Working life in Germany

Notes: Values for real GDP per capita are chain-linked volumes (based on 2010 data; €). The unemployment rate for men and women is the annual average as a percentage of the active population aged 15–74 years, and the youth unemployment rate is the annual average as a percentage of people aged 15–24 years. The employment rate for men and women is the annual average as a percentage of the active population aged 15–64 years, and the youth employment rate is the annual average as a percentage of people aged 15–24 years. GDP, gross domestic product.

Source: Eurostat [sdg_08_10], for real GDP per capita and percentage change 2012–2022; [une_rt_a], for unemployment rate by sex and age; [lfsi_emp_a], for employment rate by sex and age

Economic and labour market context

In 2021, GDP increased by 2.6% and, in 2022, it increased by 1.9% (preliminary figures). However, Germany’s economic recovery in 2021 was slower than that of the EU (the EU’s GDP per capita grew by 5.5% compared with the previous year). On the other hand, in comparison with the average unemployment rate in the EU27 (7.2% in 2020 and 7.0% in 2021), the German labour market has fared comparatively well, with average unemployment rates of 3.7% in 2020 and 3.6% in 2021. Due to the Russian war against Ukraine and the sanctions imposed against Russia in 2022, inflation has risen significantly. In 2022, it reached a 30-year high, with a 7.9% increase in comparison with the previous year. Between 2012 and 2022, GDP growth in Germany was 8.2%, which is below the EU average for the same period (15.29%). In 2020, real GDP decreased by 5% compared with the previous year. Unemployment rates for all categories continued to decrease into 2022 and were below the EU average figures. Youth unemployment stood at 6% in 2022, which was well below the EU average for that year (14.5%).

Legal context

The basic structures of the German industrial relations system have not changed since its inception after the Second World War. The Basic Law (Grundgesetz, GG) and the Collective Agreements Act of 1949 (Tarifvertragsgesetz, TVG) guarantee the freedom of coalition and the autonomy of trade unions and employer organisations/single employers in concluding binding collective agreements. Worker representation is regulated under the 1952 Works Constitution Act (amended in 1972; Betriebsverfassungsgesetz, BetrVG) and the 1955 Staff Representation Act (Personalvertretungsgesetz), which grant employees the right to elect a worker representation body in establishments and public administrative units with at least five employees. These legal acts define consultation and co-determination rights in Germany.

The Co-determination Acts (Betriebsverfassungsgesetz, BetrVG) of 1951 and 1976 introduced worker representation for supervisory boards of companies with at least 2,000 employees.

The Catholic and Protestant churches and their institutions, including social welfare organisations and private establishments, are covered not by German labour law but by church law. Workers may individually decide to become trade union members but do not have the right to strike. Wages are set unilaterally in agreement with employee representatives. Employee representation is regulated under the Employee Representation Act of the German Protestant Church (Mitarbeitervertretungsgesetz) and that of the Catholic Church (Mitarbeitervertretungsordnungen).

Industrial relations context

The German industrial relations system was shaped in the post-war period in West Germany. Transferring the West German industrial relations system to the eastern part of the country after reunification has remained a challenge, as eastern Germany is characterised by a lack of large manufacturing companies and a dominance of small and medium-sized enterprises (SMEs). Collective bargaining coverage and works council coverage have remained significantly lower in eastern Germany than in western Germany. In 2021, 54% of workers in western Germany were covered by a collective agreement, compared with 45% in eastern Germany; in the same year, the proportion of workers in establishments with a works council stood at 39% in western Germany and 34% in eastern Germany.

One overall challenge has been the decline in membership of employer organisations, due to difficulties in organising new establishments, SMEs and enterprises in newly emerging economic sectors. As a result, most sectoral employer organisations have decided to offer membership without a binding obligation to apply sectoral collective agreements (which is referred to in German as Mitgliedschaft ohne Tarifbindung, OT). Employer organisations typically do not publish a breakdown of different types of members. An exception is the employer organisation of the metal sector, Gesamtmetall, which reported that, in 2016, the member companies with OT membership slightly outnumbered other types of members.

Similarly, not even a fifth of workers are members of a German trade union. As of 2019, trade union density in Germany was 16.3% (data from the Organisation of Economic Co-operation and Development (OECD)). However, recent trade union membership figures show diverging trends, namely clear signs of recovery (in occupational and sectoral trade unions in privatised companies and in the public sector), stability because of strong organising activities (in the metal and machinery sectors), an ongoing decline because of restructuring activities (in the construction, chemicals and mining sectors) and ongoing difficulties in organising certain service sectors. In additions, a number of small occupational trade unions stand in competition to established unions.

Collective bargaining coverage and works council coverage are still strong in the core zone of the industrial relations system – large manufacturing companies – but are considerably weaker in private service sectors. In Germany, some 56% of all manufacturing workers were covered by a collective agreement in 2021– compared with only 28% of German retail workers (Ellguth and Kohaut, 2022). However, by and large, employer organisations and unions in different sectors continued to negotiate collective agreements during the COVID-19 pandemic and find solutions that fit the developments in their sectors. During the 2020 collective bargaining rounds, social partners in some sectors postponed collective wage increases due to the economic uncertainties of the times (that is, in the metal and electrical sectors, by the automotive manufacturer Volkswagen and by the railway company Deutsche Bahn). In other sectors, social partners resorted to the use of one-time payments or combined one-off payments with newly negotiated wage increases for 2021 and 2022 (e.g. the metal, public administration, construction and energy sectors). In addition, collective agreements on short-time work were also concluded by employer organisations/single employers and unions to safeguard employment during the COVID-19 pandemic.

Trade unions, employer organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes European, national, sectoral, regional (provincial or local) and company levels. This section looks at the key players and institutions and their role in Germany.

