Applications for preliminary injunctions against the Act on Uniformity of Collective Agreements unsuccessful

Press Release No. 73/2015 of 09 October 2015

Order of 6 October 2015
1 BvR 1571/15, 1 BvR 1588/15, 1 BvR 1582/15

In an order published today, the First Senate of the Federal Constitutional Court has dismissed three applications for a preliminary injunction against the Act on Uniform Application of Collective Agreements (Tarifeinheitsgesetz). A particularly strict standard applies to suspending the execution of an act of Parliament. In the case at hand, the Senate did not find such grave or irreversible disadvantages, or disadvantages that would be difficult to reverse, that would require a preliminary injunction. Currently, there is no evidence available that, if the Act on Uniform Application of Collective Agreements remains in force until the Court decides the principal proceedings, the complainants will be unable to negotiate collective agreements in the longer term or that their existence will be threatened by losing too many members or with regard to their collective bargaining capacity (Tariffähigkeit). The First Senate aims at deciding the principal proceedings, the outcome of which remains open, by the end of next year.

Facts of the Case and Procedural History:

In their constitutional complaints and the applications for preliminary injunctions that were submitted at the same time, the three complainants challenge the Act on Uniform Application of Collective Agreements of 3 July 2015. They are trade unions that organise specific professions (Berufsgruppengewerkschaften). Their collective bargaining competences (Tarifzuständigkeit) overlap with those of other trade unions, which organise employment sectors and thus usually unite bigger groups of employees.

The Act on Uniform Application of Collective Agreements inserts a new rule of conflict into the law on collective agreements. This rule applies if the scope of collective agreements negotiated by different trade unions overlap in one firm (Betrieb), either as a company or a unit in a larger company. Pursuant to § 4a sec. 2 sentence 2 of the Collective Agreements Act (Tarifvertragsgesetz – TVG), a court has the power to decide that only the collective agreement applies that has been negotiated by the trade union with most members in that firm. A trade union that sees its collective agreement superseded may join the collective agreement negotiated by the majority trade union (Mehrheitsgewerkschaft) through subsequent signature.

Prior to the adoption of the Act on Uniform Application of Collective Agreements, this type of situation was not regulated by law. Up to 2010, in case of conflict between collective agreements in one firm, the courts, based on a principle of speciality, enforced the collective agreement that was most closely related to the firm regarding location, organisation, operation, and personnel, and therefore was best suited to meet the requirements and the characteristics of the firm. Since 2010, after the Federal Labour Court (Bundesarbeitsgericht) changed its jurisprudence, conflicts between collective agreements were tolerated; in cases concerning individual employees, labour courts solved conflicts between collective agreements primarily based on the principle of speciality, but without deciding that one collective agreement had priority in the entire firm. Now, according to the Act on Uniform Application of Collective Agreements, the principle of majority applies to the entire firm in cases of conflict between different collective agreements.

Key Considerations of the Senate:

The applications for preliminary injunctions are admissible but unfounded.

1. Under § 32 sec. 1 of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz – BVerfGG), the Federal Constitutional Court may provisionally decide a matter by way of a preliminary injunction if this is urgently required to avert severe disadvantage, prevent imminent violence, or for other important reasons in the interest of the common good. This decision is taken independent of the principal proceedings’ prospects of success. The Federal Constitutional Court merely weighs the consequences, by comparing the situation with and without preliminary injunction, for the time until the principal proceedings are decided. A strict standard applies, which is even stricter if the execution of an act of Parliament is to be suspended. The Federal Constitutional Court must exercise the utmost restraint in using its power to issue preliminary injunctions, as a preliminary injunction against an act of Parliament constitutes a significant interference with the original competence of the legislature.

2. Insofar it is decisive whether the disadvantages that are likely to occur if the act of Parliament remained in force, until a decision is rendered in the principal proceedings, are irreversible or very difficult to reverse. For example, a preliminary injunction would be conceivable if it were foreseeable that, with the challenged provisions remaining in force until a decision is rendered in the principal proceedings, the complainants would not be able to negotiate collective agreements in the longer term, an activity constituting an essential objective of trade unions. A preliminary injunction may also be called for if the challenged provisions remaining in force had such an impact on a trade union’s number of members that its collective bargaining capacity would be called into question. This does not currently seem to be the case.

a) Currently, there is nothing that indicates that the complainants or third parties will suffer grave or irreversible disadvantages, or disadvantages that would be difficult to reverse, in the period until a decision is rendered in the principal proceedings, which the Senate aims to do by the end of next year. The complainants consider their bargaining power to be weakened by the Act on Uniform Application of Collective Agreements, and this does constitute a disadvantage. However, the challenged Act of Parliament does not prohibit activities in the field of collective bargaining as such.

Admittedly, one complainant has brought individual cases to the attention of the Court in which employers, relying on the Act on Uniform Application of Collective Agreements, refused to negotiate or stopped a process of collective bargaining. Those are indeed grave disadvantages. However, they are to be tolerated for this limited period of time. In addition, the Act on Uniform Application of Collective Agreements does not directly regulate the lawfulness of measures of industrial action in labour disputes, which, as such, are protected by Art. 9 sec. 3 of the Basic Law (Grundgesetz – GG).

b) Currently, it is not clear whether, in the period until a decision in the principal proceedings is rendered, the rule of conflict under § 4a TVG will be applied so often that a preliminary injunction becomes indispensable. While cases of conflict might occur in this period, the parties to collective agreements have several possibilities in collective bargaining politics to avoid this situation. In addition, it cannot be ruled out that collective agreements that have been superseded would apply to past situations if the challenged rule of conflict was declared void in the principal proceedings in this case.

c) Furthermore, at least for the period until a decision in the principal proceedings is rendered, there is no sufficiently specific prognosis that the number of members of a trade union will change irreversibly or in a way that threatens the unions’ existence, nor does it necessarily follow from the application of the Act in question. There is no realistic prognosis available as to whether the complainants will lose any members, and if so how many, in the period until a decision is rendered in the principal proceedings, that they would not be able to win back. Likewise, there is no sufficiently specific expectation that the Act on Uniform Application of Collective Agreements would force trade unions to reorient themselves with respect to their organisation and policy objectives in a way that would threaten their existence. In any case, there is currently no indication that the complainants’ collective bargaining capacity and thereby their existence as collective bargaining partners would be seriously threatened.

3. The complainants are free to reapply for a preliminary injunction should the factual circumstances change significantly. The preliminary injunction‘s protective function may justify that the Senate issue a preliminary injunction ex officio without such an application by the complainants.