Some non-tariff (außertariflich, AT) employment contracts in the chemical and pharmaceutical industry are little more than a grey area: they leave employees in the dark about key terms and conditions of their employment, including whether they actually qualify as AT employees in the first place. Following an initial court victory, more and more members of the IGBCE are now taking action against these practices.

A Landmark Ruling

In 2022, a ruling by the Rhineland-Palatinate Higher Labour Court (Landesarbeitsgericht Rheinland-Pfalz, Case No. 2 Sa 114/21, January 27, 2022) finally brought greater clarity to the question of which specific minimum requirements for AT salaries in the chemical industry are derived from the collective agreement.

You can read more about the details here.

The Background: An IGBCE member wanted a definitive answer to this question and, together with his union, took the case to court – successfully. Thanks to the union’s free legal protection for members in labour and social security law matters, he was able to pursue the claim without financial risk. In the second instance, that is the Rhineland-Palatinate Higher Labour Court, the employee was awarded a compensation payment from the collective bargaining-bound chemical company based on the applicable collective agreement. The decision has far-reaching implications because it spells out in detail which collectively agreed remuneration elements and AT entitlements must be considered when determining whether an AT salary genuinely exceeds the collectively agreed minimum threshold, known in Germany as the Abstandsgebot. On most respects, the judges followed the legal arguments put forward by IGBCE.

Since that ruling, some employers have “cleaned up” their AT employment contracts and compensation systems. Others, however, have simply carried on as before: using vague wording, leaving employees unclear about their required working hours, depriving them of rights and entitlements, or treating them as AT employees one moment and not the next, depending on what best serves the employer’s interests. For employees, this creates a great deal of uncertainty. After all, if you do not know whether you are an AT employee, which collective agreement applies to you, or what working hours you are expected to work, you are effectively operating in the dark. And the consequence is obvious: people who are unclear about their rights are far less able to exercise and defend them.

Sebastian Gödecke, head of the department KAAT/Zielgrupen at IGBCE, has seen the effects firsthand: “At first, employees are simply unsure about which rules actually apply to them. When their questions to HR go unanswered or they receive contradictory information, they understandably become even more uncertain or feel they are being taken advantage of. We support our members in these situations and help them understand their options. The employers’ grey-area strategy shifts risks from the employer to the employee. That is simply not acceptable.”

New Cases, Familiar Problems

Unfortunately, German labour law does not know class actions or representative lawsuits. This means that IGBCE cannot take legal action on behalf of its members. Employees affected by these issues must take action individually. Individually, but not alone: IGBCE’s legal protection covers its members and takes care of all legal matters arising in this context.

More than four years have now passed since the ruling by the Rhineland-Palatinate Higher Labour Court. That should have been enough time for companies to put their AT practices on a sound legal footing. Yet this has not happened everywhere, and it is therefore no surprise that more affected employees have decided to take action. After all, questions concerning pay, working hours, and employment status go to the heart of working life.

Further Successes for AT Employees

We spoke with two members who decided to take action.

Member 1 has been employed as an engineer at a major chemical company since 2017. He enjoys both his work and the company, but following the ruling by the Rhineland-Palatinate Higher Labour Court, he felt increasingly insecure about his employment status.

The contradictions were significant. On the one hand, he was classified within the company’s AT compensation system. On the other, he appeared not to have a genuine AT employment contract. His salary did not exceed the collectively agreed AT threshold every year, yet he was also denied collectively agreed benefits such as the Future Contribution (Zukunftsbetrag) and holiday pay (Urlaubsgeld). The member asked his employer to clarify the situation, but his questions were repeatedly sidestepped. After receiving advice from IGBCE, he decided to formally assert his claims. When the employer still failed to provide a satisfactory response, he took the case to court. The labour court found that there was a conflict between the provisions of the collective agreement and the terms of the employment contract. Under German labour law, such conflicts must be resolved through what is known as a favourability comparison (Günstigkeitsvergleich). This means that the various provisions are grouped by subject matter, such as vacation entitlement or compensation, and then compared. The purpose is to determine whether the individual AT arrangements are more advantageous for the employee in every relevant area than the corresponding collectively agreed provisions. This follows directly from Section 1 of the Chemical Industry Collective Framework Agreement (Manteltarifvertrag): viewed as a whole, AT compensation and general working conditions must exceed the minimum standards established by the collective agreement.

