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Cyprus, September 2009

Instruments for secure employment in the crisis. Cyprus, September 2009. Effects of the crisis on the metall industry in Germany. Strongest decrease of Gross Domestic Product since 80 years Rate of change in percent. Forecast.

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Cyprus, September 2009

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  1. Instruments for secure employment in the crisis Cyprus, September 2009

  2. Effects of the crisis on the metall industry in Germany Strongest decrease of Gross Domestic Product since 80 years Rate of change in percent Forecast Source: Federal Bureau of Statistics, Spring/Summer 2009 Forecast of Economic Institutes FB Tarifpolitik, Ressort Europa, Uwe Fink

  3. Effects of the crisis on the metall industry in Germany Incomming orders in the metall and electrical industry Source: Federal Bureau of Statistics FB Tarifpolitik, Ressort Europa, Uwe Fink

  4. Effects of the crisis on the metall industry in Germany Industrial Produktion in the sectors of IG Metall rate of change May 2009/08 in % Source: Federal Bureau of Statistics FB Tarifpolitik, Ressort Europa, Uwe Fink

  5. Effects of the crisis on the metall industry in Germany Scenarios: Threat of job losses in the German Metall and Electrical Industry Source: Economic Department of IGM FB Tarifpolitik, Ressort Europa, Uwe Fink

  6. Effects of the crisis upon collective bargaining • Steel collective bargaining round Spring 2009. Employers idea: wage freeze!But Effective defence by IG Metall! • But next CB campaing in M+E sector will happen in worse conditions (Beginning 2010). • Possible demands: secure income and employment. FB Tarifpolitik, Ressort Europa, Uwe Fink

  7. Instruments in the crisis • Collective bargaining policy alone can not stop the economic crisis! • It‘s necessary to fight the crisis with the with instruments of economic policy. • Instruments of collective bargaining can in the first step only moderate the situation of the affected workers (first a defensive instrument). • Prospect: Collective bargaining policy as element of stabilizing the economic situation: • Strengthen the domestic market by securing income especially during the crisis. • Fair distribution of existing labour volume. FB Tarifpolitik, Ressort Europa, Uwe Fink

  8. Company Policy Instruments First measures when first indicators of the crisis appeared in the industrial sectors (late summer 2008): • Reduction of overtime. • Reduction of flexitime account. • Reduction of agency work (minefield for trade unions: agency workers were the first victims of the crisis, decreasing number of agency workers from July 2008 till April 2009 aprox. 300.000!) All these measures in autumn 2008 were not enough! FB Tarifpolitik, Ressort Europa, Uwe Fink

  9. Short time (1) • Instrument with a time limit to avoid job losses. • Maintain the skilled labour force. • Maintain the performance of the company. • Have high flexibility in the company. • Secure jobs. • Part compensation of reduction in wage. • Conditions: short time allowance (STA) can be introduced when the reduction of labour volume due to: • temporary situations, • inevitable situations, • situations for economic reasons, • the appearance of a reduction in wages. • All workers with a labour contract which includes a social security contribution and who are not layed off have the right to STA. FB Tarifpolitik, Ressort Europa, Uwe Fink

  10. Short time (2) • The employer alone has to pay the social security contribution for the short time allowance (unlike the normal wage: employers and employees share together). • From 01.02.2009 the employer receives a 50% reimbursement for the social security contribution on short time allowance. • From 01.07.2009 the employer receives 100% reimbursement for the social security contribution on short time allowance. FB Tarifpolitik, Ressort Europa, Uwe Fink

  11. Short time (3) • Maximum period of short time allowance: 24 months, condition short time must start latest in December 2009. • IG Metall has supported the demand to prolong the period of short time allowance from 18 to 24 months. Change of legislation in 29th of May 2009. • Volume of short time allowance in relation to the lost net wage: • 60% for employees without children • 67% for employees with children • To secure the income in a better way IG Metall demands additional payment at company level on the net wage plus short time allowance (general collective agreement BaWü or company agreements). FB Tarifpolitik, Ressort Europa, Uwe Fink

