Germany: crisis agreements struck at Deutsche Telekom and ThyssenKrupp

Two new ‘crisis’ agreements, which were negotiated by video-conference, were announced last week at two major German companies in diverse sectors and differing economic conditions: Deutsche Telekom (60,000 employees) in the telecommunications sector (union: Verdi) and ThyssenKrupp (162,000 employees) in the steel industry (union: IG Metall). Although Deutsche Telekom is in much better financial health than ThyssenKrupp, which is currently undergoing a restructuring process, the two agreements have common features linked to the current crisis. These include an increase in the level of wages paid during short-time working as well as a period of long-term job security. In detail, Deutsche Telekom will grant its employees a wage increase in two stages. The first increase, of between 2.6% and 3%, will occur on 1 July 2020, with the largest increases being granted to employees at the bottom of the pay scale. The second rise, of 2% for all employees, will occur on 1 July 2021. As the current employment guarantee is due to expire at the end of the year, Deutsche Telekom has agreed to renew this until 31 December 2023. Finally, social partners have agreed that the company will increase the level of short-time working compensation paid by the Federal Employment Agency. Originally 60% of the last net salary, Deutsche Telekom will raise this proportion to 85%. It is not yet known how many people will be placed on short-time working at the company, but the company has closed most of its sales outlets and some of the group’s sales staff are expected to be affected. On ThyssenKrupp’s side, the poor financial situation at the group has prevented a salary increase from being negotiated. On the other hand, the employment guarantee, which expired on 31 December 2019 and had been postponed in-extremis until 31 March 2020, is now valid until the end of 2026. Finally, the level of short-time working compensation has been increased to 80% of the last net wage. Once again, it is still too early to say how many employees ThyssenKrupp is going to place on short-time work.