What is a collective agreement and who can conclude one?

A collective agreement can only be concluded by collective bargaining parties. Collective bargaining parties are trade unions, employers' associations or individual employers.

There are different types of collective agreements:

• Company collective agreements are agreements between a company and the trade union.
• Sectoral collective agreements are agreements between the employers' association and the trade union of a specific sector. They regulate the working conditions of this sector in a particular federal state and are therefore also known as regional collective agreements.
• General collective agreements: agreements between the employers' association and the trade union. They regulate longer-term, more general provisions: for example, termination/dismissal conditions, length of holidays, sick leave
• Framework collective agreements: regulate the wage and salary groups of employees
• Collective wage/salary agreements: regulate pay for a specific company or for a specific sector in a specific federal state.
• Collective wage framework agreements: description of job and qualification characteristics for the wage and salary groups and the criteria for categorisation.
• Generally binding collective agreements apply to a specific sector throughout Germany. All employers in the sector in Germany must comply with these collective agreements. The employer does not have to be a member of an employers' organisation and the employee does not have to be a member of the trade union.