FIFTH SECTION

Application no. 23646/09 GEOTECH KANCEV GMBH against Germany lodged on 29 April 2009

STATEMENT OF FACTS

The applicant, Geotech Kancev GmbH, is a limited company registered in Germany. The applicant company is represented before the Court by Ms H. Böttcher, a lawyer practising in Hamburg.

A. The circumstances of the case

The facts of the case, as submitted by the applicant, may be summarised as follows.

The applicant company is specialising in taking soil samples for geological examination. On 11 October 2007 the Wiesbaden Labour Court ordered the applicant company to pay 63,625.58 euros in welfare fund arrears for the period of time between September 2002 and March 2004 to the Supplementary Welfare Fund of the Building Trade ( Zusatzversorgungskasse für das Baugewerbe ), an entity jointly established by the employer association and the trade unions of the building trade. The applicant company was further ordered to submit copies of the wage slips issued to its employees between January 2006 and June 2007. The Labour Court considered that the applicant company was bound by the Collective Agreement on Social Welfare Proceedings in the Building Trade ( Tarifvertrag über das Sozialkassenverfahren im Baugewerbe , “VTV”), as it operated in the building industry. Under section 5 § 1 of the Law on Collective Agreements (see relevant domestic law, below), the VTV was binding on all employers in the building industry even if they did not belong to the employers ’ association.

The applicant company lodged an appeal submitting, in particular, that the general binding effect attributed to the VTV violated its right to negative freedom of association. The applicant company argued that it was obliged to contribute to a fund jointly set up by the employers ’ association and the trade union, even though it did not belong to either of these associations. The applicant company further complained that it was prevented from founding an own association for lack of funds.

On 27 June 2009 the Hessian Labour Court of Appeal rejected the applicant company ’ s appeal and did not grant leave for an appeal on points of law. Further to confirming the Labour Court ’ s reasoning, the Court of Appeal held that the general binding effect ( Allgemeinverbindlichkeit ) of the VTV did not violate the applicant company ’ s right to freedom of association. That court observed that the general binding effect did neither entail an obligation to adhere to the employer association nor to the Supplementary Welfare Fund. Referring to the case-law of the Federal Constitutional Court (decision of 15 July 1980, 1 BVR 24/74), the Labour Court of Appeal conceded that the applicant company, who was not a member of the employers ’ association, had the disadvantage of not being able to assert its interests by exercising control over the activities of the Supplementary Welfare Fund. The right to participate in the decision ‑ making process was reserved to members of the association. In so far as this fact exerted a certain pressure to become a member of the employers ’ association, this was, however, not sufficient to amount to a violation of the right to negative freedom of association.

The Court of Appeal further considered that the obligation to contribute to the Welfare Fund did not prevent the applicant company from founding its own association. The court observed, at the outset, that the major parts of the contributions due were to be reimbursed to the applicant if properly declared. Furthermore, there was no indication that the payment of these contributions would prevent the applicant company from founding an own association.

The Court of Appeal finally considered that the obligatory contribution to the Welfare Fund took account of the high fluctuation of employees in the building industries and served the public interest of allowing for a management of the employee ’ s claims by the Welfare Fund, thus preventing a distortion of competition.

On 10 December 2008 the Federal Law Court rejected the applicant company ’ s complaint against the refusal to grant leave to appeal.

On 5 February 2009 the Federal Constitutional Court refused to accept the applicant company ’ s constitutional complaint for adjudication.

B. Relevant domestic law and practice

Section 5 of the Law on Collective Agreements ( Tarifvertragsgesetz ) provides:

“(1) The Federal Ministry for Labour and Social Affairs, may, on request, and with the consent of a committee consisting of three representatives each of the head organisations of the employers and of the employees, declare a collective agreement generally binding, if

1. the employees of the employers which are bound by the collective agreement constitute no less than 50 % of the employees to which the collective agreement applies and

2. it appears to be in the public interest to grant the agreement binding effect.

...

(4) In case a collective agreement has been declared generally binding, the provisions of that agreement also apply to those employers and employees who had previously not been bound by it.

... ”

Collective agreements may contain provisions on shared facilities set up by the social partners. In view of the high fluctuation of employees in the building industries, which resulted in some employees ’ not being able to fulfil the prerequisites for obtaining certain social benefits in respect of one single employer, the employers ’ associations and trade unions concluded the Collective Agreement on Social Welfare Proceedings in the Building Trade , which set up a social welfare fund covering these social benefits.

As the Federal Ministry for Labour and Social Affairs has declared this collective agreement generally binding, all employers in the building industry are obliged to contribute an additional sum amounting to 19,8 % of the gross wages paid to its employees to the Social Welfare Fund. Since 1 January 2007 the Social Welfare Fund operates in the legal form of a stock company.

COMPLAINT

The applicant company complains under Article 11 of the Convention that the obligation to pay contributions to the Social Welfare Fund violated its right to freedom of association in two ways: Firstly, its right to negative freedom of association was violated by the fact that it had the obligation to contribute to the Social Welfare Fund in the same way as a member of the employers ’ association, but without having any competence to control the protection of its own interests within the organisation. Secondly, the obligation to contribute to the Social Welfare Fund deprived the applicant company of the necessary means to found an own employers ’ association.

The applicant further submitted that the creation of a joint Social Welfare Fund was not in the public interest and that the statements of accounts published by the Social Welfare Fund were intransparent and did not provide sufficient information on the use of the employers ’ contributions.

QUESTIONS TO THE PARTIES

1. Has there been an interference with the applicant company ’ s freedom of association, within the meaning of Article 11 § 1 of the Convention?

If so, was that interference necessary in terms of Article 11 § 2?

2. In which legal form was the Social Welfare Fund organised before 1 January 2007? Did this legal form qualify as an “association” within the meaning of Article 11 of the Convention?

3. How did the Social Welfare Fund inform third parties like the applicant, who were not members of the employer ’ s association, about the use of their funds? The Government are invited to submit supporting documents, such as the annual reports for the relevant periods of time.

4. Has there been an interference with the applicant association ’ s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1?

If so, was that interference necessary to secure the payment of taxes or other contributions or penalties?