New-style package agreed at Deutsche Telekom AG

On 9 April 1997, Deutsche Telekom AG and the Deutsche Postgewerkschaft trade union signed a package of new-style collective agreements for the employees at the DeTeMobil mobile telphones subsidiary.

On 9 April 1997, the telecommunication conglomerate Deutsche Telekom AG and the Deutsche Postgewerkschaft (DPG) postal workers' union signed a package of enterprise-level collective agreements for the employees at the Telekom subsidiary Deutsche Telekom Mobilnet GmbH (DeTeMobil). After five months of negotiations, this package represents the first such collective agreement in the mobile telephony industry since the beginning of the step-by-step liberalisation of the telecommunications sector.

The package contains the following agreements:

• the framework agreement on working conditions establishes a 38-hour working week, annual holiday of 30 days, 100% sick pay during the first six weeks of sickness, and the conditions of the occupational pension scheme;
• the framework agreement on wage-payment systems includes a basic compensation system and a performance-related pay system. The basic wage is determined on the basis of eight pay grades and four levels. The fourth level is reached at the beginning of the fourth year of employment at DeTeMobil. In addition, all employees receive a variable performance-related pay component, which is determined on the basis of annual performance appraisals; and
• it was agreed that the bargaining partners will soon negotiate about regulations on the design of the performance related pay scheme, which will be organised according to the "management by objectives" principle.

Furthermore, the parties involved abolished the distinction between waged workers and salaried employees as well as between employees working in eastern and western Germany. All agreements cover about 4,000 employees, 86% of all people employed at DeTeMobil, and will come into force on 1 July 1997.

According to Günter Heidorn, a member of the executive board of the DPG, the package sets the standard for all other trade unions in the telecommunications sector, and should be the basis for national and European enterprise-level collective bargaining. Heinz Klinkhammer, personnel director at the Deutsche Telekom, welcomed the agreement as a radical turning-away from the traditional compensation structures of the public sector.