Federal orders from 10,000 euros only with collective agreement

Federal Labor Minister Hubertus Heil

In the 2021 coalition agreement, the SPD, Greens and FDP agreed to make the award of public contracts dependent on companies paying according to tariffs.

(Photo: IMAGO/Future Image)

Berlin In the future, the federal government should only be able to award contracts to companies that pay their employees according to collective agreements. Minister of Labor Hubertus Heil (SPD) wants to set the threshold for the order value at 10,000 euros. This emerges from a draft bill by the Ministry of Labour, which is available to the Handelsblatt. First, the editorial network Germany (RND) reported about it.

With the law, the federal government wants to do something against the falling collective bargaining agreement. According to the Institute for Labor Market and Occupational Research (IAB), in 2021 in western Germany only 27 percent of companies had a sectoral or in-house collective agreement, in the east this only applied to 18 percent of companies.

The traffic light coalition has therefore set itself the goal of anchoring a tariff loyalty regulation in federal procurement law, as has already been introduced at state level in 14 of the 16 federal states. The hope: In order not to be excluded from the enormous volume of public contracts, previously reluctant companies could submit to the collective bargaining agreement.

Huge volume of orders from the state

According to the Economic and Social Sciences Institute (WSI) of the trade union-affiliated Hans Böckler Foundation, the public sector awards contracts with a volume of 300 to 500 billion euros every year. Almost one eighth of this is accounted for by the federal government.

At the request of employers and trade unions, the Ministry of Labor intends to issue statutory ordinances specifying which binding working conditions companies must meet in order to be able to receive orders from the federal government.

>> Read here: The left relies on stronger collective bargaining agreements – the federal government does not want to shake freedom of association

This applies, for example, to remuneration, the minimum paid annual leave or minimum rest and break times. The rules should also apply to subcontractors or temporary employment agencies when they carry out work for the contractor.

If there are several collective agreements with overlapping areas of application for employees in an industry, then the more representative collective agreement is stipulated as binding in the regulation.

The contracting authorities are to randomly check adherence to the tariff, in the event of violations there is a risk of termination of the contract without notice in addition to a contractual penalty. In addition, companies can be excluded from public contracts for up to three years after the draft.

Left agree

The union political spokesman for the left-wing faction, Pascal Meiser, welcomed the plans. “Public money must no longer flow to companies that use wage dumping to gain dirty competitive advantages,” he said.

But if the federal government is serious about strengthening collective bargaining coverage, then it shouldn’t build any new hurdles into the new law, for example through an additional application process.

The locally customary collective agreements applicable at the place of performance must apply directly to all contractors, as is also regulated in the Berlin Public Procurement Act, for example, said Meiser. According to Heil’s plans, the binding rules should only be laid down in legal ordinances at the request of employers and trade unions.

More: Attracting more founders from abroad: Employers are demanding start-up visas

source site-12