Variable payment schemes (VPS) are more widespread in banking and insurance than in other sectors, such as manufacturing. Irrespective of the sector concerned, however, profit-sharing, bonus and appraisal schemes do not, usually, refer to multi-employer agreements that govern other aspects of the remuneration system. Opening clauses, however, allow for the derogation of collective standards and/or the ability to make the level of bonuses contingent upon the firm’s performance. Whilst employers’ associations have, in general, called for the further extension of VPS within the framework of multi-employer collective agreements, unions are rather reluctant to replace regular wages, in part, by VPS.
German Economic Institute (IW)
Since the signing of the Stinnes-Legien Agreement in 1918, the collective bargaining autonomy of Germany’s employers’ associations and trade unions has been the subject of continual political debate and at times its legitimacy even called into question.
Germany’s Minimum Wage Act accords a Minimum Wage Commission the task of deciding on a biennial adjustment to the minimum wage. While including an overall assessment, their decision is to be oriented on the development of collective wages.