Martin Werding, a noted German economist, dismissed the federal Tariff‑Loyalty Act as ineffective.
In an interview with the “Rheinische Post” (Friday edition) he said:
> “Collective wage autonomy and a company’s choice-whether to join a collective agreement or not-are key elements of our labour market and competition framework”.
> The Tariff‑Loyalty Act is intended to strengthen collective autonomy by restricting that choice. In practice, experience shows it does not deliver any benefit.
Werding added that, apart from Bavaria and Saxony, every federal state already has its own tariff‑loyalty rules, which vary in scope and conditions-often linked to the size of public contracts that trigger the provisions. Analyses from the Institute of German Economists in Cologne found no evidence that these state‑level measures have increased collective binding or slowed its overall decline.
Accordingly, the law merely adds bureaucracy for firms chasing public work and drives up costs for projects in sectors with low collective binding. Werding, a member of the Federal Economic Advisory Council, made these remarks to the press.
