22 February, 2010
German union IG Metall and the employers’ federation Gesamtmetall set the tone inside Germany for 2010-2011 bargaining when the two sides came to an early and enlightened accord on a pair of collective agreements covering 700,000 metal and electronics workers in North Rhine-Westphalia state. The agreement, two months ahead of schedule, is sure to serve as the boilerplate for collective agreements contracts covering 3.4 million German workers in the metals and electronics sectors.
Most profoundly, the new North Rhine-Westphalia pilot contracts guarantee job security until the middle of 2012 and establish a precedent-setting protocol against job redundancies as a lesson to this global economic crisis.
The 25-month pair of agreements was crafted congenially in Dusseldorf between IG Metall and the employers’ federation in two sets of talks that concluded in the early hours of 18 February. One pact defers a wage increase until spring 2011, while the other assures no operational redundancies will occur before 30 June 2012. This agreement also sets new and far-reaching regulations on shortened work-time, including partial wage adjustments for short-term work and lowered costs for employers who utilize short-time work.
A key and unifying part of the job-security agreement, called the “future in work” pact, is a joint and vigorous call on the German government to extend crisis-fostered benefits beyond the end of this year for workers taking shorter work weeks. It also guarantees that shorter work weeks, from 35 to 28 hours with pay of 29.5 hours, will be an option, with that short-time work to be met with sickness, vacation, and Christmas benefits based on 12 months work.
A 2.7% wage increase will take effect around April 2011, with Works Councils given the mandate to negotiate that sum within two months prior or two months after that date. Between May 2010 and March 2011, two single, one-off payments totaling €320 per worker will be made. An important underlying element to the accord is that it allows employers to undertake the precise planning necessary to dig out of the crisis.
IG Metall President Berthold Huber
IG Metall President Berthold Huber termed the job protection provisions of the agreement “a good result in securing jobs in the biggest economic crisis in 80 years.” He added that the government must now do its part to supplement the agreement with extended social insurance benefits. And more precise to the German economy, the agreements serve as a bellwether statement that mass job losses weaken purchasing power far more than nominal wage increases do to spike buying power.
The agreements not only will protect the jobs of hundreds of thousands of workers but equally, they assure that German enterprises will retain the skilled and seasoned staff in a sector so crucial to Germany’s economy.
By late last week, IG Metall and the metal, electronics employers were already tabling the accord in negotiations in Baden-Württemberg state. And this week the novel social contracts will come before the parties in Lower Saxony and Saxony-Anhalt, talks that take place in Hannover.