New agreements signed in west German chemicals industry

In May 1998, the collective bargaining parties in the west German chemicals industry agreed on a 2.4% wage increase, a further one-off payment of 1.1% of annual pay, a 5% increase in the number of vocational training places and new provisions for partial retirement and additional pension schemes.

On 9 May 1998, the Mining, Chemicals and Energy Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) and the employers' association for the chemical industry (Bundesarbeitgeberverband Chemie, BAVC) signed new collective agreements for the 590,000 or so employees in the west German chemicals industry. With a term of 14 months, the new collective agreements provide for a 2.4% wage increase and, in addition, a one-off payment of about 1.1% of collectively agreed annual income. According to IG BCE, the overall wage increase calculated on an annual basis is equivalent to a 3% pay rise. Originally, IG BCE started the 1998 collective bargaining round with demands for 5% wage increases.

The special interest of the new chemicals agreements lies not only in its distinction between consolidated wage increases and one-off payments, but also in the introduction of an "opening clause" which allows individual employers in accordance with their works councils to postpone the one-off payment or even to reduce its amount. The BAVC welcomed the opening clause as a further step for a greater differentiation of pay policy at company level.

Under the heading of a new "vocational training initiative", the chemicals employers have committed themselves to creating about 5% more vocational training places until the end of 2000. In exchange for this, IG BCE has agreed that vocational trainees should receive a one-off payment of DEM 200 but that otherwise there should be a freeze of vocational trainees' pay.

The collective bargaining parties in the west German chemical industry also concluded a new collective agreement on partial retirement, which renews the old 1996 partial retirement agreement and adapts it to the provisions of the new Partial Retirement Law (DE9801146N). The major difference between the old and the new agreement lies in the extension of the partial retirement period from a maximum of five years to a maximum of 10 years.

Finally, the bargaining parties for the first time concluded provisions relating to a collectively agreed additional pensions scheme (tarifvertraglich geregelte Zusatzrente). According to the new agreement, companies are able, on a voluntary basis, to use certain elements of collectively agreed payments, such as capital-forming payments (vermögenswirksame Leistungen), to finance their occupational pension schemes.

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