Public authorities involved in regulating working life

In the post-war years, in response to the country’s Nazi past, the legislator gave the public authorities a rather limited role in industrial relations. The 1949 TVG guarantees trade unions, employer organisations and single employers autonomy in collective bargaining. In the case of a juridical dispute, the labour courts decide on the right of an organisation to conclude a collective agreement and on the validity of a collective agreement. The social partners may ask the labour minister to extend an agreement.

The Minimum Wage Act (Mindestlohngesetz, MiLoG) introduced the statutory minimum wage, which came into effect at the beginning of 2015. MiLoG also sets out that the labour minister appoints the chair of the Minimum Wage Commission from among peak-level social partner organisations. The Minimum Wage Commission recommends the level of the statutory minimum wage to the labour minister and the federal government takes the final decision on the statutory minimum wage adjustments. In 2022, the federal government suspended this procedure for the first time since its introduction in 2015 and set the statutory minimum wage at €12 per hour without any such recommendation from the Minimum Wage Commission.

The labour inspectorates in the 16 federal states (Länder) monitor occupational health and safety, while the Customs Service – a unit of the Federal Ministry of Finance – monitors compliance with the statutory minimum wage (MiLoG), the Posted Workers Act (Arbeitnehmerentsendegesetz, ArbEntG), the Temporary Agency Work Act (Arbeitnehmerüberlassungsgesetz) and the Act Against Undeclared Work (Schwarzarbeitsbekämpfungsgesetz).

Representativeness

The concept of organisational representativeness is not covered in the German system. The alternative concept used in Germany is collective bargaining capacity (Tariffähigkeit). This concept has its basis in the GG (freedom of coalition) and the TVG and is governed by the rulings of the Federal Labour Court. Trade unions and employer organisations have the right to engage in collective bargaining if collective bargaining is designated as a statutory task (Article 2 of the TVG). Based on a ruling by the Federal Labour Court, the main indicators of collective bargaining capacity are organisational independence (of the opposite party and third parties), internal democracy and the organisational capacity (soziale Mächtigkeit) both to get the opposite party to join the bargaining table (for example through strikes) and to enforce the implementation of collective bargaining outcomes.

Trade unions

About trade union representation

All employees in Germany have the right to join a trade union. However, some groups of employees are excluded from trade union representation for the following reasons.

• The collective bargaining partners determine the highest wage level they want to cover in collective bargaining. Employees earning more than the threshold of the agreed wage scale (Ni Angestellte) are not covered by the collective agreements.
• Self-employed workers are not covered by labour law and trade unions do not represent them in collective bargaining. However, self-employed workers can still be trade union members. The United Services Trade Union (Vereinte Dienstleistungsgewerkschaft, ver.di) organises and consults self-employed workers, particularly those working in the media and in the transport sector. The metalworkers’ union IG Metall has started organising digital platform workers.
• Trade unions may represent the interests of civil servants and judges before public authorities, but they cannot engage in collective bargaining on their behalf.
• Trade unions may not represent the interests of workers covered by Catholic Church law. This also holds for workers under Protestant Church law, although some church worker organisations have opted to be represented by ver.di in collective bargaining.

OECD figures indicate a slow decrease in union density and a tendency towards organisational fragmentation. Membership of the three-trade union peak-level organisations is slowly declining. Public service worker unions and occupational unions organised around sectoral professions have slightly increased their membership in recent years.

Trade union membership and density, 2010–2019

Notes: * Proportion of employees who are members of a trade union. ** The trade union membership figures were provided by, among others, the German Trade Union Confederation (Deutscher Gewerkschaftsbund, DGB), the German Civil Servants Union and Wage Union (Deutscher Beamtenbund und Tarifunion, dbb), the Christian Trade Union Federation (Christlicher Gewerkschaftsbund, CGB), the doctors’ union Marburger Bund, Cockpit (the airline pilots’ union) and the Independent Flight Attendants’ Union (Unabhängige Flugbegleiter Organisation, UFO). ** Net trade union membership of employees derived from the total union membership and adjusted, if necessary, for trade union members outside the active, dependent and employed labour force (i.e. retired workers, self-employed workers, students and unemployed people). WSI, Institute of Economic and Social Research (Wirtschafts- und Sozialwissenschaftliche Institut).

Source: OECD (2024) and OECD/AIAS/ICTWSS (2023)

Main trade union confederations and federations, 2021

Sources: DGB (undated); dbb (undated); CGB (undated)

Employer organisations

About employer representation

Section 9 of the GG (guaranteeing freedom of association) also applies to employer organisations. Like trade unions, employer organisations have the right to engage in collective bargaining if assigned representative functions by their members and if tasked with collective bargaining according to their statutes (section 2 of the TVG). There are no further statutory regulations defining criteria for representativeness or any statutory requirement for an association.

Employer organisations have been affected by a decline in membership. Density figures cannot be provided because employer organisations release figures for the number of organisational members, but not for the numbers of establishments or employees covered.

In response to a challenging decline in membership, the vast majority of employer organisations offer membership without the binding obligation to apply collective agreements. The Federal Labour Court decided that employer organisations are allowed to do this given that members not applying collective agreements does not influence the organisations on issues regulated by collective bargaining. Craft guilds engaged in collective bargaining are prohibited from providing non-binding memberships.

Employer organisation membership and density, 2012–2019

Notes: * Percentage of employees working in an establishment that is member of any employer organisation that is involved in collective bargaining. n.a., not applicable.

Main employer organisations

Main employer organisations and confederations, 2019

Tripartite and bipartite bodies and concertation

Statutory tripartite bodies are rare in the German system. In the case of the extension of a sectoral collective agreement, labour ministers cooperate with a sectoral bipartite wage committee. Article 5 of the TVG stipulates that the Federal Labour Ministry – in cooperation with a wage committee set up by three representatives of the trade union and three representatives on the employer side – may declare a sectoral agreement generally binding. Since 2009, ArbEntG has contained a similar regulation with regards to extension mechanisms.

