Membership in employers’ associations and collective bargaining coverage in Germany

Abstract

While there is a strong overlap between membership in employers’ associations and collective bargaining coverage, the overlap is far from being perfect. Using unique firm-level data from Germany, this study estimates the determinants of the membership in employers’ associations and the coverage by industry-level or firm-level agreements. The analysis particularly focuses on the various constellations of membership and collective bargaining status. The results show that firm-level worker representation, foreign ownership, work organization, firm size, age and East–West differences are important determinants. Altogether, the analysis demonstrates that a more differentiated picture of industrial relations can be obtained by considering both membership in employers’ associations and collective bargaining coverage.

On the determinants of bargaining‐free membership in German Employers' Associations

“…Members of an employers' association enjoy a series of benefits (Jirjahn, 2022b). They may gain influence on public policy, have access to selective services of the association, and can participate in interfirm networks providing opportunities for information sharing and coordination.…”

“…However, a bargaining‐free membership does not come without costs. Coverage by a collective agreement has a commitment value (Jirjahn, 2022b). A firm commits itself to pay the wages and to provide the working conditions specified in the collective agreement.…”

“…This gives rise to the question as to which firms use the option of a bargaining‐free membership. Considering both members and nonmembers of employers' associations, Jirjahn (2022b) has tried to answer the question by simultaneously examining both the decision to join an employers' association and the decision to be freed from applying the terms and conditions of an industry‐level agreement. However, most of the explanatory variables did not show a significant influence in his examination.…”

The relationship between works councils and firms’ further training provision in times of technological change

“…In firms covered by a collective bargaining agreement, the works councils could still try to increase wages, but might be less successful. Moreover, Jirjahn (2021) states that employers have an increased incentive to join employers' associations for legal advice and support in personnel policy in case a works council is present in the firm. Increased legal support and advice reduces the discretionary power of the works councils and restricts rent-seeking activities in firms that are covered by a collective bargaining agreement.…”

Social dialogue report 2022

“…This type of membership allows companies to benefit from services offered by an EBMO (such as networking opportunities and legal assistance) and take part in the development of its advocacy activities, without having to apply collective agreements negotiated by the EBMO. Firms with such a membership status usually pay reduced membership fees (Jirjahn 2021).…”