Due to the industrial revolution in countries, there has arisen a need for industrial relations. There are regions that are viewed to posses the biggest economy globally. The largest economy globally being the European economy since they control a big percentage of the global market. Germany is believed to be the Europe’s largest economy. According to Euro found (2009), the largest sector in Germany is the service sector which comprises of about 68% of the labor market. The state has transformed into a service society and hence generates about 70% of Gross Domestic Product from this sector. This was slightly less than the average Gross Domestic Product of the 15 European Union members before the enlargement (Britannica, 2010).
Germany has a five model principle that uses in the industrial relations. This system was shaped in the post World War II period in the federal state and later extended to the East Germany state after the unification (Lazlo Goerke, 2007). The five models consist of; relative centralization of collective bargaining, extensive juridification, dual structure, collective representation of all employees and ‘intermediary’ character of collective bargaining institutions (Manfred Weiss ‘et al’, 2008).
According to Etui.com (2009), the Germany industrial relation model, unions are to be organized at the industry level. It also recommends co-existence of the unions with work councils at the plant and company levels. The German dual system of industrial relations has gained a unique status in international comparative studies because of the level of exclusiveness of the two pillars of interest representation (Peter Mayer ‘et al’, 1998). This is unique among the European and the Western countries. The states that have tried the model have experienced the weakening of the union powers for example the United Kingdom and the United States of America. Others have experienced the constant conflict between unions for example France and Italy (Knut Gerlach ‘et al’, 2007).
According to Fedee (2011), other European countries have also been trying to adopt the system. For example, Netherlands, Belgium, Denmark, Austria and Sweden also have a two layer system. They are characterized by; collective bargaining and plant-level works council. These two layers often overlap due to the interrelation between them. In Germany, however, both layers are clearly sub-divided into; the role of moderating distributional conflict between trade unions and employers’ confederations and overseeing plant-level consultation (E-FERN, 2000).
The centralization nature of the model has played a vital role in the success of the German industrial relations. The five principles have different features that have greatly enhanced this. The two basics of the German industrial relation system address different factors in the labor environment. For instance collective bargaining according to EIRO (2009) is an industrial jurisprudence system while Centre Piece Summer...