In 2014, MiLoG put in place a permanent Minimum Wage Commission, which decides on future minimum wage increases every two years. The commission is composed of three trade union representatives, three employer representatives and two academic experts. A chairperson is appointed by the social partners but needs approval by the Federal Labour Minister. Individual members are appointed every five years.

Main bipartite bodies

Workplace-level employee representation

Under BetrVG, in establishments with five workers or more, all workers (except for the executive staff) are entitled to take part in elections for works councils or to become members of the works council. They do not have to be a trade union member to do so. While the works council enjoys co-determination rights and consultation and information rights as regards social and health and safety issues, these rights do not extend to issues that are part of collective agreements (unless the agreement specifically allows the works council to deal with such topics).

Works councils are the main form of employee representation at establishment level. As the latest data from the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) (that is, the IAB Establishment Panel (IAB-Betriebspanel)) show, 39% of employees in the private sector in western Germany were represented by a works council in 2021(compared with 42% in 2018 and 40% in 2017). In eastern Germany, 34% of employees were represented by a works council in 2021(compared with 35% in 2018 and 33% in 2017). Coverage varies strongly by establishment size. In 2021, only 5% of establishments with up to 50 workers had worker representation, compared with 81% of establishments with more than 500 workers. The situation has remained stable at both ends of the scale and the situation in small establishments has not improved, even though a reform of BetrVG in 2003 aimed to put worker representation in place. Over the past decade, works council coverage has decreased for medium-sized establishments (with between 51 and 500 employees): only 49% of medium-sized companies had a works council in 2021, compared with over 60% in the early 2000s (the percentages do not vary between eastern and western Germany).

Regulation, composition and competencies of the bodies

The central concern of employment relations is the collective governance of work and employment. This section looks at collective bargaining in Germany.

According to the IAB Establishment Panel (Ellguth and Kohat, 2022), around 43% of employees in Germany were covered by a collective bargaining agreement in 2021. However, there were still significant differences between the western and eastern federal states. While, in western Germany, 54% of employees were covered by a collective bargaining agreement in 2021, only 45% of employees were covered in eastern Germany.

Bargaining system

The autonomy of the collective bargaining partners is guaranteed by law. The concluded agreements are binding and must be applied by all members of the employer organisation (unless the organisation offers membership without a binding obligation to apply collective agreements). Collective agreements cover all trade union members in a company; in practice, they are generally applied to all workers of a company.

The dominant feature of collective bargaining in Germany is sectoral collective bargaining, and agreements are typically concluded at regional level. Single-employer agreements are of minor importance and their proportion has only slightly increased in recent years, according to survey data from the IAB.

Collective agreements reached in the metal and electrical sectors serve as guiding examples for many other sectors, but pattern bargaining has been affected by a growing gap between the more stable industrial relations in the export-oriented manufacturing sector and the more difficult and conflicting private service sectors, which depend on private demand.

Wage bargaining coverage

Collective wage bargaining coverage of employees from different sources

Note: * Percentage of employees working in local units where more than 50% of the employees are covered under a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013 and 2019 (including private sector companies with establishments of >10 employees (Nomenclature of Economic Activities (NACE) codes B–S), with multiple answers possible; Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01], Structure of Earnings Survey 2010, 2014 and 2018 (including companies with >10 employees (NACE codes B–S, excluding O), with a single answer for each local unit); IAB Establishment Panel, representative survey of the IAB (2022) (including private sector companies with establishments with more than one worker); see also Destatis (2019a)

Data from the European Company Survey and national sources are not easily comparable, as the European Company Survey provides data at occupational level and national cross-sectoral level, which are not categories that are used in German statistics. National data may be more reliable than data from the European Company Survey, as the IAB survey offers a representative sample and surveys 16,000 establishments. According to the national data, there has been an ongoing decline in both collective bargaining coverage and in works council coverage, although this decline has been less pronounced in recent years.

Bargaining levels

Levels of collective bargaining, 2022

Articulation

All three levels of vertical articulation exist; the main level is the sectoral level and Germany is a paradigm case for sectoral-level collective bargaining. Due to increased decentralisation, such as the increasing use of opening clauses, company-level collective bargaining is gaining in importance and must be considered as an important level of collective bargaining at present. National-level collective bargaining is comparably rare.

Timing of the bargaining rounds

New bargaining rounds can start once a collective agreement has expired. As of 2022, collective agreements remained in place for 24.4 months on average – the longest duration was in the financial services and insurance sector (30.9 months), while the shortest duration was in the food and beverage industry (14.6 months).

Coordination

Due to Germany’s federal structure and the regionalised structure of trade unions and employer organisations, the main pattern is horizontal coordination within a sector across different regions. Federal states vary significantly in their collective bargaining coverage – between 60% in North Rhine-Westphalia and 40% in Saxony (Lübker and Schulten, 2020). Vertical coordination is rare and is carried out mainly through the dbb, which in some sectors bargains on behalf of small trade union affiliates.

Pattern bargaining under the leadership of the metal and machinery sectors remains a dominant form of coordination in Germany. In the service sectors, public sector bargaining plays an important role, even as regards wage setting under church law. In recent years, pattern bargaining has been losing importance due to a growing divergence in the quality of industrial relations.

Extension mechanisms

Collective agreements can be extended either under the TVG or under ArbEntG. Under the former, the federal and regional labour ministers may extend an agreement if the extension is approved by a bipartite wage committee. Under ArbEntG, the Federal Labour Minister may react to a plea by the collective bargaining partners and extend a sectoral agreement at national level.

