A Tarifvertrag (collective bargaining agreement) is a contract between a trade union and an employer or employers' association (TVG). Its legal norms apply directly and mandatorily to bound employment relationships (§ 4 TVG). Binding force arises from mutual membership or from reference clauses in the contract; a declaration of universal applicability (§ 5 TVG) can extend an agreement to non-members. The favourability principle applies.
At a glance
- The parties are a trade union and an employer or employers' association
- The normative part applies directly and mandatorily to bound employment relationships (§ 4 TVG)
- Binding force arises from mutual membership in the parties to the agreement
- Non-members are often brought in through a reference clause (Bezugnahmeklausel) in the contract
- A declaration of universal applicability can extend an agreement to outsiders (§ 5 TVG)
- Favourability principle: arrangements more favourable to the employee prevail over the agreement (§ 4 TVG)
Types of collective agreements
- Sector or association agreement (Flächen- or Verbandstarifvertrag): between a union and an employers' association, covering a whole industry and region
- Company agreement (Haus- or Firmentarifvertrag): between a union and a single company
- Framework agreement (Manteltarifvertrag): governs general, longer-lasting conditions such as working time and notice periods, as opposed to the pay agreement (Entgelttarifvertrag) that sets wages and salaries
FAQ
When am I bound by a collective agreement?
Binding force generally requires that the employee is a union member and the employer is a member of the association or itself a party to the agreement. Without mutual membership there is no direct binding force, unless the contract refers to the agreement or it has been declared universally applicable.
What is a Bezugnahmeklausel?
A clause in the employment contract that refers to a collective agreement. It lets employers apply the agreed terms to employees who are not union members. The content then applies by virtue of the contract, not of collective binding force.
What does a declaration of universal applicability mean?
The Federal Ministry of Labour and Social Affairs can, on application, declare an agreement universally applicable (§ 5 TVG). Within its scope it then also applies to employers and employees who are not otherwise bound.
What applies if the contract offers better terms?
Under the favourability principle (§ 4 TVG) the rule more favourable to the employee applies. The collective agreement sets a minimum standard that individual arrangements may exceed but not undercut.
Last updated: August 2026
This article provides general information and is not a substitute for legal advice in individual cases.
