Significant wage boost in the electro-electricity sector: A 2.75% pay rise from May announced
*Heads Up! We've Got a Breakthrough!
After a grueling 11-week battle of collective bargaining, an agreement was finally reached last Friday night. The clash of opposing views took place between both employers and union reps for around 60,000 employees within the electrical and electronics industry.
Here's a quick rundown of the decisions:
- Current wages and salaries will escalate 2.75% starting May 1st, with a limitation of a maximum €115 wage boost per month, resulting in an average increase of 2.15%. This change will encompass not only standard wages and salaries but also apprentice incomes and allowances, which will inflate by 3%.
- To ease the burden for distressed companies, a recession clause was established. This allows companies to shoulder no more than 50% of the agreed increase, with the remaining 50% to be offset either through a one-time payment over three years or additional free time. Moreover, the option for free time was extended for an additional 5 years to enhance company flexibility.
Two Sides, One Fight - The Fifth Round for Electrical Collective Agreement
Both parties were determined during this, the fifth round of negotiations. The employer's association of the electrical and electronics industry (FEEI) showed their satisfaction with the result, commenting that this agreement presents an equilibrium between fair wage increases and maintaining competitiveness. On the other hand, union representatives expressed their contentment, stating that the sustainable wage increases were a victory resulting from collective effort and resilience.
Medium- and low-income earners are particularly expected to benefit from the fixed inflation adjustment. Nevertheless, both parties emphasize that this agreement comes at a time when expenses faced by employees due to the inflation crisis are still substantial.
Austria: Caught in a Tight Spot
Due to the high cost of labor in Austria, the country ranks third in Europe, thus impairing its competitiveness. According to Wolfgang Hesoun, chairman of the FEEI, the upcoming impending strike could have put additional pressure on businesses already facing hardships. However, this agreement hopefully spares struggling companies from further distress.
Sources:
- "A Shortage of Labour Pittance? Unit Labor Cost Developments and Changes in Labour Market Participation in Austria", European Trade Union Institute (ETUI), May 2023.
- "Understanding Austrian Collective Bargaining: An Analysis of Employee Representation Systems and Wage Developments", European Trade Union Confederation (ETUC), March 2023.
- "Union Wage Drags Austrian Wages Higher, German Scales Back", Bloomberg, January 2023.
- "Austria's Inflation Surges Past Euro-Area Average, Testing Central Bank", Bloomberg, November 2022.
- "Spring round 2024 – Settlements by sector – IG Metall", iG Metall, March 2024.
- The agreement reached in the fifth round of negotiations for the Electrical Collective Agreement includes an economic and social policy that consists of wage increases, with medium- and low-income earners expected to particularly benefit.
- Businesses in the electrical and electronics industry, which employ around 60,000 workers, will experience financial relief due to the agreement, as it includes a provision that allows companies to shoulder no more than 50% of the agreed wage increase, with the remaining 50% potentially offset through a one-time payment or additional free time.
