Collective agreement for the western German construction industry

On 16 April 1998, the collective bargaining parties in western Germany's construction industry concluded a collective agreement which includes a 1.5% pay rise.

On 16 April 1998, the construction workers' union, IG Bau-Agrar-Umwelt, and the construction industry employers' association, Hauptverband der deutschen Bauindustrie (HDB), concluded a new collective agreement for the 830,000 employees in the western German construction industry.

The agreement is valid until 31 March 1999. The most important provisions are:

• a general 1.5% pay rise from 1 April 1998;

• a "framework paper" on the reform of the sector's bipartite social funds (Sozialkassen). This paper includes the introduction of working time accounts and changes in the holiday bonus provisions, whereby the annual extra month's salary will be permanently excluded from the calculation base for the annual holiday bonus. This compensation for the employers' cost increases, agreed by the trade union, is estimated to amount to a reduction in total personnel costs of about 1%. All provisions are planned to be implemented from 1 January 1999. Furthermore, the parties agreed on further talks on the reform of the social funds; and

• an "opening clause" similar to that for the eastern German construction industry (DE9707126N) will be applied in the whole city of Berlin. According to this clause, a company agreement may establish wages which are 6% below the valid hourly wage rate. The deviation must be approved by the collective bargaining parties.

IG Bau chair Klaus Wieshügel stated that he regarded the agreement as success, since the union succeeded in rejecting the employers' demands for concessions in the form of three days holiday or a reduction of the holiday bonus. The employers' negotiator, Werner Kahl, called the result a bearable compromise.