Pay dispute resolved in retail sector

After collective bargaining in the German retail trade had dragged on for some weeks, a collective agreement signed in Bavaria on 13 July 2000 brought the dispute between trade unions and employers' associations to an end. Subsequently, the basic guidelines of the Bavaria settlement - a relatively high pay increase and a supplementary pensions scheme - were followed in other bargaining regions.

Existing collective agreements for the retail trade terminated on 31 March 2000 for west German federal states (Länder) and on 30 April 2000 and 30 June 2000 for east German Länder. Collective bargaining in the sector dragged on for weeks after the national employers' association for the retail trade, Hauptverband des Deutschen Einzelhandels (HDE), and the joint federation of medium and large-scale enterprises, Bundesarbeitsgemeinschaft der Mittel- und Großbetriebe (BAG), in North Rhine Westphalia (NRW) offered a pay increase of 2% for 2000 and 2% for 2001, whereas the Commerce, Banking and Insurance Union (Gewerkschaft Handel, Banken und Versicherungen, HBV) and the German White-Collar Workers' Union (Deutsche Angestellten Gewerkschaft, DAG) expected a similar wage settlement to that for the wholesale and foreign trade sector. In this sector, wages and salaries will increase by 2.5% in 2000 and by 2.8% in 2001. On 7 June 2000, the negotiations in NRW failed and the unions launched strike ballots and token strikes in some companies.

In Baden-Württemberg, retail employers offered financial support for private pension schemes for employees, provided that the pay settlements had a term of two years. This was not accepted by HBV, which was afraid of missing out on any economic upswing in the sector. Retail unions and employers in Rhineland-Palatine, Saarland and Hamburg had already agreed on a wage settlement in June 2000, consisting of a pay increase of 2.5% over 12 months, a minimum wage of DEM 2,500 for the lowest salary bracket and an increase in employer contributions to savings schemes from DEM 20 to DEM 46 per month from 1 January 2001. This settlement was later withdrawn by the employers in Rhineland-Palatine and Saarland.

HDE initially wanted to accept a collectively agreed supplementary retirement pension scheme only in return for major cuts in holiday pay. Because of disagreement with the other employers' association, BAG, HDE was not able to push through this demand. For about four weeks, it seemed as if the pay dispute had reached deadlock, not only because of differences between unions and employers but also because the two employers' associations disagreed.

The end of the pay dispute came as something of a surprise for all participants. On 13 July 2000, HBV, DAG and HDE agreed to a pay settlement for Bavaria, similar to that signed in Hamburg in June. It provides for an increase in wages and salaries of 2.5% over 12 months. This means that the pay increase for the retail sector is 0.2 percentage points higher than the average pay increase in the 2000 collective bargaining, which stands at around 2.3% (DE0007270F). In addition, the negotiators agreed on a supplementary pension scheme: from the beginning of the 2001, full-time employees are entitled to receive an additional payment of DEM 20 each month – but only if they invest the money in a company pension scheme. Details will be negotiated in autumn 2000. Part-time employees will receive the money pro rata, while vocational trainees will receive DEM 10 per month. Employees older than 50 years can use the money for alternative investments. At present, it seems as if the social partners will sign a contract with a national pensions insurance company in order to offer additional benefits to those employees whose employers do not offer company pension schemes. The Bavaria agreement became the model for deals in Hesse, Schleswig-Holstein, Saarland, Thuringia, Saxony and Saxony-Anhalt.

On 30 July 2000, the social partners finally agreed on similar collective agreements for Rhineland-Palatine, NRW, Berlin and Baden-Württemberg. Lower Saxony was to continue with a fourth round of negotiations at the end of August. It may be expected that the social partners there - as well as in some of the east German Länder– will also agree on settlements following the pattern of the earlier agreements.

As productivity growth in the retail trade is between 1.5% and 1.7%, and the recent wage settlements are 2.5% (more than 3% if the pension scheme is included) over a term of 12 months, the social partners have not followed the recommendations of the tripartite National Alliance for Jobs that wage settlements should be oriented to the productivity of the sector and should cover a period of more than one year (DE0001232F).