Austria: Metalworkers’ 2015 deal sees wages rise by 2.1%

The metalworking sector is put in the spotlight each autumn as it is the first to begin negotiations for wage agreements.

The sector’s agreement plays an important role across the country as it is widely considered as important in setting the pattern for subsequent negotiations in other industries.

After four rounds of negotiations, the bargaining partners – the Manufacturing Union (ProGe) and the Union of Salaried Employees, Graphical Workers and Journalists (GPA-djp) and the Association of Machinery & Metalware Industries (FFMI) – agreed to a wage increase of 2.1%.

Traditionally wage agreements in Austria compensate for the inflation rate of the previous year plus some compensation for productivity gains. The negotiations were controversial in that the employers proposed using the European-wide inflation rate as a basis for the negotiations rather than the Austrian inflation rate. While the Austrian inflation rate had reached 1.7%, the European inflation rate was only 0.5%.

The employers argued that they compete in a European-wide market and already struggle with high labour costs. Given the much lower inflation rate in the rest of Europe, their competitors are likely to be paying lower wage increases.

The proposal attracted attention in the Austrian media and was largely dismissed by economic experts. The employers eventually abandoned the proposal and accepted the use of the Austrian inflation rate.

The agreement was reached after an 11th hour negotiating marathon on 28 October 2014. The unions also managed to fight off employers’ demands that minimum wages should not be increased. In turn the employers insisted on having separate negotiations for the six different employer associations in the sector – a practice they had started in the 2012 bargaining round.

Representing businesses employing 120,000 workers, FFMI is the country’s largest employers’ organisation. The care industry’s employers’ organisation represents businesses with 30,000 workers, the mining and steel industry organisation 17,000, the foundry industry 7,000, and the non-iron based metal industry 6,500, while gas and heating companies have 2,500 employees.

Despite the separate negotiations, all six agreements contain the same basic conditions, including the 2.1% wage increase.

However, the agreements for the mining and steel sector as well as for the car industry also contain the so-called ‘option free time’. Workers have the ability to use the equivalent of their wage increase to reduce their working time by up to 38.5 hours.

This option was first introduced in the electro and electronics industry, and has proved popular. Unions are looking to extend the idea to other sectors. To take advantage of ‘option free time’, management and works councils are obliged to conclude a company agreement.

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