When trade unions send their members onto the streets in these times to put additional pressure on employers in collective bargaining, there are usually two demands at stake. First: higher wages and salaries. Second: a tax-free one-time payment, commonly known as a corona premium. The latter is permitted by law in order to mitigate the additional burdens of the pandemic on employees. There is no talk of replacing regular wage increases with the Corona bonus. According to the Federal Ministry of Finance, the special payment must be made “in addition to the wages that are owed anyway.” A requirement that trade unions like to insist on when dealing with employers. However, you don’t always take it so seriously.
This is shown by a collective agreement concluded by DGB Rechtsschutz GmbH as an employer and the Verdi service union. It replaces wage and salary increases with the Corona bonus. “If non-union employers did it that way, there would be a lot of screaming from the unions nationwide,” criticizes a veteran and affected employee representative. He considers the actions of his own organization to be “outrageous”, yes, “downright scandalous and catastrophic in terms of trade union policy”. About 700 employees of DGB Rechtsschutz GmbH, a wholly-owned DGB subsidiary that provides legal assistance to trade union members in labor law disputes, are spread across Germany. After all, this happens in about 120,000 procedures per year. The current wage agreement for these union workers has been in effect since 2019 and could have been terminated by August 31 to push through higher wages and salaries.
In fact, representatives of the employer DGB Rechtsschutz GmbH met with representatives of the Verdi union for collective bargaining. With the result that wages and salaries will not be increased but will be frozen for at least 13 months until the end of September 2023. Instead, there is a one-time corona bonus of 1000 euros for each employee. This replaces regular salary increases, which Rechtsschutz GmbH now saves. But that is exactly what the legislature wanted to prevent, namely to replace collectively agreed remuneration payments with the corona premium. The bonus is intended to mitigate the Corona crisis and not as a wage or salary replacement.
“This is how a union-owned company passes on wage and salary increases to the general public,” says one of those affected. Because neither taxes nor social security contributions have to be paid on the Corona premium, and not even the pension fund benefits from it. Above all, however, the one-off payment does not affect the table. This means that the one-off payment does not change the salary table that has been in force since 2019, but freezes the tariff groups specified therein. As a result, collective bargaining at the end of 2023 will be based on the lower rates of 2019. Any negotiated increases are lower than would have been the case if table-based salary increases had now been agreed.
Beyond its own organization, Verdi boasts of a successful dual strategy
“No employer in the world would have let Verdi get away with it,” says the person concerned from DGB Rechtsschutz GmbH. However, their managing director, Eva Pulfrich, sells the solution as a generous boon. “From the employers’ side,” the 1,000-euro bonus went “significantly beyond what would have been possible within the framework of regular wage negotiations for this period,” she wrote in a circular to the employees. “In this respect, it is an additional service.” When asked, Pulfrich added that she could not understand the accusation that the corona premium was replacing regular remuneration. After all, the legislature has created the possibility of providing employees with a tax and duty-free net benefit. And it is precisely this opportunity that one makes use of. Incidentally, the fact that DGB Rechtsschutz GmbH would otherwise have paid its employees regular salary increases this year is “pure speculation”.
A daring statement, because it is unlikely that the Verdi negotiators would have agreed to an extension of the collective agreement at no cost. A Verdi spokesman denies that such an approach would never have been allowed to get away with a non-union employer. “In the ideal of all collective bargaining worlds, one-off payments are only considered the second-best solution, and of course unions try – wherever possible – to push through table increases,” he admits. “But in this specific situation, there was still room for maneuver in terms of collective bargaining. At the same time, employees have noticeably more in their wage packets – practically even gross equal to net.” And finally, one must also acknowledge that “the employer” had “considerable additional work due to Corona, organizational and technical changes and changed refinancing conditions” in the past. “We cannot avoid that as a negotiating partner.”
Other employers from Verdi would also like to have this much understanding. But beyond its own organization, Verdi boasts of a successful dual strategy. The collective agreement concluded between the federal states and the union in autumn provides for exactly what DGB Rechtsschutz GmbH allegedly did not do: “The one-off corona special payment will be granted in addition to the remuneration that is already owed,” it said.