Pay rises and new minimum wage in metalworking and retail sectors

At the start of the 2010 collective bargaining round in Austria, the unions were optimistic that a decent wage settlement would be agreed. Due to the improved economic situation, higher wage increases than those awarded in 2009 were expected. These expectations were met, with the pattern-setting metalworkers negotiating rises of between 2.2% and 2.5%. In the retail sector, a new minimum monthly wage of €1,300 will be implemented in 2011 and wages will rise by between 2% and 2.3%.

Before the start of Austria’s annual collective bargaining round in autumn 2010, expectations on organised labour’s side were high. With the economy having almost completely recovered, wage increases above the inflation rate (1.9% in November 2010) were anticipated, in contrast with the marginal increases agreed in 2009 because of the economic and financial crisis. Of the 450-plus collective agreements negotiated annually, collective bargaining in the metalworking and retail sectors was particularly keenly awaited in the autumn. These sectors employ over 600,000 workers.

Metalworkers win wage increases of 2.2% to 2.5%

The annual collective bargaining rounds traditionally start in the metalworking and mining industry and set the pattern for Austria’s overall collective bargaining process. In 2009, when the economic crisis hit the sector hard, moderate increases of 1.5% (minimum wages) and 1.45% (actual wages) were agreed. Furthermore, the issue of working time (increased flexibility vs. reduction in working hours) was hotly debated, but without a solution being agreed (AT1002029I, AT1004011I).

The 2010 negotiations for the 165,000 workers in the metalworking and mining industries started badly when the representatives of the Manufacturing Trade Union (PRO-GE) and the Union of Salaried Employees, Graphical Workers and Journalists (GPA-djp) called off the first negotiating round because of a change in the seating order at the hosts’ premises, the Federal Economic Chamber (WKÖ). Due to the employers’ unexpected waiver of the demand for increased flexibility, which they had tried to push through in the preceding negotiating rounds, the controversial issue of working time was avoided. Wage increases of 2.5% for minimum wages (or a minimum increase of €45 per month (gross), whichever is the higher) and 2.2% for actual wages were agreed. A new minimum wage of €1,515.84 per month was also negotiated, and for the first time gender-neutral language was used in the collective agreement to combat discrimination.

New minimum wage for retail sector

Collective bargaining in the retail sector, affecting 450,000 white-collar employees (which makes this the collective agreement covering the largest single group of employees), was awaited with great interest as it started off with a demand from GPA-djp for an increase in the minimum wage for full-time employment to €1,300 per month (gross). After several rounds of tough negotiations and a threat of industrial action from the trade union, the €1,300 minimum was agreed. According to estimates by GPA-djp, this affects between 30,000 and 40,000 employees in the sector. Furthermore, GPA-djp and the sectoral WKÖ sub-unit for commerce on the employers’ side also agreed on incremental wage increases of between 2% and 2.3%. Employees who formerly earned under €1,500 per month (gross) will benefit from a wage increase of 2.3% (60% of workers, including apprentices, are affected); employees who formerly earned between €1,500 and €1,800 will receive a rise of 2.1% and employees on a monthly wage of more than €1,800 will receive a 2% increase (compared to the previous year’s negotiated wage increase of 1.5%). Special bonus payments of up to €150 will be made to apprentices who finish their apprenticeship with good marks.

Reactions of the social partners

Karl Proyer, Deputy Director of GPA-djp, and Rainer Wimmer, Chair of PRO-GE, announced their satisfaction with the wage increases reached in the collective agreement in the metalworking sector, but said there would need to be continuing discussion on the reduction of working time in the future. Other GPA-djp representatives welcomed the outcome, stating that the settlement is a big improvement especially for lower wage earners, which include a high share of women and apprentices.

WKÖ representatives, on the other hand, stated that the wage settlement was a barely acceptable compromise and that they, in turn, are planning to step up the pressure for greater working time flexibility. Similarly, Fritz Aichinger, Chair of Trade at the Austrian Chamber of Commerce and the employers’ chief negotiator in the retail sector, stated that the agreement reached is just about bearable for employers in the sector, who will have to meet extra staff costs of €380 million as a result.

Gabriele Heinisch-Hosek, Austria’s Minister for Women’s Affairs, welcomed the settlement and said that the implementation of the minimum wage was a major step towards fighting poverty and supporting women.

Bernadette Allinger, Working Life Research Centre (FORBA)

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