the other hand. (Thorsten Schulten, Institute for Economic and Social Research (WSI))