Small change, big impact? Organisational membership rules and the exit of employers' associations from multiemployer bargaining in Germany

• DOI: http://doi.org/10.1111/1748-8583.12210
• Author: Markus Helfen,Martin Behrens
• Published date: 01 January 2019
• Date: 01 January 2019

SPECIAL ISSUE

Small change, big impact? Organisational

membership rules and the exit of employers'

associations from multiemployer bargaining in

Germany

Martin Behrens

1

|Markus Helfen

2

1

WSI, Hans‐Böckler‐Foundation, Düsseldorf,

Germany

2

Department of Organisation and Learning,

Faculty of Business and Management,

University of Innsbruck, Innsbruck, Austria

Correspondence

Martin Behrens, WSI, Hans‐Böckler‐

Foundation, Hans‐Böckler‐Str. 39, D‐40476

Düsseldorf, Germany.

Email: martin‐behrens@boeckler.de

Funding information

Hans‐Böckler‐Foundation, Grant/Award

Number: 2011‐466‐2

Abstract

German employers' associations first introduced a so‐called

“bargaining‐free”membership (BFM) category in 1990, giv-

ing companies the option to join and access services while

avoiding the obligations arising to regular members from

industry‐level collective agreements with unions. To explain

how this phenomenon contributes to change in the German

political economy, we investigate why some associations

offer their members BFM status whereas others have

refused to introduce this option. Controlling for influences

such as size and industry, our multivariate analysis of survey

data shows that four sets of influences are positively asso-

ciated with BFM: the role of courts' judicial decisions as

“door openers,”structural characteristics of diverging busi-

ness environments, the evaluation of multiemployer

bargaining by the leadership of the association, and the stra-

tegic choices of associations.

KEYWORDS

bargaining‐free membership, collective bargaining, employers'

associations, institutional change, strategic choice

1|INTRODUCTION

In the comparative political economy literature, (West) Germany is treated as emblematic of a cooperative style of

capitalism (Hall & Soskice, 2001) supportive of collaborative labour–management relations and high‐road practices

at the firm and workplace levels (Katz & Wailes, 2014). Multiemployer bargaining by employers' associations and

unions has been central to the success of this model (Turner, 1998). Traditionally, in the German collective bargaining

Received: 15 December 2016 Revised: 4 July 2018 Accepted: 12 July 2018

DOI: 10.1111/1748-8583.12210

Hum Resour Manag J. 2019;29:51–66. © 2018 John Wiley & Sons Ltdwileyonlinelibrary.com/journal/hrmj 51

system (CBS), employers' associations extend collective agreements with unions to all of their member companies

regardless of whether these are unionised or not. This mechanism explains why, with a net union density of only

17.7%, about 57.6% of the workforce are covered by collective agreements (data for the year 2013, according to

the ICTWSS database; Visser, 2016).

Although German employers' associations—along with the system of industry‐wide multiemployer collective

bargaining they are embedded in—were subject to a long period of stability (see Silvia, 2013), since the mid‐1990s,

the debate has shifted to focus on the erosion of the CBS (Bispinck, 1995; Hassel, 1999). Apart from the overall

reduction in collective bargaining coverage, the other key quantitative indicator of erosion is the continuous member-

ship decline experienced by most unions affiliated with the Federation of German Trade Unions (Deutscher

Gewerkschaftsbund, DGB), with membership of all DGB affiliates declining from a postunification high of 11.8 million

in 1991 to less than 6 million in 2017 (DGB, 2018). More qualitative indicators of erosioncan be found in the changing

nature of bargaining processes and practices. One is the introduction of opening clauses into collective agreements,

that is, clauses that limit agreements' coverage by certain criteria, and, most recently, the introduction of a statutory

federal minimum wage (Bosch, 2018). Whereas the former has been interpreted as a controlled form of decentralisa-

tion, the latter indicates that large parts of Germany's low‐wage labour market are not adequately covered by the CBS.

Our focus here is the introduction of what we term a “bargaining‐free”membership (BFM) category by

employers' associations. First introduced about 25 years ago, the slow dissemination of this new form of membership

in employers' associations is indicative of a profound change to long‐standing practices of industry‐wide collective

bargaining. The BFM category allows firms to join the association to obtain the benefits of membership, but

without becoming subject to industry‐wide collective agreements negotiated with unions, which are binding on other

member firms.

BFM directly relates to the theoretical issue of the organisational foundations of coordinated varieties of

capitalism and whether associations are drivers of institutional change processes within this variety of capitalism (Deeg

& Jackson, 2007). Traditionally, in the comparative capitalisms literature, apart from rare events of dramatic change,

change within the German political economy has been seen as incremental and denoted with terms such as “dynamic

equilibrium”(Katzenstein, 1989), “negotiated adjustment”(Thelen, 1991), or even “nontransformation”(Wallerstein,

Golden, & Lange, 1997). Because much of this work takes a macroperspective, the functioning of mesolevel actors such

as member associations has typically been assumed rather than explicitly theorised and investigated. By shifting our

focus to the association as an important part of the explanatory puzzle, we wish to add another perspective to the

analysis of processes and outcomes of institutional change. In so doing, we seek to improve our understanding of

how associations react to defection by individual members and also how they engage more deeply with the specific

mechanisms that link the microlevel of the firm

1

and management strategies with the macrolevel changes in the CBS.

We contend that seemingly small organisational changes in the internal structures and processes of associations—such

as a change in the bylaws regulating membership categories—remain beneath the analytical and empirical radar but

might have tremendous consequences for the workings of a political economy. Following the theory of organisational

path dependence (Sydow, Schreyögg, &Koch, 2009), we interpret the emergence and spread of BFM as a small event on

the organisational level, that is, an apparently minor organisational deviation in associations' bylaws, which carries a lot

of weight for the future development of collective bargaining as it turned to represent a critical juncture with

far‐reaching consequences. For the German system of multiemployer collective bargaining, the judicial sanctioning of

BFM after its cursory introduction by a few associations leaves the macrolevel (regulatory) institutions formally intact

but has set in motion a wave of defection among employers' association that negatively impinges on the reproduction

of the collective bargaining institutions along the established collaborative path.

Our following analysis seeks to build this link between mesolevel actors' strategies and motivations for change

on the one hand and the incidents and outcomes of institutional change on the other. Mesolevel (or meta‐) organi-

sations can organise their interactions with other actors in various ways (Ahrne & Brunsson, 2005). Interactions

between an association and its environment can be governed not only through markets, state regulation, community

norms, and unions but also through exercising legal action, for example, by filing lawsuits (Edelman & Suchman, 1997,

52 BEHRENS AND HELFEN