On May 24, 2012, a new collective bargaining agreement for the German Chemical Industry has been concluded. Under German law the content of such an agreement applies directly to the employment relationships between employees and employers who are bound by the collective bargaining agreement, either due to memberships in unions and employers’ associations or by means of reference clauses in individual employment agreements. Collective bargaining agreements’ rules are enforceable in court and employees regularly make use of this right. Therefore, any company bound by collective bargaining agreements in the Chemical Industry must quickly acquaint itself with the new additional requirements stipulated in the new collective bargaining agreement.

The collective bargaining agreement applies in all areas of Germany effective as of June 1, 2012 and has a duration of 19 months. Its core content are provisions on salary, working time and increased retirement preparation and can be summarized as follows:

  • Salary Raise
    Tariff salaries will be raised by 4.5%. Depending on the relevant tariff area, the increase will come into force on July 1, 2012 (Northrhine, Rhineland-Palatinate and Hesse), August 1, 2012 (Bavaria, Baden-Wuerttemberg, Lower Saxony & Bremen, Schleswig-Holstein & Hamburg and Berlin) or September 1, 2012 (Saarland and Northeast). The apprentices’ income will be raised by EUR 50.

  • Flexible Working time and demography
    The regular weekly working time remains at 37.5 hours. However, employers and the competent works councils together with the individual employees can agree on a weekly working time between 35 and 40 hours. Any working time exceeding 37.5 hours must be compensated with free time and may only be paid out in exceptional cases.

  • Demography Funds
    From 2012 until 2015, employers will continue to pay EUR 200 per year per worker into the already existing demography funds. For economic reasons this amount can be reduced to EUR 100 per year.

    The objective of this program is to finance new plans which – among other topics – address the matter of flexible working time for older employees, such as long-term time account schemes (also see below). Employers and the competent works councils must agree on the way these funds are used.

More Flexibility for Older Employees
Under the newly established program „reduced full-time 80” (reduzierte Vollzeit 80), older employees can opt to use their entitlement to reduced working time under the collective bargaining agreements (reduction by 3.5 hours for shift workers as of age 55, reduction by 2.5 hours as of age 57 for all other tariff employees) to work longer and more flexible. Employees can opt to work full time beyond the threshold ages for working time reduction and thereby accumulate additional credit on time accounts that they can use at a later stage for reducing their working time by 20% while receiving full remuneration.