Collective bargaining capacity: No particularities in the care sector

Proceedings

In proceedings pursuant to sec. 2a para. 1 no. 4 Labour Court Act (Arbeitsgerichtsgesetz "ArbGG") in conjunction with sec. 97 Labour Court Act, the employers' association for the care sector (Arbeitgeberverband Pflege e.V. - AGVP) applied for a declaration that ver.di lacks collective bargaining capacity in the care sector outside hospitals. Alternatively, AGVP claimed that ver.di was incapable of concluding collective agreements as a whole. The Regional Labour Court rejected these claims (Regional Labour Court of Berlin-Brandenburg dated 24 June 2021 - 21 BVL 5001/21). The Federal Labour Court has now confirmed this decision; ver.di is therefore capable of concluding collective agreements, including the care sector (Federal Labour Court dated 13 September 2022 - 1 ABR 24/21).

Collective bargaining capacity

The term "collective bargaining capacity" is not defined by law, but is presumed in secs. 2a para. 4, 97 paras. 1, 5 sentence 1 Labour Court Act, sec. 2 para. 1 Collective Bargaining Agreements Act (Tarifvertragsgesetz "TVG"). According to the case law of the Federal Labor Court, the capacity to conclude collective agreements is the legal ability to regulate working conditions with normative effect with the social counterpart by means of collective agreements (Federal Labour Court dated 28 March 2006 - 1 ABR 58/04). To do this, certain minimum requirements must be met.

Assertiveness as a decisive criterion

An employee association must have set itself the statutory task of representing the interests of its members in their capacity as employees and be willing to conclude collective agreements. It must be freely formed, free of opponents, independent and organized on an supra-company basis and recognize the applicable collective bargaining law as binding (Federal Labour Court dated 14 December 2004 - 1 ABR 51/03). In addition, the organizational structure of a trade union must enable it to perform the tasks assigned to it (Federal Labour Court dated 14 December 2004 - 1 ABR 51/03).

The criterion of assertiveness is of decisive importance: What is required is an assertiveness in the sense of a power vis-à-vis the social opponent ensuring the latter cannot ignore negotiation offers. Hence, a minimum degree of negotiating balance is required (Federal Constitutional Court dated 20 October 1981 - 1 BvR 404/78). A certain pressure potential is necessary (Federal Labour Court dated 22 June 2021 - 1 ABR 28/20).

It is not sufficient for the association to be able to assert itself in any part of its self-chosen area of responsibility. Rather, it is necessary, yet also sufficient, for the association to have collective bargaining capacity if it has assertive power and organizational capability in some significant part of the area of responsibility (Federal Labour Court dated 22 June 2021, loc. cit.; Federal Labour Court dated 13 September 2022, loc. cit.).

Principle: No partial collective bargaining capacity

According to the established case law of the Federal Labour Court, there is no such thing as partial collective bargaining capacity. An employee association is either completely or not at all capable to collectively bargain for the claimed area of competence. Collective bargaining capacity is therefore uniform and indivisible (Federal Labour Court dated 28 March2006, loc. cit.). This principle ensures the functionality of collective bargaining autonomy guaranteed by Article 9 (3) of the Constitution (Grundgesetz “GG”). If collective bargaining capacity were divisible, the question would arise for each collective agreement as to whether the association concluding it is sufficiently assertive in the respective geographical, technical and personnel areas. The resulting legal uncertainty would seriously jeopardize the functioning of collective bargaining autonomy (Federal Labour Court dated 28 March 2006, loc. cit.; Federal Labour Court dated 22 June 2021, loc. cit.).

Special feature in the care sector?

The AGVP argued that the provisions of the Posting of Employees Act (Arbeitnehmer-Entsendegesetz "AEntG") would exceptionally require the recognition of partial collective bargaining capacity in the care sector. The Federal Labour Court rejected this view: The principle of uniformity and indivisibility of collective bargaining capacity also applies to the care sector.

In this respect, the Federal Labour Court argues that secs. 10-13 of the Posting of Employees Act serve exclusively to create and enforce minimum working conditions in the care sector by means of legal ordinance and do not contain any indications for a regulation on collective bargaining capacity. Quite the opposite: The Federal Labour Court refers in particular to the fact that sec. 12 Posting of Employees Act makes use of a uniform and cross-legislative concept of trade unions by naming "trade unions", which includes the requirement of the collective bargaining capacity of this association together with the case law on the prerequisites in this regard (Federal Labour Court dated 13 September 2022, loc. cit.). Sec. 12 para. 6 of the Posting of Employees Act is also of importance: Pursuant to it, the criterion of representativeness is applied for the selection between the proposals of competing trade unions. This only applies to organizations with collective bargaining capacity.

