Logistics
Contracts for services aren’t the problem
Tekin Yildirim is vice chair of the General Works Council at ISS Facility Services. The company is like a large general store that does almost everything—from catering and technical services to internal logistics and industrial cleaning. Yildirim started 20 years ago at Daimler in production and later moved to logistics. In 1996, Daimler spun off the division and sold it to ISS in 2007. A lot has changed since then—not just the ID cards. Since 2011, there has been no collective bargaining agreement and no wage increases. Only the older employees, who are still covered by our collective bargaining agreements, receive vacation pay and Christmas bonuses. The only thing that hasn’t changed for Yildirim and his colleagues is the work. They’re still doing the same jobs they did 20 years ago.
Contracts for specific services have always existed, and often for good reason. No one hires a painter on a permanent basis just because they want to paint their apartment every five years. In companies, too, there is work that arises only occasionally or that requires specialists who aren’t available in-house. Contracts for work are not the problem; their abuse is. This abuse begins when companies outsource work to service providers in order to save money at the expense of employees, lower social standards, or circumvent employee participation—when work shifts from companies bound by collective bargaining agreements to areas not covered by such agreements.
Conditions Must Be Right
Contract logistics providers, facility management companies, and development service providers are now taking on work under service contracts that is part of manufacturers’ core business. In production, outside firms already handle more than a third of the work; in assembly, 28 percent; and in research, development, and engineering, nearly a fifth. Often, employees of these service providers work side by side with colleagues from the permanent workforce, performing the same tasks but under worse conditions.
This is also the case at Bremer Lagerhaus Gesellschaft (BLG) in Wackersdorf, Bavaria. It all began with the decision by automaker BMW to outsource part of its logistics operations and award the contract to a service provider, the contract logistics company BLG. The task: to pack auto parts for international shipment to assembly plants abroad. Previously, this work had been done primarily by BMW employees at our wage rates. Then, BLG Wackersdorf employees took over the task for a fraction of the pay. Jürgen Scholz of IG Metall in Regensburg does not have a general objection to service contracts. “But the conditions have to be right,” says the union representative.
Contract-for-service agreements are widespread
At companies using service contracts, they often aren’t. BLG is not an isolated case. The extent to which this phenomenon is spreading is illustrated by examples that IG Metall on the coast has compiled in a dossier. Not only automakers, but also shipyards, the wind power sector, and the aerospace industry outsource work to external firms to save costs. The case of Greek female workers we discovered in Rostock illustrates just how dramatic this situation can become. They had been working at shipyards under service contracts. Eighty of them were living in shipping containers. They hadn’t been paid for weeks and had been surviving on toast and instant soup. Such extreme cases are the exception.
Facility Management
In general, there is much room for improvement when it comes to service contracts. Our first goal: to keep the work within the company. Only where that is not possible does IG Metall aim to ensure fair conditions for employees at contract firms—good working conditions, decent pay, and job security. In the view of our Second Chair, Jörg Hofmann, this addresses a fundamental flaw in corporate strategies that prioritize short-term profit over the long-term preservation of core competencies and know-how. “Employers shouldn’t think they can use outsourcing to lower wages and working conditions without resistance and evade IG Metall’s jurisdiction,” says Hofmann. For us, the right to fair working conditions doesn’t end with the end manufacturers. It applies to the entire value chain across their industries. That means: equal rights, co-determination, and collective bargaining agreements for employees at subcontracting firms.
More Money Through a Collective Bargaining Agreement
Securing a collective bargaining agreement with us was also the goal of the workers at the contract logistics firm BLG in Wackersdorf. To that end, the works council members distributed flyers, recruited members, and began negotiating a collective bargaining agreement. Works council chair Sergio Vecchiolla recalls that management wasn’t pleased at all. “We had to use our first warning strike to shake things up a bit in the negotiations,” Vecchiolla says with a smile. Almost all employees took part.
A few weeks and a 14-hour negotiation marathon later: finally a result, finally the collective bargaining agreement, finally more money. “For many, the collective bargaining agreement means up to ten percent more pay,” says Vecchiolla. In addition, there are now higher vacation and Christmas bonuses, as well as a gradual increase in vacation days to 30 days.
