New collective agreement reached in construction sector

In late May 2009, the social partners in Germany’s construction sector reached a new collective agreement on pay increases and minimum wages. The provisions are based on a proposal by the mediators in the negotiations and were unanimously accepted by representatives of both the trade union and employer organisations.

On 23 May 2009, the Trade Union for Building, Forestry, Agriculture and the Environment (Industriegewerkschaft Bauen-Agrar-Umwelt, IG BAU) and the two employer organisations in the construction sector – the Central Association of the German Construction Industry (Zentralverband Deutsches Baugewerbe, ZDB) and the Federal Association of the German Construction Industry (Hauptverband der Deutschen Bauindustrie, HDB) – concluded a new collective agreement (in German, 290Kb PDF) in the construction sector. The agreement provides for a general wage increase, as well as a rise in the minimum wage for construction workers. Moreover, it covers about 700,000 employees.

Provisions of agreement

The collective agreement took effect on 1 April 2009 and will expire on 31 March 2011.

For employees in western Germany and Berlin in northeastern Germany, the social partners agreed on a pay rise of 2.3% from 1 June 2009 onwards, to be followed by a further 2.3% for the last 12 months of the agreement. The monthly wages of employees in eastern Germany will be raised by an absolute amount equal to the value of the 2.3% pay rise for the corresponding employees in western Germany. As a result, the wages of construction workers in western and eastern regions will converge in relative terms for at least the next 22 months. In addition, agreement was reached on a lump-sum payment of €60 for workers in May 2009, whereas no pay rise was provided for in April 2009.

The monthly remuneration of apprentices will increase by €20 for those in their first year of training and by 2.3% for those in their second, third and fourth years effective from 1 June 2009. A further 2.3% increase for all apprentices will take effect from 1 April 2010.

In addition, the binding minimum wage applying to the construction sector will be increased in four stages over the period from 1 September 2009 to 30 November 2011.

Finally, the social partners agreed to establish a committee to develop a uniform wage scale for all bargaining districts within the next two years.

Events leading up to agreement

The settlement was reached after IG BAU initiated the collective dispute resolution procedure, which the social partner organisations in the construction sector can invoke in order to avoid strike action. The details of this dispute resolution procedure are laid down in a separate collective agreement (see German contribution (94Kb MS Word doc) to the EIRO thematic feature on Collective dispute resolutions in an enlarged European Union in 2005). The provisions of the new agreement are based on the proposal put forward by the mediators in the negotiations and were unanimously approved by the representatives of both the trade union and employer organisations. Separate approval of the provisions by the bargaining committees of both the trade union and employer organisations is therefore not required.

Prior to mediation, the social partners had failed to reach a settlement in the three bargaining rounds staged since 5 March 2009. IG BAU had initially demanded a wage increase of 6% for all employees and apprentices, as well as the equalisation of wages in eastern and western Germany. In view of the current economic situation, the employer organisations rejected the trade union’s demand as unjustified and emphasised the need to safeguard jobs. They also called for a uniform wage scale in eastern and western Germany but insisted that it must allow for differentiation between the regions on the basis of regional supplements.

Reactions to agreement

In a press release (in German) on 23 May, the Vice-President of ZDB, Frank Dupré, considered the new agreement reasonable in light of the current economic situation. Moreover, he emphasised that the cost burden resulting from the agreement was lower than that of previous agreements. This had made possible equal pay increases for construction workers in western and eastern Germany in absolute terms.

Furthermore, in a press statement (in German) on the same date, the Chair of IG BAU, Klaus Wiesehügel, regarded the settlement as acceptable. Moreover, in a further article (in German), he expressed satisfaction that the agreement applied to the whole of Germany.

Oliver Stettes, Cologne Institute for Economic Research (IW Köln)

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