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ER processes: collective bargaining 1 There are three kinds of collective agreements: Wage agreements fix the level of wages and their periodic increases Framework agreements specify wage payment systems Umbrella agreements regulate all other conditions of employment (e.g. working time, overtime, holidays) In the majority of industries, collective bargaining takes place at regional and industry levels, for example, between the regional branches of an employer association and the union associated with that industry This structure has led to pattern bargaining: pilot agreements in the metal and electrical industry are transferred to other regions (within the same industry) and other sectors (i.e. different industries) ER processes: collective bargaining 2 Moderate level of centralisation with highly coordinated collective bargaining. Narrow wage differentials, although recently there has been a widening. Some companies negotiate enterprise agreements with unions outside of the industry-wide agreement. The coverage rate of industry-level agreements has decreased to a ‘crisis point’: less than 60% of employees in western Germany and 40% in the east are covered by industry agreements. Some companies are also ‘tacitly escaping’ collective agreements, i.e. they do not comply with certain provisions of the agreement despite being legally bound to do so. Industrial disputes Industrial disputes are usually industry-wide within a certain region and are coordinated centrally by unions and employer associations. Strikes as well as lockouts are legal. Unions take ballots before a strike, and the ballots are prescribed by union rules, not legislation as in some other countries. The number of industrial disputes is low compared with other countries due to centralisation of the collective bargaining system, the high degree of cooperation and trust that is generated through co-determination, and the existence of alternative dispute resolution mechanisms (conciliation, labour co
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