Study reveals fall in bargaining coverage

New representative data, published in May 1999, indicate that just two-thirds of employees in western Germany and one-half of those in eastern Germany were covered by sectoral collective agreements in 1998.

A recent study by the Cologne Institute of Business Research (Institut der deutschen Wirtschaft Köln, IW) and the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung der Bundesanstalt für Arbeit, IAB) published in May 1999 provides new figures on collective bargaining coverage in Germany ("Tarifbindung im Wandel", S Kohaut and C Schnabel, in iw-trends 2/99). In contrast to previous analyses (DE9902196F), the new study covers all branches of the economy, including the public sector, and for the first time it also examines the coverage rates of company agreements.

The representative data from the IAB establishment panel indicate that in 1998 just one out of two establishments in western Germany and only one out of four establishments in eastern Germany were covered by industry-wide agreements. These agreements applied to 68% of western German employees and 51% of eastern German employees respectively. Coverage rates were above average in the public sector, in banking and insurance, and in mining and energy, and below average in private services. Larger firms were more likely and newly founded firms less likely to be covered by association-level agreements. In terms of employee numbers, coverage rates have fallen by more than four percentage points in western Germany since 1995 and by almost six percentage points in eastern Germany since 1996.

In 1998, about 5% of establishments in western Germany and 8% of establishments in eastern Germany were covered by company agreements. In terms of employees, coverage rates were 8% in western Germany and almost 13% in eastern Germany, indicating that larger establishments used company agreements more often than smaller ones. Small enterprises more frequently rely on individual contracts when fixing wages and working conditions. In consequence, 24% of western German employees and 37% of eastern German employees are not covered by collective agreements.

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