Agreements at Mercedes Benz: new and old forms of worksharing

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Trade unions and management at Mercedes Benz's Spanish operations agreed in mid-1997 to create a pool of working hours aimed at achieving greater flexibility in the use of labour and avoiding redundancies. They have also agreed to convert temporary contracts into permanent contracts and to introduce a retirement procedure.

Management and the workers' committee - comprising the CC.OO, UGT, ELA-STV, ESK-CUIS and LAB trade unions - convened in May and June 1997 at the Mercedes Benz plant in Álava to negotiate a reorganisation of working hours patterns to meet fluctuations in demand, that would benefit both parties.

To this end, management and unions have signed a series of agreements that involve a new formula for worksharing, based on flexibility in the number of days worked in exchange for greater job security. A "structural pool of working hours" - a new concept in Spanish collective bargaining - has thus been created through which the company management will be able to allocate plus five or minus five days per worker a year on the basis of the individual number of working days set out in the agreement (220 days per employee for the year 1997). This option will be exercised if demand increases or lost production must be made up (plus five days) or if there is a recession in the market and in cases of force majeure (minus five days).

In exchange for this flexibility, management is offering commitments to relieve the negative effects of any redundancy procedure s (ERE s) or reductions in the workforce and, by the end of 1997, to have converted to permanent contracts a minimum of 500 employees with temporary contracts who have worked in the company for more than six months during the two last years. However, the management reserves the right to select the workers to be given the new contracts, even if they do not meet the established requirements. The number of conversions may seem high, but this is because there is a high percentage of temporary contracts amongst the workforce: there were 1,200 temporary workers out of a workforce of 3,300 and so the minimum figure of 500 does not cover even half the workers on temporary contracts. However, 564 workers have already been converted to permanent contracts by November 1997, more than the agreed figure.

The agreements also include a "retirement procedure", which involves the retirement of workers (including "direct and indirect labour") who will be aged 60 or more in 1998. The only objective of this measure, according to the text of the agreement, is "to be sensitive to older people or people with physical problems". However, it may have another interpretation if it is linked to the previous measure: it would involve the replacement of older workers with younger workers who have already been unilaterally selected by management and prepared for the requirements of production through temporary contracts, and who are better qualified, more malleable and cheaper.

The "working hours pool" in itself seems to be a formula worth promoting because it is a good way to avoid job losses through redundancy, an instrument that is widely used by management in Spain to restructure workforces in response to variations in demand. Worksharing amongst employees to cover companies' requirements for flexibility would be more acceptable. With respect to the other agreements, it might be argued that under the guise of "promoting stable employment and incorporating young workers", an intergenerational division of income is taking place.