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Quality of employment

Dimension 5: Social dialogue

Information on Dimension 5

Social dialogue

Labour relations constitute the institutionalised relationship between employers and employees, and may exist at several levels. In Germany, the labour relations are organised at company level between works councils and management and at branch level between trade unions and employers' associations. Here, for example, arrangements are made to regulate the specific working conditions, or collective agreements are concluded that are essential for determining salaries or working hours. During recent years collective agreements were concluded more often with opening clauses which increases the importance of arrangements at establishment level. The freedom to strike allows the workers to given more weight to their interests.

The representation of employee’s interests at the company and branch levels allow e.g. minimum standards in working conditions and payments as well as the possibility to participate in professional training. By this, they can contribute substantially to the quality of employment.

Branch-specific collective agreements

What is the proportion of employees whose job is regulated by a collective agreement?
Collective agreements govern pay, working hours and other working conditions. They may be negotiated for companies or economic branches. For persons employed in establishments with a collective agreement, minimum standards apply, although branch-specific collective agreements involve manifold opening clauses.

Collective bargaining coverage markedly higher in the West

Collective bargaining coverage of employeesEnlarge picture

For 50.8% of the employees in the old Länder, their job was regulated by a branch-specific collective agreement in 2016. Company agreements applied to 7.5% of the employees. In the new Länder, the collective bargaining coverage was considerably lower. Branch-specific collective agreements applied to 36.3% of the employees there. 10.9% worked in enterprises with company agreements. 41.7% of the employees in the old Länder and 52.8% of the employees in the new Länder worked in companies without any collective agreements.


Collective agreements decreasing

The development of collective agreements shows a downward trend in both the new and the old Länder. In 1998, 76% of the employees in the former territory of the Federal Republic of Germany were covered by a collective agreement. Since then the coverage decreased by 18 percentage points until the year 2016. In the new Länder the decrease was slightly smaller showing 16 percentage points decrease since 1998 (63%).

Collective bargaining coverage differs greatly between branches

Collective bargaining coverage differs widely between branches, while the importance for the individual branches has changed little from year to year. For years, collective bargaining coverage has been well above average (77%) in industry and manufacturing sectors with traditionally high trade union membership levels and also in financial and insurance activities. Collective bargaining coverage plays a minor role especially in information and communication sector (17%).

Share of employees covered by collective agreements by company size
2016, in %
Companies with … to … employees Branch-specific agreement
Former territory
of the Federal
Republic of
Germany
New
Länder
Source: Panel of Establishments (IAB) (2016).
1 to 9 employees2616
10 to 49 employees4031
50 to 199 employees5244
200 to 499 employees6246
500 and more employees7559
Total5136

Share of employees covered by collective agreements increases with company size

An important role plays the size of the company. In small companies with one to nine employees the coverage rate is lowest at 26% in the old Länder and 16% in the new Länder. The share increases parallel to the company size. In companies with more than 500 employees, the rate is highest at 75% in the old Länder and 59% in the new Länder.


Information on the Indicator

Description or definition
Percentage of employees whose company is regulated by a collective agreement or who have own collective agreements in all employees.

Source
Institut for Employment Research (IAB) - Panel of Establishments

Information for interpretation
For methodological information on the Institut for Employment Research (IAB) please refer to: The IAB Establishment Panel.

Employee representative bodies

How big is the share of employees who are represented by employee representatives? An indicator of the social dialogue at the establishment level is the share of employees for whom there is an employee representative body.
Works councils in companies and in the public service are involved in staff decisions and, representing the employees, conclude agreements with the employers.

Employee representative bodies more widespread in public service than in the private sector

Share of employees represented by work councils by number of employeesEnlarge picture

In 2016, a total 41,2% of the employees of the private sector in Germany were represented by employee representative bodies. Works councils are elected in establishments with more than five persons employed. In the public service, the share of employees for whom there are staff councils was 91.0%, which is more than twice.



Employees1 in companies with work councils in 2016
in %
Economic sectorGermany

1 Employees in private companies with at least 5 employees
(excluding agriculture and non-profit organizations).

Source: Panel of Establishments (IAB) 2016.

