Alliance for Jobs agrees to support vocational training and lifelong qualification

In July 2000, leading representatives of the German federal government, trade unions and employers associations met officially for their sixth round of top-level talks within the National Alliance for Jobs, Training and Competitiveness. In the run-up to the meeting, several topics were excluded from the agenda with the result that its outcome was not satisfactory for the participants. Nevertheless, they agreed to promote vocational training, to compensate overtime work with "vouchers" instead of money and to introduce "job-rotation".

On 10 July 2000, leading representatives of the federal government, trade unions and employers' associations met officially, chaired by the Federal Chancellor, Gerhard Schröder, for their sixth round of top-level talks within the National Alliance for Jobs, Training and Competitiveness (Bündnis für Arbeit, Ausbildung und Wettbewerbsfähigkeit) (DE9812286N). Employers' and business associations were represented by: Hans-Olaf Henkel, the head of the Confederation of German Industries (Bundesvereinigung der Deutschen Industrie, BDI); Dieter Hundt, the head of the Confederation of German Employers' Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA); Hans-Peter Stihl, the head of the German Association of Chambers of Commerce (Deutscher Industrie- und Handelstag, DIHT); and Dieter Philipp, the president of the Central Association of German Crafts (Zentralverband des Deutschen Handwerks, ZDH). Employees were represented by: Dieter Schulte, the head of the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB); Klaus Zwickel, the head of the German Metalworkers' Union (IG Metall); Hubertus Schmoldt, the head of the Mining, Chemicals and Energy Union (Industriegwerkschaft Bergbau, Chemie und Energie, IG BCE); Herbert Mai, the head of the Public Services, Transport and Traffic Union (Gewerkschaft Öffentliche Dienste, Transport und Verkehr, ÖTV); and Roland Issen, the head of the German White-Collar Workers Union (Deutsche Angestellten Gewerkschaft, DAG).

Background

In the run-up to the meeting, several topics were excluded from the agenda, partly because trade unions withdrew their proposals in advance of the talks, partly because no majority within the Alliance was found to discuss them. Originally, unions and employers' associations wanted to discuss the highly controversial topic of wealth formation by employers and employees, as well as concepts for the creation of additional jobs.

Shortly before the meeting, DGB proposed a programme on investments for the care of the environment, which could have two effects: environmental care and job creation. It was proposed that house-owners and occupants should receive credit on easy terms for heat-insulation measures, in order to reduce carbon dioxide emissions. The resulting works could create about 200,000 new jobs. To realise this privileged credit, the government would have to invest about DEM 20 billion over 15 years. Although DGB had invited representatives from the construction and installation industries to popularise these ideas, this topic was not placed on the agenda of the July meeting. Therefore, DGB expects that the proposals will be discussed at the next meeting in autumn 2000.

Another topic which was withdrawn in the run-up to the top-level talks was the demand for compensatory payments by companies which do not offer training posts for young people. This demand is part of current DGB policy.

The Chancellor's office tried to include on the agenda of the July meeting its tax reform, which was to be accepted by parliament only four days later on 14 July 2000, in order to put pressure on those federal states ( Länder) where the Christian Democrats are in the government. Neither the head of DGB, Mr Schulte, nor representatives of the employers' associations agreed to include this thorny issue in the talks, arguing that this was a subject for the parliament. Mr Schulte further emphasised that other topics should also be excluded from the Alliance and dealt with only by parliament - such as reform of the statutory pension scheme or reform of the Works Constitution Act. The employers' associations wanted to discuss the latter issue within the Alliance for Jobs. According to Mr Schulte, Chancellor Schroeder promised during the talks that the Works Constitution Act - and thus co-determination- would not be negotiated within the Alliance.

The topics eventually discussed were vocational training, working time accounts and a combination of flexible working time with further training, known as "job-rotation".

Joint declaration

In a joint declaration, the federal government and social partners committed themselves to transferring the economic upswing into sustainable growth and to taking up opportunities for reforms. Although the government's tax reform was not part of the talks, the participants recommended tax relief for employees and companies, including small and medium-sized enterprises. The participants further greeted the launch of pilot projects for the wage subsidies that the Alliance had agreed earlier (DE0005260F). On the three substantive issues on the agenda, the participants decided the following.

Promotion of vocational training

The social partners agreed to promote internal vocational training within firms. The federal government decided to extend its "Jump" programme for vocational training beyond 2000, with 50% of the financial means to be used for the eastern part of Germany. The programme involves employment offices supporting young people who have to move to find a training post. The government hopes that young persons from the east will thereby be more likely to find a training post in a firm in the south of Germany, where the number of vacancies for apprentices is much higher than in the rest of the country. In advance, the crucial point of the debate was the question of who is to finance the programme. In a press release, BDA sharply rejected the government plan for seeking to continue taking the money required from the non-wage labour costs of employers and employees (ie unemployment insurance contributions), while the social partners want the government to pay for the DEM 2 billion programme by using taxes. Until now, this has not led to a conflict because the government has been paying subsidies to the Federal Labour Office (Bundesanstalt für Arbeit). The Office's budget for 2000 is about DEM 7.75 billion. Because unemployment will decrease because of demographic changes, the federal finance minister, Hans Eichel, plans to cut these subsidies from 2001. This means that the Jump programme has to be paid for fully from the employers' and employees' contributions to unemployment insurance funds.

