21. Dec 16

Collective agreements for social security funds in construction sector no longer generally binding

The declarations from the years 2008, 2010 and 2014 concerning the universal application of the collective agreement on social security procedures in the construction sector have been overturned and declared invalid by the Bundesarbeitsgericht (BAG), Germany’s Federal Labour Court.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The Bundesarbeitsgericht’s recent judgments on the declarations of universal applicability [Allgemeinverbindlicherklärungen] (AVE) in relation to the collective agreement on social security procedures in the construction industry could have far-reaching consequences. In its rulings of September 21, the BAG declared the AVE from May 15, 2008, June 25, 2010 and March 17, 2014 invalid on the basis that the relevant legal requirements had not been met (Az.: 10 ABR 33/15 and 10 ABR 48/15). The Court reasoned that the matter had neither been looked into by Germany’s Ministerium für Arbeit und Soziales (Ministry of Labour and Social Affairs) nor had the required quota at the time of 50% been reached.

The social security procedures in the construction industry are regulated by the collective agreements that have been declared generally binding. Due to the AVE, the collective agreements apply not only to members who are bound by them but all of the workers in the construction sector who are obliged to make payments as a result. The claimants, mostly employers, that are not members of an employer organisation took the view that the legal requirements pertaining to the AVE had not been met. The BAG ruled in their favour, determining that the AVE were invalid. Consequently, only the employers that are bound by the collective agreements in the relevant period were obliged to pay contributions to the social security funds in the construction industry. Other employers were not obligated to make contributions during this period.

Employers that were not obliged to pay contributions but did in fact do so can now have someone assess whether they are entitled to have their contributions plus, where applicable, any debt interest reimbursed. To this end, they can turn to lawyers who are versed in the field of collective labour law. However, it is important to note that the BAG’s recent rulings do not concern complaint proceedings relating to contribution claims which have been concluded and are legally binding. The Court also held that proceedings could not be reopened.

For more informations: https://www.grprainer.com/en/legal-advice/employment-law.html

Do you have any questions?
Make an appointment at one of our locations in Cologne, Berlin, Dusseldorf, Frankfurt, Hamburg, Munich or Stuttgart! For International inquiries, please contact us at our offices in London or Singapore!