Tariffs: failure and arbitration – tariff dispute before the next level

Employers and unions negotiated for days – but on Thursday night Verdi and the civil servants’ association dbb declared the talks for the 2.5 million federal and municipal employees to have failed.

Hours later, the Association of Municipal Employers’ Associations (VKA) and the Federal Ministry of the Interior launched a new attempt at a solution by invoking arbitration. They had already announced the step during the night in the Potsdam negotiation hotel – how things will continue now:

How does the stratification work?

According to fixed rules and deadlines. An expected 24-strong arbitration commission will meet for the first time by next Thursday. The arbitrators then probably negotiate on the basis of the current status of the negotiations at a presumably secret location. The chairmen of the arbitration commission are the former Prime Minister of Saxony Georg Milbradt from the employers’ side and the former Bremen State Councilor Hans-Henning Lühr for the trade unions – Lühr with the decisive vote in the event of a stalemate.

How can the arbitration end?

With an agreement – the arbitration procedure had already increased the pressure on the parties to a compromise in the past. An arbitration decision is expected in mid-April. Then unions and employers sit down again and negotiate about it. As the example of the most recent comprehensive strikes in the public sector shows, arbitration does not necessarily bring about a breakthrough. In 1992 an arbitrator’s verdict was not accepted – around ten days of widespread strikes followed.

Can there also be a strike during the arbitration?

No. From the third day after the invocation of the arbitration, there is a peace obligation – that is, from Sunday. Warning strikes in the public sector are then excluded until after Easter.

Who are the Arbitrators?

The former Prime Minister of Saxony, Milbradt, has often helped out in public service conflicts. In 2010, for example, the CDU politician mediated with Hanover’s ex-mayor Herbert Schmalstieg (SPD) on deadlocked collective bargaining in the public sector. As a result of an arbitration ruling, salaries rose by 2.3 percent at the time. Lühr is new as an arbitrator. The SPD member has a wide range of experience in public administration.

What other examples of arbitration are there?

In 2020, Brandenburg’s former Prime Minister Matthias Platzeck (SPD) failed in an attempt to mediate between Deutsche Bahn and the German Train Drivers’ Union (GDL). His proposal was rejected by the GDL. In 2016, former Federal Chancellor Gerhard Schröder (SPD) made it possible for Edeka to take over Tengelmann as an arbitrator through a reconciliation of interests.

What’s on the negotiating table?

The employers offered 8 percent more income and a minimum amount of 300 euros as well as a one-time payment of 3000 euros – which, according to the Association of Towns and Municipalities, would amount to a double-digit billion amount per year for the municipalities. The unions had demanded 10.5 percent more wages, but at least 500 euros more.

What else was negotiated?

Another aspect is the term – the unions demand 12 months. That’s not enough for employers. They initially offered 27 months. There was also intense debate about this. As it was said in negotiating circles, both sides were quite willing to compromise here. The variant of a 24-month term was also in the room.

How willing are the unions to go on strike today?

Verdi sees itself strengthened by the massive warning strikes of the past few weeks – and has recorded over 70,000 entries in the past three months. Verdi boss Frank Werneke is also up for re-election at the federal congress of his union in September – then good wage agreements and successful mobilization count.