BEERG Newsletter - Collective Bargaining: IG Metall agrees below inflation pay deal

Germany’s biggest union IG Metall has agreed a pay deal that only partly compensates for cost of living for millions of industrial workers. Under the deal, workers will get pay rises well below Germany’s inflation rate, currently at a 70-year high of 11.6%, receiving 5.2% next year and 3.3% in 2024 plus two €1,500 tax-free, lump sum payments. While last week’s deal only covers the Baden-Württemberg region it is expected to be mirrored for all 3.9mn workers in the metal and electrical sector and to set a standard for other wage agreements. 

Companies initially rejected the union’s demands, arguing they were being squeezed by rising energy costs and a probable recession this winter. The outcome is below the union’s initial ask for an 8% annual pay rise, although it is well above the employers’ opening offer to give workers only a €3,000 lump sum payment spread over 30 months.

“The employees will soon have significantly more money in their pockets — and permanently,” said Jörg Hofmann, chair of IG Metall, adding the deal would “bring the employees a noticeable relief in view of the increased prices”.

In the UK, negotiations between rail companies and the Rail, Maritime and Transport workers union (RMT) have broken down meaning there will be eight days of strikes by members over Christmas and New Year. The four 48-hour strikes will take place on December 13-14, 16-17 and on January 3-4, and 6-7. The RMT blamed the “dead hand of government” for the breakdown in negotiations, but ministers have insisted throughout the dispute that the government has no direct role. “We once again urge union leaders to work with employers and come to an agreement which is fair for passengers, taxpayers and workers alike,” the Department for Transport said.