New law to extend shop opening hours

In March 2003, the first chamber of the German parliament adopted a bill on the extension of shop opening hours on Saturdays. The new law, once approved by the second chamber, will allow shops to open until 20.00 on Saturdays (currently 16.00). The initiative has been welcomed by retailers' associations, although they argued for even longer opening hours, whereas trade unions, supported by church organisations, opposed any extension of shop opening hours, which they see as damaging the working conditions of retail employees.

On 13 March 2003, the 'red-Green' majority in the first chamber of parliament (Bundestag) - composed of the two parties in the coalition government, the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) and Alliance 90/The Greens (Bündnis 90/Die Grünen) - adopted a bill for a new Law on the Extension of Shop Opening Hours on Saturdays (Gesetz zur Verlängerung der Ladenöffnung an Samstagen). The opposition Christian Democratic Party (Christlich Demokratische Union, CDU) and its Bavarian counterpart, the Christian Social Union (Christlich Soziale Union, CSU), favoured longer opening hours during the week, whereas the Free Democratic Party (Freie Demokratische Partei, FDP) wanted to repeal the entire Shop Closing Hours Act (Ladenschlussgesetz).

Although the bill - first announced in December 2002 - still has to pass the second chamber of parliament, the Bundesrat, which represents the federal states' governments (Länder), it does not require the consent of the Bundesrat. The government would like the new law to come into force on 1 June 2003.

The law will alter a number of provisions of the Shop Closing Hours Act, as follows:

  • retailers will be allowed to open their shops from Monday to Saturday from 06.00 to 20.00 - currently the general closing time is 20.00 from Monday to Friday and 16.00 on Saturdays, with the exception of the four Saturdays preceding Christmas when shops are able to stay open until 18.00;
  • the current provision that shops which open on Sundays have to close the preceding Saturday at 14.00 will be repealed;
  • barbers' shops and hairdressers will no longer come under the Shop Closing Hours Act; and
  • retail employees will be entitled to one Saturday off per month.

Since the last legal changes in 1996, further deregulation of shop opening hours has been a political issue (DE9912230F). Whereas employers' associations have lobbied for longer opening hours, the main opposition to any change has come from the Unified Service Sector Union (Vereinte Dienstleistungsgewerkschaft, ver.di).

Government's position

The intention of the government, as outlined in the explanatory statement attached to the bill, is to enable retailers to meet consumer demands better. The government recognises that German retail turnover has grown considerably slower than the rest of the economy in recent years and that employment in retail is declining at a rate of between 20,000 and 30,000 jobs per year. The government wants to stimulate economic growth in retail and argues that longer opening hours on Saturdays will provide retailers with opportunities for higher turnover and thus help to maintain employment.

The government considered the abolition of the provision obliging shops which open on Sundays to close at 14.00 on the previous Saturday as necessary in order to harmonise opening hours on Saturdays and to remove a barrier against legal Sunday trading.

The government conceded that the Shop Closing Hours Act is part of the legal framework on occupational health and safety intended to protect shop workers from excessive working times and unsocial hours. It argued, however, that this protection was sufficiently secured both by the Working Time Act (Arbeitszeitgesetz) and existing collective agreements in retail. The government therefore decided that the relaxation of the current regulations against unsocial hours - as a consequence of the new legislation - was acceptable in view of the added advantages for consumers and the prospect of economic growth. In the face of public protest by trade unions, church organisations and retail employees and some concern amongst Social Democratic members of parliament, the bill was amended during the parliamentary consultation in the Committee on Economic Affairs and Employment (Ausschuss für Wirtschaft und Arbeit) to entitle all retail employees to at least one Saturday off per month.

Employers' position

In a public hearing before the parliamentary Committee on Economic Affairs and Employment on 10 March 2003, the two major retail employers' associations, 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), both welcomed the government's initiative as a step in the right direction, but argued for further extensions of shop opening hours. In the detail of their positions, however, there were considerable differences between the two associations.

BAG campaigned for a differentiated extension of shop opening hours, allowing shops located in town centres to open until 22.00 while keeping the closing time for out-of-town shops at 20.00. This so-called 'town-centre privilege' (City-Privileg) was aimed at strengthening the competitiveness of shops in town centres and preventing a further decline in the number of shops and employees in those locations. BAG promoted its proposal as a means to 'revitalise' high streets.

HDE favoured the abolition of all restrictions on shop opening hours from Monday to Saturday, thus enabling shops to be open 24 hours a day if employers so wish. In contrast to BAG, HDE was strictly opposed to any privileged treatment of town-centre shops. It argued that this would discriminate against other locations, lead to confusion among customers and thus damage the retail industry as a whole.