Energy/water/waste & mining and quarrying81.1
Manufacturing65.7
Construction16.4
Wholesale and retail trade30.0
Transportation & storage51.4
Information & communication42.8
Finance and insurance activities69.2
Hospitality & other services12.7
Human health & education44.2
Economic, scientific and professional services30.4
Total42.6

Chance of having a works council increasing with company size

The firm size plays an important role, too: Only 9% of the persons employed in establishments with 5 to 50 employees had a works council. The share rises with the firm size, reaching 88.5% in western Germany and 87% in establishments with more than 500 employees.

Employee representatives rate lower in the new Länder

In the new Länder employee representatives (33.9%) were less common than in the former territory of the Federal Republic of Germany (42.7%). Especially in medium-sized companies with 101 to 199 and 200 to 500 employees, the employees of the new Länder are represented less frequently by works councils than in the Western Länder. However, in companies with more than 500 employees, the coverage rate in the new Länder was higher at 94.9% than in the west (88.1%).


Information on the Indicator

Description or definition
Percentage of employees whose company has a work council in all employees.

Source
Institut for Employment Research (IAB) - Panel of Establishments

Information for interpretation
For methodological information on the Institut for Employment Research (IAB) please refer to: The IAB Establishment Panel.

Working days lost through strikes or lockouts

The indicator shows the annual number of working days lost through strikes or lockouts per 1,000 employees.

When considering strikes and lockouts, the various national forms of the social dialogue must be taken into account. In Germany, employees usually strike after failed negotiations for new collective agreements. As the most frequent form in Germany are regional collective agreements, which are binding for all enterprises of a specific branch in a specific region and also apply to employees who are not members of the trade union, strikes are rather rare. In many cases, regional collective agreements are subsequently adopted in other regions (pilot collective agreement). This shows that employer and employee representative bodies in Germany are rather consensus oriented.

The right to strike is a fundamental right of employees to add emphasis to their demands. However, frequent strikes may reflect bad working conditions.

The figures used here relate to strikes and lockouts reported by employers to the Federal Employment Agency.

Strike days declining again after record year 2015

In Germany, in 2016, an average of 5.4 working days per 1,000 employees lost by strikes. This shows that there were significantly fewer strikes in 2016 than in the record year 2015, which resulted in 28.3 days of strike per 1,000 employees. In 2006 there was also a relatively high strike rate, with an average of 12.2 days. whereas in 2,000 less than on working day (0.3) per 1,000 employees was lost due to strikes.

Number of strike days depends on economic branch

Average number of working days lost through strikes or lockoutsEnlarge picture

The average number of strike days depends on the number and size of the economic branches on strike. The impact of the strikes, especially the impact on the population, are very different. For example, 87,500 lost days were recorded in manufacturing in 2016, which was caused by 156,300 employees and related to 241 companies. In contrast are the conflicts in the information and communication sector. Here, only five companies were hit by strike, which was corresponding to a group of 270 employees. However, the total number of lost working days was 10,700 days in 2016.



Average number of working days lost through strikes or lockouts in 2016
per 1,000 employees
Economic sectorAverage number
of working days lost
Source: Federal Employment Agency and Employment Accounts.
Manufacturing12.0
Manufacturing industry0.6
Trade, transportation and hospitality7.0
Information and communication9.7
Financial and insurance activities4.7
Business activities2.4
Public and other private services2.1
Total5.4

Strikes are short and rare in most economic branches

In most branches of economic activity, strikes occurred only sporadically so that in many years no working days were lost at all. Often, strikes are barely noticeable to the public. However, the strikes arising from periodic collective bargaining in industry, transport and the public service regularly capture the public's attention.


Information on the Indicator

Description or definition
Number of working days lost through strikes and lockouts.

Source
Strikes and lockouts: Statistics of Federal Employment Agency.
Employees: results in Employment Accounts as defined in the National Account Systems (SNA)

Information for interpretation
The figures provided by the Federal Employment Agency, of instance, on the working days not worked include undercounting. More detailed information is given in the publication to: Bundesagentur für Arbeit, Statistik.(only german) “Arbeitsmarkt in Zahlen, Streikstatistik, Nürnberg, April 2013“ in the methodological notes chapter (“Methodische Hinweise”).

© Statistisches Bundesamt (Destatis), 2019

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