Social partners sign new package of agreements for chemicals industry

In mid April 2008, the social partners in the chemicals industry signed several collective agreements. The whole package of agreements comprises a substantial pay increase for the next 25 months, an agreement to smooth the transition from work to retirement and a commitment by the employers to increase the number of initial vocational training places over the next two years. Both the trade union and employer organisation welcomed the new deal.

On 16 April 2008, the Mining, Chemicals and Energy Industrial Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) and the German Federation of Chemicals Employers’ Associations (Bundesarbeitgeberverband Chemie, BAVC) concluded several collective agreements on wages, progressive retirement and vocational training. The settlement covers about 550,000 workers in the chemicals industry.

Substantial pay increases

The social partners agreed on a pay rise of 4.4% for a period of 13 months, to be followed by a further 3.3% for the subsequent 12 months. Monthly wages of apprentices were raised by a flat-rate payment of €34 and €26 respectively for the same periods. The wage deal comes into force between 1 March and 1 May 2008, taking effect at different times across Germany’s regions (Länder). The agreement will therefore expire in the various regions between the end of March and the end of May 2010.

In addition, agreement was reached on a one-off payment for each month in the first stage. The payment is calculated on the basis of 13 times 0.5% of the collectively agreed monthly wage, amounting to a total of 7% of the monthly wage for the entire period. The employer and the works council are entitled to make the amount and/or the date of the payment of this increase dependent on the company’s economic situation.

Smooth transition from work to retirement

IG BCE and BAVC also concluded a new agreement on working life and demography (Tarifvertrag Lebensarbeitszeit und Demografie), which aims to smooth the transition from work to retirement and to retain older workers in the workforce. The agreement allows the employer and works council to conclude a works agreement which may stipulate the use of long-term working time accounts and progressive retirement, as well as partial retirement plans. Moreover, invalidity and regular pension plans based on the corresponding collective agreement may also be implemented by a works agreement. To provide for sufficient financial resources for these measures, from 1 January 2010 onwards, employers will be obliged to pay an annual €300 per employee into a company-specific ‘demography fund’ (Demographie-Fonds).

If no settlement is reached at company level, a ‘catch-all’ clause comes into effect. According to this clause, the fund must be used for the implementation of regular pension plans in companies employing up to 200 workers and for the implementation of long-term working time accounts in companies with a workforce of more than 200 employees. The agreement in the chemicals industry is independent of any political decisions that may extend or abolish the current public subsidisation of progressive retirement plans (in German, 639Kb PDF).

18,200 new training places to be provided

In 2003, IG BCE and BAVC concluded for the first time a specific collective agreement on vocational training (Tarifvertrag Zukunft durch Ausbildung) to foster the creation of initial vocational training places in the chemicals industry (DE0307205F, see also the German contribution to the EIRO thematic feature on ‘Youth and work’). This agreement has been extended and will now run until 2011. The employers have committed themselves to providing 18,200 new training places in 2009 and 2010. This commitment implies an increase of almost 12% compared with the total of 16,800 apprenticeship positions stipulated for 2007 and 2008 in the collective agreement signed in 2007 (DE0703039I).

Social partner reactions

In a BAVC press release (in German, 113Kb PDF) on 16 April 2008, chief negotiator Hans-Carsten Hansen underlined that the pay increase was the maximum amount possible consistent with economic developments in the sector. Mr Hansen acknowledged, however, that the relatively long agreement period of 25 months and the flexibility of the one-off payment would make it easier for companies to plan. Both Mr Hansen and the President of BAVC, Eggert Voscherau, praised the collective agreement on working life and demography as ‘a unique approach to the challenges that may arise from an ageing workforce’ and ‘as a demonstration of the creativity and proactive attitude of the social partners in the chemical industry’.

On the same day, Werner Bischoff, who led the bargaining round for IG BCE, stated that the pay increase topped that of 2007 and accurately reflected the economic situation in the chemicals industry, according to an IG BCE press release (in German). Moreover, Mr Bischoff warmly welcomed the extension of the collective agreement on vocational training. Finally, he described the settlement on working life and demography as ‘a unique new development and a milestone for collective bargaining in Germany’.

Oliver Stettes, Cologne Institute for Economic Research (IW Köln)

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