Dispute over German public-sector wages resolved

BERLIN - A widely concerned collective wage dispute involving 2.3 million public-sector employees in Germany has been resolved, negotiators from both employers and unions confirmed on Wednesday.

According to the solution, the 2.3 million public-sector employees will on average receive a 7.5 percent pay rise for the period between March 2018 and March 2020.

The settlement marks the end of disruptions in many public services, such as transportation, child day-care centers, health clinics, administrative offices and waste disposal services, amid a nationwide "warning strikes" participated by 220,000 government workers.

The trade union ver.di had threatened to further escalate the industrial action unless a solution was found in the final round of negotiations held between Sunday and Wednesday.

The new collective wage agreement will have retrospective validity from March 1, 2018 onwards for an initial period of 30 months.

In total, the compensation package will impose financial costs of 7.5 billion euros ($9.3 billion) for communal governments and 2.2 billion euros for the federal government. Interior minister and Christian Social Union (CSU) leader Horst Seehofer emphasized on Wednesday that civil servants would be included in the settlement.

Ver.di president Frank Bsirske commented favorably on the final outcome of negotiations in a statement, saying "This is the best result which has been achieved in many years."

The settlement was also welcomed by the interior minister Seehofer, who described the measures agreed on by negotiators as a big and necessary reform of working conditions in the public sector.

Both Bsirske and Seehofer further highlighted that changes to the existing paygrade system would make public-sector careers more attractive to skilled workers in Germany's tight labor market.

Thomas Boehle, the chief negotiator for communal governments in the dispute, similarly expressed confidence that it would now become easier for public-sector employers to hire highly-qualified staff such as IT-specialists, engineers or educators.

The dispute over public-sector wages was the first of its kind experienced by Seehofer since he assumed the post of interior minister.

The CSU leader said that it was only fair for staff employed by diverse levels of the German government to benefit from the country's strong economic momentum.