Provisions on working time accounts in collective agreements
Published: 27 March 1998
Since the mid-1980s, the development of collectively agreed working time in Germany has been mainly the result of a compromise between the trade unions' demands for shorter working time and the employers' demand for more working time flexibility. As Table 1 below indicates, over the past 10 years, average annual working time in western Germany has been reduced by about 88 hours from 1,732 in 1987 down to 1,644 hours in 1997. In the past few years, however, there has been a remarkable slowdown in the speed of working time reduction: since 1993 average annual working time has been reduced by only about 16 hours.
According to a study by the Institute for Economics and Social Science (WSI), published in February 1998, there are numerous collectively agreed provisions on the introduction of "working time accounts" in Germany, which have become a major instrument for flexible working time arrangements.
Since the mid-1980s, the development of collectively agreed working time in Germany has been mainly the result of a compromise between the trade unions' demands for shorter working time and the employers' demand for more working time flexibility. As Table 1 below indicates, over the past 10 years, average annual working time in western Germany has been reduced by about 88 hours from 1,732 in 1987 down to 1,644 hours in 1997. In the past few years, however, there has been a remarkable slowdown in the speed of working time reduction: since 1993 average annual working time has been reduced by only about 16 hours.
| 1987 | 1,732 |
| 1988 | 1,722 |
| 1989 | 1,704 |
| 1990 | 1,689 |
| 1991 | 1,676 |
| 1992 | 1,673 |
| 1993 | 1,660 |
| 1994 | 1,656 |
| 1995 | 1,652 |
| 1996 | 1,645 |
| 1997 | 1,644 |
Source: WSI Collective Agreement Archive 1998.
Parallel to the development of working time reduction, various flexible working time arrangements have been introduced, such as:
the possibility for a certain percentage of employees to work permanently longer than the collectively agreed working time;
the introduction of working time "corridors", which give companies the possibility, within certain limits, to reduce or to extend working time;
the possibility for further working time reduction without wage compensation for a limited period of time;
the introduction of seasonal work; and
new regulations which make weekend work easier to introduce.
In addition, in recent years the introduction of so-called individual "working time accounts" (Arbeitszeitkonten) has become a major instrument for flexible working time arrangements. According to a recent study by the Institute for Economics and Social Science (Wirtschafts- und Sozialwissenschaftliches Institut, WSI), there are numerous collective agreements which include provisions for the introduction and application of these working time accounts ("Arbeitszeitkonten. Ein Überblick über ausgewählte tarifliche Regelungen", Reinhard Bispinck, WSI Informationen zur Tarifpolitik, Düsseldorf, February 1998).
Working time accounts in action
The basic idea behind working time accounts is that over a certain period of time an employee is able to work longer or shorter hours than collectively agreed and thereby collect working time credits or debits in an individual working time account, which are later compensated for by additional free time or work. From the employers' point of view, this concept has at least two major advantages. First it allows the companies to have more flexible production, which is more closely related to the demands of the market. Second, since most of the working time credits are not counted as overtime, the employer does not have to pay regular overtime bonuses and can thus reduce labour costs. From an employees' viewpoint, the use of working time accounts might be an instrument for more "time sovereignty" (Zeitsouveränität) which could help them organise working time more in line with their individual needs and interests.
The WSI study, which is based on an evaluation of collective agreements in about 60 collective bargaining units, finds that there is no single model of a working time account. On the contrary, the opportunities as well as the restrictions on how to use working time accounts differ widely from sector to sector. Additionally, collectively agreed provisions usually have to be adopted at company-level through the conclusion of a works agreement.
Most collective agreements define limiting values for the use of working time accounts. The agreed limits range between 40 and 600 hours for maximum working time credits and between 20 and 170 hours for maximum working time debits. In addition, most collective agreements prescribe a certain period of time - usually between six months and two years - within which the working time account has to be balanced. Table 2 below gives the limits laid down in a selection of agreements.
| Collective agreement | Max. hours credit | Max. hours debit |
|---|---|---|
| Water industries (Northrhine-Westphalia) | 600 | 40 |
| Agriculture (Schleswig-Holstein) | 520 | - |
| Confectionery | 494 | - |
| Private transport and traffic (Saxony) | 400 | - |
| Fine sheet metal packaging (Hamburg) | 224 | 170 |
| Real estate and property management | 150 | 80 |
| Construction industry | 150 | 70 |
| Scrap metal and recycling business | 148 | 100 |
| Fitters and wrought-iron workers trade | 130 | 70 |
| Automobile trade (Hessen) | 120 | 90 |
| Plumbing trade (Northrhine-Westphalia) | 120 | 60 |
| Hairdressing | 111 | - |
| Book trade (Bavaria) | 100 | 20 |
| Electronics trade (Hessen) | 100 | 30 |
| Shipping company | 60 | - |
| Electronics trade (Baden-Würtemberg) | 60 | 40 |
| Wood and plastics industries | 60 | 30 |
| Air traffic control | 50 | 25 |
| Beverage industries | 40 | - |
Source: WSI Collective Agreement Archive 1998
According to the WSI study, the dominant working time account model is rather oriented to flexible adaptation to short- and mid-term changes in the market situation. Although most collective agreements contain a general declaration of intent to improve flexible working time options in the interest of the employees, the use of working time accounts is in reality primarily influenced by the needs of the companies. Collectively agreed provisions on working time accounts, therefore, also have the purpose of protecting the employees against a one-sided subordination to the employers' demands for flexibility, says the report. For example, the determination of limiting values for working time accounts could be interpreted as a kind of protection against an excessive extension of individual working time. On the other hand, a more extensive working time account could also be in the interest of the employees, who might prefer a more long-term flexibility.
Most collective agreements foresee a regular (at least monthly) information to the employees about the balance of their individual working time account. Many collective agreements also give works councils information and consultation rights on the use of working time accounts. Only a few agreements include the collective bargaining parties in the determination of working time account provisions at company-level.
Finally, the WSI study establishes that most collective agreements contain no provision to safeguard working time credits in the case of bankruptcy. While some agreements include vague provisions, only the collective agreements for horticulture and agriculture foresee the introduction of a special fund which could compensate for losses of working time credits in the case of bankruptcy. Such funds, it is stated, should be managed jointly by employers' associations and trade unions.
Commentary
The widespread introduction of collectively agreed working time accounts gives companies the opportunity to have far-reaching flexible working time arrangements which correspond closely to changing market constraints. Collective agreements on working time accounts are furthermore another proof that the German system of branch-level collective agreements is much more flexible and differentiated than its image.
However, from an employees' perspective the issue of flexible working time arrangements by using working time accounts is rather ambiguous. On the one hand there is an opportunity for more individual "time sovereignty", on the other hand there is the danger of a subordination to the company's demands for flexibility. Regarding the latter, the WSI study sees the need for further improvements in collective agreements in order to define an acceptable compromise. (Thorsten Schulten, Institute for Economics and Social Science (WSI))
Eurofound recommends citing this publication in the following way.
Eurofound (1998), Provisions on working time accounts in collective agreements, article.
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