The 22nd Chamber of the Berlin Labor Court has issued a first-instance ruling stating that the collective agreement on granting a capital city allowance (Hauptstadtzulage) shall apply at Freie Universität Berlin and Humboldt-Universität zu Berlin.

Freie Universität leadership welcomes the prospect that its employees should benefit from the capital city allowance, but must first review the court’s full official decision once it has been delivered. There is also great interest in the pending decision regarding the collective agreement for universities covered by the TV-L (Tarifvertrag der Länder).

How the capital city allowance will be financed is currently unclear. This is because, unlike in the case of Berlin Senate employees and other employees of the State of Berlin, the Berlin Senate has not yet provided Berlin’s universities with additional funds to cover these costs. University leadership and labor unions are united in opposing this form of unequal treatment.

As the ruling primarily addresses the distinction between direct and indirect employees of the State of Berlin, universities and labor unions are calling on the Berlin House of Representatives to provide the funds necessary for the capital city allowance.

Freie Universität and Humboldt-Universität zu Berlin will face substantial additional expenses due to the capital city allowance in the coming years. In 2025 alone, costs for the capital city allowance at both universities are expected to total around ten million euros.

Expenses of this magnitude would further worsen the already strained financial situation at the universities caused by recent budget cuts. If the House of Representatives does not approve additional funding for the capital city allowance, this would inevitably lead to further painful cuts in studying, teaching, research, and administration.

The collective agreement on the capital city allowance came into effect on April 1, 2025, meaning that back payments will be necessary should the Labor Court’s ruling stand.

Together with labor unions, university leaders had sought clarification from the court, as the Berlin Senate was unable to confirm whether employees of Berlin universities are entitled to the capital city allowance.

It is important to note that the Labor Court decision does not apply to all Berlin universities, but only to Freie Universität and Humboldt-Universität zu Berlin. This is because these universities have concluded their own collective agreements (TV-L FU and TV-L HU); all other Berlin universities fall under the standard TV-L agreement. Nevertheless, today’s decision is likely to send a strong signal to other universities in Berlin.