Real and Verdi agree on the key parameters for a future package

  • Breakthrough in the tariff debate - agreement on a three and a half year future package
  • Agreement has created the necessary basis for further investment in Real
  • Basis for an improved competitiveness for Real
  • Agreement is pending on the approval of the Verdi members at Real

Today, the negotiation commissions at Real and the Verdi trade union agreed upon the key parameters for a resolution to the tariff negotiations. The Verdi members at Real shall vote shortly on the result of the agreement today. The agreement to a future package with a three and a half year duration essentially stipulates that Real will fundamentally acknowledge the collective bargaining agreements of the retail sector and that the negotiations surrounding a new remuneration structure will begin in October 2016. In addition, both parties agreed to significant short-term savings with regard to tariff increase, vacation and Christmas allowance. Executive employees will also make a significant contribution to the savings. In return, comprehensive provisions for safeguarding stores and employment have also been adopted. This creates the prerequisites for the planned €1 billion investment into the modernisation of Real within the next five years.

"The agreement reached with Verdi to start negotiations on a remuneration structure that is competitive and creates good working conditions is a landmark decision," said Olaf Koch, Chairman of the Management Board of METRO AG. "We are convinced of the sustainability of Real’s format, that a hypermarket with enhanced services and increased emotional appeal can be established on the German market. Today’s agreement has created the basis for further investment into the modernisation of Real."

Henning Gieseke and Patrick Müller-Sarmiento, Chairmen of the Management Board of Real, say: "The future package allows us to further promote investments in growth segments.

Even though this means individual costs for all involved, employees, the management and also the works council and the trade union have now the opportunity to show that it is also possible to operate successfully in the German food retail sector with fully co-determined structures. Today’s agreement is a good starting point for this."

The details of the agreement stipulate that Real will fundamentally acknowledge the collective bargaining agreements in the retail sector. Real will, however, initially suspend tariff increases between 2015 and 2017. It has, however, been guaranteed that the remuneration of employees will gradually be brought back to the level of the collective bargaining agreement starting in 2018. In addition, vacation allowances for the calendar years 2017 to 2019, as outlined in the tariff, will be reduced to 40%, while Christmas allowances for the calendar years 2016 to 2018 will also be reduced to 40%, and to 70% in 2019. In return, executive employees will not receive any increase to their basis salary between 2015 and 2019 and will additionally make a considerable contribution to the savings. Altogether, these measures lead to significant cost savings for Real. Negotiations surrounding a new remuneration structure over the medium term should begin in October 2016 with the goal of closing them in the first quarter of 2018. Comprehensive provisions for safeguarding stores and employment were also adopted. In June 2015, Real switched to a membership that is not bound by collective agreements (a so-called "OT membership") within the Handelsverband Deutschland (German Retail Federation) and immediately offered to negotiate with Verdi on an in-house collective agreement. Real had opted for an OT membership on the grounds of structural disadvantages regarding its personnel expenses, which are up to 30 per cent higher than those of its competitors.

"During our discussions with Verdi and our workers council we struggled for a good solution for both Real and their employees. With the agreement, we have found a solution that is viable for both parties," said Heiko Hutmacher, Chief Human Resources Officer of METRO AG and leader of the negotiations. "We will now start our negations in October with the same attitude in order to achieve a competitive remuneration structure for Real. At the same time, we will continually support the efforts of the HDE surrounding the necessary reform of the collective tariff and greater retail inclusion for wage settlements. Our goal is modernisation, whether by means of an independent solution for Real or as part of the collective tariff."

 

METRO GROUP is one of the most important international retailing companies. It generated sales of some €59 billion in financial year 2014/15. The company operates over 2,000 locations in 29 countries and employs more than 220,000 people. The performance of METRO GROUP is based on the strength of its sales brands, which act independently on the market: METRO/MAKRO Cash & Carry, the international leader in the self-service wholesale trade; Media Markt and Saturn, the European market leader in consumer electronics retailing; and Real hypermarkets.