New collective agreements for public service employees

In March 2008, the United Services Union signed a new package of agreements on pay and working time for the public services sector with representatives of the German government and municipal employers. The agreements, which cover the period 2008–2009, provide for an average wage increase of about 5% for all federal and municipal employees in public services. In exchange for the pay rise, the trade unions had to accept an increase in the standard weekly working time in western Germany.

On 31 March 2008, the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) agreed with representatives of the federal government (Bundesregierung) and the Municipal Employers’ Association (Vereinigung kommunaler Arbeitgeberverbände, VKA) on a package of collective agreements on pay and working time for federal and municipal employees in the public services sector. The agreements cover about 2.1 million public sector employees who work in local transport, utilities and hospitals, as well as teachers with an employee status. The settlement followed several waves of warning strikes involving hundreds of thousands of public sector employees.

The collective bargaining association of the trade unions, dbb tarifunion, which is affiliated to the German Civil Service Association (Deutscher Beamtenbund, dbb), also signed the final package of agreements. Dbb tarifunion had formed a joint bargaining association with ver.di, the German Police Union (Gewerkschaft der Polizei, GdP) and the German Union of Education (Gewerkschaft Erziehung und Wissenschaft, GEW). GdP and GEW, like ver.di, are affiliated to the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) and traditionally join ver.di in the public sector bargaining rounds, whereby ver.di is the leading negotiator. The new agreements do not cover employees working in the public services of the federal states (Länder), as they are covered by a different agreement which is due to be renegotiated in 2009.

Parallel negotiations for doctors in municipal hospitals were held between VKA and the trade union representing medical doctors, Marburger Bund (MB), which is not a DGB affiliate. On 8 April 2008, these resulted in a new collective agreement for medical doctors in municipal hospitals.

Bargaining context

This year’s collective bargaining round for federal and municipal employees was the first regular pay round since the bargaining parties had agreed on the introduction of a new general framework agreement in 2005 (DE0503203F). It was expected to be highly contentious as public employers had announced that they would only agree to a general pay increase if the trade union was prepared to accept an extension of the standard weekly working time from 38.5 hours to 40 hours. Nonetheless, ver.di and dbb tarifunion demanded a general pay increase of 8% without any increase in the standard weekly working time.

To put pressure on employers, ver.di called for major warning strikes, which lasted up to a day and mainly affected local transport, hospitals and airports. The strikes showed that ver.di could count on broad support among public sector employees. A majority in the broader public also supported the trade union demand, as it was widely accepted that public sector employees deserved a significant pay increase after a number of years in which they had to face losses in real income. After negotiations had failed in February 2008, public employers called for a joint dispute resolution procedure. The outcome of this procedure failed to deliver an acceptable outcome for ver.di and, as a result, the trade union underlined its determination to call for industrial action. However, a settlement was eventually reached in the final negotiations on 31 March 2008.

Provisions of agreements

The new agreements in the public sector at federal and municipal level will cover a 24-month period, running until 31 December 2009.

Pay

The agreements include a monthly increase of €50 in all wages, followed by a general pay increase of 3.1% with effect from 1 January 2008. The €50 flat rate increase in each pay scale means that employees in the lower wage scales will receive a relatively higher increase than those in the top wage categories. On 1 January 2009, a further general pay increase of 2.8% will follow. Furthermore, all employees in the wage scales 1 to 15 will receive a one-off payment worth €225. The monthly remunerations for apprentices and trainees will increase by €70 with effect from January 2008.

The wage levels for public employees in eastern Germany will be brought fully in line with those of western German employees in the wage scales 1 to 9 with effect from 1 January 2008, and from 1 April 2008 for those in all other wage scales.

Working time

Working times for public sector employees at federal level remain unchanged at 39 hours a week. The standard working time for municipal employees in eastern Germany remains at 40 hours a week, while it will increase for municipal employees in western Germany from 38.5 to 39 hours with effect from 1 July 2008. As a result, the standard weekly working times which, in 2006, were collectively agreed for municipal employees in a number of German federal states (DE0606029I) will be adapted to this new standard.

Exceptions to this new standard working time were agreed for employees in municipal hospitals who will retain a 38.5-hour week, except for those in Baden-Württemberg who will maintain a 39-hour week as agreed in 2006. For employees working in childcare facilities, such as crèches and kindergartens, the extension of working time is implemented in the form of 2.5 days of extra training and preparation time. Shift workers in utilities and refuse disposal services will receive a monthly bonus of €200 or €130 depending on the shift system in which they are working.

Pay for doctors in municipal hospitals

The collective agreement concluded between MB and VKA provides for an average pay increase for doctors in municipal hospitals of about 7.8% over the two years 2008–2009 covered by the agreement. With effect from 1 April 2008, doctors’ wages will increase by 4%, followed by a further general pay increase of 3.8% which will take effect on 1 January 2009. The standard working week remains unchanged at 40 hours, as agreed in 2006.

Reactions of bargaining parties

The federal bargaining commission of ver.di accepted the outcome of the final negotiations on 31 March with 64 ‘yes’ votes and 25 ‘no’ votes. The Chair of ver.di, Frank Bsirske, said in a press statement (in German) that he regarded the outcome of the bargaining round as a great success for the trade union. He regretted, however, that the union had to accept an increase in weekly working times in exchange for the agreed pay increases. At the same time, he underlined that the pay increases would most likely be above the inflation rate in 2008 and 2009. According to the ver.di rulebook, as there had been no strike ballot, the results of the bargaining round do not have to be approved by the trade union members in a ballot. The trade union announced, however, that it would seek the consent of its members in an informal ballot (Mitgliederbefragung), whereby it will inform its members about the bargaining outcome and give them the opportunity to cast a vote.

In a press release (in German), the chief negotiator of the federal government, Wolfgang Schäuble, emphasised that the outcome of this year’s bargaining round in the public sector would allow employees to take part in the economic upswing. He considered that the agreed pay increases are affordable for public employers and underlined that the agreement had been the only way to avert a major industrial dispute in the sector. On the other hand, the President of VKA, Thomas Böhle, highlighted in a press statement (in German) that the bargaining result was at the limit of what municipal employers could financially manage, although they had reached an extension of the standard weekly working time. He further indicated that the settlement would put additional pressure on employers to save costs and cut jobs in the public sector. Local transport in particular was likely to face increasing competition from private sector employers who are not bound to the settlement.

The chief negotiator of VKA for municipal hospitals, Joachim Finkelburg, considered that the pay increases agreed with MB are in the range of those conceded to by ver.di for nurses and non-medical staff. He announced that VKA, together with the trade unions, would push the government to levy the legal budget restraints put on hospitals. Meanwhile, the chief negotiator of MB, Lutz Hammerschlag, called the outcome a difficult compromise, but emphasised that the trade union had defended a 40-hour working week against demands on the employers’ side to extend it to 41.5 hours.

Heiner Dribbusch, Institute of Economic and Social Research, WSI

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