New package of agreements signed in metal industry

In April 2006, the collective bargaining parties in the metalworking industry in North-Rhine Westphalia signed new collective agreements. The settlement, which was subsequently adopted as a ‘pilot agreement’ in the industry’s other bargaining regions, provides for a pay increase of 3% with effect from June 2006, and a lump sum payment of €310. As part of the compromise, it was agreed that works councils and employers can agree at company level either to increase or decrease this lump-sum payment according to the economic situation of the company. The bargaining parties also concluded a new collective agreement on continuous training.

On 22 April 2006, the German Metalworkers’ Union (Industriegewerkschaft Metall, IG Metall) and the employers’ association for the metal and electrical industry in North-Rhine Westphalia (Verband der Metall- und Elektro-Industrie Nordrhein-Westfalen, Metall NRW) reached new collective agreements covering pay and continuous training. The agreement followed a series of warning strikes which involved several hundred thousand employees.

The settlement consists of a new pay agreement and a collective agreement on continuous training.

Pay increases

The new collective agreement on pay has a duration of 13 months, covering the period from 1 March 2006 to 31 March 2007, and provides for:

  • a general pay increase amounting to 3% from June 2006; this includes remuneration for apprentices;
  • a lump-sum payment of €310 to compensate for the three so-called ‘zero-months’ with no pay increase from March to May 2006; works councils and employers may agree at company level to either increase or even double this payment, or to reduce or even cancel it, according to the economic situation of the company. They may also agree to postpone the payment. If no agreement is reached, however, the €310 amount has to be paid.

Continuous training

In accordance with the information and consultation and co-determination rights of the works council based on the Works Constitution Act (Betriebsverfassungsgesetz, BetrVG), the employer has to inform the works council of all plans involving changes in the organisation. According to the new collective agreement, the company will set its levels of requirement for further training at least annually. This will be followed by individual talks with employees. If the training of the employee is required by the company or is necessary due to changes in the work organisation, it will be fully paid by the employer. In cases where the continuous training is not immediately required but is aimed at qualifying the employee to take up a better paid position in the organisation (Entwicklungsqualifizierung), only 50% of the required training time is covered by the employer.

In cases of disagreement, the works council and the employer will try to find an agreement. If this is not possible, the collective agreement provides for a joint dispute resolutions procedure with the possibility of a final collectively agreed arbitration.

For continuous training that is solely based on the personal interests of the employee and for which the company does not see any current need (persönliche Weiterbildung), the employee is responsible for all costs and working time. For this kind of training, the dispute resolutions procedure applies only in part and only to employees with five years of employment and working in establishments having more than 200 employees.

During the 2006 bargaining round, the social partners disagreed on whether collective agreements on continuous training represent an appropriate means to tackle the imminent skills shortage in the German labour market (DE0605029I).

Other issues

A sum of €319, which is currently paid as capital-forming payments, will in future be converted into an employer contribution to an occupational pension scheme.

The North-Rhine Westphalia settlement was adopted as a ‘pilot agreement’ and applied in other bargaining regions, with some adjustments. In Baden-Württemberg, a collective agreement on continuous training was concluded in 2001 (DE0104218F): the bargaining parties agreed to maintain – with some adaptations – a collective agreement that provides paid breaks of five minutes per hour for manual workers at assembly lines or other short-cycle work processes. Employers had demanded a cancellation of this provision, which exists solely in this bargaining region.

Reactions

In a statement to the press (in German), the Chair of IG Metall in North-Rhine Westphalia, Detlef Wetzel, called the settlement a very good compromise.

In a radio interview (in German), the President of the employers’ association for the German metalworking and electrical industry, Gesamtmetall, Martin Kannegiesser – reacting to some criticism among employers – believed that the 3% pay rise would be affordable for the majority of companies. He claimed that it was an achievement for employers to gain agreement on some flexibility regarding the lump-sum payment.

Commentary

The 3% pay increase achieved by IG Metall is higher than many collectively agreed pay increases concluded in other industries this year. Employers obviously regarded the economic situation in metalworking as being too good to risk serious industrial action. As part of the compromise, IG Metall agreed for the first time that works councils and employers can reduce a collectively agreed payment without requiring the further consent of the bargaining parties.

Heiner Dribbusch, Institute for Economic and Social Research, WSI

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