Nothing to the contrary can be inferred from sec. 7a of the Posting of Employees Act either: The provision relates to the extension of sectoral collective agreements. Insofar as sec. 7a para. 2 and sec. 7 para. 2 of the Posting of Employees Act also refer to representativeness - in this case, however, of the collective agreements - this confirms the ruling of the Federal Labour Court: The representativeness of a collective agreement in turn presupposes that it has been concluded by a trade union and thus that it has the capacity to conclude collective agreements, sec. 2 para. 1 of the Collective Bargaining Agreements Act.

The Federal Labour Court also considers sec. 72 paras. 3a, 3b Social Security Code XI (Sozialgesetzbuch XI "SGB XI"). This provision regulates the admission to care by means of a care contract. Since 1 September 2022, care contracts may only be concluded with care facilities if they are bound by collective bargaining agreements or if they grant remuneration in line with collective bargaining requirements - even without a corresponding binding agreement. In this respect, the Federal Labour Court clarifies that it cannot be concluded from this that the principle of uniformity and indivisibility of collective bargaining capacity does not apply to the care sector.

The AGVP also argued that the employers in the care sector should constitutionally have a collective bargaining partner that is specifically strong in this sector. The Federal Labour Court also rejects this view. The requirements for the collective bargaining capacity of an association are not intended to protect the social counterpart, but rather the functioning of the collective bargaining autonomy as such. 

No decision by the Federal Labour Court on the collective bargaining capacity of ver.di as a whole

In the first instance, the Regional Labour Court of Berlin-Brandenburg (dated 24 June 2021, loc. cit.) dismissed the alternative application for a declaration of collective bargaining incapacity as unfounded.

The Federal Labour Court did not comment on the merits of the case in that regard, as the respective appeal was inadmissible due to the lack of information on which legal provisions were allegedly violated by the first-instance decision.

Procedural aspects of sec. 97 Labor Court Act

Sec. 97 Labour Court Act contains special provisions for resolution proceedings to decide on the collective bargaining capacity or the collective bargaining competence of an association. The provision serves to safeguard the autonomy of collective bargaining and as a corrective to the fact that, in principle, any employee association can participate in collective bargaining without a license (Federal Labour Court dated 14 December 2010 - 1 ABR 19/10). The regional labor courts serve as first instance of the jurisdiction in such procedures.

The Federal Labour Court has now also further contoured the procedural law under sec. 97 of the Labour Court Act. From a procedural point of view, it had previously not been clarified in particular whether an application for a determination of partial collective bargaining incapacity is admissible at all. Sec. 2a para. 1 no. 4 of the Labour Court Act mentions the "decision on collective bargaining capacity". Sec. 97 of the Labour Court Act also uses this wording ("decision on the collective bargaining capacity").

The Regional Labour Court of Berlin-Brandenburg (dated 24 June 2021, loc. cit.) had held that an application for a declaration of partial collective bargaining incapacity was admissible and argued in this respect with the objective of secs. 2a para. 1 no. 4 and 97 Labour Court Act. The objective was to create an objectified procedure with erga omnes effect with regard to the characteristic of collective bargaining capacity. This also serves the interests of the association, whose collective bargaining capacity is questioned, which are protected by Article 9 Para. 3 of the Constitution . The effect of its collective agreements would be equally endangered if only part of the association's collective bargaining capacity were denied. The term "decision on collective bargaining capacity" is therefore to be understood as a "decision on questions of collective bargaining capacity". Whether a partial inability to collectively bargain exists is a question of substantive law and thus belongs to the merits.

The Federal Labour Court (dated 13 September 2022, loc. cit.) deviates from this and classifies this as a question of admissibility. In the opinion of the Federal Labour Court, an application for a declaration of partial inability to collectively bargain is therefore already inadmissible. This is required by the purpose of the order and the erga omnes effect. The filing of an application merely aimed at the partial collective bargaining capacity of an association, which is intended by these proceedings, cannot achieve the clarification of a characteristic that is essential for participation in collective bargaining.

Classification of the Federal Labour Court decision

The Federal Labour Court's decision deserves approval in any case insofar as the requirements for collective bargaining capacity are uniform across all sectors. It is compelling that the Federal Labour Court rejects an exception with regard to partial collective bargaining capacity for the care sector. It is not at all conclusive why industry-specific parameters should play any role at all in the rejection or recognition of partial collective bargaining capacity. The following applies to all sectors without differentiation: If collective bargaining capacity were divisible, the question would arise for each collective agreement as to whether the association concluding it is sufficiently strong in terms of enforcement in the respective local, technical and personnel areas. This would create considerable legal uncertainty, which would not be compatible with the functioning of the autonomy of collective bargaining.

To the extent that the Federal Labour Court considers an application for the determination of a partial incapacity to collectively bargain to be inadmissible (rather than without merits), this view is likely not compelling. The intended clarification of collective bargaining capacity with erga omnes effect resulting from the purpose of the order can also be achieved if applications for the determination of a partial collective bargaining incapacity are always dismissed for lack of merits. In practice, however, the procedural location of the question of partial collective bargaining incapacity is unlikely to be relevant.