The German Industrial Relations Law and the Collective Agreement Act concede extensive cartel rights to the trade unions since they suppress competition among individual employees and give to a collective institution the right to negotiate prices for human labour. The law also allows employers to form cartels for the purposes of wage negotiations. The employee cartel is allowed to set wage minimums but the employer cartel cannot set wage maximums. The cartelisation of the two sides of the labour market stands in fundamental contradiction to the principles of Ordo-liberalism and is thus an element that is foreign to the economic system of the Federal Republic of Germany. In future, autonomy in wage bargaining should be interpreted in such a way that it is at least compatible with the competitive practices of the companies. This can only be achieved if collective wage agreements function as wage guidelines that are only valid so long as nothing has been agreed between labour and management of individual firms. It is totally unacceptable that a firm’s competitors have the right to prevent wage agreements in individual firms by referring to the collective wage agreements, although the employer and the employees of the firm unanimously stand behind the individual solution. This, however, is the prevailing legal situation in Germany.
Sinn, Hans-Werner, "Der kranke Mann Europas: Diagnose und Therapie eines Kathedersozialisten" (The Sick Man of Europe: Diagnosis and Therapy of a Kathedersozialist), Deutsche Rede, Stiftung Schloss Neuhardenberg, November 2003 Downloads and Videos
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