Service Employees

Not Working For Tips

The new picket line. Kita workers on strike in Berlin. Source: dpa
The new picket line. Daycare center workers on strike on May 19 in Berlin.
  • Why it matters

    Why it matters

    If Germany’s unions and employers fail to recognize the changing nature of the country’s labor market, they will not manage to stop industrial unrest.

  • Facts


    • IG Metall was founded in 1949 and has some 2.3 million members.
    • Ver.di, the service sector union founded in 2001, now has 2.2 million members
    • The German parliament votes Friday on a law to cut the power of smaller unions.
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At a deli counter in West Berlin, a customer was trying to pay for his tub of olives and bread roll with a credit card.

“I queued at the cash point for 20 minutes and when I got to the front, it was empty,” he said apologetically.

The employees of the company responsible for refilling cash points across the German capital had gone on strike in mid-May. Berlin, the capital of one of the richest countries in Western Europe, was literally running out of money.

The cash point strike was not the only industrial action making life complicated in Germany this spring.  There have been also two train strikes, a postal strike, several airline pilot’s strikes and a kindergarten workers strike.

Germany’s famed collective bargaining agreements, when union employees and management sit down and agree to wages, working hours and holiday pay has often been for the benefit of workers in heavy industry, such as Germany’s automobile sector.

At the height of the financial crisis, for example, many workers in the sector held onto their jobs when the unions agreed to a scheme, called kurzarbeit, or short work, that cut their hours in return for fewer lay-offs.

Yet, the kindergarten worker and the cash point carrier need as much protection in the workforce as the skilled auto worker. And in a country with an ageing population, the welfare of people working in the healthcare sector will only grow in importance.

It is these sectors that are now seeing the most industrial action, as service workers increasingly feel left behind in an almost two-tier labor market.

In fact, despite the view from the outside that Germany is prosperous, real wages have stagnated since after reunification, and, partly as a result of labor reforms a decade ago, the low-paid sector, particularly prevalent in the services industry, has expanded signficantly.

“Unions in Germany have, like the rest of working place, been too slow to rearrange themselves, to recognize the needs of the service industry. Unions have been intertwined with traditional industry which is employing fewer and fewer people,” Bernd Riexinger, the co-chairman of the far-left Left Party, told Handelsblatt Global Edition.

“I think unions still have a good future ahead. They will have to organize themselves better, to attract more women.”

Bernd Riexinger, co-chairman, Left party

Mr. Riexinger points out that the German labor market is changing fast.  “We have today, for example, six million workers working in healthcare, and only 2.7 million in the car industry. This means the health sector has the biggest number of workers, and unions must work harder to organize and attract these workers,” he said.

The more traditional unions are being replaced, in terms of membership, and ability to wreak havoc on corporate Germany, by newer unions that represent the service industry, and professionals.

IG Metall, for example, the metal workers union that dominates the automotive industry,  was founded in 1949 and has some 2.3 million members. But Ver.di, the service sector union founded in 2001 now has 2.2 million members.


Video: social workers and kindergarden teachers demonstrating in Freigericht.


Their members work in the areas that affect everyday people: in kindergartens, and in Amazon warehouses. When they down tools, the daily life of the type of person who drops a child at kindergarten, catches a train to work and buys office supplies online, gets disrupted. But the nature of the service sector means that Ver.di is rarely the largest single union in a company.

The current grid lock in German industrial relations has its roots in a court ruling in June 2012, when the judges on Germany’s Federal Labor Court ruled in favor of the Marburger Bund, Germany’s largest medical trade union, and against the principle uniformity in collective agreements.

The ruling substantially bolsters the position of sector unions like the train drivers union GDL, the Marburger Bund and the pilots’ union Cockpit, because these organizations now have the right to strike for their interests, even if there are collective bargaining agreements with other unions in the companies they work for.

On Friday, the German parliament votes on whether to break the gridlock by voting on the Tarifeinheitsgesetz, a law that will require companies to negotiate only with a single union, the one that represents the most employees. Under the new law smaller unions will not have the power to call strikes. If the parliamentary vote is passed, it will come into effect over the summer.

If it does, GDL, for example, would not be able to call strikes because most Deutsche Bahn staff belong to the larger EVG union. One of the unions core demands, in fact, is that it can represent other staff aside from drivers.

Carola Frege, professor in comparative employment relations at the London School of Economics, said the actions of unions such as the GDL had made such a law necessary. Germany’s rail network has been hit by nine strikes in the last 11 months, including a five day strike earlier in May which was the longest in Deutsche Bahn’s 21 year history and public patience with the train drivers is wearing thin.

“It’s very unfortunate as the GDL is not acting in the best interest of the Deutsche Bahn employees at all. It’s a sinister power fight which hurts the entire union landscape in Germany,” she told Handelsblatt Global Edition. “Either they finally give in because their money is running out or we indeed need a law. We need union cooperation and solidarity and not internal power struggles which hurt the common interest of unions.”

Ms. Frege also said the GDL’s battles were ultimately undermining support for other workers, who had more legitimate grievances.

“The kindergarden strike is a completely different matter and here I find that they have a legitimate demand. They are without doubt paid badly, also compared to primary school teachers, and they are increasingly providing an essential service to our society and economy,” she said.

Mr. Riexinger said that while unions did need to reform the way they operated, the Tarifeinheitsgesetz is an attack on the right to strike.

“It is not just an attack on the smaller unions but also ones with lots of members like Ver.di,” he said. I don’t believe that small unions will only be hit by this legislation It will hit larger unions too. It is a hard attack on the right to strike.”

Several unions including the doctors union have already said they will fight to keep their right to strike, taking the government to court if need be. Mr. Riexinger too believes Friday’s vote will ultimately be declared unconstitutional but warned again that unions must change the way they operate.

“I think unions still have a good future ahead,” he said. “They will have to organize themselves better, to attract more women, for example, especially those who are most disadvantaged at work, like teaching assistants, health workers.”


 Meera Selva is an editor at Handelsblatt Global Edition. To contact her:

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