issued by the Registrar of the Court  
ECHR 185 (2016)  
02.06.2016  
Company’s obligation to participate in construction industry’s social welfare  
fund did not breach its rights under the Convention  
In today’s Chamber judgment1 in the case of Geotech Kancev GmbH v. Germany (application  
no. 23646/09) the European Court of Human Rights held, unanimously, that there had been:  
no violation of Article 11 (freedom of assembly and association) of the European Convention on  
Human Rights, and  
no violation of Article 1 of Protocol No. 1 (protection of property) to the Convention.  
The case concerned a company’s complaint about its obligation to participate in a social welfare  
fund jointly set up by employers’ associations and the trade union in the building industry.  
The Court found that, while the obligation to contribute to the fund could be regarded as creating an  
incentive for the applicant company to join one of the employers’ associations in the building  
industry in order to be able to exercise control over the activities of the fund, such an incentive was  
too remote to strike at the very substance of its right to freedom of association. The Court noted in  
particular that: the company’s contributions could be used exclusively for the administration and  
implementation of social welfare schemes; members of the associations which had set up the fund  
did not receive a more favourable treatment than non-members as regards transparency and  
accountability; and there was a high degree of control by public authorities.  
Principal facts  
The applicant, Geotech Kancev GmbH, is a limited company registered in Castrop-Rauxel (Germany).  
It specialises in taking soil samples for geological examination, in particular for the purpose of  
assessing the suitability of the ground for building sites.  
Under a collective agreement on social welfare proceedings between two employers’ associations  
and the trade union in the building industry in Germany – which the Federal Ministry for Labour and  
Social Affairs has declared generally binding – employers in the industry, notwithstanding whether  
or not they are members of the employers’ associations, are obliged to contribute to a social welfare  
fund (“SOKA-BAU“) 19.8% of the gross wages paid to their employees.  
In 2005 the applicant company informed the social welfare fund that it objected to being registered  
with the fund. In October 2007 the Wiesbaden Labour Court ordered the company to pay over  
63,000 euros (EUR) in welfare fund arrears for the period between September 2002 and March 2004  
to the Supplementary Pension Scheme for the Construction Industry (Zusatzversorgungskasse des  
Baugewerbes, “ZVK”), which formed part of the welfare fund. The judgment was eventually upheld  
by the Federal Labour Court in December 2008.  
On 5 February 2009 the Federal Constitutional Court declined to consider the company’s  
constitutional complaint (file no. 1 BvR 243/09).  
1. Under Articles 43 and 44 of the Convention, this Chamber judgment is not final. During the three-month period following its delivery,  
any party may request that the case be referred to the Grand Chamber of the Court. If such a request is made, a panel of five judges  
considers whether the case deserves further examination. In that event, the Grand Chamber will hear the case and deliver a final  
judgment. If the referral request is refused, the Chamber judgment will become final on that day.  
Once a judgment becomes final, it is transmitted to the Committee of Ministers of the Council of Europe for supervision of its execution.  
Further information about the execution process can be found here: www.coe.int/t/dghl/monitoring/execution.  
Complaints, procedure and composition of the Court  
The applicant company complained that the obligation to participate in the social welfare fund  
violated its rights under Article 11 (freedom of assembly and association). It alleged that there was  
an interference with the negative aspect of its right to freedom of association since it was obliged to  
contribute to the fund in the same way as a member of one of the employers’ associations but  
without being able to protect its own interests within such an organisation. This exerted a significant  
pressure on it to become a member of one of the employers’ associations. The company also  
complained of a violation of its rights under Article 1 of Protocol No. 1 (protection of property) to  
the Convention.  
The application was lodged with the European Court of Human Rights on 29 April 2009. The  
Supplementary Pension Scheme for the Construction Industry (ZVK) was given leave to intervene in  
the procedure as a third party and submitted written comments.  
Judgment was given by a Chamber of seven judges, composed as follows:  
Ganna Yudkivska (Ukraine), President,  
Angelika Nußberger (Germany),  
Khanlar Hajiyev (Azerbaijan),  
André Potocki (France),  
Faris Vehabović (Bosnia and Herzegovina),  
Yonko Grozev (Bulgaria),  
Carlo Ranzoni (Liechtenstein),  
and also Claudia Westerdiek, Section Registrar.  
Decision of the Court  
Article 11  
The Court had to determine whether, as argued by the applicant company, the obligation to  
contribute to the social welfare fund was tantamount to compulsory membership in an employers’  
association adversely affecting the negative aspect of the company’s freedom of association.  
It was true that the obligation to contribute to the fund could be regarded as creating an incentive  
for the applicant company to join one of the employers’ associations in the building industry in order  
to be able to exercise control over the activities of the social welfare fund. However, the Court  
concluded that such an incentive was too remote to strike at the very substance of its right to  
freedom of association under Article 11. There had accordingly been no violation of Article 11.  
In reaching this conclusion the Court took the following considerations into account:  
The applicant company’s obligation to contribute financially to social welfare entitlements was in the  
interest of all employees working in the building industry and based on the principle of solidarity. In  
order to provide the social security they aimed for, the social welfare schemes required that all  
employers and employees in the building industry were included in the schemes. The applicant  
company’s contributions could be used exclusively for the administration and implementation of  
those schemes and to pay out the respective benefits. The Court found that those contributions  
could therefore not be considered membership contributions. Moreover, the duty to pay the  
contributions was counterbalanced by the company’s entitlement to reimbursement by the social  
welfare fund.  
Furthermore, all companies that contributed to the fund, whether or not they were members of an  
employers’ association, received comprehensive information about the use of their contributions.  
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Members of the associations which had set up the fund thus did not receive a more favourable  
treatment than non-members as regards transparency and accountability.  
Finally, the entity of the social welfare fund to which the applicant company was obliged to  
contribute, the ZVK, was subject to supervision by the German Federal Supervisory Authority  
(Bundesanstalt für Finanzdienstleistungsaufsicht, “BaFin”). There was accordingly a significant  
degree of involvement and control of the scheme by public authorities.  
Article 1 of Protocol No. 1  
The Court found that there had been an interference with the company’s rights under Article 1 of  
Protocol No. 1, which had a basis in domestic law and pursued a legitimate aim, notably to ensure  
the social protection of all employees working in the building industry. The Court referred to its  
considerations under Article 11 and concluded that the interference had been proportionate to the  
legitimate aim pursued, in that a fair balance had been struck between the interest to ensure the  
social protection of all employees working in the building industry on the one hand and the  
company’s right to peaceful enjoyment of its possessions on the other hand. The German authorities  
had acted within their wide room for manoeuvre (“margin of appreciation” in the Court’s case-law)  
which they enjoyed in the area of social and economic policies. Accordingly there had been no  
violation of Article 1 of Protocol No. 1.  
The judgment is available only in English.  
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The European Court of Human Rights was set up in Strasbourg by the Council of Europe Member  
States in 1959 to deal with alleged violations of the 1950 European Convention on Human Rights.  
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