The right of the collective industrial organizations to regulate terms and conditions of employment on their own responsibility and independently of any influence exercised by the state; more specifically, their right to create an appropriate system of regulation of working life, and to adjust it regularly to current economic and social developments, through the conclusion of collective agreements .

The core of this authority is protected by the Basic Law. By law, collectively agreed terms and conditions of employment apply only to members of the organizations concluding the collective agreement in question. In practice, however, they are usually applied to all employment relationships .

Thus, it is primarily the parties to a collective agreement who create a uniform system of employment conditions covering all establishments within each individual collective bargaining region. For the employees' side, the most important consequence of freedom of association (i.e. the right to organize) and autonomy of collective bargaining is that, instead of having to deal with the employer on an individual basis in negotiating their terms and conditions of employment, employees are able to unite in forming trade unions to negotiate conditions with the employers' side and, where necessary, to impose these by means of strikes . In accordance with the Basic Law, collective bargaining autonomy may not be undermined by prohibiting industrial action and replacing it by state-imposed arrangements or compulsory arbitration .

Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.