Unions demonstrate against statutory limits on civil service pay increases

In October 1999, more than 60,000 employees in German public services demonstrated against government plans to limit pay increases for civil servants to the level of inflation for the coming two years.

On 19 October 1999, between 60,000 and 70,000 public service employees went to Berlin to demonstrate against government plans to limit pay increases for Germany's 2 million or so career public servants (Beamte) to the level of inflation over the next two years. The federal government had already announced this intention in June 1999 as part of its new state Budget consolidation plan. There were two demonstrations against the government - one organised by several unions affiliated to the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) and the other by the German Federation of Career Public Servants (Deutscher Beamtenbund, DBB).

The public service trade unions accused the government of introducing a "statutory pay diktat" (staatliches Besoldungsdiktat) or "wage guideline" (Lohnleitlinie), which fundamentally contravenes the principle of collective bargaining autonomy. In Germany, pay for career civil servants is not negotiated in collective bargaining but determined by the state through the Federal Career Public Service Pay Act (Bundesbesoldungsgesetz). Usually, however, statutory pay increases for career civil servants have been very close to what has been collectively agreed for the other employees in public services. Since the federal government has on this occasion announced the forthcoming pay increases for career civil servants long before the next bargaining round is due to start, the unions are now afraid that the imposed linkage of the pay increase to inflation could create the benchmark for all public service employees. Furthermore, the unions also have criticised the government plan because it would freeze the wage differentials between east and west Germany for another two years. According to trade union figures, east German employees in public services receive only 86.5% of the remuneration received by their west German colleagues.

In a reaction to the unions' demonstrations, Chancellor Gerhard Schröder defended the limitation on pay increases for career public servants to the inflation rate as an "acceptable contribution" to the consolidation of the state deficit. According to the federal government, the move will lead to savings of DEM 1.8 billion.