New collective agreement in banking sector

In June 2006, the bargaining parties in the German banking sector signed a new collective agreement. Following three so-called zero-months with no increase from June to August 2006 and a one-off payment in August 2006 of €100, the agreement provides for a general pay increase of 3% with effect from 1 September 2006 and a further increase of 1.5% with effect from 1 December 2007. The bargaining parties also agreed to increase the number of apprenticeships in 2006 and 2007 by 4%. The agreement covers some 240,000 employees in private and public banking but not the 170,000 employees in the cooperative banking sector.

Signatories of agreement

On 22 June 2006, the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) and the Bargaining Association of Public and Private Banks (Verhandlungsgemeinschaft Banken) signed a new collective agreement for the German banking sector. Verhandlungsgemeinschaft Banken represented the Employers’ Association of Private Banks (Arbeitgeberverband des privaten Bankgewerbes, AGVBanken) and the Association of German Public Sector Banks (Bundesverband Öffentlicher Banken Deutschlands, VÖB). The Employers’ Association for Cooperative Banks (Arbeitgeberverband der Deutschen Volksbanken und Raiffeisenbanken, AVR) had left the negotiations at an early stage to pursue separate negotiations with ver.di.

The new agreement therefore covers some 240,000 employees in private and public banking but not the approximately 170,000 employees in the cooperative banking sector. The agreement was also signed by the German Association of Bank Employees (Deutscher Bankangestellten-Verband, DBV), a trade union which has no affiliation, and by the German Trade and Industry Employees’ Association (Deutscher Handels- und Industrieangestellten-Verband, DHV) a union with a small presence in the sector and affiliated to the Christian Federation of Trade Unions (Christlicher Gewerkschaftsbund, CGB).

Content of agreement

Following three so-called zero-months with no increase from June to August 2006, employees receive a one-off payment in August 2006 of €100. The agreement then provides for a 3% pay increase with effect from 1 September 2006 and a further increase of 1.5% with effect from 1 December 2007.

The bargaining parties also agreed to increase the number of apprenticeships in 2006 and 2007 by 4%, which is one percentage point more than had been set out in the agreement. In addition, the collective agreement on early retirement is now extended until the end of 2008. Under certain conditions, it entitles employees with at least 10 years of employment to retire one year prior to the statutory retirement age and those with 20 years’ service to retire two years earlier.

With regard to so-called long-term working time accounts, it is now possible for employees to collect up to 195 hours per year. These accounts can then be used in the context of early retirement or to take extra leave. The provision allowing the extension of regular working time to Saturdays was also continued until the end of 2008.

Performance related pay is now possible as a proportion of up to 8% of annual pay and the collectively agreed annual bonus payment can vary at company level between 90% and 120% of the monthly pay depending on the economic situation of the particular bank.

Views of the social partners

Both ver.di and Verhandlungsgemeinschaft Banken called the outcome an acceptable compromise. Ver.di emphasised the importance of extending the provisions on early retirement with regard to forecasts of job cuts in the industry. The employers’ side in particular was content with the long duration of the agreement.

Talks break down in cooperative banking

Meanwhile, the negotiations for cooperative banks between ver.di and AVR broke down on 27 July 2006. The employers refused to accept the pay increases agreed for private and public banks and demanded as a precondition for any pay agreement that performance related pay should be increased to up to 16% of an individual’s annual pay and that the annual bonus payment as a whole should be dependent on the annual performance of the bank. This position was rejected by ver.di.

Heiner Dribbusch, Institute of Economic and Social Research (WSI)

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