Working Conditions: A World of Difference
But even if the pay is more than enough to get by, the conditions are relatively good, and the work is interesting—things aren’t always fair. The work done by the engineering services provider MBtech for Daimler is also classified as a contract-for-services arrangement. In terms of working conditions, however, the developers are worlds apart from the Greek workers and still worlds apart from the contract logistics workers. For Sven Dittmar, it used to be irrelevant whether he was a Daimler employee or a contract worker. When the computer scientist started at MBtech eleven years ago, he earned only slightly less than his Daimler colleagues. He was doing well. But at some point, he started comparing. “At Daimler, working hours were tracked. We had a trust-based work schedule. The Daimler colleagues received weekend premiums. We didn’t.” Dissatisfaction grew as the income disparities widened. “New hires were paid 10, 15, or even 20 percent less,” Dittmar explains. “Pay raises were based on personal discretion, not on the collective bargaining agreement.” More and more people began to wonder why they were earning less than others, even though they were doing the same work.
IndustrieServices
In 2009, MBtech employees elected a works council for the first time. Its first action: Since then, working hours have been tracked. “But the real game-changer was when we secured a collective bargaining agreement a year and a half ago. Now the industry-wide wage increase applies to all colleagues,” says Dittmar, who was chairman of the works council at the time. He’s now back to working as a project manager and serves on the works council only part-time. “I also just enjoy being a computer scientist,” says Dittmar.
Stronger with a Works Council
At first, Andreas Engel believed he didn’t need anyone—no works council and no union. The 53-year-old had studied physics and gained experience as an engineer. Now he had a good job at Elan-Ausy in Hamburg, an engineering services provider. About 180 people worked there, mainly on contracts for Airbus. What could possibly go wrong, Andreas Engel thought. That was in 2006. Now Engel knows just how much can happen. He knows there are situations where you need allies. It started in 2009, when Airbus began awarding fewer contracts—and then, before the workforce could get its bearings, they were put on short-time work. “Suddenly, it became clear to us that things were going to get tough,” says Engel.
In 2009, they formed a works council at Elan-Ausy; Engel has been the works council chair for two years. However, the reactions of many colleagues remained cautious. “Most are convinced that professional success depends first and foremost on them,” says Engel, “it was unimaginable to them that they could be let go.”
Research and Development
That’s exactly what happened last year. Airbus had been steadily cutting back its orders, and Engel’s plant—which had grown to about 400 employees—decided to take a drastic step. There were layoffs for operational reasons. “About 80 colleagues were laid off,” says Engel. “It was a huge shock for everyone.” Since then, Engel senses, the mood has shifted. Colleagues who previously wanted nothing to do with works council work are now open-minded and interested. “Many have lost their basic trust,” says Engel, “the belief that they can handle everything on their own.” That doesn’t mean colleagues are lining up at his door or that he’s handing out membership applications one after another. “A lot of persuasion is still needed,” says Engel. “But we’re reaching our colleagues more effectively now.”
Circumventing Collective Bargaining Agreements: Legislators Must Act
Whether among developers, contract logistics workers, or in facility management—when employees organize and elect a works council, they improve many aspects of the workplace. On the other hand, we’re fighting to prevent work from being shifted from companies bound by collective bargaining agreements to non-collective bargaining zones. With success: In total, we’ve already concluded 30 supplementary collective bargaining agreements that protect against outsourcing. However, only lawmakers can fundamentally put an end to these abuses. “We expect the federal government to put a stop to the arbitrary spinning off of parts of the workforce into lower-paying jobs without a collective bargaining agreement or a works council,” says Jörg Hofmann, Second Chairman of IG Metall.
Meanwhile, ISS Works Council member Tekin Yildirim is fighting for a company-wide collective bargaining agreement. Things are difficult right now. The contract with Daimler expires at the end of 2016, and the contract is being put out to bid. “In this business, companies undercut each other,” says Yildirim. If he could make a wish, it would be that contracts be awarded only to companies with a collective bargaining agreement.
