Observation (CEACR) - adoptée 1996, publiée 85ème session CIT (1997)

The Committee notes the information contained in the Government's report.

Part XIII (Common provisions), Article 69(i), of the Convention, concerning suspension of unemployment benefit. For a certain number of years, following observations made by the German Confederation of Trade Unions (DGB), the Committee has considered whether section 116 of the Federal Employment Promotion Act, as amended in 1986, is consistent with Article 69(i).

Section 116(3) as amended, permits the suspension of unemployment benefit due to workers who have lost their employment as a result of a trade dispute, but who have not participated in the dispute: (a) when the enterprise in which the persons concerned have been employed falls within the territorial and occupational scope of the collective agreement which gave rise to the dispute; and (b) when the enterprise in question does not fall within the territorial scope of the collective agreement but belongs to an occupational sector covered by it. In the latter case, benefits are only suspended if a claim which is the same - but not necessarily identical - in nature and scope to the principal claim giving rise to the dispute has been made and if the results of the dispute will in all probability be endorsed, "in essential respects", by the collective agreement which is not the subject of dispute, but which applies in the territory where the enterprise is located. The Neutrality Committee, composed of employers' and workers' representatives and the President of the Federal Labour Institute, determines whether these conditions for suspension of benefits under section 116 have been met.

In its previous comments, the Committee stressed the importance of the practical application of the amendment to section 116 in assessing compliance with Article 69(i) and requested copies of any relevant decisions of judicial bodies.

In December 1994, the DGB submitted a communication concerning the judgement of the Federal Social Tribunal published 4 October 1994 (No. BSGE, AZ: 7KeAr 1/93) which confirmed a decision of the Neutrality Committee in most respects and found that, in the circumstances of the case, the requirement provided for under section 116(3) of the Employment Promotion Act was met so as to allow the refusal of unemployment benefit in cases of work stoppage due to strike actions in other geographic regions. The DGB alleged that this decision contravenes Article 69(i) and infringed upon the right to strike.

In reply to the comments of the DGB, the Government fully endorsed the finding of the Federal Social Tribunal that section 116 was in compliance with Article 69(i) and was consistent with the principle that the State should not intervene in an industrial dispute by granting benefits to laid-off workers who will probably also benefit from the result achieved by other workers on strike. According to the Government, such intervention would come about if the State were to assume the loss of earnings risk for workers who will probably also benefit from the result achieved by other workers on strike although they are not themselves directly involved in the industrial action.

The Committee has been supplied with copies of the decisions of the Neutrality Committee (1 July 1993), the Federal Social Tribunal (4 October 1994) and the Constitutional Court (BVG, 14 April 1995), concerning section 116 of the BVG Employment Promotion Act, as amended in 1986. The Committee has examined these decisions. It notes that, according to the Federal Social Tribunal and the Constitutional Court, section 116(3)(2) requires that the Neutrality Committee find the following facts: (1) that the workers affected by the work stoppage but not involved in the strike in another geographic region must have formulated claims concerning their collective agreements and be in the process of asserting them; (2) that the principal claim they have asserted or intend to assert is "the same in nature and scope" as the principal claim asserted by the workers on strike; and (3) that "in all probability" the one set of claims will be substantially endorsed in the other. All three elements must exist throughout the duration of the denial of benefit under section 116(3)(2); a change in circumstances eliminating any one element will result in a termination of the application of the Neutrality Committee's decision upon which the Employment Office determines individual claims for benefit in case of work stoppage due to an industrial dispute. The Federal Social Tribunal found that in the case before it, all three elements clearly existed simultaneously for a limited period of time during the work stoppage, and it presented data on the high correlation in recent years in the wages and training allowances in the same wage sector between the geographic areas involved in collective bargaining more or less simultaneously in May 1993. The Federal Social Tribunal found irrelevant the fact that the industrial action in this case was taken in reaction to the employers' withdrawal from the collective agreement of 1991.

The Committee notes in particular that the Federal Social Tribunal considered the principal claim in a strike to be that for which the trade union mobilizes its membership with a view to industrial action, and which has predominantly characterized that action. The principal demands in each geographic sector must be the same in terms of nature (i.e. its objective) and scope (i.e. its extent), without necessarily being identical: according to the Federal Social Tribunal, the legislative intent was to indicate that the word "same" did not imply that the claims were fully equivalent in every detail; however, "same" should be considered in each individual situation to determine the economic importance of the claim. The Federal Social Tribunal emphasized that the term "same" should be interpreted narrowly: "(t)he claim made and the action's principal demands have to be so close to each other that they almost entirely correspond." Although the Federal Social Tribunal considered that the differences in the kind of agreement proposed (company level, sectoral level, etc.) did not have any bearing on the determination of similarity of claims, it stressed that such differences should be scrutinized in connection with the assessment of probability.

Lastly, according to the Federal Social Tribunal, the Neutrality Committee has no flexibility margin or prerogative of evaluation, when it decides whether the result of the dispute in one sector will probably be transferred to the other; and its forecasts are subject to judicial review. The forecast must stand up to a stringent analysis and the conclusions must appear highly probable on the basis of specific information and experience. The Constitutional Court generally affirmed the Federal Social Tribunal's ruling and held that section 116 was consistent with the German Constitution, based on the facts of the case before it.

The Committee recalls that in its previous observations, especially the 1965 observation addressed to Germany, it has discussed at length the meaning of "as a direct result of a work stoppage" contained in Article 69(i). This wording is intended to distinguish between workers who have little or no interest in the outcome of a trade dispute and therefore should not have to bear the risk of such an action, and those who have a substantial interest in the outcome of the trade dispute and therefore may more reasonably be expected to shoulder the burden along with the workers on strike. As the Committee has stated in previous comments, the key issue is whether the trade dispute is likely to influence the claimants' conditions of work. In this respect it considers that the standard of "in all probability" applied in section 116(3)(2)(b) distinguishes adequately between interested and uninterested workers. The Committee also considers that the assessment of whether the claims are the "same in nature and scope" to be a key issue in evaluating compliance of section 116 with Article 69(i). The Committee is aware that the amendment to section 116(3), is likely to affect adversely entitlement to unemployment benefit during industrial action but, based on the Federal Social Trinbunal's findings of fact, it appears that the suspension of benefit in this specific case was not inconsistent with the provisions of the Convention. In this respect, however, the Committee again draws attention to the Federal Social Tribunal's statement that the term "same" must be determined in each individual case, and it would appreciate being kept informed of any future rulings on section 116.