Metalworking agreement provides for sharp pay increase

In September 2005, earlier than in recent years, the pattern-setting metalworking industry opened Austria’s annual collective bargaining round. After only a few days of negotiations, the sectoral social partners concluded a new collective agreement providing for a considerable pay increase of 3.1%, the highest for several years. This agreement is seen by some commentators as proof of social partnership’s continuing efficiency and independence, since the parties involved ignored third parties’ attempts to influence the bargaining process.

On 23 September 2005, only one week after the first meeting of the bargaining parties involved, the new collective agreement for some 180,000 employees in the metalworking industry was concluded. Accordingly, both minimum and actual wages and salaries (including the apprentices’ remuneration) will increase by 3.1%, beginning on 1 November 2005. This agreement provides for the highest pay increase of recent years (see table below). Both parties, ie branch subunit representatives of the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) on the employers’ side and representatives of the blue-collar Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT) and white-collar Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) on the employees’ side, have emphasised that the bargaining process proved extraordinarily difficult. However, this contrasts with the fact that the sectoral social partners reached an agreement within a few days only. Considering the high inflation rate of 2.5% in 2005 as well as outstandingly high productivity rates of the metalworking industry in 2004 (WKÖ 2005: Leistungsbericht 2004), it soon became clear that the trade unions would not be willing to accept pay increases lower than 3%. Therefore the agreement did not come as a great surprise.

Collectively agreed pay increases in the metalworking industry 2002-2005
Increase of 2002 2003 2004 2005
Minimum wages 2.3% EUR 110* 2.1% 2.5% 3.1%
Actual wages 2.2% EUR 110* 2.1% 2.5% 3.1%
Inflation rate 1.8% 1.3% 2.1% 2.5%

*extra one-off payment

Source: Austrian Trade Union Federation ( Österreichischer Gewerkschaftsbund , ÖGB).

It is important to note that the metalworking sector traditionally opens Austria’s annual bargaining round (usually starting in October, AT0410202F). According to its pattern-setting role in the country’s bargaining process, the metalworking collective agreement sets the tone for subsequent negotiations in other sectors and branches of the economy (AT0412201N). The relative high pay increase provided by the metalworking collective agreement has encourages the unions to make higher demands in other bargaining units in the course of this year’s autumn bargaining round. The GPA’s chief negotiator in the coming commerce bargaining round for about 350,000 employees (plus 100,000 employees in related occupations), for instance, stated that the new metalworking agreement would act as a signal for the commerce sector bargaining parties, which will meet on 20 October for the first time. Although WKÖ representatives have rejected any demands for pay increases in the commerce sector higher than the inflation rate of 2.5%, experts presume that most collective agreements, even those in the services sectors with productivity rates significantly lower than in the manufacturing industry sectors, will provide for pay increases close to 3%.

Some commentators consider the hurried conclusion of the metalworking collective agreement as a deliberate demonstration of social partner efficiency and independence. This is because the bargaining parties involved - in opposition to the explicit wish of both the Federal Minister of Economy and Labour Affairs, Martin Bartenstein, and the Federation of Austrian Industry (Industriellenvereinigung, IV) - left current working time debates out of consideration. They argue that working time issues beyond the existing collectively agreed regulations fall within the purview of legislation and thus within the responsibility of the Minister in charge. Against this background, commentators argue, the WKÖ employers’ organisation seems to be interested in maintaining social peace rather than in further relaxing working time regulations.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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