IG Metall Union Signs Wage Deal for Bavaria image

IG Metall union has agreed with a deal which will increase salaries in the metal and electric engineering industries by 5.6% in the following 20 months.

After weeks of negotiations and walk-out IG Metall has finally accepted the deal for the German state of Bavaria, hoping that this agreement would serve as an example for the other German regions and will hopefully apply to all 3.7 million workers in the sector. Salaries will be increased in two steps: by 3.4% on July 1st and by 2.2% in May 2014.

“With this deal, workers are being treated in a fair and appropriate way, in line with the economic situation,” said IG Metall president Bertold Huber.

Although the labor union was seeking an increase of 5.5% this year, the agreement reached in Bavaria is a clear confirmation for the trend of increasing salaries in Germany and consolidates expectations that private consumption will make economy grow this year. Last year salaries in Germany increased 0.6%, 1.0% in 2011 and 1.5% in 2010.

Earlier this week IG Metall warned that its members will launch a major strike action unless a wage agreement is reached. The union’s deputy leader Detlef Wetzel said that if an agreement is not reached by the end of this week the union members will “go to the ballot after Pentecost” and he offered a May 21st deadline for the union members to vote on the next industrial action.

Source: nasdaq.com