  12. Short time (4a) Example: gross wage: 3000 €, employee tax class III, ; reduction 10 % total netto: 2.055,31 FB Tarifpolitik, Ressort Europa, Uwe Fink

  13. Short time (4b) Calculation of short time allowance with part reduction and complete reduction FB Tarifpolitik, Ressort Europa, Uwe Fink

  14. Short time (5) Number of employees in short time (in 1000) FB Tarifpolitik, Ressort Europa, Uwe Fink

  15. Use qualification offensivly • Use the „quiet period“: qualification in times of short work: Secure the future of employees and companies. • Possibilities for sponsored qualification during short time created by stimulus package II: • Reimbursement of complete social security contribution, if the employee partcipates in a qualification. • Costs of qualification are covered partly or completely by the Bundesagentur für Arbeit (Federal Labour Office). • Qualifications obliged by law are not covered (e.g. accident prevention). Qualifications, which would have been done by the company also without public subsidies (e.g. qualification needed because of new products and new machines). • Collective agreement „Short work, qualification and employment“ FB Tarifpolitik, Ressort Europa, Uwe Fink

  16. Collective agreement: Secure employment • Use when the period of short time allowance is due to expire. • TVBesch permits the reduction of working time to 30 hours per week in West Germany and to 33 hours per week in East Germany. • Employees maintain their status as full time workers and receive during the contract protection against job losses at company level . • Reduction of wages in relation to reduced working time. • Reduction of 5 hours means wage reduction of 14,3 percent. FB Tarifpolitik, Ressort Europa, Uwe Fink

  17. Collective agreements during the crisis: Metall + Electrical Agreement 2008 • After twentythree hours of negotiations, a pilot agreement about pay increase was concluded on the 12th of November 2008 in Sindelfingen (region of Baden-Württemberg). • Pay increase • One-off payment of 510 €(which does not enter into the pay scale) • 510 € one-off payment (170 € each month) for the period 1st of November 2008 until 31st of January 2009 • that is about 5.5 % increase for the reference pay (pay of a skilled worker, “Ecklohn”). • Pay Increase of 4,2 % which enters into the pay scale: • 2.1 % for the period: 1st of February 2009 until 30th of April 2009: • An additional increase of 2.1 % for the period: 1st of May 2009 until 30th of April 2010 (both periods together amount to 4.2 % calculated against the reference period of October 2008) • Option: At company level, the beginning of the second period of pay rise (May until April 2010) can be put off until the 30th of November 2009. It depends on the respective economic situation of a company. Management and works council have to negotiate and to conclude a works agreement. • Additonal lump-sum payment (which does not enter into the pay scale): • 122 € lump-sum payment in September 2009 • The period of validity of the whole agreement lasts 18 months. The agreement ends on 30th of April 2010 and was adopted in all the other regions. FB Tarifpolitik, Ressort Europa, Uwe Fink

  18. Collective agreements during the crisis: Steel Agreement 2009 – Secure wages and employment • Secure and increase wages stabilize the internal market in the crisis! • One-off payment 350 € for 2009. • Apprentices recive 50 € for 2009. • 2,0 % Wage increase beginning 1st of January 2010. • Improvment of TV Besch (part compensation of wage reduction) • From 1st of April all employees receive compensation as shown below: • 33 hours + ¼ hour • 32 hours + ½ hour • 31 hours + ¾ hour • 30 hours + 1 hour • 29 hours + 1 ¼ hour • 28 hours + 1 ¾ hour FB Tarifpolitik, Ressort Europa, Uwe Fink

  19. Threat: Job losses after Summer break 2009 Number of uneployed will increase Unemployed in M. Forecast FB Tarifpolitik, Ressort Europa, Uwe Fink

  20. Thanks for your attention! Collective Bargaining Department/European Wage Policy Uwe Fink, Tel.: +49/69/6693-2151, uwe.fink@igmetall.de

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