Pay agreement in construction industry

Employers and trade unions in the Austrian construction industry decided in April 1998 to settle on minimal adjustments to the sector's collective agreement, and to increase wages by 2%. A working group has been requested to agree on outstanding issues by the end of 1998.

At their fifth negotiating meeting on 21 April 1998, the social partners in the construction industry succeeded in concluding an agreement on the wages of 130,000 blue-collar workers in the sector (AT9804177F). Basic rates will rise by 2% from 1 May 1998, whilst actual wages will move up in line with this increase.

The Association of Industrial Employers and the Guild of Crafts Employers, both of which are formal groupings within the Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ), had originally submitted a long list of demands to the Union of Construction and Wood Workers (Gewerkschaft Bau-Holz, GBH), in exchange for a rise of 2.7%. The union opposed all the points on the list and countered with a claim for a pay rise sufficient at least to offset inflation, forecast at 1.2% for 1998. Points were whittled away from the list and the pay offer reduced to 1.9%. In the end the following points were agreed.

• The day in each year on which accumulated entitlements to compensatory time off in lieu fall due as overtime payments is being moved from 15 February to 31 March. This is expected to make it more likely that companies will want to implement the "annual working time model" agreed in 1996 (AT9801156F), though for companies with works councils this looks improbable.

• Working time and rest breaks for drivers are being amended. Instead of 45 minutes after 4.5 hours work, there may now be three 15-minute breaks over a 5.25-hour period. Legal reforms in 1997 made this possible and strict controls imposed in at least one province helped the adjustment.

• A compromise over the "working at altitude" premium rate of pay was found. Construction workers employed above an altitude of 800 metres receive a premium of 9%; above 1,200 metres 14%; above 1,600 metres 18%; and above 2,000 metres 22%. However, the premium below 1,600 metres is payable only if there is no town or village within 200 metres above or below the construction site, and since 1992, this provision had not applied above 1,600 metres either. The employers wanted a return to pre-1992 regulations. The compromise is that above 1,600 metres, if there is a town or village in the 400-metre band, only half the premium will be paid. There are 20 towns above 1,600 metres, some of which have a lot of construction activity because of tourism.

A working group has been set up to evaluate and overhaul the framework agreement for the construction industry in a cost- and income-neutral way. Its interim report is due at the end of October 1998, with the final report by the end of the year. Legal changes are not included in the working group's remit. Thus the main demand of the employers - the adjustment of holiday entitlements - is excluded. Construction workers are eligible for full entitlement to holidays once they have been employed for 46 weeks. In companies with an annualised hours working time model, eligibility occurs effectively after 47 weeks. In the rest of the economy, 52 weeks' service is required. However, while construction workers need not only have a contract for the stipulated period but must also have actually worked the full period, workers in the rest of the economy can start taking up their holiday entitlements after only six months of effective employment.

Negotiations had been unusually acrimonious. Since January the employers had been airing a series of demands which the trade union felt was a direct attack on wages. It had countered by holding public meetings during the negotiation period.