Above-inflation wage increase for metalworking sector

After five tough rounds of negotiations and the threat of strikes, a new collective agreement in the Austrian metalworking industry was reached. Wages will increase by between 2.5% and 3.2%, with the lowest wage groups receiving the highest increase. The highly controversial topic of flexible working time was also raised, but was once again postponed. Both employers and employees are content with the agreement, which should set an example for other sectors.

Background

Austria’s annual main bargaining round takes place in the autumn and traditionally starts with the strong and influential metalworking industry. For the second time in a row, the Federal Economic Chamber’s (WKO) six subsectoral employer organisations conducted separate negotiations, having, in 2012, left the bargaining community to which they had belonged for 40 years (AT1212011I). The unions strongly opposed this step, having adopted a resolution in September to maintain a communal collective agreement. They also condemned employers’ aspirations to move important decision-making away from collective to company level.

Unions threaten to strike

Following a long-standing tradition, the annual bargaining procedure began with the unions (the white-collar Union of Salaried Employees, Graphical Workers and Journalists GPA-djp and the blue-collar Manufacturing Union PRO-GE) handing over their demands to the largest subsectoral employer organisation in the metalworking sector, the Association of Austrian Machinery and Metalware Industries (FMMI). Initially, there seemed little hope of an agreement being reached, with the unions demanding an increase of 3.4% and the FMMI offering 2.3%. After five rounds of negotiations, protest measures (such as works meetings and demonstrations) and the threat of strikes from the unions, an agreement was finally concluded after 11 hours of negotiations on 29 October 2013. Had no agreement been reached, production would have been halted from 06.00 the following day.

Terms of the agreement

Wages were increased to between 2.5% and 3.2% (lower wage groups will receive the biggest rises), with an average wage rise of 2.8%. A minimum monthly wage of €1,688.71 was agreed. In the following weeks, the other five subsectoral employer organisations concluded identical agreements and agreed on the same increases. All 12 collective agreements – separate agreements for blue- and white-collar employees were reached in all six subsectors – are valid from 1 November 2013 onwards, covering about 180,000 workers. The mining and steel industry’s 17,000 workers can choose to take extra time off instead of a wage increase. A works agreement is yet to be concluded on this.

Working time negotiations postponed

Five rounds of negotiations were needed because no agreement could be reached on working time flexibility, which employers first brought up in the 2009 bargaining process (AT1002029I) but then postponed. While employers demand flexible working time, unions argue that this would mean wage cuts for employees. Eventually, the bargaining parties agreed to conduct separate negotiations and agree on a new, binding, collectively agreed working time model by 30 June 2014. This timeline would allow for the implementation of a new working time model before the autumn 2014 bargaining round. According to the employers’ demands, responsibility for working time matters will shift from national to company level, or even to individual level in companies with no works council. The unions strongly oppose this decentralisation process. According to current regulations, up to 120 extra hours worked beyond regular working time may be kept in a working time account for 12 months, and used by employers to reduce working hours when demand for production is low. These provisions, according to managers, are not sufficient.

Reactions and commentary

Both Rainer Wimmer, Chair of the PRO-GE union, and Karl Proyer, Federal Deputy Manager of GPA-djp, expressed relief over the wage increases which are well above the inflation rate.

The President of the Chamber of Labour (AK), Rudolf Kaske, stressed the importance of maintaining private consumption and purchasing power.

Veit Schmid-Schmidsfelden, the employers’ chief negotiator, said that agreement was only reached on condition that working time issues would be negotiated separately.

The Federation of Austrian Industry (IV) commented that, given the sensitive economic situation, the pay rises would make business conditions demanding but were just about acceptable.

The agreement in the metalworking industry is more generous than in previous years. The expert view is that, in particular, the bigger pay rise for low wage groups is positive for the country’s economy and will stimulate a growth in productivity. While all six subsectoral groups agreed on identical wage increases for the second year in a row, it has yet to be seen what the decentralisation process will bring in the future, especially during the highly controversial negotiations on working time that will take place in the first half of 2014.

Bernadette Allinger, FORBA (Working Life Research Centre)

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