Effects on wages

Emergency clause enables 28-hour week at VW

The new VW in-house wage agreement also contains an emergency clause that could lead to wage cuts.

(Bild: APA/AFP)

In its wage agreement with IG Metall, Volkswagen has secured itself against a further worsening of the crisis with an emergency clause. The future collective agreement concluded shortly before Christmas contains a provision that allows working hours to be reduced to 28 hours in the event of bottlenecks - with only partial wage compensation.

The collective agreement, which is available to Deutsche Presse-Agentur, states that all other measures such as reducing overtime and short-time working must have been exhausted beforehand.

Working week can be reduced to 28 hours
In the event of temporary employment problems, the weekly working hours for all employees could then be reduced by up to seven hours across the board, i.e. from the regular 35 hours to up to 28 hours.

(Bild: APA/dpa/Julian Stratenschulte)

Pay cuts from the third hour
For the first two hours of the reduction, there would be full pay compensation; from the third hour onwards, wages would be reduced proportionately. A maximum of three hours would remain unpaid. However, according to company circles, the regulation is only intended for absolute emergencies in which the situation escalates dramatically, which nobody expects.

Four-day week as a model
The regulation is reminiscent of the four-day week that VW used more than 30 years ago to prevent impending job losses. Back then, the company was also in a deep crisis and tens of thousands of jobs were at risk. In order to prevent this, Peter Hartz, then VW Board Member for Human Resources, agreed a nationwide reduction in working hours with IG Metall at the end of 1993. The regulation remained in force for more than 12 years.

35,000 fewer jobs by 2030
Shortly before Christmas, after a long struggle, the company and the union agreed on a restructuring program that provides for 35,000 job cuts in Germany by 2030. In return, VW has reinstated the previously terminated job security agreement and extended it until 2030. The planned job cuts are now to take place without compulsory redundancies. VW has around 130,000 employees at its plants in Lower Saxony, Hesse and Saxony.