Friederike Posselt, Confederation of German Trade Unions (DGB) 1 ETUC Collective Bargaining Coordination Committee, Summer Seminar 2009 Recession salary employment: The Experiences of Bargaining at the National Level – Germany Rome, 1st September 2009 Friederike Posselt, Confederation of German Trade Unions (DGB)

2 Contents  Recent situation, e.g.  Economic Data  Unemployment Rate  Most Concerned Sectors  New Regulations on Short-Time Work  Situation of Collective Bargaining  General Development  Developments in Certain Sectors

Friederike Posselt, Confederation of German Trade Unions (DGB) 3 Recent situation

Friederike Posselt, Confederation of German Trade Unions (DGB) 4 Inflation in 2009  January: 0,9%  February: 1,0%  March: 0,5%  May: 0,0%  June: 0,1%  July: - 0,5%

Friederike Posselt, Confederation of German Trade Unions (DGB) 5 Unemployment rate  June 2009: 8,1%; 3.4 Mio.  employment and social insured work decreased  with regard to the massiv reduction in production the unemployment rate increased moderatly  especially the high demand for short-time work stabilised the labour market  mostly men in West-Germany are concerned  employment rate of women about the same as last year (reason: work in service sector)  unemployment rate increases mostly in the South of Germany where export-oriented industry has its plants  DGB-study: 16% more unemployed among young workers (age: 15 up to 24) than one year before, especially persons between 20 and 24

Friederike Posselt, Confederation of German Trade Unions (DGB) 6 Most concerned sectors  car industry and supplier for the car industry  machine construction May 2009: order entries decreased by 48% compared to year before; three quarters of business are made with foreign buyers; president of employer organisation foresees shrinking in production by one-fifth  temporary agency work July 2008: temps April 2009: temps The number of temps decreased by 30%!

Friederike Posselt, Confederation of German Trade Unions (DGB) 7 New Regulations: Short-Time Work  short-time allowance (“Kurzarbeitergeld“) = local employment agency pays certain percentage (60%; 67%) of compensation for the remuneration which is lost because of short-time work  longer entitlement for short-time allowance  12 months  November 2008: entitlement up to 18 months  June 2009: entitlement up to 24 months and local employment agency reimburses 100 percent of the social insurance contributions starting from the 7th month of short-time work

Friederike Posselt, Confederation of German Trade Unions (DGB) 8 Short-Time Work: Experiences  until mid-June 2009: costs for short-time allowance: Mio. Euro number of workers on short-time work: 1.1 Mio. reduction of working-time: in average about 32%  companys concernd  among the companys: agencies for temporary agency workers with temps  few companys make use of professional training during short-time work, even though the local employment agency would support this financially

Friederike Posselt, Confederation of German Trade Unions (DGB) 9 Further economic stabilisation measures Federal Government's Package of Measures: first and second economic stimulus package examples:  car-scrap bonus (“cash for clunkers“): Euro  “Bank emergency parachute“: million Euro  reduction of income tax  one-off payment of 100 EUR per child  in 2010: reduction of income tax by rediting of health insurance expenditures

Friederike Posselt, Confederation of German Trade Unions (DGB) 10 Development in the Future  unclear when the crisis will reach its bottom  Statements of the Employers´ side:  Dr. Hundt, President of the Confederation of German Employer Organisations (BDA) (July 2009): because of the crisis wage cuts are normally necessary  Otto Kentzler, President of Employers in the Craft Sector (July/August 2009): back to 40 weekly working hours  Martin Kannegiesser, President of Metal Employers (August 2009): against wage cuts, 40-hour-week and reduction of holiday days  election for German parliament takes place at the 27th September 2009: after election of Parliament in 2005: wave of dismissals

Friederike Posselt, Confederation of German Trade Unions (DGB) 11 Situation of Collective Bargaining

Friederike Posselt, Confederation of German Trade Unions (DGB) 12 General remarks to collective agreements in first half 2009  fortunately, collective bargaining did not follow the economic decrease at the same scale  increase rates are mostly between 2.5 % and 3 %  regarding collective agreements settled in 2009: increase of 2.4 %  regarding collective agreements settled in 2008: increase of 3.3 %  expected average pay increase by collective agreements in the year 2009: 3.0 %  special features: months without pay increase, one-off payments, opening clauses  average duration of collective agreement: 23 months (development towards longer agreements)

Friederike Posselt, Confederation of German Trade Unions (DGB) 13 Development of effectivly paid gross wages  effectively paid gross wages could decrease in the future  concerning working time:  reduction of time bank hours  excessive use of short-time work  result: relatively moderate increase of unemployment rate, but possibly pay decrease  concerning pay elements which depend on success or result: these elements will fall short or be reduced

Friederike Posselt, Confederation of German Trade Unions (DGB) 14 Trade union demands  pay demands mostly on a high level  in several sectors unions ask for basic allowance in order to achieve a higher pay increase for lower tariff groups (e.g. Deutsche Telekom AG, retail industry, public services) argument: measure in order to stabilise domestic demand  special sectors:  social and education services of the public service: Verdi and GEW ask for collective agreement for the improvement of health

Friederike Posselt, Confederation of German Trade Unions (DGB) 15 Collective agreement: metal and electro sector 2008  second step of pay rise (2.1 % starting in May 2009) could be postponed by 7 months, if employer and work council settle agreement due to the bad economic situation  only 25.6 % of companies used this clause  in the run-up, the employer president for the sector decleared that half of the companies would make use of this clause  if the clause was used, agreements on employment garantees were often made

Friederike Posselt, Confederation of German Trade Unions (DGB) 16 Collective agreement: metal and electro sector 2009  collective agreement in Baden-Wuerttemberg  longer duration of fixed- term contracts lawful  law only allows fixed-term contract with a maximum duration of 24 months, but opening clause for enlarged duration, if settled in collective agreement  collective agreement now allows a maximum of 48 months reason: in order to avoid dismissals due to the fulfilment of 24 months, IG Metall settled the agreement

Friederike Posselt, Confederation of German Trade Unions (DGB) 17 Collective agreement: metal and electro sector 2009  collective agreement in order to lend skilled workers between companies in the region of Siegen  example: employer A: short-time work employer B: high need of employees due to good order situation  similar agreements in other regions in Germany (e.g. Bavaria, Saxony, Northern Westfalia, Lower Saxony)

Friederike Posselt, Confederation of German Trade Unions (DGB) 18 Collective agreement: chemical industry  increased fallback on opening clauses of the existing collective agreements in the chemical industry since 2009  use of opening clause only, if job security or investment in plant is promised  rise of requests for cut in wages or working hours  collective agreement allows wage cuts up to 10%, but only on a temporary basis  more requests in order to reduce weekly working hours to 35 hours  existing collective agreement contains increase of short-time allowance

Friederike Posselt, Confederation of German Trade Unions (DGB) 19 Collective agreement: service sector  collective agreements with low wage rises  no development towards a reduction of working time  tendency to reduce time bank hours

Friederike Posselt, Confederation of German Trade Unions (DGB) 20 Collective bargaining topics: working time  IG Metall Baden-Wuerttemberg: strategy debate shall start after the summer break  trigger: real weekly working time was in 2007 and 2008 above the working time settled in collective agreements  aim: shorter working time  not yet decided, whether the topic will be addressed in the next bargaining round  starting point: definition of instruments for new and differentiated solutions amongst others: more freedom concerning working time throughout the whole working life