Wednesday, April 10, 2013

German Retail Companies Finally Challenge Rigid Labor Union Contracts

Trigger

According to an article (German language) published in the online Frankfurter Allgemeine Zeitung on 4/9/2013, some major retail companies in Germany intend not to or to refuse to renew so called “Flächentarifvertrag” (comprehensive, oppressive collective bargaining contracts between employers of a specific industry and their respective labor union covering every employee located within a large geographic region or jurisdiction).

The structure of these contracts in the retail sector are said to have been largely unchanged for over 70 years (thus dating back to the Nazi era).

German Collective Bargaining Contracts

Unfortunately, the German language article on Wikipedia about these types of contracts is anything but adequate to cover this topic.

These contracts are rigid and totally anachronistic. The federal government has the power to declare such contracts to be binding on all employers (Allgemeinverbindlichkeitserklärung).

These contracts are instruments of central planning to the advantage of large businesses and labor unions at the expense of a dynamic free market economy made up of a mix of businesses.

There Is No Good English Translation For This German Monstrosity

According to Wikipedia this German word is translated into master contract, which is simply an euphemism. 

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