From 2000 to 2016, the number of extended agreements decreased from 551 to 444. Excluding agreements that amend existing agreements, the total number of extended agreements is even lower: in 2016, it was 230 (Schulten, 2018). To counteract the trend, the previous government amended both the TVG and ArbEntG to simplify the extension mechanism. Sectoral agreements can now be extended if the extension is ‘in the public interest’; previously, they had to cover at least 50% of the sectoral employees to be eligible for extension. Despite these legislative efforts, the number of new extensions remains both generally low and limited to few sectors. In July 2017, nearly three-quarters (73%) of all of the extended collective agreements in force had been reached in one of the following five sectors: textile and clothing, construction and construction-related trades, hairdressing, security services, and the stone industry and related trades (Schulten, 2018). There are no other voluntary mechanisms of extension/application of the terms of collective agreements.

Derogation mechanisms

Many collective agreements contain so-called opening clauses that allow derogation from collective agreements under various circumstances. The exact proportion that contain these clauses is unknown. There is no year in which no such clauses existed.

Expiry of collective agreements

Under Article 4 of the TVG, collective agreements remain valid until a new collective agreement is concluded (Nachwirkungsfrist). Workers hired after the termination of the collective agreement and before the settling of a new agreement are not covered by the expired agreement.

Peace clauses

Collective agreements are by nature meant to ensure industrial peace and contain an obligation to hold the peace during the validity of the agreement. Collective bargaining partners typically conclude a relative obligation, meaning that industrial action can be taken to reach a new agreement. BetrVG contains an absolute peace obligation, meaning that works councils are not allowed to call a strike by themselves and outside collective bargaining.

Other aspects of working life addressed in collective agreements

In recent years, collective agreements have gained importance in settling new working time arrangements or in providing options to do so at establishment level. This trend is due to employers’ call for more flexibility in working time and to trade union demands for more autonomy. Under a collective agreement settled in 2016, workers employed by Deutsche Bahn can choose between a wage increase, a reduction of weekly working hours or an additional six days off. In the chemical and mining sector, the collective agreement of 2017 offers an opening clause to deviate from sectoral weekly working hours at establishment level by providing a choice between 35 and 40 hours to particular units or groups of workers. Very long working hours of up to 12 hours are also allowed. Adjustment time is extended to 36 months (the EU Working Time Directive stipulates four months). The collective agreement settled in the metal and electrical sector in 2018 contained an opening clause giving all workers the choice to either reduce their working time to a minimum of 28 hours for a fixed period and to return to full-time hours afterwards or, on the other hand, increase the proportion of workers working overtime.

Legal aspects

There are two main types of industrial action in Germany: strikes and lockouts.

There is no law governing the regulation of strikes or lockouts. The GG – apart from its general guarantee of the freedom of association – mentions neither. The regulation of industrial conflict remains subject to separate legislation and, as the legislator has remained inactive, has effectively been left to the courts. Case law has been developed by the Federal Labour Court in subsequent rulings.

A fundamental legal principle governing disputes is that industrial action must pursue an aim that can be regulated by collective agreement. Therefore, strikes and lockouts are only lawful in the context of collective bargaining, and political or general strikes are considered unlawful. Only unions have the right to call a strike. Secondary action may be legal under certain circumstances. There is no individual right of workers to go on strike. Strikes that are not officially recognised by a union are unlawful. A ballot is not required unless specific union rules require such a ballot. Career civil servants (Beamte) are banned from the right to strike. An unlawful strike gives rise to entitlements to damages and, in particular for mutual entitlements, to a restraining injunction between those involved. Whether or not a strike is unlawful is decided by the labour courts concerned in each case.

Developments in industrial action, 2012–2021

Notes: In 2015, the number of days lost was exceptionally high due to several long-lasting strong industrial conflicts in the public sector (social care and childcare workers in municipalities) and in privatised companies (Deutsche Bahn and Lufthansa). In 2018, many industrial disputes took place in the metal industry and in the food and drinks sector. The German Federal Office of Statistics (Statistisches Bundesamt) registered a clear decrease in strike days lost per 1,000 employees for 2019.

Dispute resolution mechanisms

Collective dispute resolution mechanisms

In many sectors, trade unions and employer organisations have concluded a joint dispute resolution agreement (Schlichtungsvereinbarung). Such resolution agreements usually define the amount of time after which peace obligations expire and therefore when a trade union can call an official strike. If negotiating for a new collective agreement, the bargaining parties can activate the agreed joint dispute resolution procedure (Schlichtung) to prevent the outbreak of industrial action. The procedure does not have to lead to a compromise but may merely include mediation. There is no statutory mediation or arbitration procedure.

Individual dispute resolution mechanisms

Where they exist, works councils play an important role in resolving disputes before they become legal disputes. Individual workers as well as works councils and trade unions have the right to take a case to court. Trade unions, on the other hand, do not have the right to represent collective demands (Verbandsklagerecht) – establishing such a right for collective legal action remains a long-standing trade union demand.

Labour law is applicable only to relationships based on a private contract. Career public servants (Beamte), in the strict sense of the term, are not covered by German labour law. The relationship between career public servants and the state is not a private contractual relationship, but is defined by, and based on, public law. This is why the Law on Career Public Servants (Beamtenrecht) is considered to be a special section of public law.

Disputes concerning career public servants are settled not by the labour courts but by the administrative courts.

Total number of cases brought before labour courts of first instance in Germany, including those pending from previous years, 2012–2021

Sources: BMAS (undated); Destatis (2021)

Use of alternative dispute resolution mechanisms

The Labour Court Act (Arbeitsgerichtsgesetz) includes various alternative forms of dispute resolution. The most common one is the conciliation procedure (Güteverhandlung). In this procedure, the judge and the conflicting parties agree on an out-of-court settlement. If an agreement cannot be reached, the case goes back to court. The transposition of EU legislation has strengthened the role of out-of-court mediation. Judges may appoint a judge not involved in the court case for the conciliation procedure (Güterichter); subject to the agreement of the conflicting parties, they also involve an out-of-court mediator for mediating the conflict. If the parties cannot reach an agreement, the labour court decides the case.

