Proposed Alteration to the Legislation Governing the Social Security System by the Commission
In a bid to protect employees and ensure good working conditions, Saxony-Anhalt's Ministry of Labor has established a digital portal for collective agreement compliance in public procurement. This modern approach is designed to facilitate procurement procedures and strengthen collective agreement coverage overall.
The portal offers up-to-date information on around 100 sector-specific collective agreements, making it a valuable resource for procuring entities and contractors alike. This initiative is part of Saxony-Anhalt's commitment to collective agreement compliance, following the lead of various federal states, including Saxony-Anhalt, which has been committed to collective agreement compliance in public procurement for years.
However, the implementation of this law is not without controversy. The collective agreement compliance law for federal public procurement in Germany, particularly affecting Saxony-Anhalt, is currently a subject of strong opposition by regional employers' associations. The law, drafted by Federal Labour Minister Bärbel Bas (SPD), requires companies awarded federal contracts worth €50,000 or more to comply with collective bargaining agreements, covering pay, vacation, and rest periods, with penalties for violations.
Employers in Saxony-Anhalt view this as unconstitutional interference in collective bargaining autonomy and detrimental to small and medium-sized enterprises (SMEs). They argue it interferes with constitutionally protected collective bargaining autonomy, threatens economic development, and disadvantages strong SMEs in eastern Germany. The federal cabinet was expected to decide on this law as of early August 2025, but the opposition from Saxony-Anhalt and other East German states highlights the tension between federal labor policy aims to enforce collective agreement standards and regional economic concerns about competitiveness and freedom of contract in public procurement.
Despite the opposition, the implementation of the portal in Saxony-Anhalt signifies a step towards strengthening collective agreement coverage. The portal allows collective agreement data to be accurately recorded in tenders, ensuring that the state only collaborates with companies that commit to paying fair wages. Furthermore, the portal significantly reduces the workload for all parties involved in procurement.
As of August 2025, around 22% of businesses in Saxony-Anhalt are covered by collective agreements, with 43% of employees working for companies covered by collective agreements - 2% more than the Eastern German average. This means that a lack of collective agreement coverage can result in a wage loss of up to one fifth. The draft stipulates that future federal public tenders will only be awarded to companies that adhere to collectively agreed minimum employment conditions.
Saxony-Anhalt's Minister of Labor, Petra Grimm-Benne, welcomes the federal cabinet's draft for a collective agreement compliance law. The information available on the portal is from 30 different economic sectors, making it a comprehensive resource for all parties involved in public procurement. The portal is a modern approach to ensuring compliance with collectively agreed minimum employment conditions in public procurement, setting a precedent for other states to follow.
The ongoing debate between federal labor policy and regional economic concerns underscores the importance of finding a balance between enforcing collective agreement standards and maintaining regional economic competitiveness. The implementation and enforcement status of the law as of August 2025 remains uncertain, with ongoing debate and opposition from regional employers.
- The ongoing debate in Saxony-Anhalt's politics centers around the federal cabinet's draft for a policy-and-legislation on collective agreement compliance in public procurement, with regional employers' associations fiercely opposing it, claiming it infringes on their collective bargaining autonomy and disadvantages small and medium-sized enterprises (SMEs).
- The digital portal established by Saxony-Anhalt's Ministry of Labor for collective agreement compliance in public procurement serves as a general-news proof point of the state's commitment to enhancing collective agreement coverage, offering sector-specific data that enables procuring entities and contractors to adhere to collectively agreed minimum employment conditions, thereby promoting fair wages and fostering a conducive work environment.
