Metalworking's first agreement on partial retirement signed at PPS Salzgitter

On 3 March 1997, the Hanover regional branch of the metalworkers' trade union, IG Metall, and the management of PPS Salzgitter concluded the first collective agreement on partial retirement in the metalworking industry.

On 3 March 1997, the Hanover regional branch of the metalworkers' trade union Industriegewerkschaft Metall (IG Metall) and the management of PPS Personal-, Produktions- und Servicegesellschaft mbH, Salzgitter, concluded a company agreement on partial retirement - the first such agreement in the metalworking industry. Negotiations between IG Metall and the metalworking employers' association Gesamtverband der metallindustriellen Arbeitgeberverbände (Gesamtmetall), first about industry-wide and later about regional collective agreements on partial retirement, reached an impasse in June 1997. Although the agreement at PPS was signed in March, reliable information has only recently been publicised.

PPS Personal-, Produktions- und Servicegesellschaft mbH, a subsidiary of the steel company Preussag-Stahl AG, was established in October 1996. It currently employs more than 1,000 people, nearly all of whom were transferred from Preussag. By agreeing to the setting up of PPS, IG Metall aimed to avoid further workforce reductions resulting from the outsourcing of certain services and activities from Preussag to other companies. IG Metall and PPS are currently negotiating over a company collective agreement which will - according to IG Metall information - provide for lower costs than the current steel industry collective wage agreement.

The PPS collective agreement on partial retirement (Altersteilzeit- for details of the legal provisions see DE9704108F) aims at giving older employees the possibility of a phased transition to retirement and at offering positive employment perspectives to vocational trainees. The agreement includes the following:

  • for older employees signing up for the part-time scheme, regular working time is reduced by 50% to an average of 17.5 hours per week during the partial retirement period. This period may range from two to five years. The very popular "block-model" allows employees to work full time in the first half of the part-time period and not work at all in the second half. All ways of distributing working time over the part-time period are possible, provided that an average of 17.5 hours per week is reached over the period of up to five years;
  • the regular wage income over the whole partial retirement period constantly reaches 85% of previous monthly net wage income;
  • there is no additional annual pay bonus;
  • monthly contributions to pension schemes during the partial retirement period are topped up to 100% of the previous full-time contributions by the employer; and
  • reductions in pension incomes resulting from part-time work for older workers will be partially compensated by PPS. Depending on the level of pension entitlements, PPS will compensate for up to 25% of the losses of entitlement. If the part-time employee decides to work an additional maximum 20 hours per month over a maximum of 30 months, PPS will increase compensation further.

In an interview published in the Handelsblatt business daily, Jürgen Peters, chair of IG Metall Hanover, stated that for each two employees aged 55 who sign up for the partial retirement scheme, one new employee will be hired, preferably a vocational trainee.

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