Interim report on 2010 bargaining round

In July 2010, the Institute of Economic and Social Research presented its interim report on Germany’s 2010 round of collective bargaining which was strongly affected by the economic crisis. The study evaluates agreements concluded in the first half of 2010 which affect about 37% of all employees whose working conditions are determined by collective bargaining. The average annual increase in wages and salaries will be around 1.7% in 2010, well below the average of 2.6% in 2009.

Background

In July 2010, the Collective Agreement Archive (Tarifarchiv) of the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans Böckler Foundation (Hans-Böckler-Stiftung, HBS) published its interim report (in German) on the 2010 collective bargaining round. The study evaluates all collective agreements concluded by trade unions affiliated to the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) in the first half of 2010. These new collective agreements cover 7.1 million employees (of whom one million are in eastern Germany), which accounts for about 37% of all employees covered by collective agreements. In 2010, a further seven million employees are to receive pay increases agreed in previous years.

Calculated on an annual basis, the average pay increase in wages based on collective agreements for 2010 will be around 1.7%, which is well below the average increase of 2.6% in 2009 (DE1002029I). The average increase in eastern German pay levels is estimated to be about 2.0%, thereby bringing this year’s increases above the western German level (Table 1). Average collectively agreed pay in eastern Germany will amount to around 96.2% of average western German pay levels in 2010, which is slightly above the 96.1% reached at the end of 2009.

Table 1: Increases in collectively agreed pay, by sector (%)*

Sector

Western Germany

Eastern Germany

Germany

Horticulture, agriculture, forestry

2.2

-

2.2

Energy, water, mining

2.3

2.1

2.3

Raw materials and production industries

2.1

3.4

2.2

Investment goods industry

1.0

0.8

0.9

Consumption goods industry

1.5

1.6

1.5

Food industry

2.3

3.9

2.4

Construction industry

2.4

2.7

2.5

Commerce

2.5

2.4

2.5

Transport and communications

2.3

2.6

2.3

Banking, insurance

1.7

1.7

1.7

Private services, non-profit associations

2.4

3.2

2.5

Public services, social security

0.8

1.0

0.9

All sectors

1.7

2.0

1.7

Notes: * Annual pay increases in 2010 compared with 2009. Figures are calculated on the basis of all pay increases coming into effect in 2010, collectively agreed either in the first half of 2010 or in previous years.

Source: WSI Collective Agreement Archive 2010 (as at 30 June 2010)

Major agreements

The 2010 bargaining rounds in the German metalworking and electrical industry were strongly affected by the impact of the economic crisis on the industry (DE1004029I). 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, the German Metalworkers’ Union (Industriegewerkschaft Metall, IG Metall) and the Baden-Württemberg Employer Association for the Metal and Electrical Industry (Verband der Metall- und Elektroindustrie Baden Württemberg, Südwestmetall) settled on 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. 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. 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, wages will increase by 2.7%. A works agreement can alter this date by up to two months. 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.

On 27 February following a joint dispute resolution procedure, the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) agreed with representatives of the federal government (Bundesregierung) and the Municipal Employers’ Association (Vereinigung kommunaler Arbeitgeberverbände, VKA) on a new collective agreement that will cover about 2.1 million public sector employees at federal and local level. The collective agreement covers the period from 1 January 2010 to 29 February 2012. The agreement provides for a general pay increase of 1.2% in January 2010 followed by an increase of 0.6% with effect from 1 January 2011 and a further general pay increase of 0.5% with effect from 1 August 2011. In January 2011, there will also be a one-off payment of €240.

On 21 March, the Mining, Chemicals and Energy Industrial Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) and the German Federation of Chemicals Employers’ Associations (Bundesarbeitgeberverband Chemie, BAVC) settled on a package of collective agreements on pay and vocational training and a series of measures to minimise the risk of forced redundancies. The agreement covers about 550,000 workers. The pay agreements include one-off payments of either €550, €611 or €715 depending on whether employees work normal hours or two or three shifts including weekends. The pay agreements have a short duration of only 11 months starting on 1 April, 1 May or 1 June 2010 depending on the bargaining region.

Other collective pay agreements concluded in the first half of 2010 included those in the paper processing industries and in banking (Table 2).

Table 2: Selected pay agreements concluded up to June 2010

Date

Bargaining area

Outcome

18 February

Metalworking industry, North-Rhine Westphalia (Pilot agreement)

One-off payment of €320 for the period between May 2010 and March 2011; 2.7% increase on 1 April 2011; duration until 31 March 2012

27 February

Public service, federal and local level

One-off payment of €240 in January 2011; 1.2% increase with effect from 1 January 2010; 0.6% on 1 January 2011; 0.5% increase on 1 August 2011; duration until 29 February 2012

21 April

Chemicals industry

One-off payments of €550/€611/€715 depending on shift system; duration depending on region until March, April or May 2011

10 May 2010

German harbours

Two ‘zero months’ (June and July 2010); 1% increase on 1 August 2010; €550 one-off payment in January 2011

10 May 2010

Automotive trades (sales and repair)

One ‘zero month’ (May 2010), increase of 0.6% on 1 June 2010; 1% on 1 December 2010; 1.9% on 1 July 2011; 0.6% on 1 January 2012; duration until 30 April 2012

20 May 2010

Paper processing industry

Six ‘zero months’ (May–October 2010); 1.3% on 1 November 2011; 1.5% on 1 May 2011; 1.3% on 1 March 2012; duration until 31 August 2012

31 May 2010

Hotel and restaurants, North-Rhine Westphalia

Two ‘zero months’ (June and July); 2% on 1 August 2010; 1.8% on 1 July 2011; duration until 30 April 2012.

10 June 2010

Banking

€300 one-off payment for period May–December 2010; 1.6% on 1 January 2011; duration until 28 February 2012

Source: WSI Collective Agreement Archive, July 2010

Gender pay gap

Although a considerable gap in earnings between men and women continues to exist in Germany, special provisions to tackle wage discrimination and to promote equal opportunities were not included in those collective agreements concluded in the first half of 2010.

Commentary

Collectively agreed pay increases in the first half of 2010 were, on average, well below those concluded in 2009. The effects of the economic crisis had an impact on a number of important bargaining rounds. In particular, in the metalworking and steel industries the bargaining parties were keen to conclude agreements which included measures to help maintain existing employment levels, most frequently through the extension of short-time working schemes. The bargaining round in the public sector was affected by the negative consequences of the crisis, and the government’s response to it. In contrast to previous years, there was comparatively little strike activity accompanying the bargaining rounds.

Heiner Dribbusch, Institute of Economic and Social Research (WSI)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment