Extension of shop opening hours sparks intense debate

In November 2006, following the example of the city state of Berlin, parliaments in the majority of German federal states (Länder) passed legislation which effectively repeals most of the restrictions of the federal Shop Closing Hours Act. As a result, it is now possible for shops in many German states to open 24 hours a day from Monday to Saturday. Shop opening on Sundays remains restricted, although some states allow shops to open for up to 10 Sundays a year. While the deregulation of shop opening hours was largely welcomed by the employers, it met with severe criticism from the United Services Union (ver.di), which fears disadvantages for shop employees, most of whom are women. Meanwhile, against the background of the extension of shop opening hours, employer organisations in the retail sector in all German states cancelled the existing framework collective agreements, with the intention of repealing or reducing the bonus payments for work during unsocial hours.

New legislation for Berlin

On 9 November 2006, the parliament of the city state of Berlin passed a new Shop Opening Hours Act (Ladenöffnungsgesetz (145Kb PDF)), introduced by the centre-left coalition government of the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) and the socialist party DieLinke.PDS. The new law allows shops to open 24 hours a day from Monday to Saturday. Shops can also open on the four Sundays in Advent (four weeks preceding Christmas) from 13.00 to 20.00, except when the fourth Sunday falls on 24 December. In addition, shops may be permitted to open on a further four Sundays if it is deemed to be in the public interest. Two more Sundays can be added on special occasions, such as for street carnivals or companies’ anniversaries. In total, therefore, Berlin retailers may be allowed to open for up to 10 Sundays a year.

The law stipulates that employees shall not work for more than two Sundays in Advent and that, under certain circumstances, single parents may be exempt from Sunday and late night working should they so wish. Extended shop opening hours are possible at airports, train stations and petrol stations as had already been the case.

Other German states follow suit

The example of Berlin was soon followed by other federal states (Länder) in Germany. In the largest German state North Rhine-Westphalia – which is governed by a coalition of the conservative Christian Democratic Party (Christlich Demokratische Union, CDU) and the liberal Free Democratic Party (Freie Demokratische Partei, FDP) – shops will also be allowed to open around the clock from Monday to Saturday. Sunday trading will be permitted for up to five hours on a maximum of four Sundays a year.

In eastern and western Germany, other states passed, or plan to pass, similar regulations which completely abolish all restrictions during the working week. Regulations vary in the extent to which Sunday trading is allowed. In the Rhineland-Palatinate state, shops are now allowed to open from 6.00 to 22.00 from Monday to Saturday, with the possibility to open 24 hours a day on eight working days a year. While Sunday trading is not allowed in principle, a number of exceptions are permitted. In Saxony, a similar regulation is planned. The most restricted regulation so far exists in Saarland where shops are only allowed to open from 6.00 to 20.00 from Monday to Saturday, with only one 24-hour opening a year permitted and Sunday trading allowed on up to four Sundays or public holidays. In Bavaria, no changes have yet been introduced to the provisions of the Shop Closing Hours Act, as the parliamentary party of the ruling conservative Christian Social Union (Christlich-Soziale Union, CSU) was unable to reach agreement on an extension of shop opening hours.

Legislative context

The legislation of the federal states effectively replaces the Shop Closing Hours Act, which came into effect in 1956. The latter act has undergone several amendments, usually to extend opening hours. In 2003, for instance, Saturday opening hours were extended until 20.00 (DE0303203F). A number of retail companies have continued to lobby for longer shop opening hours.

In August 2006, the German parliament passed new legislation which shifted the legal competence for the regulation of shop opening hours from the federal to the individual state level. This shift in competence had been demanded by a majority of federal states (DE0410202N) since 2004. The initiative of the Länder followed a Federal Constitutional Court (Bundesverfassungsgericht) ruling of June 2004 (DE0407103N); the latter stated that, while current restrictions on shop opening times were constitutional, the federal government could give the federal states the power to overhaul shop opening hours, as the regulation of shop opening times would not necessarily require uniform nationwide legislation. This court decision had been triggered by a legal challenge from a chain of nationwide department stores.

