Instrument for the regulation of employment conditions and associated economic conditions, as constitutionally guaranteed by Article 9(3) of the Basic Law ( collective bargaining autonomy ) and formulated by the legislature in the Collective Agreements Act (Tarifvertragsgesetz). A collective agreement has two parts: an obligational part, which regulates the rights and obligations existing between the parties to a collective agreement , and a normative part, which contains normative provisions . The most important of the obligations arising from a collective agreement, namely, the peace obligation and the duty to exert influence , are deemed to be inherent in the very existence of the agreement. The obligational part of the agreement also includes obligations on the parties which are expressly stated, more particularly the widespread inclusion of joint dispute resolution agreements . The nomenclature of the various types of collective agreement that exist is determined by the scope of application of their regulations (association-level agreements and company agreements ) and by their content (pay agreements, general agreements on pay grades and framework agreements on employment conditions ). Other types of collective agreement include agreements on capital-forming payments or end-of-year payments, protection against rationalization and joint dispute resolution procedures, or union workplace representatives .
Collective agreements are of central importance to industrial relations. Some 5,000-7,000 collective agreements are concluded annually, although the majority amend, follow or supplement previous ones. In 1990 approximately 5,000 were concluded for the former Federal Republic of Germany, and approximately 700 for the former German Democratic Republic or new Länder of the Federal Republic. From the time when the Collective Agreements Act came into force in 1949 up to the end of 1990 some 245,000 collective agreements were concluded in the Federal Republic.
As at 1990 the number of collective agreements in force was 34,000, made up of some 24,700 association-level agreements and some 8,800 company agreements in the western Länder and some 250 association-level agreements and some 450 company agreements in the eastern Länder. These agreements applied directly to close on 11 million employees, and by virtue of the individual contract of employment their application was extended to 18.5 million employees.