Common pay system for blue and white collar workers

After a three year period of intense negotiations with the Federal Organisation of the Electrical and Electronics Industry (Fachverband der Elektro- und Elektronikindustrie), the blue collar Austrian Metalworking and Textile Workers’ Union (GMT) and the white collar Union of Private Sector Employees (GPA) finally managed to reach an agreement on a new, common pay system for blue and white collar workers. It will take effect from May 1st 2004.

Breakthrough in terms of pay harmonisation

Until now, a harmonisation for both blue and white collar workers was achieved in some sectors only in terms of equal application of labour law regulations, but not in terms of the pay system. This new agreement in the electrical and electronics sector might now pave the way for similar arrangements in other sectors such as the overall metalworking industry, where negotiations on this issue have already started.

New, more flexible classification scheme In May 2004 a new “era” will start for the sector’ s 56.000 employees, since they will be covered by a new common classification system (Beschäftigtengruppenschema), providing for a more precise single classification of jobs, whereas the old scheme has been widely perceived as too inflexible and imprecise, with problems of incorrect classification.

Eleven new grades (Beschäftigungsgruppen)

The new grading scheme specifies 11 newly designed grades to replace the “old” pay grades (Lohngruppen) for blue collar workers and their counterparts for white collar workers (Verwendungsgruppen).

Classification criteria Hitherto, there have been different classification criteria for blue collar workers on the one hand and white collar workers on the other hand. Whereas the former have primarily been classified according to their (formal) skills, the latter have primarily been classified according to actual job requirements, including such criteria as the degree of responsibility involved and practical experience. The new grading system provides now common criteria •it will enable even unskilled blue collar workers to move up into higher grades which have so far been reserved for skilled/trained workers only if they do such a job. This implies that workers without an apprenticeship leaving certificate (Lehrabschlussprüfung) may move up into skilled grades. •With regard to white collar workers: the new system defines more precisely the (formal) qualifications (apprenticeship leaving certificate, etc.) which will result in more security and fairness, when it comes to classifying a given employee, in particular women, in a particular grade. •As in the current system, the classification of employees has to be carried out with the consultation of the works’ council

New increments scheme (Vorrückungen)

The future collective agreement will lay down a new scheme for automatic increments relating to wage/salary levels within each of the 11 grades. The increment applies to both (collectively agreed) minimum pay and effective pay. Interestingly, the increment falling due after two and four years will be twice as high as the third and fourth increment.

•Four pay increments are established in the grades group B to K, becoming due after two, four, seven and ten years •Employees, classified in the lower grades group A will not receive automatic increments, but move up automatically into grades group B after three years in grades group A The increment is fixed as a certain percentage of the collectively agreed minimum pay for each grade (Grundbezüge). This means that the actual amount of pay increment-calculated as a certain percentage of the minimum pay for each grade- is the same for all employees within the same grade.

As of May 1st 2004 the increment scheme is set out as below:

Grade Increment falling due after two and four years Increment falling due after seven and ten years B 2 percent 1 percent C-D 3 percent 1,5 percent E-J 4 percent 2 percent
This scheme will replace the current scheme based on two-years increments only reserved for white collar workers.

Annually distributed flexible wage component (Jährlicher Verteilungstopf)

Aside from the new grading and increment system another innovative provision is contained in the new common pay system: an obligatory, flexible pay increase in addition to the collectively agreed pay increase. This new wage component is to be distributed flexibly among employee groups in an individual enterprise. This flexible pay increase has to be paid on an annual basis and irrespective of the normal bargaining procedure. The new scheme must be implemented by the employer. Accordingly, the employer is obliged to distribute at least 0,35 percent of the total pay bill in September each year flexibly among the employees, unless a works’ agreement provides for more favourable conditions. The distribution of the wage component must be based on the following criteria: •working performance (including social skills •the company’ s pay structure (involving compensation of low pay) •equal treatment of both sexes (involving compensation for unjustified unequal remuneration of men and women) In this matter, the collective agreement provides for a co-determination right for the works’ council. Rules on how to distribute the wage component as well as names and amount of wage increase of the selected workers must be laid down annually in a works agreement between management and works’ council.

Differentiation between blue and white collar workers continues

The introduction of the common pay system marks the end of the traditional, unequal treatment of white and blue collar workers to the disadvantage of the latter. However, the distinction between blue and white collar workers, reflected in the establishment of separate works councils for blue and white collar workers and separate collective agreement for each category will continue to exist. In contrast to current collective agreements the wage/salary related part will be mainly identical.