Germany - Pay agreement at Volkswagen - September 28, 2009

Volkswagen AG , Europe’s biggest carmaker, will increase pay and institute performance-linked bonuses under an accord reached on 28 September, covering 95,000 manufacturing workers in western Germany. Earlier, the IG Metall union planned to stage work stoppages should a pay agreement not be reached. Management and IG Metall leaders agreed on a 4.2% raise to take effect on 1 January, 2010. Terms for payments tied to individuals’ performance will be arranged for when the next contract starts in 2011, said VW’s chief negotiator. The 18-month pay contract is in effect from August 1, 2009, till January 31, 2011. Workers will receive bonuses of Euro 510 in October and Euro 200 in February 2010. The performance-linked bonuses would average Euro 100 a month.

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