"Inadequate" retail pay rise is accepted in Berlin

After more than six months of negotiations, the first regional settlement has been reached in the German retail sector.

The agreement in Berlin is a two-year deal from 1 July 2005 to the end of June 2007, with a 1% pay rise on 1 December 2006 plus one-off payments of €200 in April 2006 and €75 in April 2007.

Lower increases will be permitted in companies facing financial difficulties, as long as jobs are safeguarded. But the union Verdi stresses that any such arrangements will have be agreed with the union, not simply negotiated between management and the works council. Other terms and conditions remain unchanged.

The settlement, which increases the monthly pay of full-time sales staff from €1,957 to €1,977, is well below Germany's current (November 2005) inflation rate of 2.3%. The union negotiators themselves described the pay increase as "inadequate", but said they were prepared to accept it in order to achieve their main goal of defending existing terms and conditions.

The Berlin settlement, signed on 4 January, has already been followed by an identical deal in the neighbouring region of Brandenburg and may be a model for other regional settlements. Some 2.5 million workers are covered by regional retail agreements across Germany.