Federal Constitutional Court Strengthens Collective Bargaining Autonomy: Different Night Work Bonuses May Be Permissible

Free collective bargaining autonomy under Article 9 (3) sentence 1 of the German Basic Law (Grundgesetz – GG), is of paramount importance. Nevertheless, legal disputes continue to arise over the extent to which collective bargaining agreements can be reviewed by the legislature or the courts. A recent ruling by the BverfG (ruling of December 11, 2024 – Ref. 1 BvR 1109/21 and 1 BvR 1422/23) ultimately strengthens the position of the collective bargaining parties.

Background

In February 2024, the BAG ruled that the differentiation in night work bonuses stipulated in collective bargaining agreements was impermissible. Specifically, shift workers with regular night shifts received a bonus of 25 percent, while employees performing irregular night shifts received a bonus of 50 percent. The BAG ruled that this distinction violated the principle of equality (Article 3 (1) of the German Basic Law) and therefore required an “upward” adjustment of the bonuses so that shift workers would also receive the higher 50 percent. The Court argued that there was no objective justification for the disparate treatment, given that both groups performed night work.

The employers successfully challeneded this decision before the BVerfG.

Decision

The BVerfG ruled that the review and correction of the collective bargaining agreement by the BAG was impermissible. Given the fundamental principle of collective bargaining autonomy, intervention by courts is permissible only in cases where a regulation is deemed arbitrary or violates fundamental rights. The BAG review did not align with this standard.

The BVerfG determined that there was no arbitrary unequal treatment in this case, as the differentiation between regular and irregular night shifts was objectively justified. Shift workers with regular night shifts benefit, among other things, from compensatory days off, while irregular night shifts are more demanding due to their rarity and lack of predictability. This distinction justifies the different bonuses. It is important to note that, this differentiation was acknowledge by the parties involved when the collective bargaining agreement was executed. Therefore an “adjustment all the way to the top” could not be based on the intention of the collective bargaining parties. Consequently, the “adjustment all the way to the top” mandated by the BAG violated the principle of collective bargaining autonomy.

Outlook

The BVerfG decision strengthens the collective bargaining autonomy applicable in Germany, clarifies the standard of review in this regard, and provides clear guidance for employees: Distinctions that are objective and comprehensible and not arbitrary, such agreements are generally lawful. Employers should, however, ensure that their collective bargaining agreements are transparent and well-justified.

Photo: shutterstock / PeopleImages.com – Yuri A