German bargaining system reprieved

Germany's system of collective bargaining will remain largely intact for now, although pressure on the 50-year old system seems likely to continue.

This was one of the key results of the difficult negotiations between Germany's government and opposition last month.

Bargaining on pay and conditions in Germany is normally carried out at industry level between the unions and the employers' associations, with company-based issues negotiated between the works council and the company management.

But for some time employers have wanted works councils and company management to be able vary the terms of industry agreements locally. The German political opposition, which has a majority in the upper house of the parliament, has been pushing for this as an amendment to a package of measures being promoted by the government.

In the end, however, the opposition agreed to drop its demands on collective bargaining in return for concessions elsewhere.

However, the employers have made it clear that they will continue to press for greater local flexibility.