News

Deutsche Post and the German postal union Ver.di have reached a new “Generations Pact” for age-based working under the new condition of retiring at the age of 67, with a job guarantee until 2015 in exchange for lower starting wages.

The new collective bargaining agreement reached during the ninth negotiating round for the company’s 130,000 employees safeguards jobs extending dismissal protection until the end of 2015.

However, the deal reduces the entry wages for new employees by 4% on average. For example, a newly hired postman will earn €10.70 an hour compared to the current €11.13.

"The agreement is an important contribution to stabilising earnings in the Mail Division at €1 billion over the long term. It creates the leeway that the company needs to respond to future trends in a shrinking postal market," said Deutsche Post DHL CEO Frank Appel. "As a result, we are strengthening our competitive position and securing jobs."

The Generations Pact allows older employees to work actively until they reach the legal retirement age of 67, thus “preserving their knowledge and experience for the business”. At the same time, the deal creates employment opportunities for young people. More than 1,000 qualified trainees will thus be taken over next year while at least 1,500 part-time employees will receive a permanent contract at the end of 2011.

The legal partial retirement system will be complemented by the so-called "working-time accounts" and a "demographic fund". The working time accounts enable employees to build up a balance of time during their active professional lives which they can use for non-working periods or to work less when they get older.

In addition, Deutsche Post is setting up a so-called demographic fund for the first time to use the contribution from this fund for increasing payments to employees during the partial retirement. The fund is financed through the appropriate deduction of future wage increases.

Walter Scheurle, Member of the Management Board responsible for personnel at Deutsche Post DHL, commented: “With the introduction of working-time accounts and the demographic fund, the negotiating parties have added a new tool to the current system of bargaining agreements. It offers attractive models to older employees that will allow them to stay at the company until they retire by working fewer hours.”

With effect from 1 January 2012, the union and Deutsche Post also agreed on new vacation policies based on the German General Equal-Treatment Act which now depend on job tenure and not the age.

While the 990 parcel delivery districts will continue to be operated by the subcontracted service partners, the company will extend its outsourcing activities in transportation reducing the number of its own drivers from the current 3,600 to 2,600. As for mail delivery, no mail districts will be operated by subcontractors. All regulations applying to subcontractors will remain in effect through December 31, 2015.

The deputy chairwoman of the Verdi Union, Andrea Kocsis, welcomed the agreement: “We have signed a Generation Pact that will allow our colleagues to reach the retirement age healthy while opening up new opportunities for young employees.”

She acknowledged that the top-up payment due during the partial retirement has a social component as employees with a lower income will get a higher top-up payment as the ones with a better salary. “We want the workers who work physically hard but are not well paid to take part in this model,” Koscis stressed.