German pay round gets underway with rail deal

The first major pay deals for 2003 are now being signed although several of Germany's key bargaining groups, such as metalworking and the construction industry signed two-year deals in 2002 and so are not involved in negotiations this year.

The agreement at Deutsche Bahn, the German rail company, was signed this month and provides for two lump sum payments each of €200 this year and a 3.2% increase in May 2004. This settlement runs for 24 month from 1 March 2003 and covers 151,000 employees

The pay deal for 85,000 cleaners in the Nordrhein-Westfalen region provides for a 2.9% increase from 1 May 2003 over 13 months.

Last month finally saw the signing of one of the agreements left over from last year covering 55,000 cabin and ground personnel at the German airline Lufthansa.

The settlement was reached after warning strikes in January and the involvement of an independent arbitrator. It provides for a 3.2% increase from January, a 1.8% increase in October 2003 and a further 1.2% in May 2004.

There is a lump sum payment of €250 to cover the two months without an increase in November and December 2002.

The agreement, which also includes new profit-sharing arrangements runs for 26 months from 1 November 2002 until the end of December 2004.

Inflation in Germany is currently at 1.3% (February).

The Euro was worth 68p as at 19 March.