The binding rate of employees to collective bargaining agreements and, consequently, to the agreed-upon pay standards, has significantly declined in Germany. This concern was highlighted in a report based on an answer from the Federal Government to a small inquiry submitted by the Left Party.
According to the government’s response, the number of collective bargaining agreements declared general binding for an entire industry has dropped sharply since the year 2000. Specifically, the number of applications for this general binding declaration (AVE) in 2025 was nearly 80 percent fewer than those filed in 2000, dropping from 137 applications to only 30. Over the same period, the total number of general binding agreements saw a decrease from 551 to 216.
This trend is particularly noticeable in the retail sector. While 27 AVE applications were submitted in retail in 2000, there have been none filed since 2024, according to the Federal Ministry of Labor.
The decline in collective bargaining binding is already a long-standing issue; currently, fewer than half of employees work in an enterprise governed by such agreements, compared to more than two-thirds in 2000. The AVE mechanism is designed to extend the provisions of existing agreements across entire sectors, thereby ensuring that companies not explicitly bound by the agreement still adhere to the generally better pay standards. However, the employer side holds a dual veto right regarding the AVE, a right that the government’s answer reveals is used very frequently.
Pascal Meiser, an official from the Left Party, called for a reform of the General Binding Declaration instrument. He argued that if Germany wishes to achieve the European Union’s goal of a minimum 80 percent binding rate, significantly more agreements must be declared general binding. However, he noted that the current mechanism remains ineffective. Meiser proposed that to combat the deliberate blockade tactics employed by employer associations, the application process must be simplified, and the employers’ double veto right concerning the declaration of collective agreements must be abolished.