German pay deal "shows system works"

The German union confederation, the DGB, has welcomed a recent agreement for the metalworking industry as a positive example of how the existing system of collective bargaining can work well.

Unions have been defending the current system, under which pay and conditions are generally set at industry rather than company level. The system has been attacked by some employers and politicians as not giving sufficient freedom to companies to make their own decisions.

The metalworking agreement is a two-year deal linking above-inflation pay increases worth 2.2% this year and 2.7% next with potentially increased working time at company level. The deal would allow 50% of a company's workforce (up from 18%) to work 40 hours a week rather than the standard 35, provided the elected works council agrees. However, the unions have fought off the original employers' demand for the extra work to be unpaid.

The leading conservative newspaper, the FAZ, sees the deal as a defeat for the employers "all along the line". But the DGB said the deal is a "triumph for German social partnership ... both sides have made concessions and both have won".