Germany’s giant IG Metall union has secured an inflation-busting pay increase of 4.3% for engineers and metal workers.
Germany’s giant IG Metall union has secured an inflation-busting pay deal for engineers and metal workers, paving the way for a 4.3 per cent wage increase in Germany’s manufacturing sectors.
The agreement also improved co-determination rights on regulating agency and contract workers, as well as job security for apprentices. The 4.3 per cent pay hike effects 800,000 workers from May 1st, this year.
The deal represents the biggest pay rise in 20 years and is more than double the inflation rate.
Co-determination rights for works councils will come into play if the employer intends to take on agency workers. Company works councils (usually dominated by union reps) will now have the right to oppose the use of agency labour and, if disputed, the employer has to go to an industrial court.
The other option for employers is to negotiate an agreement on agency labour, including regulating the number of agency workers being used with limits on the time period and agreement on their wages.
The expectation is that most employers will choose to reach a negotiated agreement giving works councils the power to restrict agency work and guarantee equal pay.
The other success is a new agreement on job guarantees for apprentices. The agreement means the employer must agree with the works council on the further need for staff, before offering open-ended employment to an agreed number of apprentices.
If such an agreement does not exist, the employer must discuss with the works council whether staff are needed six months before the apprenticeships end. The employer must then offer an agreed number of apprentices open-ended employment and a job for a minimum of one year to the rest.
Three months before ending this time, the employer must again negotiate with the works council on whether there is need for additional staff and therefore an opportunity to offer more apprentices open ended employment. In comparison to wage deals across manufacturing in other EU countries, the IG Metall deal is a real breakthrough for German workers.
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There is an understanding that to develop economic growth, workers need spending power across an entire sector such as metals. However, IG Metall won the deal after taking a tough negotiating position and a series of targeted warning strikes by workers. The deal will be applied almost universally in Germany’s manufacturing sector.
Germany are at the forefront of the austerity campaign, yet were still able to make these changes for German workers. Hopefully this development will encourage other European countries to follow suit.