Interim review finds Bavarian employment pact successful

On 1 July 1998, Bavaria's tripartite employment pact was reviewed by all parties involved and found successful. From June 1996 to June 1998, 153,000 jobs were saved and another 52,000 created.

In January/February 1996, the Bavarian State Government, and all Bavarian trade unions and employers' and trade associations agreed on an "Employment Pact Bavaria" (Beschäftigungspakt Bayern). Subsequently, on 11 June 1996, the partners agreed a formal employment pact "treaty" which included concrete measures to stem the increase in job losses and to halve the number of unemployed persons in the period until 2000, basically through the creation of new jobs and the establishment of new companies. Among other points, measures relevant to labour relations included an increase in part-time jobs and working time flexibility as well as the introduction of "opening clauses" in collective agreements. The Bavarian employment pact, with the participation and guidance of the region's conservative Christian Social government, is the only regional-level employment alliance to survive the failed national Employment Alliance of 1996 (TN9710201S andDE9806166F).

On 1 July 1998, the Bavarian employment pact was reviewed by all partners involved and considered successful. At a summit meeting, Edmund Stoiber, Bavarian Minister-President, Erich Sennebogen, president of the peak association of Bavarian enterprises (Vereinigung der Bayerischen Wirtschaft, VBM) and Fritz Schlösser, regional chair of the DGB trade union confederation, recommended the continuation of the pact.

The interim review covers the period between June 1996 and June 1998 and states that, with government support and due to the moderate wage behaviour of trade unions and employers, 153,000 jobs were saved and another 52,000 were created. According to information from the state ministries involved, the following measures accounted for the positive job record:

• increased public demand in the construction sector - saved 30,000 jobs;
• "fair collective wages practices" whereby public sector contracts for projects such as road-building are given only to companies which declare that they pay wages according to the collectively agreed rates (Tariftreueererklärung) - saved 38,000 jobs;
• various start-up support measures for the foundation of new enterprises - saved 10,000 jobs and created 39,335 jobs;
• regional business promotion policy - saved 45,000 jobs and created 6,000 jobs;
• support for small and medium-sized companies (Mittelstand), excluding start-up support - saved 30,000 jobs and created 4,500 jobs; and
• other measures (among which were several active labour market policies) - saved 1,770 jobs and created 500 jobs.