Bad business:

Lower wages and salaries due to “hardship clause”

A handful of industrial companies in Vorarlberg will probably not give their employees the full wage increase. Provided the trade union agrees.

If a company experiences economic difficulties, it does not have to pass on the full wage and salary increases negotiated in the fall to its employees. This is a brief summary of a special agreement reached between the trade union and the Chamber of Commerce during the last collective bargaining negotiations. This "hardship clause" enables companies that are struggling in international competition and have high personnel costs to reduce the agreed collective agreement increases to seven or 8.5 percent.

Agreements for compensation
Companies had until the end of last year to justify why they were unable to pay. And the companies had until the end of February to submit corresponding agreements for compensation. The union did not let the companies "get away with it" that easily during the collective bargaining negotiations: although the employee representatives also emphasized that securing jobs was the top priority in lean economic times, they demanded compensation for the reduced wage and salary increase. The lost part of the increase can be compensated in the form of additional time off and/or bonuses. The type of compensation that companies will offer their employees had to be worked out by the end of last month in consultation with employees and the works council.

Toughest wage and salary negotiations
According to reports, a handful of companies in Vorarlberg want to make use of the "hardship clause". It is now up to the trade union to examine these agreements at company level. The parties to the collective agreement have agreed on a comprehensive right of objection - whereby it is naturally to be expected that the union will grant the wishes of the workforce and works council. The objection period ends at the end of March. In April, it will therefore be clear how many Vorarlberg employees will not receive the full wage and salary increase and how this will be compensated by the companies.

The clause is the result of probably the toughest wage and salary negotiations that have ever taken place in the industry. The union was desperate to have inflation compensated for, while the companies, for their part, pointed to the difficult economic situation. It remains to be seen whether the "hardship case" regulation will set a precedent. According to the union, an evaluation will first be carried out before renegotiating again in the fall.