Data on the number of mediation or conciliation cases are not available.

‘Individual employment relations’ refers to the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over terms and conditions. This section looks at the start and termination of the employment relationship and entitlements and obligations in Germany.

Start and termination of the employment relationship

Requirements regarding an employment contract

Employers and workers conclude employment contracts (Arbeitsvertrag), meaning that the employer is in the position of giving the worker orders and that the worker is in a dependent position. Self-employed workers or freelancers conclude contracts to deliver work (Werkverträge) or to provide services (Dienstverträge) and are covered not by labour law but by the Civil Code.

The minimum age requirement for entering an employment contract is 13 years. Children aged 13 to 15 years may conclude an employment contract with their parents’ consent. The contract can be concluded in writing or verbally but has to be laid down in written form within two weeks from the starting date of the work. The contract has to consider a given collective agreement or work agreement.

Dismissal and termination procedures

The Dismissal Protection Act (Kündigungsschutzgesetz) covers workers who have an employment contract with an employer for more than six months. Workers employed in establishments with up to 10 workers are not covered (small enterprises have been excluded since 2004).

Workers can be dismissed for personal reasons (voluntarily), for reasons of conduct or for business reasons. In the case of business reasons, the dismissal is subject to selection based on social criteria if more than one worker is affected by the planned dismissal. This means that, when several comparable jobs are at risk, older workers, workers with the longest tenure and workers with family obligations or with a significant disability have the best chance of not being dismissed.

Entitlements and obligations

Parental, maternity and paternity leave

In 2017, the federal government amended occupational health and safety regulations, merging the Law Protecting Mothers (Verordnung zum Schutz der Mütter am Arbeitsplatz) with the Maternity Protection Act (Mutterschaftsschutzgesetz, MuSchG). The new MuSchG was extended to cover young women in vocational training, internships or training for a qualification; in addition, evening work (20:00–22:00) was liberalised on the condition that women apply for permission to work and that the public authorities give permission within six weeks of the application.

In 2014, an amendment to the parental allowance scheme (Elterngeld) was enacted (starting 1 January 2015). The new scheme (Elterngeld Plus) aims to reduce the proportion of mothers staying at home for up to three years and to promote a double-earner model. It includes incentives for mothers to take up part-time employment and for fathers to reduce working time and to take a greater part in childcare.

Statutory leave arrangements

Sick leave

Under the Act on the Continuing of Remuneration (Entgeltfortzahlungsgesetz) of 1994, in terms of sick leave, the employer is obliged to pay the worker’s full wage for up to six weeks. The worker must have been employed for a minimum period of at least four weeks and on the third day of sick leave has to provide proof of their incapacity to work from a medical doctor. After six weeks, health insurance covers 70% of the gross salary in the case of long-term sickness (under the Social Code, Book V, Sozialgesetzbuch V). Termination of an employment relationship while a worker is on sick leave is prohibited unless unlawful conduct is detected.

Retirement age

In 2007, the statutory retirement age was raised from 65 to 67 years. There are no gender differences. To smooth the transition to the new retirement age, the retirement age has been progressively increasing for workers born between 1947 and 1963.

In 2014, retirement reforms were enacted. Under the new regulation, workers with 45 years of contributions to the statutory retirement scheme may retire at the age of 63 years (if they were born in 1953 or earlier) or up to 65 years (if they were born in 1963). In practice, the regulation covers predominantly male manual workers. Women born before 1952 with extended phases of non-employment because of family obligations may retire at the age of 60 years if they provide proof of 15 years of social security coverage and 10 years of paid contributions to the retirement scheme after their 40th birthday.

For workers, pay is a reward for their work and their main source of income; for employers, it is a cost of production and a focus of bargaining and legislation. This section looks at minimum wage setting in Germany.

Minimum wages

Following the 2014 MiLoG, a national minimum wage has been in place since 1 January 2015. MiLoG does not cover workers aged 18 years or younger (who instead are covered by the Youth Protection Act, Jugendschutzgesetz), trainees in vocational training or interns (who are defined as participating in qualification measures) or those who have been long-term unemployed who are in their first six months of employment. The Minimum Wage Commission (see above meets to debate if the minimum wage level should be increased, and if so by how much, based on the rise in the index of collective agreements concluded. In 2018, the commission suggested raising it to €9.91, which came into effect on 1 January 2019. In the years following, the statutory minimum wage was further increased as follows: €9.35 (1 January 2020), €9.50 (1 January 2021), €9.60 (1 July 2021), €9.82 (1 January 2022), €10.45 (1 July 2022) and €12.00 (1 October 2022). The final increase was implemented by the federal government without any recommendation from the Minimum Wage Commission.

Sectoral minimum wages (€), 2021/2022

Source: Schulten and WSI-Tarifarchiv (2022)

Collectively agreed pay outcomes

According to the WSI Collective Agreement Archive, collectively agreed pay rose by 2.7% in 2022 compared with the previous year (preliminary figures). This is in , comparison with an increase of 1.7% in 2021 and 2.0% in 2020. Collectively agreed pay in eastern Germany still remains below the western German average. After the COVID-19 pandemic, collectively agreed wages started to rise again in 2022. However, the average increase of 2.7% in 2022 was still below the increases of 2018 (3%) and 2019 (2.9%). This is partly because social partners often resorted to granting employees one-off payments instead of or in combination with more moderate wage increases during the pandemic.

Working time is ‘any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice’ (Directive 2003/88/EC). This section briefly summarises the regulation of and issues regarding working time, overtime, part-time work and working time flexibility in Germany.

