From next year, workers at many of Germany’s top engineering firms can opt to work 28 hours a week. After two years they will have to return to the standard 35-hour week. This is valid for firms such as Mercedes-Benz owner Daimler (DDAIF). It could be extended to the 3.9 million workers in Germany’s industrial sector.
IG Metall said the flexibility would help employees who want to care for children or relatives. Pay will be reduced to reflect the shorter working week. The deal also gives workers the option to work 40 hours to earn more.
Firms had feared that granting too generous a deal on hours would drastically slash the amount of labor available. At a time when the economy is bounding ahead leaving some companies struggling to fill orders and to find skilled workers for open positions.
“The agreement is a milestone on the way to a modern, self-determined world of work,” said leader Jörg Hofmann.
The deal came after half a million workers drawn from sectors as varied as carmaking, electrical and electronic goods or metal production downed tools last week in 24-hour “warning strikes” as talks made little headway.
Since the financial crisis wages have been slowly rising in Germany – mainly because record low unemployment means that in many sectors firms are struggling to find workers.
So an agreement that increases wages was not surprising. More unusual is the automatic right to work fewer hours, something which has been discussed in Germany for years, as people try to combine work and family life.
If this goes down well with employees, we could see it spread to other sectors.
Some observers had suggested a muscular pay increase in Germany could help stoke inflation across the 19-nation euro single currency area, which the European Central Bank has struggled to steer towards its target of just below 2.0 percent.
The metalworkers’ deal is certain to be picked over in detail by other labor groups. This includes civil servants, whose contracts are up for renegotiation in the coming months.
Ultimately, this is good for workers. They will see their pay rise by far more than inflation. This raises their disposable income and spending power.