Construction agreement is extended

Stalemate over a pay deal in Germany’s building industry has ended with a new agreement.

Under a 19-month settlement reached with the union IG BAU in March, 700,000 construction workers were to receive a 3.1% increase plus a lump sum of 0.4% from May (see Workplace Report, April 2007). But some employers refused to ratify the agreement or to accept an arbitrator’s recommendations, prompting a regional strike.

However, all the employers last month accepted a new agreement which still includes a 3.1% pay rise, albeit from 1 June rather than 1 May. The deal will run until the end of March 2009, with further increases of 1.5% in April 2008 and 1.6% in September 2008. And lump-sum payments worth 0.4% of monthly pay will be paid each month from June 2007, rising to 0.5% from April 2008.

The total value of the increases is above inflation – currently 1.9% (July) – but individual firms will be allowed to agree a deviation of up to 8% from the national deal.