Working time regulation

Working time is regulated under the Working Time Act (Arbeitszeitgesetz, ArbZG), which is based on European regulation. ArbZG does not cover civil servants (who are covered by ordinances of the Länder), workers in the transport sectors (who are covered by other national, European or international regulations), workers in liturgical services (who are covered by church law) and self-employed workers (who are not subject to working time regulation). The ArbZG can be opted out of via collective agreements and – under the condition of an opening clause in the collective agreement – via works council agreements. If neither a collective agreement nor a works council is in place, the employer may turn to the public authorities for authorisation to deviate from ArbZG. This can be granted in cases of urgency.

ArbZG stipulates an eight-hour working day and 11 hours of rest. Weekly working time can be extended to a maximum of 60 hours (given that Saturday is a working day) under the condition of an adjustment time of six months (the EU Working Time Directive stipulates four months). ArbZG allows sectors with high proportions of stand-by service workers to deviate from the regulations on resting periods (for example in hospitals, nursing care, and hotels and restaurants) and to extend weekly working time to more than 60 hours (including stand-by work).

Agreed working time is strongly influenced by sectoral collective agreements, which define monthly or weekly working time, rest periods and breaks, the number of holidays and hours of shift work and night work. There is a current trend of concluding working time accounts or leave regulations by sectoral collective agreements. At establishment level, co-determination rights by the works council and work agreements concluded by worker representatives and management play dominant roles in determining working hours, overtime regulations, flexible working time arrangements and mobile working.

Overtime regulation

Under ArbZG, employers have the right to demand overtime work in the case of urgent extraordinary business needs or if the individual employment/work contract contains a specific provision for overtime.

Under ArbZG, the extension of working time (which is referred to as ‘additional work’ (Mehrarbeit)) beyond the statutory norm falls within the remit of collective bargaining. Works councils and management hold the right to conclude extensions beyond the agreed norm. Overtime work (Mehrarbeit) lies beyond the threshold of the negotiated norm. The agreements settle the form of compensation (time off or remuneration).

Part-time work

Part-time work is a widespread form of female employment in Germany. In response to the male breadwinner/single-earner model of western Germany, the labour market reforms of the early 2000s promoted part-time work as a way of increasing employment among women. The EU Labour Force Survey figures show that, in 2021, 47.1% of female employees worked part time, compared with 10.2% of male employees. Part-time work in Germany in 2021 accounted for 27.9% of all employment, a much higher proportion than the EU average for the same period (17.2%). Part-time work decreased as a proportion of total employment in 2020, but recovered in 2021 to its pre-pandemic level. Specifically, it dropped by 4.5 percentage points to 22.7% in Germany in 2020, compared with a 1.2 percentage point change in the EU27. The majority of part-time workers do not work in standard forms of employment but instead work in atypical forms in so-called mini-jobs (see the explanation of this term below).

Standard part-time work has been regulated under the Act on Part-time and Fixed-term Employment (Teilzeit und Befristungsgesetz, TzBfG) since 2000. In establishments with at least 15 employees, workers have the right to transfer from a full-time to a part-time position. Standard part-time work is liable to social security contributions, and workers’ rights are the same as those of full-time workers. A reform enabling part-time workers to go back to full-time work is under debate in Germany.

Under the Social Code, Book IV, two forms of marginal part-time work exist: part-time jobs paid up to a threshold of €520 per month (mini-jobs) and part-time jobs of very short duration (up to 70 days per year). An additional form (midi-jobs) is defined by a maximum threshold of €2,000 per month. These forms of employment are covered by the statutory retirement system, but workers may opt not to pay any contributions to the retirement or employment security schemes. Employers pay a lump sum to the social security scheme.

Night work

Article 2 of ArbZG defines night time as the time between 23:00 and 06:00 (or, in the case of bakeries, 22:00 to 05:00). Night work is defined as any work performed during at least two hours of this night time. Workers are defined as night workers if they work at night because of shift work or if they work at night for at least 48 days per year.

Shift work

ArbZG does not give a definition of shift work. Under Article 6, it states that shift work is to be designed according to the latest academic expertise on occupational health and safety requirements.

Weekend work

Work on Sunday is regulated under Articles 9 and 10 of ArbZG. Article 9 states that on Sundays and holidays work is prohibited from 00:00 to 24:00. In the case of ongoing shift work, the 24-hour rest period may start six hours before or after the normal time frame. Article 10 lists the exceptions to Article 9, namely shift workers in manufacturing (for whom compliance with Article 9 would result in the need for more staff), workers in bakeries (for a maximum of three hours), workers in certain financial services, firefighters and police, and workers in hotels and restaurants, hospitals, the live performance field, media, industrial cleaning, safety and control, transport, agriculture and others.

Rest and breaks

According to ArbZG (Article 4), work of six to nine hours’ duration is to be interrupted for at least 30 minutes and work of more than nine hours’ duration is to be interrupted for at least 45 minutes. The time of the breaks can be split in half. Workers may not work for more than six hours without a break.

According to Article 5, workers must have a rest period of at least 11 hours. In hospitals, hotels and restaurants, care, media and agriculture, the rest period can be cut by one hour under the condition of compensation within a four-week period.

Working time flexibility

Working time flexibility is a major issue that is under public debate, with employers calling for more working time flexibility and a 40-hour week, while workers complain about overtime and call for more autonomy in setting their working time. While a reform of ArbZG has been postponed, sectoral collective bargaining partners have reached various agreements on working time at sectoral and company levels, which provide for new working time arrangement or for a new option for workers to choose between a wage rise or more leave or days off.

Collective agreements and work agreements provide for various forms of working time flexibility in terms of weekend work, overtime, shift work or working time accounts. Flexitime (Gleitzeit) is one of the most long-standing forms; a new development is the provision of leave for training or care purposes (Bispinck, 2017).

