Metalworking agreement averts threat of industrial action

In November 2009, the social partners in the metalworking industry concluded a new collective agreement covering 170,000 employees. The agreement provides for minimum and actual wage increases of 1.5% and 1.45%, respectively. This outcome was reached after the trade unions had threatened to take industrial action. Against the background of the current economic downturn, some employers argue that wages in the industry are too high.

On 16 November 2009, a new collective agreement covering 170,000 metalworking employees was signed between the Union of Salaried Employees, Graphical Workers and Journalists (Gewerkschaft der Privatangestellten – Druck, Journalismus, Papier, GPA-DJP), the then Metalworking, Textiles and Food-Processing Union (Gewerkschaft Metall, Textil, Nahrung, GMTN), now Pro-ge, and various branches of the Austrian Federal Economic Chamber (Wirtschaftskammer Österreich, WKO).

Threat of industrial action

According to the two sides of industry, the negotiations that commenced in September 2009 proved particularly difficult and were at breaking point on several occasions. Intermittently, the trade unions representing the industry held a series of meetings at the larger metalworking companies to inform workers about the current situation. Whereas both employers and trade unions agreed that, against the background of the current economic downturn, moderate pay increases were acceptable, the point of controversy was the employers’ intention to introduce a more flexible working time scheme. In particular, the employer side demanded an extension of the reference period for calculating overtime from 12 to 24 months, which would lead to significant cuts in overtime premium pay for the employees. When the 2009 collective bargaining process appeared to have reached a deadlock, a resolution was adopted at several work meetings according to which token strikes and overtime boycotts were threatened to force the employers to renegotiate.

Provisions of agreement

Nevertheless, the social partners eventually reached a compromise on 16 November 2009. The agreement provides for increases in minimum and actual wages and salaries – that is, by 1.5% and 1.45%, respectively, beginning on 1 November 2009. Nominally, these increases are rather moderate. However, given the prospective inflation rate of about 0.4%–0.5% in 2009, the increase in real wages and salaries achieved in 2009 (about 1%) roughly corresponds to the real wage growth of recent years, when inflation tended to be much higher (AT0611019I, AT0810029I). Although the trade unions could avert any relaxation of working time schemes, they had to commit themselves to enter into negotiations with the employer side on that issue and to present proposals on how to render working time more flexible in the sector by the end of March 2010.

Social partners’ response

The social partners’ assessment of the wage provisions agreed on varies somewhat. Whereas the trade union side is largely satisfied, the Federation of Austrian Industry (Industriellenvereinigung, IV) deems the pay increases to be too high and not sustainable for many companies. Both the IV and WKO have strongly criticised as reckless the trade unions’ threats during the bargaining procedures. In turn, the trade unions view the employers’ attempt to make a wage agreement contingent on a working time flexibility package as extortion.

View of experts

In contrast to the employers’ side, most experts and commentators consider the metalworking agreement to be economically reasonable. Some commentators have criticised the fact that the exclusive reference to ‘standard’ wage increases, without taking into account the profit yielded by the individual company, may place a differing burden on the companies. However, as the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO) emphasises, labour costs are only part of a multiplicity of cost factors. WIFO has also pointed out that the traditional pattern-setting effect of the metalworking industry for wage bargaining in other economic sectors may be weaker during the 2009–2010 bargaining round, compared with its normal trendsetting role (AT0210202F). This is because the Austrian metalworking industry has been hit harder by the global economic crisis compared with most other industries – as a result, the wage provisions of other sectors are likely to exceed those of the metalworking industry in the current bargaining round.

Georg Adam, Department of Industrial Sociology, University of Vienna

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

Eurofound welcomes feedback and updates on this regulation

Add new comment