Innovative package deal in the Lower-Saxony metalworking sector

On 22 July 1998, the social partners in the Lower-Saxony metalworking industry agreed on an innovative package deal which includes the foundation of a "joint society" for the promotion of employment.

On 22 July 1998, the metalworking sectoral employers' association of Lower-Saxony (Verband der Metallindustriellen Niedersachsens, VMN) and the Hannover region of the IG Metall metalworkers' trade union agreed a package deal which covers 80,000 employees in the region's metalworking industry.

The deal includes the following elements:

1. partial retirement (Altersteilzeit). The provisions in the collective agreement on partial retirement are identical with the provisions in the agreements of the other western German metalworking industry collective bargaining districts (DE9710133F);

2. framework agreement on employment conditions and general agreement on pay grades. Both agreements, which also include provision for the 35-hour working week, are extended until 31 December 2000;

3. vocational training. In order to promote vocational training, the parties agree to increase the number of places for first-year vocational trainees by 15% in 1998 as compared with 1996; and

4. promotion of employment. The bargaining parties agree to initiate talks on the promotion of employment - eg by the increased introduction of part-time jobs. Employers and employees may voluntarily agree to reducing working time in order to allow for the hiring of an additional employee. The voluntary reduction of working time is to be supported by bonus payments which will be financed by a "joint society" to be founded by the social partners. The metalworking employers will pay DEM 10 million to provide the financial basis for the society. In return, IG Metall agrees to the abolition of the payment of employees' bank charges of DEM 2.5 per month by the employer. Since there are still some unsettled issues and legal problems, this pilot project is expected to start later in 1998.

The employers' association and IG Metall both welcomed the experiment on the promotion of employment as collective bargaining innovation which reflects the social responsibility of the social partners. Regional IG Metall chair Jürgen Peters demanded that the government support the initiative financially. Furthermore, he stated that he could imagine the state of Lower-Saxony and the labour administration joining the society in order to make the bargaining experiment a socio-political experiment.