Allgemeinverbindlich

Allgemeinverbindlich refers to the status of a collective agreement (Tarifvertrag) that is binding for all employers and employees in a given sector or region, even if they are not party to the agreement. In Germany, such general binding effects are provided by the Tarifvertragsgesetz (TVG). When a tariff agreement is declared generally binding (Allgemeinverbindlicherklärung) by the Federal Ministry of Labour and Social Affairs (BMAS), its provisions apply across the specified scope.

The declaration process can be initiated by signatory trade unions and employers’ associations or by the ministry on its own initiative. The decision rests on criteria intended to ensure broad coverage of the affected workforce and the public interest in uniform wages and working conditions. The declaration can cover a national or regional sector, and its legal effect extends to all employers and employees within the defined area.

The generally binding tariff agreement sets minimum terms such as wages, working hours and leave. Employers must comply with these minimum standards even if they are not members of the signatory associations. If an individual employment contract or a more favorable collective agreement provides better conditions, those terms typically remain valid; the generally binding rule establishes a floor rather than a ceiling.

Significance and use: Allgemeinverbindlichkeit aims to prevent wage and condition dumping and to stabilize collective bargaining results, especially in sectors with fragmented bargaining structures or many small employers. It serves to equalize competitive conditions and to ensure a baseline level of protection for workers across the covered area.