Maintaining health and well-being should be a high priority for workers and employers alike. Health is an asset closely associated with a person’s quality of life and longevity, as well as their ability to work. A healthy economy depends on a healthy workforce: organisations can experience loss of productivity through the ill health of their workers. This section looks at psychosocial risks and health and safety at work in Germany.

Health and safety at work

The Federal Institute for Occupational Safety and Health (Bundesanstalt für Arbeitsmedizin und Arbeitssicherheit, BAuA) attributes the significant decline in workplace accidents in Germany to campaigns on prevention and safety policies. However, the trend also relates to a decline in manual manufacturing work (BAuA, 2014). Incidence rates are measured based on the number of accidents suffered by full-time workers (rather than the number of employees). In 2015, the number of accidents at work per 1,000 workers (full-time equivalents) stood at an all-time low of 19.7 (compared with 23 in 2008). However, the number of workplace accidents has been rising in Germany since 2016, reaching an all-time high in 2018 (24.2 accidents per 1,000 employees). In 2019 and 2020, the number of working days lost due to accidents declined again (BAuA, 2022).

Psychosocial risks

Monitoring psychosocial risks at work is a major issue in Germany, as mental disorders account for a growing number of days of absence from work and for long spells of sick leaves. The regulation in place is the Occupational Safety and Health Act (Arbeitsschutzgesetz, ArbschG), which, since December 2013, has stipulated that work may have detrimental effects on mental health and that work ought to be designed not to pose such risks. ArbschG sets out how psychosocial risks should be assessed and places the responsibility for compliance on the labour inspectorate. In cases of ongoing non-compliance, employers have to pay an administrative fine.

The implementation of ArbschG is supported by a new work programme on mental health (2013–2017) launched by the Joint German Occupational Safety and Health Strategy (Gemeinsame Deutsche Arbeitsschutzstrategie), a joint initiative by the national and the regional states and insurers.

Preceding the amendment of ArbschG, the Federal Labour Ministry, the German Trade Union Confederation (Deutscher Gewerkschaftsbund, DGB) and the Confederation of German Employer Organisations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) published a joint statement on mental health risks at workplace level and the need for prevention. An initiative by the Federal Council (the council of the 16 regional states) to enact a legislative order on psychosocial risk prevention was rejected by parliament.

Skills are the passport to employment; the more highly skilled an individual, the more employable they are. People with good skills also tend to secure better-quality jobs and better earnings. This section briefly summarises the German system for ensuring skills and employability and looks at training provision.

National system for ensuring skills and employability

One pillar of the German system is the dual vocational training scheme; it combines training in vocational schools and workplace-based training in establishments. This dual training may be complemented by workshops run by the guilds and chambers of commerce in order to compensate for the bias caused by training at only one company. These extra courses usually take three or four weeks a year. The time spent at vocational school is approximately 60 days a year, in blocks of one or two weeks at a time spread out over the year.

Occupational trends and skill needs are monitored by the Federal Institute for Education and Vocational Training (Bundesinstitut für Berufsbildung, BIBB), which is also in charge of developing qualification schemes and monitoring the supply and demand in dual training posts. The social partners are represented on the board of BIBB as well as on the boards of the Chamber of Industry and Chamber of Crafts (Industrie- und Handelskammern), which set the examinations and are involved in the design of training programmes.

Collective bargaining covers the wages and working hours of trainees and their options to be hired after termination of training. At establishment level, works councils have co-determination rights with regard to the implementation of the in-company vocational training.

Since late 2014, a trilateral alliance on vocational and further training (Allianz für Aus- und Weiterbildung) has been in place under the responsibility of the Federal Economics Minister. The alliance has sought to substantially increase the number of apprenticeship posts and internships and to cooperate with the Federal Employment Agency with regard to support measures for school-leavers and unskilled, unemployed and foreign workers from Member States and for refugees. In September 2015, the partners launched a joint statement stating that they will cooperate in the labour market integration of refugees.

Furthermore, trilateral alliances on skilled labour (Fachkräfteallianzen) operate at regional and local levels. With regard to refugees, social partners in the metal, chemical and printing sectors have extended their collective agreements on the integration and training of low-achieving school-leavers also to refugees.

Training

Legally, employers are not obliged to provide vocational training or further training. If they do so, BetrVG stipulates that they should cooperate with the works council in this regard. Under the laws of the regional states (Länder), workers have the right to take five days of education leave per year (Bildungsurlaub). This form of paid leave can be taken for adult education (languages, health, and political and societal topics) or for occupation-related training. The training has to follow set standards and the providers have to be certified to provide paid training leave. In practice, training vacations are most often taken by public sector workers and workers in large companies.

In addition, paid time off for training is also provided for in work agreements concluded by employers and works councils. This form of time off is most often taken by workers in the public sector and in large companies.

In the 2015 collective bargaining round, the social partners in the metal and electrical sectoragreed on the inclusion of paid training leave in the sectoral agreement.

The principle of equal treatment requires that all people – and, in the context of the workplace, all workers – have the right to receive the same treatment, and will not be discriminated against on the basis of criteria such as age, sex, disability, nationality, race and religion.

The legal basis of equality and non-discrimination at work in Germany is the Treaty on the Functioning of the European Union and the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz, AGG). The AGG is monitored by the Federal Anti-Discrimination Office (Antidiskriminierungsstelle des Bundes), which publishes monitoring reports. Anti-discrimination offices also exist at regional level and as local contact points. There is some indication that cases of discrimination are significantly under-reported. Juridical disputes are resolved by local and regional labour courts.

