The Hessian Higher Labor Court has now expressly confirmed the IG Bau cable construction competence for cable duct construction work. The ruling of July 31, 2026 (Ref. 10 SLa 584/25 SK) has far-reaching consequences for employers and employees in the construction industry – particularly for the obligation to pay social security fund contributions. Many employees wonder whether their employer is paying the correct contributions at all – and what happens if they don’t. This article explains the background of the decision and shows how you can enforce your rights.
The LAG Hessen ruling: IG Bau is competent for cable duct construction
The Hessian Higher Labor Court (10th Appeals Chamber) dismissed the appeal of a company performing cable duct construction work for a telecommunications corporation with its ruling of July 31, 2026. The plaintiff – a joint institution of the collective bargaining parties in the construction industry – demanded contributions to the social security fund procedure amounting to €1,277.11 for blue-collar workers and white-collar employees. The company had argued it was not bound by collective agreements and that the IG Bau was not competent for this type of activity. The court did not follow this view.
The core finding: There are no reasonable doubts that the IG Bau is competent for businesses performing cable duct construction work. Such companies are therefore obliged to pay contributions to the construction industry’s social security fund – even if they are not members of an employers’ association, provided the collective agreement has been declared generally binding. The ruling has signal effect for the entire industry, particularly in connection with the expansion of fiber-optic networks.
IG Bau cable construction competence: What this means for employers and employees
The IG Bau cable construction competence is the legal basis allowing the union to conclude collective agreements for specific sectors. Without this competence, collective agreements would be invalid. For employers, this means: they must verify whether their activities fall within the scope of the construction collective agreements. For employees, it means: they have a claim that their employer pays the social security fund contributions – for instance for the supplementary pension scheme, vacation and wage compensation funds.
The ruling clarifies that the IG Bau cable construction competence applies even when a company-level collective agreement exists with another DGB union. Even if a business has concluded its own collective agreement with a union that also belongs to the German Trade Union Confederation (DGB), the generally binding social security fund collective agreement takes precedence. The court bases this on Section 5(4) sentence 2 of the Collective Agreements Act (TVG), which establishes a clear hierarchy. An arbitration award by the DGB cannot change this – it has no external effect towards the parties to the proceedings.
Social security fund contributions in the construction industry: Who must pay and for what?
The social security funds in the construction industry are joint institutions of the collective bargaining parties. They administer, among other things, contributions for the supplementary pension scheme, vacation pay, and wage compensation during bad weather. Employers are obliged to contribute a certain percentage of gross wages for their blue-collar workers and white-collar employees. The exact amount is governed by the respective collective agreement – usually the VTV (Collective Agreement on the Social Security Fund Procedure in the Construction Industry).
In the specific case, it concerned contributions for December 2023 (blue-collar workers) as well as November and December 2023 (white-collar employees). The plaintiff had calculated the claim based on the reported annual earnings. The company did not dispute the amount, but the fundamental obligation. The court nevertheless ruled in favor of the plaintiff – a clear signal to all businesses attempting to evade their social security fund obligations.
The role of the VTV and generally binding collective agreements
The VTV is a collective agreement regulating the social security fund procedure in the construction industry. It is regularly declared generally binding, meaning it applies to all employers and employees in the sector – regardless of membership in collective bargaining parties. This general binding force is the key: only thus can non-organized businesses also be held liable.
The VTV contains provisions on contribution obligation, contribution rates, and benefits. It is supplemented by the Collective Agreement on the Social Security Fund Procedure in Civil Engineering (TV DT Tiefbau), which contains special rules for civil engineering work. The ruling confirms that cable duct construction work – i.e., laying fiber-optic and power cables underground – falls within the scope of these collective agreements. This is particularly relevant against the backdrop of the fiber-optic expansion, in which many companies are active.
What can employees do if contributions are not paid?
If your employer fails to pay or underpays social security fund contributions, you as an employee have several options:
- Contact the competent social security fund – They can inform you whether contributions have been received for you. Often you can request a statement of account online or by phone.
- Demand payment in writing from your employer, setting a deadline and referencing the legal situation.
- Contact the supervisory authority – The Main Customs Office is responsible for monitoring undeclared work and enforcing minimum wage and social security contributions. You can file a report there.
- Consult a certified specialist lawyer for employment law – A lawyer can assess whether you have payment claims and enforce them in court. The costs can be covered within the framework of an unfair dismissal lawsuit or a payment claim lawsuit.
If you have already been dismissed and are negotiating a severance package, you should also keep an eye on the social security fund contributions. Because outstanding contributions can reduce your future pension and other benefits. More on this in our article Severance pay after dismissal.
Conclusion: How to secure your rights as a construction worker
The LAG Hessen ruling is an important milestone for enforcing social security fund contributions in the construction industry. It confirms the IG Bau cable construction competence for cable duct construction work and clarifies that generally binding collective agreements take precedence over company-level collective agreements. For you as an employee, this means: you can rely on your employer being obliged to pay contributions – even if they try to evade this with formal arguments.
If you discover that contributions have not been paid, act quickly. Check your payslips, contact the social security fund, and seek legal support. An unfair dismissal lawsuit can also be used to claim outstanding payments. RechtStark as a litigation funder can help you cover the costs of such proceedings – feel free to contact us.
The decision of the LAG Hessen shows: the courts take the rights of construction workers seriously. Use this case law to enforce your claims.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.