This good practice case describes how the trade union IGBCE (partner to the Global Deal) and the employer federation Bundesarbeitgeberverband Chemie (BAVC) have been able to find practical solutions to the economic uncertainties resulting from the war in Ukraine, by negotiating a balanced and flexible agreement for the German chemical industry.
The outbreak of the war has led to widely diverging expectations for collective bargaining on wages. While employers insist on moderate wage increases to strengthen businesses resilience, workers are expecting substantial nominal increases to recover part of the purchasing power they have lost because of high inflation.
After two intensive negotiation rounds, an agreement was reached on 4 April, which provides some breathing space for all social partners. Negotiations over a structural increase in wage levels are postponed to autumn, when economic and geopolitical developments may be clearer. At the same time, much of the purchasing power of wages is immediately restored by paying a one-off bonus (worth on average 5.4% of wages), which will help workers to maintain their existing standard of living. As a result, collective bargaining succeeds both in addressing the reality of economic uncertainty for business and in protecting workers’ wages from inflation.