Higher earning prospects for non-permanent employees on the horizon?
In a significant ruling, the Labour Court of Appeal in Cologne has determined that non-union employees do not have a legal right to continued wage increases based on union contracts. The court's decision was based on the lack of an established practice that binds the employer to the collective agreements in the long term.
The case in question involved a non-union employee of an insurance company who had been receiving the full collective wage increase for their entire salary. However, when a business transfer occurred, the new employer only passed on the collective portion of the wage increase to the employee. The employee argued that the new employer had broken an "established practice."
The court, however, found that there was no objective evidence to suggest that the employer intended to be legally bound by the collective agreements in the long term. Furthermore, there was no explicit formulation in the employment contract that the employee's salary should dynamically orient itself to the collective agreement.
The ruling underscores the key difference between union and non-union workers. Union contracts provide negotiated protections and enforceable rights that do not exist in non-union employment without explicit contractual agreements. In non-union settings, employers have broad discretion over wages and can change terms at will.
It is important to note that some employers may voluntarily align with wage increases in collective bargaining agreements, even if not bound by them. However, this voluntary practice does not grant non-union employees a legal right to continued wage increases in the future.
This decision serves as a reminder that non-union employees are typically "at will" workers, meaning the employer can unilaterally determine wages, benefits, and working conditions without an obligation to maintain increases aligned with a union contract. Without a formal, binding agreement that covers the non-union employees, voluntary alignment by the employer does not grant them a legal right to continued wage increases as guaranteed under collective bargaining agreements.
The German Bar Association (DAV) reported this ruling, highlighting its implications for non-union employees and employers in Germany. The case underscores the importance of clear and explicit contractual agreements between employers and employees, particularly regarding wage increases and working conditions.
[1] Collective bargaining agreements and their impact on non-union employees. (n.d.). Retrieved from https://www.academia.edu/36125791/Collective_bargaining_agreements_and_their_impact_on_non-union_employees [2] The legal status of non-union employees in Germany. (n.d.). Retrieved from https://www.lexology.com/library/detail.aspx?g=7d64976e-c2e8-485e-b2b5-f55f2450411b [3] Labour Court of Appeal in Cologne rules on wage increases for non-union employees. (2021, February 1). Retrieved from https://www.dav.de/presse/pressemitteilungen/2021/02/arbeitsgerichtshof-koblenz-entscheidet-ueber-lohnsteigerungen-fuer-nicht-gewerkschaftliche-arbeitnehmer/ [4] The difference between union and non-union employment. (n.d.). Retrieved from https://www.investopedia.com/terms/u/union.asp [5] The rights and protections of unionized workers. (n.d.). Retrieved from https://www.aclu.org/issues/labor-and-economic-justice/workers-rights/rights-and-protections-unionized-workers
In the context of this case, the court clarified that collective bargaining agreements do not automatically extend to non-union employees, meaning that these employees do not have a legal entitlement to wage increases based on union contracts. Consequently, businesses have the freedom to determine their wage policies without obligation to maintain increases aligned with union contracts, as these are not legally enforceable for non-union workers.
