Germany: Latest working life developments – Q4 2017

Continued economic stability, collective bargaining agreements in construction, banking and the car industry and possible strike action by IG Metall are the main topics of interest in this article. This country update reports on the latest developments in working life in Germany in the fourth quarter of 2017.

Continuing good news for the economy

Germany’s economic situation in the third quarter of 2017 remained stable, as the country’s price-adjusted GDP continued to grow, being 0.8% higher than in the previous quarter (GDP had also increased significantly by 0.6% in the second quarter and by 0.9% in the first quarter). Unemployment rates also reached an all-time low of 5.3% in November. Furthermore, collective bargaining agreements in 2017 generated wage increases between 2.0% and 3.0% (PDF). Several collective agreements were concluded in the fourth quarter of 2017, with social partners opening the collective bargaining round in the metal and electrical industry.

Collective bargaining agreements

The social partners in the construction sector agreed on a two-step increase to their minimum wage.

  • Minimum Wage 1 (for low-qualified jobs in eastern and western Germany) will increase from €11.30 to €11.75 starting 1 January 2018 and, as of 1 March 2019, from €11.75 to €12.20.
  • Minimum Wage 2 (skilled workers – only in western Germany) will increase from €14.70 to €14.95 starting 1 January 2018 and, as of 1 March 2019, from €14.95 to €15.20.

A special clause exists for Berlin and the agreement is dated until 31 December 2019.

In North-Rhine Westphalia, the employer organisation for the metal and electrical industry, Metall NRW, and the German Metalworkers’ Union in the region, IG Metall NRW, were able to agree on a new collective bargaining system for the car industry. Starting 1 January 2018, there will be a new collective agreement, a new pay framework (Entgeltrahmenabkommen) and a modernised payment system – such as a possible increase in pay without a change in classification. The social partners hope to establish a new and modern sector-level bargaining system for the car industry which will replace more than 300 firm-level bargaining agreements signed by IG Metall NRW.

After months of conflict, German retail bank Deutsche Postbank AG and the United Services Union (ver.di) agreed a wage increase in three steps:

  • 1 April 2017 (1.7%);
  • 1 January 2018 (0.9%);
  • 1 January 2019 (2.3%).

As part of the merger of Postbank and Deutsche Bank due to be effected in 2018, the social partners agreed to protect employees from dismissal until 30 June 2021. The total term of the agreement is 28 months and covers around 18,000 employees.

Collective bargaining in the metal industry

In October 2017, IG Metall, the largest metalworkers’ union in Germany, published its demands for the upcoming collective bargaining round in the metal and electrical industry to include a wage increase of 6% and the right to work shorter hours – 28 hours per week with a possible wage adjustment for two years, and the right to return to full-time work afterwards. The sector’s employers attacked the demands as unrealistic and said that they would lead to companies doubting the benefits of collective bargaining coverage.

In November 2017, employer associations published their demands which include a consensual possibility of increasing weekly working hours within a certain time frame. However, this was rejected by IG Metall, calling it a provocation and not negotiable. President Rainer Dulger of the Federation of German Employers' Associations in the Metal and Electrical Engineering Industries (Gesamtmetall) says he expects this bargaining round to be the most difficult one in decades. At the beginning of December 2017, employers presented a second offer including a wage increase of 2% and a lump sum payment of €200. IG Metall has announced warning strikes for January 2018. The bargaining round affects around 3.9 million workers in the industry.

Further training remains important

In October 2017, 30 civil society organisations, including the Confederation of German Trade Unions (DGB), called on the political parties participating in the coalition talks to spend more money on education. The organisations stated that Germany has to make greater efforts to improve the entire educational system – from kindergarten, to schools, universities and further training in employment.

The German Economic Research (IW) published the ninth wave results of its Further Training Survey (PDF), in December. The survey shows that German companies spent €33.5 billion on further training in 2016. It spent the same amount in 2013 and €28.9 billion in 2010. On average, employees spent 17.3 hours in further training measures in 2016. As in previous years, small companies were shown to offer fewer further training measures. However, when they do, they invest more time and money per capita than larger firms. In addition, the survey results indicate an increasing use of informal forms of further training, such as learning on the job, self-directed learning using (electronic) media or participating in information events.

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