Agreement to safeguard jobs signed in metalworking industry

The bargaining parties in the German metalworking and electrical industry have settled collective agreement packages that focus on safeguarding employment and on training rather than pay increases. The packages provide for collectively agreed short-time working and provide for a new scheme of ‘training leave’. Agreements reached in Baden-Württemberg and North-Rhine Westphalia in February 2010 served as pilot agreements for all other bargaining regions.

The 2010 bargaining rounds in the German metalworking and electrical industry were strongly affected by the impact of the economic crisis on the industry. In January 2010, the German Metalworkers’ Union (Industriegewerkschaft Metall, IG Metall) issued a statement (in German) that some 700,000 jobs were at risk in the event of short-time working and that other measures safeguarding employment were not being fostered by the government and employers. Unprecedented in its bargaining history, the trade union decided to enter into the bargaining round without having tabled a specific pay demand; instead, the focus was placed on employment and training. Talks between the bargaining parties started long before the current collective agreement was due to expire in April 2010 and were remarkably brief.

On 17 February 2010, IG Metall and the Baden-Württemberg Employer Association for the Metal and Electrical Industry (Verband der Metall- und Elektroindustrie Baden Württemberg, Südwestmetall) settled a regional agreement package. The following day, on 18 February, IG Metall and the North-Rhine Westphalia Employer Association for the Metal and Electrical Industry (Verband der Metall- und Elektroindustrie Nordrhein-Westfalen, Metall NRW) concluded another regional agreement package. Up until April 2010, these two settlements served as pilot agreements for all other bargaining regions. The accords contain a pay agreement, an agreement on employment and a further agreement on training, which will last until the spring of 2012.

Pay agreement

The pay agreement extends the pay scale tables of the 2008 agreement (DE0812049I) from 1 May 2010 to 31 March 2011. In this period, a lump sum of €320 (€120 for apprentices) will be paid in two steps. On 1 April 2011, the wages will increase by 2.7%. A works agreement can alter this date by up to two months.

Employment agreement

The agreement ‘Future in work’ (Zukunft in Arbeit, ZiA) targets establishments implementing short-time working for at least 12 months and provides the opportunity to extend the duration to 24 months by way of a voluntary company agreement. Statutory short-time working is restricted to 18 months if started after 1 January 2010. During this period, redundancies are not allowed if they are on the same grounds as short-time working.

The ZiA agreement plans for two phases. In the six months of statutory short-time working, when the allowance is covered by the Federal Employment Agency (Bundesagentur für Arbeit, BA), the agreement aims to reduce the employers’ residual costs. Instead of paying the Christmas and holiday bonuses once a year, the bonuses will be divided into 12 parts and added to the monthly allowance. The residual costs for the employers will decrease, because they will then only pay the share of bonuses relative to the number of hours worked.

After the end of statutory short-time working, the agreement arranges for a reduction of weekly working time by partial wage compensation. Weekly working time can be reduced to a minimum of 29 hours in east Germany or to between 28 and 26 hours in west Germany, depending on the region. A reduction to 28 hours is enforceable through an arbitration committee; a reduction to 26 hours is to be settled through a works agreement. Any reduction below 31 hours a week is to be compensated. In the case of 28 weekly working hours, 29.5 hours are to be paid; in case of 26 hours, it is a wage-equivalent of two extra hours.

The agreement also stipulates that employers and works councils should support young workers after they complete their apprenticeship to secure employment for at least 12 months.

Agreement on continuous training

The agreement on continuous training, entitled ‘Future in qualification’ (Zukunft in Bildung, ZiB) provides for a new scheme of ‘continuous training leave’ of up to five years. Similar to the partial retirement scheme, a voluntary ‘training leave’ will be made possible by the employee working for a lower wage in the preceding years. For instance, a one-year training leave can be arranged by working two years for two thirds of the wage. The measure is restricted to 1% of all employees in establishments with over 500 staff.

Reactions of social partners

Commenting on the bargaining results, IG Metall and the employer organisation Gesamtmetall each highlighted that the agreements will safeguard employment. Both parties have been calling on the government to give additional support by cutting the employers’ social security contributions during statutory short-time working and during the additional phase of collectively agreed reduced working time.

Birgit Kraemer, Institute of Economic and Social Research (WSI)

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