Against this backdrop, the parties reached a settlement already at first instance: The member receives a one-off gross payment of €7,500 as compensation for benefits he had been denied. In addition, the parties agreed that the engineer is a genuine AT employee and determined the AT salary band into which he is placed. As a result, he remains in his position, his salary will now exceed the collectively agreed compensation level every year, and he finally has clarity about his rights and obligations. Why not do it this way from the start?

Member 2’s case was somewhat different: The office administrator (Bürokauffrau) and business economist specialising in communication and management (Betriebswirtin mit der Fachrichtung Kommunikation und Management) had worked for her employer for no less than 29 years and steadily progressed to the position of Sales & Logistics Support Manager. When she was promoted to this role in 2005, she was also given a non-tariff (AT) employment contract. However, her pay remained significantly below the minimum salary level stipulated for AT employees under the collective agreement. Years of dissatisfaction ultimately contributed to her decision to look for a new job. At the same time, with the support of the IGBCE, she filed a claim with the Labour Court, seeking compensation for the payments that had been withheld from her. In response, the employer argued that her job requirements had diminished over time to such an extent that she should actually have been reclassified into the collectively agreed pay scale. Sabine Bergmann-Hendrix, legal representative of the IGBCE: „Employers often resort to this line of argument, but employees should not be discouraged by it. We demonstrated in detail that our member’s duties clearly exceeded the requirements of the highest pay grade of the collective agreement. Furthermore, we made it clear that the employer cannot simply evade its responsibilities. Established Federal Labour Court case law allows employers to specify the nature and scope of an employee’s duties, but it does not permit them to unilaterally downgrade the quality of the contractual terms. If an employer fails to assign work that is in line with the contract, in this case  AT-level tasks, this gives rise to a claim for damages. In other words, under our legal argument, the claimant was entitled either to contractual benefits under her employment agreement or to compensation for damages.“ Following these submissions, the employer’s representatives offered a settlement, which the claimant eventually accepted. The company agreed to pay her €15,000 gross. For the member, the settlement represented recognition of her many years of commitment and performance. She is pleased that she did not simply accept the situation and that, in the end, her claim was vindicated.

Conclusion

These two examples demonstrate that every case is different and must be assessed on its own merits. It is essential to take a close look at the employment contract, remuneration, company collective agreements and other relevant circumstances. Even AT employees within the same company often have different clauses or wording in their contracts. Furthermore, employees‘ objectives can vary considerably. Some primarily seek clarity, while others want to resolve the issue as quickly as possible. Depending on the individual’s situation, the key question may also be the applicable notice period or the possible entitlement to seniority-based time off under the Collective Agreement for the Chemical Industry (Altersfreizeit). That is why IGBCE Legal Protection considers not only the legal framework but also the individual’s circumstances and objectives. On this basis, it identifies possible strategies and works together with the employee to determine the most appropriate course of action.

Beyond the individual cases, every successful claim sends a clear message to employers: you cannot simply do whatever you want with AT employees! Uncertainty about working conditions must not become a business model. More and more AT employees are recognising this and joining the IGBCE. As a result, further cases are currently being heard by labour courts across Germany, including cases concerning the application of the Collective Agreement for Academic Employees in the Chemical Industry (Manteltarifvertrag für akademische Angestellte). Because some employers are attempting to play the two collective agreements off against each other. We will continue to report on developments as soon as further (landmark) decisions become available.

 

Think there may be something wrong with your AT employment conditions? Then get in touch with the KAAT Legal Hotline or your local IGBCE district office. The IGBCE will support you in reviewing your employment conditions and, if necessary, claiming what you are rightfully entitled to.

Several times a year, KAAT.net hosts online events on the topic “Is My AT Salary High Enough? Collective Agreement Minimum Standards for AT Employees in the Chemical Industry”, including events in English. We provide an overview of the rules and regulations governing AT status and compensation in the chemical and pharmaceutical industries. The events are open to everyone, including non-members! Exclusively for IGBCE members, there are follow-up consultation sessions for more individual advice.
You’ll find the dates here.