Reactions of social partners

The two major retail employer organisations – the Federal Association of Medium and Large-scale Retail Enterprises (Bundesarbeitsgemeinschaft der Mittel- und Großbetriebe des Einzelhandels, BAG) and the German Retail Federation (Hauptverband des Deutschen Einzelhandels, HDE) – cautiously welcomed the new legislation. In a press statement (in German 101Kb PDF), the President of HDE, Josef Sanktjohanser, commented that although he was in favour of removing the restrictions of the Shop Closing Hours Act in principle, he regretted that no uniform regulation had been found. The HDE president was particularly critical of the fact that differing regulations with regard to Sunday trading in many federal states might lead to competitive disadvantages for some retailers. The same view was shared by BAG. Stronger opposition to the new regulations was expressed by other employer groups. President of the Retailers’ Association in the state of Hesse, Frank Albrecht, was quoted in the media as saying that the plans to allow 24-hour shop opening constituted an attack on families, women and medium-sized enterprises.

Meanwhile, the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) remained strongly opposed to the extension of shop opening hours. In a position statement (in German), the union considered the new regulations as being especially harmful for retail employees. In particular, it opposed the extension of Sunday trading and insisted that it will challenge the new regulation regarding Sunday trading at the Bundesverfassungsgericht. The union is also convinced that the extension of shop opening hours favours the larger retailers to the detriment of small and medium-sized companies. Ver.di also expressed its disappointment that the centre-left coalition in Berlin had set a poor example for other federal states, by rushing through legislation to allow for Sunday trading before Christmas.

Effects on employment and working time

In 2005, around 2.5 million people were employed in the retail sector, about 70% of whom were women. A majority of almost 1.3 million of these employees were part-time workers. However, of these, only 580,000 (45%) had part-time jobs liable to social security contributions, whereas the remaining 713,000 worked in so-called ‘mini-jobs’ – jobs paying no more than €400 a month, which is the threshold for social security contributions. Many employers who said they would extend shop opening hours have announced that they will do so on a trial basis initially, and either use existing staff in new shift patterns or rely on the recruitment of additional temporary staff. Some employers are also offering part-time employees the opportunity to work longer hours. With regard to working time, it is expected that the extension of shop opening hours will lead to increased work at unsocial hours. The new legislation makes it possible for night shift work to be used in the retail sector, with late work on Saturdays also becoming more widespread. This is likely to cause problems, particularly for employees – mainly women – who have to care for children.

Impact on collective bargaining

Under the current collective agreements, employees working in retail are entitled to receive a bonus for work during particular hours. For example, retail workers in North Rhine-Westphalia are entitled to receive a bonus payment of 20% of wages for work carried out between the hours of 18.30 and 20.00 on Mondays to Fridays and between 14.30 and 20.00 on Saturdays. A 55% bonus has to be paid for work carried out between the hours of 20.00 and 6.00, while employees working on Sundays are entitled to receive a bonus of 120%. Similar provisions have been agreed on in other bargaining regions.

However, since the new legislation has been introduced, employer organisations in the retail sector have now cancelled all framework collective agreements across Germany, with the aim of repealing these collectively agreed bonus payments. Representatives of HDE declared that the current provisions would only hamper employers in taking full advantage of longer shop opening hours and that it would prevent companies from hiring new staff for jobs liable to social security contributions. However, ver.di is determined to defend the existing bonus payments and even wishes to expand the current provisions. The union has reminded employees that those who become union members before the collective agreements expire will continue to be covered by the current bonus payments as long as no new agreement replaces the current agreements, due to the so-called ‘after effect’ (Nachwirkung) (DE9905200F) of collective agreements. In some regions, the union reported a significant membership growth among retail workers following the extension of shop opening hours.

Heiner Dribbusch, Institute of Economic and Social Research, WSI