With respect to working conditions, both employers' associations did not see any disadvantages for employees from the new rules. Both argued that existing laws and collective agreements would sufficiently prevent employees from working excessive and unsocial hours. Indeed, BAG holds the view that longer shop opening hours would provide employees, men and women alike, with even better opportunities to adjust their working times to their individual demands. Both HDE and BAG regard the high proportion of women in the industry as an indicator that women- and family-friendly working time arrangements already exist.

Trade unions' position

Ver.di, the trade union affiliated to the German Trade Union Federation (Deutscher Gewerkschaftsbund, DGB) which organises retail employees, strongly opposed any extension of shop opening hours. Its viewpoint was supported by DGB. Ver.di argued that, in contrast to what had been predicted by the government, employment in retail has not increased but declined since the previous extension of opening hours in 1996. A further extension would increase this trend rather than bring more jobs.

The union stressed the health and safety aspect of the Shop Closing Hours Act. Any extension of shop opening hours would damage working conditions in retail, because employees would have to work more unsocial hours. Ver.di pointed to previous studies commissioned by the federal government which had found that only 4% of retail employees wanted to work after 18.00 on Saturdays and 61% wanted shops to close at 14.00 (DE9912230F). Ver.di stated that there were already problems for women with families because schools and crèches are closed on Saturdays. Especially for the high number of lone parents amongst retail employees, these problems would increase if they were to work until Saturday evening. Many of them could not afford to pay for childcare. Furthermore, shop workers would be increasingly at risk of being assaulted in shops and on their way home on Saturday nights.

Ver.di regards the new provision entitling retail employees to one Saturday off per month as insufficient compensation for the negative implications longer shop opening hours have for workers.

Verdi' s campaign against the extension of shop opening hours was supported by a number of Catholic and Protestant church organisations, which also signed a call to participate at a rally against the bill on 9 March 2003 in Berlin. Like ver.di, they regard the extension of shop opening hours on Saturdays as a further step towards eroding the Shop Closing Hours Act and its rather strict limits on Sunday trading.

The ver.di campaign and the protest of 20,000 shop workers at the rally on 9 March could not prevent the adoption of the bill. The concerns of retail employees were only partly met with the new entitlement to one Saturday off per month.

Most of the media were more in favour of the arguments of the government and the employers' associations and welcomed the extension of shop opening hours as a step towards more consumer convenience and shopping flexibility.

Implications for collective agreements

The extension of opening hours on Saturdays is likely to have an effect on a number of collective agreements. Employers have given notice that they want to terminate all bonus pay for working unsocial hours on Saturdays. These bonus payments were agreed after the last extension of shop opening hours in 1996, and entitle employees working on Saturdays to bonus pay for the hours from 14.00 to 16.00. Employers now claim that working on Saturdays can no longer be regarded as any different from working on Mondays to Fridays and therefore no longer justifies any particular bonus. Ver.di strongly opposes this view. It remains to be seen what will be agreed when the collective agreements concerned are renegotiated in the near future.

The Collective Agreements Act (Tarifvertragsgesetz) provides that existing provisions remain valid until a new agreement is reached (DE9905200F). Therefore, in the event that no agreement between the employers' associations and Ver.di is reached, employees who work within the limits set by existing collective agreements will remain entitled to bonus pay but only for the hours from 14.00 to 16.00 on Saturdays.

More and more retail employees, however, work outside the limits set by a collective agreement because bargaining coverage in retail has declined in the last decade. One reason for this is that the collective agreements have no longer been extended as they used to be. Furthermore, many retailers have either left the employers' associations altogether or taken out 'non-coverage-membership' ('Ohne-Tarifvertrag', OT-Mitgliedschaft - DE0212202F) allowing them not be bound to collective agreements signed by the association concerned.

Commentary

The new law pursues a general trend towards extended shop opening hours which already characterised previous amendments of the Shop Closing Hours Act. Equally, this new legislation meets the demands of employers more than those of shop workers. Many of the more than 2.5 million retail employees in Germany will now have to face new working time arrangements which for many of them will bring an obligation to work more unsocial hours on Saturday evenings. Despite being regarded as insufficient by ver.di, the provision to entitle shop workers to at least one Saturday off per month might have some effect in securing a minimum of social life at weekends for retail employees, given the declining collective bargaining coverage in retail. Sunday trading is likely to expand as one important barrier - the obligation to close on the preceding Saturday at 14.00 - is removed. Evidence from previous extensions of shop opening hours does not lend support to the assumption that overall employment in the retail sector will be stabilised let alone increased as a consequence of the new legislation. (Heiner Dribbusch, Institute for Economic and Social Research, WSI)

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