Collective Bargaining

• The salary collective agreement contains provisions on salary levels.
• The so-called general work conditions are regulated byIin the framework agreement, the so-called general work conditions are regulated. These include e.g. the length and positioning of working hours, breaks, vacation, termination notice conditions or also holiday payand negotiated extra payments e.g. Christmas money. AdditionallyIn addition, provisions on the classification of wage groups and the criteria for the granting of additional benefits are found here are provisions on the classification of wage groups and the criteria for the granting of additional benefits.
• The special collective agreements for the insurance industry cover the topics of partial phased retirement, deferred compensation and protection from rationalisation measuresoptimisation and wealth formation.

First, one of the two social partners (Employers’ Association or union) gives proper notice to terminate thecollective agreement. The unions submit their demands to the employers and usually inform the press at the same time. The demands are explained, the objectives made clear and the reasons why these are considered achievable put forward. The employers in turn formulate their corresponding counterclaims and inform the unions and, where appropriate, the public of the situation and the framework conditions in the industry.

The economic and business framework conditions are presented in the first or second round of collective negotiations. To support its position, each side presents the relevant benchmark datafrom their perspective. Additionally, recommendations from business institutes and/or experts are discussed. The companies’ profitability and competitive positions are focal points for the discussion as are the business development forecasts and the employees' pay situation. Collective agreements concluded in other branches may also play a decisive role.

Following the exchange of their respective positions, the often protracted negotiations begin with the aim of finding a compromise between the views of both parties. In these negotiations each party attempts to convince the other bargaining party of the correctness and importance of its arguments.

The members of the bargaining committee generally enter negotiations with clearly defined mandates. These are not deviated from without further internal discussion.If at an advanced stage further guidance is needed on complicated individual issues, such as the evaluation of individual function or the effect of new technologies, then joint expert committees or individual specialists may be consulted. Special issues may also be handled by advisory committees that are independent of the general negotiations.

If the negotiations are deadlocked and it appears that no party is prepared to deviate even slightly from its position, it can be helpful and even necessary to set new dates for negotiations. Consequently there are sometimes a number of negotiating rounds.

Where a compromise acceptable to both sides is found, the text of the agreement is drafted and the document signed. Finally, the Employers’ Association and the unions inform their respective members and the general public about the concluded collective agreement.

Although all possibilities should first be exhausted, sometimes the bargaining parties cannot reach an agreement through open negotiations. In this case many collective bargaining proceed to arbitration.

The German insurance sector had an arbitration agreement which was terminated by the unions on 30.06.1980 and was not renewed. This came about because both bargaining parties decided that it would be better to conclude reasonable wage settlements between themselves – without an arbitrator.

Industrial action (strike or lockout) is another method for unions to pursue their interests. Up until now, however, trade disputes in the German insurance industry have been resolved amicably in contrast to many other sectors.