Overtime work

The Alliance calls for a reduction of overtime work. Besides, DGB and BDA agreed to compensate overtime hours with "vouchers" instead of money. According to the social partners' decision, annual working times should be included within collective agreements, and working time beyond these agreed annual limits are to be compensated by the new vouchers. It is planned that these vouchers will be paid as shares in a pension funds or as savings in a bank or savings bank, thus guaranteeing then in the event of the death or insolvency of the employer. Interest will be paid on these "time savings", so their value will increase. The time savings account should be used by employees for further training, for retirement provision or early retirement. The Alliance further agreed that these vouchers will tax-free, which would lead to a great advantage compared with other financial compensation for overtime work.

Job-rotation

Referring to the Danish model of "job-rotation", the participants in the top-level talks decided to integrate this concept in the work of the Federal Labour Office, as already recommended in a report on working time by a group of social scientists who accompany the Alliance (DE0005261F). Under the Danish scheme, unemployed people cover for those employees who are absent from work while participating in further training measures. Experiences from Denmark have shown that many unemployed people who have participated in this programme have been able to remain in the company after the person for whom they are covering returns to work. This scheme will be financed by employers and Federal Labour Office. Employers will pay for the further training of the permanent staff, and the employment offices for the integration of the unemployed people into the new job.

Reactions

The trade unions were not very satisfied after the talks. Dieter Schulte of DGB stated that, compared with the previous top-level session in January 2000, the July meeting was not marked by harmony, because every participant wanted to bring additional topics in and keep others out. Klaus Zwickel of IG Metall and Roland Issen of DAG criticised the perceived attempt by the government to use the Alliance for political purposes, while its original purpose was to create additional jobs. Referring to Chancellor Schröder's effort to put the tax reform on the agenda, both union leaders see the Alliance as being in danger if it acts against parliament and its bodies of experts. Hubertus Schmoldt of IG BCE disagrees - in his eyes, the Alliance is of great importance and will continue to exist in future.

The youth organisation of DGB criticised the joint statement on vocational training. In a press release Lothar Judith, head of the DGB youth department, stated that a gap still exists between the supply of training posts and the demand for filling them. Mr Judith stated that the recent meeting had ignored the fact that many young people who apply for a normal training post eventually end up in measures run by job centres. According to figures from the Federal Labour Office, the number of internal training posts decreased in 1999. Compared with 1998, 13,700 fewer training posts were offered, although employers have promised to create 16,000 additional training posts. The deficit was cushioned through the federal government's Jump programme (see above), which is subsidised to the tune of DEM 2 billion each year. Mr Judith further emphasised that the government cannot finance vocational training and qualification for ever. Although recent figures from job centres provide evidence that the number of internal training posts has slightly increased, it cannot be ascertained if this is a result of the self-imposed obligation of the social partners to offer a training post to every young person. According to Mr Judith, it is not possible to strike a balance in the number of training posts being created before December 2000, and it should be discussed if the governmental support can be substituted by another financing system. The DGB youth organisation demands a new financing system whereby all employers give money to a training fund. This could guarantee vocational training independent of economic change and prevent competitive advantages between companies who offer training posts and those who do not.

The Minister President of North Rhine-Westphalia (NRW), Wolfgang Clement, criticised the fact that the federal programme for vocational training will be concentrated on east Germany. Referring to the fact that not only is NRW's total population the same as all five east German Ländertogether, but that it also has to face a similar structural change as east Germany, he said that he considers NRW to be disadvantaged by this measure.

All participants welcomed the call for a reduction of overtime work, the active promotion of training and qualification, the introduction of the Danish model of job-rotation, and the employers' promises to make additional training posts available.

Commentary

The reactions of the social partners, politicians and interest groups indicate the crucial points of the sixth set of top-level talks in the Alliance for Jobs. Of course, the agreements on vocational training, job-rotation and reduction of overtime work are important, but it is becoming obvious that it is necessary to redefine the purpose and function of the Alliance. While the government seems to be seeking support for its political plans and therefore bringing in topics which should be discussed in parliament, the social partners obviously do not want to see the Alliance "abused" for Chancellor Schröder's political purposes, although they seem to agree with his policies in several aspects. The fact that they finally agreed to a joint statement in which they to some extent supported the tax reform, and thereby influenced the decision on the reform only a few days later, shows that they were not able to have their opinion accepted. Considering all the topics which were not on the agenda this time and the fact that not only the government, but also both social partners, seem to have differences over which topics should be subject of the talks, the next round might become controversial. (Alexandra Scheele, Institute for Economic and Social Research, WSI)