Volkswagen and IG Metall successfully complete pay negotiations

Volkswagen and IG Metall have brought their negotiations for Volkswagen AG employees covered by the company collective agreement to a successful conclusion. As a result of the coronavirus crisis, the negotiations took place under extremely difficult conditions. The parties agreed that the pay agreement, which had been terminated with effect from April 30, 2020, should remain in force until the end of December 2020 without increases in the pay scales. The collective agreement has a term of eight months. In addition, support for employees was agreed so that they could master their everyday lives more effectively in the coronavirus crisis.

Arne Meiswinkel, General Representative of Volkswagen AG and chief negotiator of the company, says: “The coronavirus crisis has posed special challenges for the parties to the collective agreement. The objective in the negotiations was to limit the consequences for the company and its employees and to prepare ourselves as effectively as possible for the return to normal business. The only appropriate answer was an agreement commensurate with the present circumstances: with a short term and with the objective of continuing progress with our important projects in difficult times as well as offering our employees pragmatic and practical solutions so that they can master this situation as effectively as possible. We have succeeded in these objectives.”

Agreement was also reached on extensions of the option to convert additional remuneration under the collective agreement into six days of paid leave, which has been available since 2019. In future, the option will apply to employees taking care of a child who is under 12 years of age. Previously, the upper limit was 10 years of age. In 2020, 9,400 parents have already opted for the additional leave to date. The conversion option for parents and persons caring for relatives will also be extended. Conversion will now be possible in up to five years instead of two years.

In addition, there is to be a further simplification of mobile working. In the case of employees who can determine the beginning and the end of their working day themselves, it will be possible to reduce the rest period from 11 to 9 hours in future. For example, this will provide parents engaging in mobile work with the possibility of interrupting their work in the evening to look after the children and to continue to write emails afterwards. The reduced rest period will be offset later.

For the new limited-term statutory right to compensation for loss of earnings caused by the closure of schools and kindergartens in the coronavirus crisis, Volkswagen will be granting a subsidy dependent on earnings to the extent that this is not offset against the compensation.

Agreement was also reached on a clause allowing a new sabbatical model (“Meine Auszeit“). This model will provide for a sabbatical of up to six months for all employees in line with their requirements in the near future. The employer will finance this sabbatical in advance and employees will only have to compensate for their absence by credits to their individual working time accounts in the future.

Furthermore, the parties agreed to enter into negotiations with a view to reshaping the performance-related remuneration component for employees covered by the collective agreement by September 30, 2020.

Term of agreement: eight months, from May 1, 2020 to December 31, 2020.

Scope: The collective agreement of Volkswagen AG applies to almost 120,000 employees at the Wolfsburg, Brunswick, Hanover, Salzgitter, Emden and Kassel plants as well as Volkswagen Financial Services AG.