The German Confederation of Trade Unions (DGB) has defended the planned Loyalty to Collective Agreements Act, rejecting criticism from employer associations who argue it is overly bureaucratic and infringes upon collective bargaining autonomy.
DGB Chairwoman Yasmin Fahimi dismissed the concerns as “the old song of the employers” stating that while the DGB also supports efforts to reduce bureaucracy, society requires clear and effective rules. She emphasized that the legislation does not undermine collective bargaining autonomy but, rather, reinforces its principles.
Fahimi cautioned that awarding state contracts solely to the lowest bidder undermines societal order. “The state should champion fair competition” she asserted, “and that includes ensuring fair wages.
The Federal Cabinet approved the Bundestariftreuegesetz (Federal Loyalty to Collective Agreements Act) in August. During the parliamentary review process, the DGB intends to ensure that high thresholds for direct awards within public procurement law also adhere to the principles of collective bargaining.
However, Fahimi also warned against unintended consequences, highlighting the need for a comprehensive law to expedite public procurement. Otherwise, she cautioned, the effect of the Loyalty to Collective Agreements Act could be neutralized.
The DGB Chairwoman expressed dissatisfaction with the current proposed threshold for federal-level procurements, which stands at €50,000. She indicated a desire for significantly lower thresholds to ensure broader application of the legislation.