Germany: Wave of strikes in public service sector

After months of industrial action, structural pay increases affecting some 240,000 public employees working in nursery schools, daycare centres for children, the youth welfare service and social agencies have been agreed. The dispute between the German Municipal Employers’ Association and two key unions in the sector, the United Services Union and the German Union of Education, included a four-week strike.

On 30 September 2015, the United Services Union (ver.di) and the German Union of Education (GEW), both affiliated to the Confederation of German Trade Unions (DGB), together with the German Civil Service Association (dbb), reached agreement with the Municipal Employers’ Association (VKAon a package of provisions. They give one-off payments and new pay grades to some 240,000 public employees working in nursery schools and daycare centres for children, and in the youth welfare service and social agencies.

The settlement followed months of dispute, including a four-week strike that lasted from the beginning of May to the first week of June 2015. This strike involved tens of thousands of nursery school teachers, crèche nurses and social workers, and led to the temporary shutdown of thousands of nursery schools and daycare centres for children. A settlement reached at the end of June 2015 through a dispute resolution procedure was then rejected in a ballot in August 2015 by more than two-thirds of union members. New negotiations produced the current settlement of 30 September.

Provisions of agreement

The bargaining parties finally agreed on changes in the way the various occupations are positioned in the special grading system that applies exclusively to employees in the public social and educational services. The amount of the settlement is slightly above a proposal made by mediators in July, but there are changes in how the various groups of employees will benefit. The monthly salaries of childcare nurses will increase by between €93 and €138 calculated on a full-time basis. The salaries of social workers in the general social services (Allgemeiner Sozialdienst) will increase by between €30 and €80 a month. Ver.di calculates the average increase across all occupations to be 3.7%, whereas VKA calculates it to be 3.3%.

As in the mediation proposal, the agreement lasts from 1 July 2015 to 30 June 2020. Employers rejected the unions' demand that employees should keep their seniority if moving to another employer in the public service.

The outcome will indirectly affect several hundreds of thousands of similar workers employed in the non-profit sector whose pay is not covered by public sector agreements, but is either regulated by private sector collective agreements or agreements that cover institutions under the authority of the churches.

It should be emphasised that this settlement is concerned with structural improvements in monthly salaries. All employees will eventually benefit from the increases agreed in the forthcoming pay rounds for the public sector, starting at the beginning of 2016.

About the dispute

The four-week strike in this dispute was the second national strike in this sector in post-war Germany. In 2009, public employees in childcare and social services fought a similar battle for better working conditions and pay. The 2015 dispute is part of a broader campaign by ver.di and GEW for a re-evaluation of how those in the care professions are paid. At the core of the 2015 dispute was the question of a proper grading of educational staff and social workers. The unions demanded structural improvements in the pay scales applicable to childcare staff and social workers. On average, these amounted to pay increases of about 10%. In addition, they demanded that employees should keep their seniority if they moved to another employer within the public service.

Terms and conditions for public sector employees in Germany are regulated by the general collective agreement for the public sector (Tarifvertrag für den Öffentlichen Dienst, TvÖD). In 2009, the bargaining parties agreed on a special grading system which applies exclusively to employees in the public social and educational services. All current employees are grouped in one of the 16 scales (S3 to S18). Educational assistants (Kinderpfleger) are placed on scale S3 or S4 depending on the requirements of the job. Nursery school teachers or crèche nurses with a professional education are on scale S6 to S9, again depending on requirements and responsibilities. The top scales are generally reserved for heads of large daycare centres or approved schools. Within each scale, there are up to six pay grades related to the employee's length of service.

The public focus during the four-week strike was on crèche nurses, of whom some 96% are women. Crèche nurses start with a monthly salary of €2,366 (as of 1 March 2015). However, some 60% work part time and therefore do not receive the full salary, which is calculated on a weekly working time of 39 or 40 hours depending on the federal state (Land) where they work.

Public childcare and public social services in Germany are under the authority of the municipalities. The municipal employers, while acknowledging their appreciation for the work of the employees concerned, rejected the demands. They said there had been previous improvements in pay and they faced budget constraints. They rejected any increase in salaries across the board, but offered specific increases for a range of occupations and positions.

