New collective agreement concluded in chemicals industry

In April 2010, a new collective agreement in Germany’s chemicals industry was concluded by the Mining, Chemicals and Energy Industrial Union and the German Federation of Chemical Employers’ Associations. The agreement provides for lump-sum payments, and includes a number of measures to combat the effects of the recession. New regional networks are to be set up, as well as a fund to support companies that offer continuing employment to trainees completing their apprenticeships.

On 21 April 2010, the Mining, Chemicals and Energy Industrial Union (IG BCE) and the German Federation of Chemicals Employers’ Associations (BAVC) announced in a press article (in German) the conclusion of a new collective agreement in the sector. It runs for 11 months and will cover 550,000 employees in 1,900 establishments between 1 April 2010 (retrospectively) and 1 June 2010, depending on the region.

Content of collective agreement

Lump-sum payments

While wage levels in the chemicals sector remain the same, the new collective agreement guarantees lump-sum payments worth €550 (€611 or €715 for shift workers, and €150 for apprentices). These had to be paid by June 2010. However, the social partners agreed to deal with the payment in a flexible manner. This means that employers and works councils can postpone the payments or reduce them to €300 (€333 or €390 for shift workers) in companies in economic distress. In this case, a separate company agreement must be negotiated. Employees in companies not greatly affected by the economic crisis receive an additional bonus of €200 (€222 or €260 for shift workers). The employer and the works council must both agree to exercise this option in their company. In cases of disagreement, the social partners at national level will decide.

Measures to safeguard employment

BAVC and IG BCE also agreed to safeguard employment in the chemicals sector, adopting a catalogue of measures to be considered before companies make redundancies. Such measures may include short-time work (DE0909029I, DE0904039I) or invoking collectively agreed opening clauses (DE0606019I). The employer must give specific reasons if these instruments are not considered and explain the situation to the works council. In addition, the social partners will set up regional networks to help, for example, in placing employees from struggling companies with other firms.

Provisions for apprentices

The collective agreement for apprentices was also extended until 2013. Employers in the chemicals sector committed to creating 9,000 new training positions for apprentices each year between 2011 and 2013. The social partners have also initiated a new scheme called ‘1,000 for 1,000’. Companies in the industry are to make a one-off payment of €25 million into a new fund to support firms that continue to employ apprentices who have successfully completed their training but have not been offered permanent jobs because of the economic crisis. Such companies will receive €1,000 a month from the fund for a maximum of one year, thereby reducing their personnel costs for the employee in question by about a third. As a result, the social partners hope that around 1,000 apprentices will be able to stay with their companies when they finish their training. This measure is limited to the duration of the current crisis. The fund will be jointly administered by BAVC, IG BCE and the Support Association for the Chemicals Industry (Unterstützungsverein der chemischen Industrie, UCI).

Reaction of social partners

In the press article mentioned above, Hans-Carsten Hansen, who led the negotiations for BAVC, commented that the social partners had established a sound basis for safeguarding employment in the coming months. He emphasised the importance of the new fund in supporting companies and their young employees. The President of BAVC, Eggert Voscherau, pointed out that the global financial and economic crisis is the biggest challenge the social partners have faced in recent decades. The new collective bargaining round has once more underlined the constructive cooperation of the social partners in the German chemicals sector.

IG BCE President Michael Vassiliadis emphasised in a press statement (in German) that the new agreement was an excellent result for employees in the sector, doing justice to varying needs in the industry. Peter Hausmann, board member of IG BCE, highlighted the fact that the latest collective agreement had opened up new prospects for the younger generation and safeguarded employment. IG BCE had proved that collective bargaining can work, even under difficult circumstances. New models and ground-breaking solutions were developed by the social partners in the industry.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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