Weekly working hours is reduced from 38 hours to 34 hours - 10,000 new jobs created - Staff transferred to Vivento to receive 85 percent of present annual pay in the future - No compulsory redundancies until 2008
Deutsche Telekom AG has agreed an employment pact together with the united services union ver.di which affects 120,000 employees. After seven negotiation rounds an agreement was reached on March 23 for employees at Deutsche Telekom AG, i.e., Group Holding and T-Com . Both parties have agreed an overall package that comprises flexible solutions and measures that safeguard employment and avoid compulsory redundancies.
It was agreed to reduce weekly working hours from 38 to 34 hours. This applies retrospectively to the employees of the collectively agreed remuneration groups at T-Com as well as the Group Holding from March 1, 2004. This reduction in working hours is likewise to apply to the 50,000 civil servants from April 1, 2004. The reduction to 34 hours results in a partial effect on salary of 1.5 hours so that 35.5 hours are paid. The reduction in weekly working hours makes room for another 10,000 jobs and the possibility of sharing out work between more people. As a result, Vivento employees can return to their companies and transfers already planned to Vivento can be avoided.
The weekly working hours can even be reduced temporarily to 32 hours at individual sites and departments, creating additional jobs. Further jobs can be created if part-time employees voluntarily reduce their weekly working hours. The level of reduction will determine the partial effect on pay.
No pay increase for eight months has been agreed with ver.di for 2004. After this period, the Deutsche Telekom employees covered by collective agreements will receive a pay increase of 2.7 percent as from January 1, 2005. As the duration of 15 months is longer than a year, this increase amounts to 2.16 percent according to the Westrick calculation method used for collective agreements.
"The employment pact has seen us create a long-term, reliable basis for a balanced and workable solution for the employment and cost problems in the Group", said a satisfied CHRO Heinz Klinkhammer about the outcome of the negotiations. "Together with both sides of industry, we have achieved a historic agreement that makes a decisive contribution towards preventing compulsory redundancies beyond 2004 and also continuing to reduce surplus staff in a socially acceptable manner."
The conditions likely to create jobs in Vivento and the Vivento business models make another key contribution to the employment pact. The salaries of staff transferred to Vivento who are covered by collective agreements will be reduced to 85 percent. This has been agreed in order to create clear incentives for accepting job offers. In the future, an employee from Vivento will then receive an employment premium - depending on the employment duration and the specific assignment - that can be up to 15 percent. This should then increase and reward the willingness to also accept a job outside Deutsche Telekom. In return, Vivento has undertaken to present each Vivento employee with an assignment every three months.
With regard to the conclusion of a collective agreement, separate rules hold for some employment groups. Employees in Vivento, the new Vivento business models as well as Store-Based Retailing are excluded from the reduction in working hours. A new structural model has been agreed for employees of Vivento Customer Services GmbH, which offers services outside the core business of Deutsche Telekom. Salaries will be reduced once as of January 1, 2005 to 91.25 percent of the present annual target pay and thus brought in line with the market level. Weekly working hours will remain at 38 hours to improve competitiveness. About 1,500 employees currently work for Vivento Customer Services GmbH. In the mid-term, up to 10,000 employees are to work in the new Vivento business models.
The Group Board of Management and TOP management will make a separate "solidarity contribution" to the employment pact. For example, the Group Board of Management had already announced a salary cut in December 2003. The resulting savings will be used for a hardship fund which is to help out in those cases most severely affected by the changes. No pay increase was decided for top management in 2004.
Deutsche Telekom and ver.di have agreed to implement the announced rationalization potential. After this period, stability in staff levels has been guaranteed. Talks will be held with the social partner (ver.di/general works council) in 2006 prior to potential measures.
Given its responsibility for employees, but also its social responsibility for a stable labor market in Germany, Deutsche Telekom AG has decided to continue refraining from compulsory redundancies until December 31, 2008.
An agreement on the trainee/apprentice program offered has not yet been reached. Deutsche Telekom offered to double the quota to 4,000 trainees, to help overcome the lack of trainee positions. In the future, only the most qualified trainees will be employed following the principle "training first, employment second". The company can only make a contribution to the training program which is over and above its own needs if, just like the employees, the trainees make a solidarity contribution by going without the vacation allowance and special bonus.