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EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure DE-2020-23/1329 Updated – measures in Germany

Flexibility in wages and working hours at Covestro

Flexibilität in Gehalt und Arbeitszeit bei Covestro

Country Germany , applies locally

    • – DEA NORDRHEIN-WESTFALEN
      – DEA14 Krefeld, Kreisfreie Stadt
Time period Temporary, 01 June 2020 – 30 November 2020
Context COVID-19
Type Company practices
Category Employment protection and retention
– Wage flexibility
Author Birgit Kraemer (Hans Boeckler Foundation) and Eurofound
Measure added 26 October 2020 (updated 10 November 2021)

Background information

The political measures introduced to slow down the corona pandemic, including lock downs, social distancing, stricter hygiene standards, and restrictions in global travel and transport, pose challenges to many businesses in Germany. Covestro's production site in Krefeld-Uerdingen produces high-tech synthetics for a global market. The company had to re-arrange working hours to ensure the protection of workers during the pandemic, while also facing reduced order volumes because of a slump in demand.

Content of measure

Covestro reduced the number of workers per shift to a minimum in order to ensure social distancing and create stable teams of few workers. Shift reductions also reflected the reduction in the volume of orders. Part of the workforce was sent home at full pay. To share the financial burden of reduced production and smaller teams, the works council and management agreed significant wage reductions. These salary reductions varied between salary levels: employees in lower wage groups faced wage reductions of 6.5%, while managers at the supervisory board and board of directors had their salaries reduced by 15%. The agreement was in place until the end of November 2020, by which time full pay was planned to be re-established.

Updates

The following updates to this measure have been made after it came into effect.

30 November 2021

This measure expired on 30 November 2020. In December 2020, after the business had recovered, Covestro paid back the wage losses to the employees.

Use of measure

The goal of the measure was to ensure protection of workers during the pandemic and to avoid short-term work schemes or lay-offs. As of early November 2020, these goals have been reached. Their future viability is unsure as Germany entered into a second lock-down in November. (The research team at WSI will try to update this case in January 2021).

Contents

  • Health and safety
  • Working time flexibility

Target groups

Workers Businesses Citizens
Employees in standard employment
Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
Company / Companies
Employees
Employer

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative No involvement
Form Any other form of consultation, institutionalised (as stable working groups or committees) or informal Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Company level

Involvement

  1. The local works council and management reached an agreement.
  2. External organisations from the employer or workers' side were not involved.
  3. No contribution from social partners outside of the workplace concerned.

Views and reactions

No data.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      C - Manufacturing C20 Manufacture of chemicals and chemical products

This case is not occupation-specific.

Sources

Citation

Eurofound (2020), Flexibility in wages and working hours at Covestro, measure DE-2020-23/1329 (measures in Germany), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DE-2020-23_1329.html

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