Austria: New working time model as part of metalworking sector collective agreements

After lengthy negotiations identical wage agreements were reached in all six of Austria’s metalworking industry groups on 5 November 2015. The new collective agreements, which include across-the-board wage increases of 1.5%, cover all 180,000 employees in the sector. A new working time model and a ‘free-time option’ were also agreed.

Upset at the onset of negotiations

Collective bargaining in Austria’s pace-setting metalworking industry began with a setback when the Association of the Austrian Machinery, Metalware and Foundry Industries (FMMI) cancelled the negotiations before they had even begun.

FMMI demanded clarification from the federal government about proposals to give a sixth week of annual leave to all employees who had worked for 25 years. Currently, only people who have worked in the same company for 25 years are eligible for a sixth week of leave. Recent figures show that less than 10% of all employees have worked for the same employer for more than 25 years.

The topic has been under discussion for some time. It is included in the government's work programme 2013–2018 (in German, 830KB PDF) and was also included in the list of pre-negotiation demands by trade unions, the white-collar Union of Salaried Employees, Journalists and Graphical Workers (GPA-djp) and the blue-collar manufacturing union (PRO-GE). The unions were outraged at the FMMI’s behaviour and considered it a fundamental attack on collective bargaining and the social partnership system (from which politics is traditionally excluded). However, after the federal government announced that no extension of statutory leave would be implemented without delegating the matter to the top-level social partners, collective bargaining negotiations in the machinery and metalware industry finally began. They were finalised, after three rounds of negotiations, on 28 October 2015, with the third round lasting 24 hours.

Identical agreements in all six subsectors

Since 2012, there have been separate negotiations with all six (subsectoral) employer groups in the metalworking sector. This has broken a 40-year tradition of employers forming a bargaining community. The subsectors are:

  • machinery and metalware (120,000 employees);
  • automobile (27,000);
  • mining and steel (17,000);
  • foundry (7,000):
  • non-ferrous metal (6,500);
  • gas and heating supply (2,500).

Around 180,000 people are employed in all six groups. Despite the decentralisation process that started in 2012, the wage agreements concluded since then have been identical, with the largest group, the FMMI, being the role model; this was also the case this year. The remaining five subsectoral agreements were concluded just over a week after the FMMI agreement was finalised, and the negotiated wage increases and framework conditions (working time, see below) were identical.

Wage increases of 1.5% were agreed for both minimum and actual wages, for both blue-collar and white-collar employees, and for apprentices. Furthermore, it was agreed that 31 December should be a day off on full pay. A sixth week of annual vacation for everyone who has worked for 25 years has not been agreed. The new collective agreements came into force on 1 November 2015. The new minimum monthly gross wage is €1,750.03. The inflation rate of 1.1% was taken as a reference point at the beginning of the negotiations, so the increase lies at 0.4 percentage points in real terms; somewhat lower than in the past five years.

New working time model agreed

The issue of developing a more flexible working time scheme (especially in setting up an extension of the reference period for paying overtime) has been on the metalworking employers’ agenda since the 2009 collective bargaining round. However, this has been met by strong opposition from the unions who argue this would mean wage cuts. In spring 2010, to the surprise of the unions, the employers terminated specific negotiations on working time without having reached a result. The topic was taken up in subsequent annual bargaining rounds but, until now, the unions have been able to prevent a more flexible working time scheme being implemented.

The newly agreed working time model consists of a working time account on which plus-hours (overtime or credit hours) or minus-hours (debit hours) are accumulated over a period of one (calendar) year, up to a maximum of 167 plus-hours. Between the sixty-first hour and the hundredth hour of overtime, 10% extra time is granted to the employee; for all accumulated plus-hours above this threshold, 20% extra time is granted. Up to 40 hours of this time can be carried over into the following year and taken as time off in lieu. Any remaining accumulated overtime can be taken off in lieu – as 1.67 hours of time off for every hour of overtime worked – or added to pay – paid at 150% of usual pay. Employees decide how their accumulated hours are taken. For this new working time model to apply, the works agreement has to be binding. For the employers it means more overtime can now be accumulated without having to pay overtime premiums; thus, it allows a 45-hour working week without any premiums within a certain time frame (with a normal weekly working time of between 32 and 45 hours).

The unions had previously fiercely rejected such a step, but have now agreed to it in exchange for a ‘free-time option’. This means free time may be chosen instead of the collectively agreed wage increase, to be taken either daily, weekly or annually. It means employees can choose to work less in the short term, take the time as holiday or use any accumulated leave to shorten their working life before retirement. This has, for the first time, been implemented in all six subsectors; employees in the mining and steel industry have had this choice for three years, and employees in the automotive sector have had it for two years. This year’s negotiated wage increase of 1.5% corresponds to additional free time of two hours and fifteen minutes per month or 3.5 days in total for the whole year.

Social partner reactions

The employer side has called the agreement ‘acceptable, despite the difficult market situation’.

Christian Knill, Chief Negotiator for FMMI, has stated that the new, flexible working time model is ‘reasonable’ and ‘has clear advantages compared to the previous one’, even though he would have preferred a simpler model. However, with the new working time model, the companies would be able to better cover seasonal peak times or under-utilisation and seasonal fluctuations, thus helping towards securing job positions.

Both Christoph Leitl, Head of the Federal Economic Chamber (WKO) and Christoph Neumayer, General Secretary of the Federation of Austrian Industry (IV), have said they are content with the compromise reached. Rainer Wimmer, Chair of PRO-GE, sees the new working time model as ‘very innovative’ and as a ‘model which has been adapted to the lived reality’ of workers. He also welcomes the introduction of the free-time option in all six subsectoral groups.

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