Private waste-disposal agreement introduces entry wages 25% below the norm

In February 1999, a new collective agreement for the private waste-disposal industry was signed by the ÖTV trade union and the BDE employers' organisation. A notable feature of the deal is that it introduces "entry wages" 25% below the collectively agreed standard rate.

On 11 February 1999, the employers' association for the private waste-disposal industry (Bundesverband der Deutschen Entsorgungswirtschaft, BDE) and the public sector and transport employees' union (Gewerkschaft Öffentliche Dienste, Transport und Verkehr, ÖTV) concluded a collective agreement for the industry. BDE represents more than 1,000 mostly medium-sized companies, with a total of between 140,000 and 160,000 employees.

The main provisions of the agreement - which runs for 15 months until 30 April 2000 - are as follows:

• a consolidated pay increase of 2.5% from 1 February 1999 plus a lump-sum payment of DEM 500 for the four months since the termination of the previous agreement;

• the introduction of "working time accounts" with a one-year time-span. Furthermore, works agreements may be concluded on partial retirement and on lifetime working time accounts;

• newly hired employees may be paid up to 25% below the collectively agreed standard wages in order to avoid economic hardship to a company. However, a bottom line was drawn on such "entry wages": the entry wage may not be lower than comparable wage levels in regional local transport companies. Newly hired employees will attain standard wage levels gradually within the first seven years of employment; and

• an "employment security clause" allows redundancies to be avoided in cases of economic hardship or to avoid insolvency. In these circumstances, the works council or employer may demand an "agreement on collectively agreed employment security" (Vereinbarung zur tariflichen Beschäftigungssicherung) from the parties to the sectoral collective agreement.

The BDE chair, Gerhard Scheele, evaluated the agreement as a success, and emphasised its relevance for company-level activities, stating that in particular the provisions on entry wages would mark a step in the direction of competitiveness. He also hoped that many of the companies that had recently quit the association would now return. ÖTV stated that it was able to reject employers' demands to reduce the wages of current employees.