Equal pay and gender pay gap

From 2006 to 2022, the gender pay gap in Germany decreased from around 23% to 18%. In western Germany, the gender pay gap declined from 24% to 19%. In eastern Germany, the gap remained at much lower levels in the same period, namely in the region of 6% to 7%. This difference is due to the traditional male breadwinner model in western Germany, the legacy of a high proportion of mothers in short-time and part-time work, a lack of childcare facilities and a significant gap in wages between male-dominated sectors (with high collective bargaining coverage) and female-dominated sectors (with low coverage). In eastern Germany, the working time gap between men and women is low and the collective bargaining coverage of both sexes is low. The German Federal Office of Statistics (Statistisches Bundesamt) found that women benefited from the introduction of the statutory minimum wage somewhat more than men. It should also be noted that the adjusted gender pay gap rested at 7% in 2022.

In 2017, the government adopted a new law, the Transparency in Wage Structures Act (Entgelttransparenzgesetz), that aims to reduce gender pay inequality. It enables an individual to request information on the pay criteria in companies with more than 200 employees. In addition, private employers (companies with more than 500 workers) are obliged to draft reports about the pay structure and wage equality in their company. The effectiveness of this regulation is currently being evaluated by the federal government. The first results of the WSI Works Council Survey 2018 (Baumann et al, 2019) suggest only minor effects of the new law on gender equality in pay.

Quota regulations

On 1 May 2015, a new act on achieving a balanced proportion of women in managerial positions in private companies and in the public sector was enacted. The act, which has been in force since 1 January 2016, stipulates a 30% quota for women on company supervisory boards. Listed companies subject to parity co-determination regulation have to fill vacancies with women until the quota is reached. In 2018, this applied to about 100 companies. Other large companies that are either listed or covered by standard co-determination regulation have to design guidelines on how to reach the quota. The act also addresses companies in public ownership and stipulates that these companies should, since 2018, be aiming for 50% women in managerial positions.

By 2022, the goals of this legislation were being reached. A recent study showed that over 33% of company board members were women (FidAR, 2022). In addition, nearly 75% of the 183 companies surveyed had reached the 30% quota in 2022. This is significant step forward in comparison with former years. In 2019, less than a third (28–30%) of the co-determined listed companies had reached the 30% quota (FidAR, 2019).

A second quota regulation affects disabled workers. Under Article 71 of the Social Code, Book IX, 5% of the workforce of establishments with 20 workers or more have to be workers with disabilities. In 2020, nearly 75% of the companies falling under the regulation employed at least one person with severe disabilities. On average, a proportion of 4.6% was reached, but there were significant sectoral differences, with the public sector reaching a proportion of 6% while employers in construction and agriculture reached only 3% (Rehadat, 2022).

Employers

BDA and affiliates

• Confederation of German Employer Organisations (BDA)
• AGV: insurance employers
• AGV: housing employers
• AGVStahl: steel industry employers
• BGA: large and medium-sized retail employers
• textil+mode: clothing industry employers
• BDVZ: newspaper publishing employers
• BVDM: printing industry employers
• GVP: temporary work agency employers
• DEBRIV: brown coal (lignite) employers
• DEHOGA: hotel and restaurant employers
• Deutsche Bühnenverein: theatre employers
• DSSV: fitness and sport centre employers
• GDLFA: farming employers
• Gesamtmetall: metalworking and electrical industry employers
• HDB: construction employers
• HDE: retail employers
• HDH: wood and plastics employers
• HDS: shoe industry employers
• bbs: building materials employers
• Die Papierindustrie: paper industry employers
• DeSH sawmill industry employers

Other organisations

• Confederation of German Industry (BDI)
• German Confederation of Skilled Crafts (ZDH)
• German Association of Chambers of Commerce (DIHK)

Trade unions

DGB and affiliates

• German Trade Union Confederation (DGB)
• Police Union (GdP)
• Education and Science Workers’ Union (GEW)
• Building, Agricultural and Environmental Industrial Union (IG BAU)
• Mining, Chemical and Energy Industrial Union (IG BCE)
• German Metalworkers Trade Union (IG Metall)
• Food, Beverages and Catering Workers’ Union (NGG)
• Rail Workers’ Union (EVG)
• United Services Union (ver.di)

CGB and affiliates

• Christian Trade Union Federation (CGB)
• Christian Chemicals and Energy Workers’ Union (CGBCE)
• Christian Railworkers’ Union (CGDE)
• Christian Metalworkers’ Union (CGM)
• Christian Post and Telecoms Workers’ Union (CGPT)
• Christian White-collar Workers in Trade and Industry (DHV)
• Christian Public Service Workers’ Union (GÖD)
• Christian Drivers’ Union (GTL)
• Catholic Teachers’ Union (VkdL)

dbb and linked organisations

• German Civil Servants Union and Wage Union (dbb)
• Civil Service Public Forestry Workers’ Union (BDF)
• Judicial Administrators’ Union (BDR)
• Vocational School Teachers’ Union (BLBS)
• Courts Staff Union (DJG)
• Local Government Workers’ Union (komba)
• Civil Service Communication Workers’ Union (DPVKOM)
• Police Union (DPolG)
• Tax Staff Union (DSTG)
• Education And Science Workers’ Union (VBE)
• Civil Service Food, Agriculture and Environment Workers’ Union (VDL)

ULA and linked organisations

• Confederation of Executives in German Industry (ULA)
• Chemicals Executives Union (VAA) (English)
• Salaried Executives’ Union (VAF)
• Food and Agriculture Executives’ Union (VDL)
• Insurance Executives’ Union (VGA)

Other union organisations

• Doctors’ Union (Marburger Bund)
• Anarcho-syndicalist Union (FAU/IAA)

Government

• Federal Ministry for Labour and Social Affairs

Other links

• Federal Labour Institute
• Institute for Employment Research (IAB)
• Federal Statistical Office (Destatis)
• Institute for Economics and Social Science (WSI)
• Hans-Böckler-Stiftung: DGB-linked research centre
• German Statutory Accident Insurance (DGUV)

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