In the Federal Republic of Germany, craft trades are governed by the Crafts and Trade Code ( or HwO or HandwO). This administrative law covers the commercial practice of handicraft; vocational education and training in the craft sector; and the self-administration of this economic sector. This law is a special trade regulation, and its provisions on vocational training form a special law within the Vocational Training Act.
Articles 3 paragraph 1,(c), 14 and 43-55 of the EC Treaty - (Freedom of establishment, freedom to provide services and mutual recognition of diplomas)
The EC Treaty lays down the principle that the self-employed (whether working in commercial, industrial or craft occupations or the liberal professions) the economic operators, established in the territory of a member state, may exercise an economic activity in all member states in two ways. Self-employed person and professionals or legal persons, within the meaning of article 48 EC Treaty, who are legally acting in one member state, may carry on an economic activity in a stable and continuous way in another Member State (freedom of establishment: Article 43) or offer and provide their services in other Member States on a temporary basis while remaining in their country of origin (freedom to provide services: Article 49). This implies eliminating discrimination on the grounds of nationality and, if these freedoms are to be used effectively, the adoption of measures to make it easier to exercise them, especially harmonisation of national access rules or their mutual recognition.
German Crafts and Trade - their Special Feature: License to Market Access
The Crafts and Trade Code and its socio-economic significance
An Overview
— The Crafts and Trade Code (HWO/CTC) defines the license to craftsmanship. This means that the Master Craftsman's diploma is mandatory for self-employment. (Adequate qualifications are recognized through special permission). [ 1 ]
— The legislator regulates the practice of the profession. It defines the activities which are considered to be crafts and trade. It demarcates the career profiles and regulates the professional training.
— Moreover, the tasks of the crafts and trade organizations are specified. [ 2 ]
—The Crafts and Trade Code (CTC) thus restricts the free choice of profession expressly given by the Article 12 and the Article 3 (Equality before the law) of German Constitution called Basic Law (GG). According to the said Article 12, all Germans have the right to freely choose their trade or profession, their place of work and their place of training. The said Article 3 (Equality before Law) says, that the practice of trades and professions may be regulated by law.
— As per the constitutional law and from the constitutional-economic point of view, the government interventions in the rights of an individual to freedom and to equality before law have to be explained.
— Accordingly, only those restrictions are generally acceptable, which serve the public interest.
— Laws are in accordance with this criterion, which are independent of the changing social and-political conditions capable of getting the approval in the long run.
What does the Master Craftsman’s Diploma certify?
— As a kind of "Brand product image", it certifies that the craftsman
a) has the professional and mercantile knowledge, abilities and experience, to carry out the respective work orders independently b) so that the corresponding technical and entrepreneurial standards are guaranteed to protect the interests of the consumers (Consumer protection), of the crafts and trade (Quality of the craft and trade) and of the craftsmen themselves (Bankruptcy risk).
— Till the amendment of the law in January 2004, the regulatory purpose of the obligation to have the Master Craftsman's Diploma (Big Certificate of Competency) was that “this should guarantee the level of efficiency, productive power of the crafts and trade and the younger talent for the whole trade and industry.
— Since this amendment in the law, the purpose of the obligation to have the Master Craftsman’s Diploma is to repel “the risks for the health or the life of the third party” in the Crafts and Trade
— A direct impact on the wording of the legal text cannot be inferred. However, the law must be interpreted according to the regulatory purpose intended by the legislator, because many things are not clearly regulated through the Crafts and Trade Code, so that the interpretation plays a very great role.