Electrical sector agrees first common pay system for blue- and white-collar workers

In December 2003, a collective agreement was signed in the Austrian electrical and electronics sector providing for a common pay system for blue- and white-collar workers, which is seen as a milestone in terms of pay harmonisation for the two groups. It breaks with the tradition in all sectors of the economy of separate bargaining for blue- and white-collar workers, which has resulted in different pay grading schemes to the detriment of the former, since the classification of blue-collar workers' jobs has become increasingly inflexible and unrelated to the work actually performed. Moreover, the new agreement provides for an innovative pay increment scheme and for a proportion of the agreed pay increase to be distributed flexibly among employees at establishment level.

On 12 December 2003, the Federal Organisation of the Electrical and Electronics Industry (Fachverband der Elektro- und Elektronikindustrie, FEEI) on the employers’ side and the blue-collar Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT) and white-collar Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) on the employees’ side concluded a new collective agreement for the electrical and electronics sector. After a three-year period of negotiations, the social partners in this sector managed to reach a settlement on a new common pay scheme for both employee groups - ie blue-collar and white-collar workers. Accordingly, the sector's 250 companies and 58,000 employees will be covered by a new classification scheme (Beschäftigtengruppenschema) providing for a more precise single classification of jobs. This aim to replace the old classification system which has been widely perceived as too inflexible and imprecise, with problems of incorrect classification arising mostly to the detriment of women (AT0103209F). The new scheme is devised to improve the validity of job classifications, in particular regarding formally unskilled workers actually working as skilled/trained employees. These advantages, however, are counterbalanced by a less favourable system of automatic pay increments (Vorrückungssystem) as compared with the current automatic two-yearly increments. However, the new agreement stipulates another additional pay scheme analogous to the so-called 'distribution option' which has been laid down in collective agreements on several occasions in the past (AT0111229N). Under the new agreement, a certain proportion of the collectively agreed pay increase (Verteilungsvolumen) can be flexibly distributed among the employees of an individual establishment. In contrast to the 'distribution option' which was voluntary, the new clause is binding on the employer.

The new pay scheme will come into effect on 1 May 2004.

New grading scheme

The new collective agreement for the electrical and electronics sector provides for a joint grading scheme for blue- and white-collar workers. This scheme specifies 11 newly designed grades to replace the 'old' pay grades (Lohngruppen) for manual workers and their counterparts for white-collar employees (Verwendungsgruppen). Hitherto, there have been different classification criteria for blue-collar workers on the one hand and white-collar workers on the other hand: Whereas the former have primarily been classified according to their (formal) skills, the latter have primarily been classified according to both formal skills and actual job requirements, including such criteria as the degree of responsibility involved, the 'learning time' needed, formal qualifications and practical experience. The new classification scheme will enable even unskilled manual workers to move up into higher grades which have so far been reserved for skilled/trained workers only. This implies that workers without an apprenticeship leaving certificate may move up into skilled grades. With regard to white-collar workers, the new scheme defines more precisely the (formal) qualifications of the employees, something which will result in more security and fairness when it comes to classifying a given employee, in particular women, in a particular grade. According to the current scheme, the classification of employees is carried out by the employer with a veto right for the works council (if there is one) (AT0309203T).

New increments scheme

The new collective agreement lays down a new scheme for automatic increments relating to wage/salary levels within each of the 11 grades. More precisely, four pay increments are established, becoming due after two, four, seven and 10 years of continuous employment in the same grade. The increment applies to both (collectively agreed) minimum pay and actual pay and is fixed as a certain percentage of the collectively agreed minimum pay for each grade. This means that the actual amount of pay increment - calculated as a certain percentage of the minimum pay for each grade - is the same for all employees within the same grade. Interestingly, the increment falling due after two and four years will be twice as high as the third and fourth increments. This scheme will replace the current scheme based on two-yearly increments, which is more favourable to the employees.

Flexible wage component

Aside from the new grading and increment systems, the December 2003 collective agreement contains another innovative provision: an obligatory, flexible pay increase in addition to the collectively agreed minimum pay increase. This new wage component is to be distributed flexibly among employee groups in an individual establishment. This flexible pay increase has to be paid annually and irrespective of the 'normal' collective bargaining procedure. In contrast to the 'distribution option' as established in some sectors of industry for several years, the new scheme must be implemented by the employer. Accordingly, the employer is obliged to distribute 0.35% of the total wage bill in September each year flexibly among the employees, unless a works agreement provides for more favourable conditions. The distribution of this wage component must be based on the following criteria: working performance (including social skills); the company’s pay structure (involving compensation for low pay); and equal treatment of the sexes (involving compensation for unjustified unequal pay of men and women). In this matter, the collective agreement provides for a co-determination right for the works council, in that any rules on how to distribute this wage component must be laid down in a mandatory works agreement concluded by management and the works council.

Commentary

The conclusion of the collective agreement in the electrical and electronics sector in December 2003 is seen by the signatory parties as a milestone in Austria’s collective bargaining history. This is because the sector is the first in which a common pay system for both manual and white-collar workers has been established. Until now, a harmonisation of agreements for blue- and white-collar workers was achieved in some sectors only in terms of equal application of labour law regulations. This new agreement may pave the way for similar arrangements in other sectors such as the overall metalworking industry (where negotiations on this issue have already started).

The introduction of the joint grading scheme in the electrical and electronics sector marks the end of the traditional, unequal treatment of white-collar and blue-collar workers to the disadvantage of the latter. This is true particularly for unskilled manual workers who - in spite of their lack of formal qualifications - have often become highly trained on the job and have actually performed corresponding work. However, they have been treated as unskilled workers so far. Since the new scheme provides for far more differentiated criteria of classification (such as practical experience and actual work performance), it gives more performance-related opportunities to move up into higher grades. In general, the main beneficiaries of the new schemes will be younger employees, (formally unskilled) low-pay workers and women. Moreover, the position of works councils will be strengthened as a consequence of the enlargement of their co-determination rights. (Georg Adam, University of Vienna)

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