New collective agreements in the Saxon metalworking industry

The social partners in the Saxon metalworking industry signed new collective agreements in April 1997, which include moderate wage increases and a new agreement to secure employment.

On 25 April 1997, the Saxon metalworking employers' association (Arbeitgeberverband der Sächsischen Metall- und Elektroindustrie, VSME) and the metalworkers' trade union, IG Metall, signed new collective agreements for the 87,000 employees in the Saxon metal industry. The agreements include a new agreement on wages and salaries, new framework agreements for white- and blue-collar workers, and a new agreement to secure employment (Beschäftigungssicherungstarifvertrag). The agreements mainly follow the pattern of the agreements which have already been agreed in other regions of eastern Germany, and conclude the 1997 collective bargaining round in east German metalworking.

Concerning wages and salaries, the agreements provide for a 1.5% pay increase from 1 April 1997 and a 2.5% pay increase from 1 April 1998. Thereby, the east German metalworkers receive the same wage increases which had been agreed for the west German metal industry at the end of 1996. After the social partners agreed to a phasing-in plan for a step-by-step increase of east German wages to the west German level in 1991, eastern and western metalworkers have received the same basic payment since 1 July 1996.

However, some significant differences remain in the effective income of eastern and western metalworkers. Firstly, the new metalworking agreement for Saxony includes the payment of a Christmas bonus of 50% of an average monthly basic income, in comparison with 55% in western Germany. Secondly, the average weekly working time in the east is 38 hours in comparison with 35 hours in the west.

As another peculiarity, the east German metalworking agreements include a "hardship clause" which allows companies with immense economic problems to pay their employees below the determined minimum wage of the collective agreement for a limited period of time. In every case, the final decision about a case of hardship has to be taken jointly by IG Metall and the employers' association (DE9703205F). The new Saxon metalworking agreement, like the new agreements in other east German regions, has extended the hardship clause arrangement until 30 June 1998.

For the first time, the east German collective agreements now include an agreement to secure employment. Following the pattern of similar agreements in the west German metalworking industry, companies in Saxony as well as in other eastern regions now have the possibility of reducing their working time from 38 hours to 33 hours per week without wage compensation for a limited period of time. During the period of working time reduction, the companies agree to make no redundancies. The new agreement to secure employment will end on 30 June 1998.