The campaign resonated very well within the professions concerned. Both ver.di and GEW reported a substantial increase in membership during the dispute. At the beginning of May 2015, between 93.4% and 96.5% of the union members balloted by ver.di, GEW and dbb voted in favour of industrial action. The strike attracted major public attention. A national survey found that 69% of the public felt sympathy for the strikers. Support among parents who had to seek alternative childcare, however, was mixed and dwindled the longer the strike lasted. As childcare is subsidised by the local authorities, the strike did not have any economic effect on employers. Indeed, the municipalities saved money because they did not have to pay the strikers' salaries.

After four weeks of strike action, the parties agreed to a joint dispute resolution procedure during which strike action was postponed. On 23 June, both parties presented a compromise which provided differentiated increases for many but not all groups of employees. The increases ranged from 2% to 4%, but remained well below the union demands. This compromise was rejected by 70% of ver.di members (by far the largest group of strikers) and two-thirds of GEW members.

Shift of industrial action to service sector

There has been a shift of industrial action from the manufacturing sector to the service sector in Germany since about 2005. A major reason is the ongoing fragmentation of collective bargaining. This was partly triggered by the privatisation and liberalisation of public transport, the postal and telecommunication services, and healthcare which led to a large number of new bargaining units. According to figures collected by the Institute of Economic and Social Research (WSI), 82% of all strike days between 2004 and 2013 can be attributed to the service sector. The annual number of bargaining disputes for which industrial action was approved by the ver.di executive quadrupled from 36 in 2004 to 163 in 2009, and has remained at that level every year up to 2014 with the exception of 2010 when it dropped to 110.

In 2015 four other disputes in the service sector attracted particular public attention. After almost a year and several waves of strikes, the dispute between the German Engine Drivers’ Union (GDL) – an affiliate of dbb – and German Rail (Deutsche Bahn) was settled on 1 July 2015 following mediation. The dispute was particularly difficult as GDL had insisted on being recognised as a separate bargaining party alongside the larger Rail and Transport Union (EVG). This was eventually conceded by management, but GDL had to agree to a joint dispute resolution procedure which must be started before any industrial action takes place if one side demands it.

A major dispute was triggered by the decision of Deutsche Post DHL Group to relocate its parcel delivery services to regional subsidiaries, under the name DHL Delivery. These subsidiaries are outside the scope of the company-level collective agreement and wages are in line with the substantially lower rates of the logistics industry. The dispute was finally settled on 6 July 2015 after four weeks of strike. The parties signed a package of collective agreements which, in addition to comparatively moderate pay increases, stipulated that job guarantees be offered to all employees of Deutsche Post until 2019. The package also excludes further outsourcing of operations until 2018. However, Deutsche Post did not back down on the establishment of DHL Delivery and the employees involved were not put back under the umbrella of the Deutsche Post agreement.

Two other disputes are still pending. The first involves the German airline company, Lufthansa, and the pilots’ union, Cockpit (VC). The issue at stake here is Lufthansa's intention to cancel an old collective agreement on early retirement for pilots. Despite several rounds of strikes, this dispute which started in 2014 had not been resolved as of 30 September 2015. The second unsolved dispute, which began in 2013, is that between ver.di and Germany’s largest mail order company, Amazon. Ver.di is demanding that Amazon concludes a collective agreement similar to the ones in place for the retail and mail order sectors. This demand has been rejected by Amazon, which so far has refused to enter into negotiations with the union. Although ver.di managed to extend its strike activity from one Amazon distribution centre in 2013 to eight out of nine centres in 2015, it did not succeed in bringing Amazon to the bargaining table. In addition to these prominent disputes, there have been strikes in the retail sector and a national strike at the Deutsche Bank subsidiary, Postbank, both of which have led to collective agreements.

Reactions to the agreement

The chief negotiator for VKA, Thomas Böhle, stated that the municipal employers had agreed to a settlement that was at the limit of what employers could bear given the difficult budget situation of the municipalities, but acceptable when compared with the demands of the unions. VKA said the agreement would involve additional costs of €315 million, which was €9 million above what was proposed by the dispute resolution procedure.

The Chair of ver.di, Frank Bsirske, admitted that the agreement was not what the union had hoped for. However, he said it was a step forward in efforts to gain more recognition for the professions in the education sector. Ver.di regretted in particular that it had not been able to gain improvements for all groups of social workers, but felt it should contribute to avoiding further strikes. The union therefore recommended approval of the settlement in the final ballot to its members.

The chief negotiator of GEW, Andreas Gehrke, agreed with Frank Bsirske that it would not have been possible for the unions to achieve all their demands. However, he stressed that younger childcare workers in particular would receive higher salaries than those initially proposed by the mediators. GEW also recommended approval of the settlement to its members.

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