Employers forge ahead in metalwork wage-bargaining

Wage negotiations at subsectoral level went ahead in Austria’s metalworking sector for the first time in 40 years in autumn 2012. A voluntary bargaining community of the six employer organisations in the sector was abandoned, although the outcome resembled a traditional collective agreement because similar wage increases were agreed in all six subsectors. Even so, it seems that the role of the metalworking sector as a pattern-setter for wage rises nationally may be at an end.

Background

In 2011, the wage-bargaining round in Austria’s metalworking sector was marked by the first strikes for 25 years (AT1112011I). At the time, negotiations were being conducted by the six subsectoral employer organisations of the Federal Economic Chamber (WKO) in the metalworking sector, as they had been for the previous 40 years.

Before the 2012 bargaining round began, the employers decided to quit this voluntary bargaining community and conduct wage negotiations within their own subsectors. The first announcement was made in spring 2012 by the largest employer organisation in the sector, the Association of Austrian Machinery and Metalware Industries (FMMI). It argued that this would make it possible to have more detailed discussions about specific conditions in its subsector.

The unions, however, interpreted it as an attempt to hollow out the pattern-setting uniform collective agreement of the strong metalworking sector.

Similar results in all sectors

FMMI started the annual autumn bargaining rounds and its first step was to insist that the negotiation of more flexible working time arrangements should be done at company level. This was met with fierce opposition from the unions, which also declined the employers’ initial offer of a 2.8% wage increase.

This first unsuccessful bargaining round was followed by a nationwide works council conference attended by around 1,000 delegates. More than 300 works meetings were also held at businesses across the country, which led to FMMI abandoning its talks on working time.

After four negotiating rounds, an agreement was reached between the FMMI and the two unions organising sectoral workers. White collar workers were represented by the Union of Salaried Employees, Graphical Workers and Journalists (GPA-djp) and blue collar workers by the manufacturing union (PRO-GE).

The subsequent wage settlements in the remaining five subsectors took two negotiating rounds each to reach an agreement. The result was 12 separate collective agreements for six subsectors – one agreement each for white-collar and blue-collar workers in each sector – negotiated during 14 bargaining rounds.

The wage increases agreed in the six subsectors were in the same range, with an increase in minimum wages of 3.3%–3.4%, and in actual wages of between 3% and 3.3%, depending on wage group. Both rises were above the inflation rate for 2012 of 2.4%. The new minimum wage, gross, was set at €1,636.35.

Altogether, about 180,000 employees are affected by the six wage agreements. In the machinery and metalware industry there are around 120,000 workers, followed by the automotive industry with around 30,000, the mining and steel industry with 17,000, the foundry industry with 7,000, the non-ferrous metal industry with 6,500 workers, and there are around 6,000 in the gas and heating supply sector.

Social partner reaction

The unions fiercely objected to the separation of the wage negotiations, but were happy with the outcome. Rainer Wimmer, President of the PRO-GE union, and Karl Proyer, Deputy National Secretary of GPA-djp, were satisfied that essentially the ‘continuity of a uniform collective agreement’ for the whole sector could be achieved.

The employer side stated that the wage agreements were challenging for businesses, considering the economic outlook.

Mr Thaller, representing the The Association of Mining and Steel Industries (FVBS), which took part in the last of the six wage agreements, felt that separate negotiations were the way forward.

The FMMI said that questions on topics like demographic development and age-appropriate working hours needed to be discussed in a separate working group made up of representatives from both sides of industry.

Commentary

The wage agreements in the metalworking sector in Austria have always been considered as setting a pattern for the rest of the economy. It is the sector which traditionally starts the annual bargaining rounds.

With the decentralisation process which evolved in the 2012 bargaining round, however, it is highly questionable whether the sector can keep its pattern-setting character, because there can be no guarantee that similarly uniform wage agreements will be achieved in the future.

Bernadette Allinger, FORBA (Working Life Research Centre)

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