The tariff negotiations for the public service of the federal government and municipalities have officially failed after four intense days of discussions, as announced by Federal Interior Minister Nancy Faeser on the evening of March 17, 2025. This breakdown leaves the fate of over 2.5 million public sector employees hanging as both unions and employers prepare for the next steps.
Negotiations began on March 14, 2025, but the parties could not reach agreement on key points, including wage increases and additional vacation days. The unions, represented by Gewerkschaften Verdi and der Beamtenbund dbb, originally requested an 8% salary increase, with at least 350 euros more per month, along with three extra days off. They argue these demands are necessary to maintain fair compensation and improve the working conditions for their members.
Conversely, the employers, represented by Faeser and Karin Welge, president of the Association of Municipal Employers' Associations (VKA), found these demands excessive. They last offered a wage increase of 5.5%, along with higher shift allowances and the prospect of increasing the 13th month's salary. According to the employers, these offers were as high as they could afford.
Faeser expressed disappointment over the lack of progress, stating, "I expect from the unions the willingness to compromise so we can conclude successfully in the interest of employees." This was echoed by Frank Werneke, the head of Verdi, who candidly remarked, "We have moved to the point of pain, and the employers have rejected our proposals for agreement." It was clear from both sides there had been significant discussions, but no resolution.
The most contentious point appears to be the request for three additional free days. There were discussions of alternative solutions, including a model called "Zeit-statt-Geld," where portions of the annual special payment could be converted to free days instead. While this concept had been considered, it did not gain enough traction to sway the negotiations toward agreement.
Now, arbitration will be called upon to seek resolution. Faeser confirmed the need for arbitration during her announcement of the negotiations’ failure, stating it was necessary to avoid escalation. The arbitrators assigned to this case are former Hessian Prime Minister Roland Koch from the employer's side and former Bremen Finance Senator Hans-Henning Lühr for the employees. This process aims to facilitate compromise and reaction on both sides.
The arbitration panel is expected to convene within three days. During this time, all planned warning strikes across the country, which recently included disruptions at kindergartens, waste collection, and public transport, will be suspended. The aim is to create a peaceful environment conducive for negotiations without the threat of immediate strikes.
Previous negotiations for federal and municipal employees have utilized arbitration processes, demonstrating both sides' willingness to avoid reaching deadlock through independent mediation. Following the completion of the arbitration talks, the panel must issue recommendations within one week. Should they struggle to reach consensus, Koch will have final say on the proposals.
Only if the arbitrators’ outcomes are deemed unacceptable can unions initiate votes for indefinite strikes, which emphasizes the weight of their demands.
Backtracking to the employee perspective, it is evident the stakes are high. Over 2.5 million people are impacted by these negotiations, spanning various sectors such as healthcare, education, public transport, and waste management. The results of these discussions will also set precedents for future negotiations and the overall health of the public sector workforce.
Geyer, the leader of the Civil Servants Association, lamented, "The federal and municipal employers have thwarted progress with much delay and destructive energy." He insists the public sector must accelerate initiatives for flexible working time models to remain competitive with the private sector. This sentiment resonates deeply within the union's membership as they seek meaningful changes to improve their work-life balance.
With the arbitration process now underway, all eyes will be on the recommendations from the arbitrators and how both sides react. The outcome will not only affect the livelihoods of millions of public sector employees but could also shape future interactions between unions and employers amid changing economic and social factors.
