German construction industry reaches wage deal after renewed strikes

A collective wage agreement has been reached for the approximately 930,000 employees in the German construction industry, the IG BAU union and employers announced jointly on Wednesday.

In the third week of strikes, both parties agreed on a joint proposal with a three-year term.

The proposal is to be discussed in committees until June 14. Until then, industrial action measures are suspended.

By the end of the three-year period, the full alignment of wages in Germany’s eastern states with those in the west is to be achieved.

In the first stage, all monthly salaries will increase by a flat rate of €230 ($249) as well as by 1.2% in the west and 2.2% in the east.

The second stage will see a 4.2% increase in the west and a 5% increase in the east on April 1 next year. One year later, wages in the west will rise by 3.9%, and those in the east will fully align with those in the west, according to the plan.

The head of IG BAU, Robert Feiger, considered the agreement a success. “This result is above the volume of the arbitrator’s award, which is what we have always demanded. It was the construction workers who achieved this result through their strikes.”

He said he will recommend that the union committees accept the deal.

The employers had rejected the arbitrator’s award. Negotiator Uwe Nostitz expressed his pleasure that the wage conflict can now end peacefully. “The sooner our companies and their employees can jointly concentrate on construction again, the better for the entire industry.”

Jutta Beeke, vice president of the German Construction Industry Association, emphasized the importance of the three-year term. This, she said, creates planning security in a strained order situation.

At the beginning of May, the contractually stipulated wage arbitration failed. After three unsuccessful rounds of negotiations, arbitrator Rainer Schlegel proposed two-stage wage increases on April 19.

Initially, incomes were to rise by a flat rate of €250 in May and again by 4.15% in the west and 4.95% in the east 11 months later.

While IG BAU accepted this proposal, the employers’ associations rejected it at the beginning of May. IG BAU then called for strikes sticking to their original demand of an extra €500 per month.