The rise of capitalism in Germany was also accompanied by the flowering of the trade union activities. For quite some time anti-trade union legislation had hampered the trade union activities in Germany.

But in 1860’s a number of German federal states did away with these restrictions by repealing the existing laws and enacting new laws. The most Significant step in this direction was the adoption of a Code by the Reich in 1871.

As a result of the repeal of the existing laws and enactment of new laws regulating trade union activities, gates for the rise of a strong trade unionism in Germany were opened. A large number of trade unions with strong central organization were formed.

It may be noted that the German trade union movement from the very beginning was politically oriented and most of the trade unions were affiliated with the Social Democratic Party. Similarly, the Christian Unions were affili­ated with the Catholic Centre Party. For the regulation of relations between the employer and the employees the state set up industrial courts (Gewerbegerichte) in 1891.