Bundesinstitut für Berufsbildung (BIBB)

Content

• Continuing training policy covered by collective wage agreements and branch funds
• The Social Fund in the scaffolding sector
• Areas of potential offeres by the branch fund
• Literature

Continuing training policy covered by collective wage agreements and branch funds

Over the course of the past decade, training regulations based on collective wage agreements have been concluded in the chemical industry (2003), in the metalworking and electrical industry (2001/2006), in the public sector (2005/2006) and in the insurance sector (2008) as well as across a number of smaller branches such as textile services (2008), jewellery (2011) and lingerie and corsetry (2012). The scope of application of these new collective wage agreements alone covers approximately five million employees (cf. BAHNMÜLLER/HOPPE 2011).

Collective wage agreements which regulate issues relating to training date back to as early as the 1960's. The parties negotiating collective wage agreements often used agreements regarding training as a way of reacting to technological and economic structural change (cf. BISPINCK 2001; BAHNMÜLLER 2002). It is not until recent times that stand-alone continuing training agreements have been concluded in increasing numbers.

Regulatory content of cellctive training agreements

Most collective training agreements govern the types of continuing training management procedures to be adopted at an individual company level (cf. Table 1). These include the binding right to an annual training appraisal meeting as laid down in the Collective Wage Agreement for the Public Sector (TVöD). Collective wage agreements may also include a "right which can be quantified in terms of time for all employees to take part in continuing training whilst continuing to receive remuneration", although this is less common and often involves (cf. BAHNMÜLLER 2009). One relatively recent example of this is the two-day annual right to advanced training for educational support staff agreed as part of the Collective Wage Agreement for the Western Region concluded between the service workers' trade union ver.di and local government employers.

Two examples of collective wage agreement regulations for the establishment of inter-company support structures are the "Q Agency for the promotion of continuing vocational training in the metalworking and electrical sector in the State of Baden-Württemberg" and the "Chemical Foundation Social Partners' Academy" (CSSA). Both these institutions are funded by the social partners and offer participating companies information, advice and support on matters relating to continuing vocational training within the area covered by their collective wage agreement.

Collective branch funds for the financing of continuing training

Branch funds for the financing of company-based continuing training constitute a particular form of support structures governed by collective wage agreements. The central approach of such a financing system is based on the decoupling of company-based continuing training decision making and company funding of such training. Under the system, all companies subject to such a collective wage agreement pay a certain percentage of the gross wages or salary of their employees or a fixed amount per employee into a fund which is mostly equally administered by both social partners. Companies can then use the fund to refinance the costs of investing in continuing training for their staff.

Collective wage agreement funds for the financing of inter-company continuing training offer three benefits (cf. BAHNMÜLLER 2009). Firstly, they assist in ensuring that continuing training activities aimed at securing the availability of skilled workers and the associated necessity of identifying requirements and supply in this regard are recognised and approached as a task for the whole of the branch rather than merely as a problem for an individual company. Secondly, they reduce the pressure on smaller individual companies in particular in terms of both financing and organising continuing training. Last but not least, BAHNMÜLLER (2009) points out that fund-financed continuing training investments take place independently of fluctuations in economic development and of the current business situation of a company. One moderating aspect which needs to be indicated at this point, however, is the fact that payment into the collective wage agreement fund is determined by the number of employees within the respective branch and is therefore also influenced by the economic situation of the companies.

Table 2 enlarged

Despite the benefits stated here, employers' associations frequently do not agree to such a funds-based solution for the financing of continuing training until the trade unions have made other concessions. To this extent, collective training agreements are always so-called "compensation collective wage agreements" due to the fact that the funding contribution made by the employers is mostly counterbalanced by the willingness of employees to give up certain demands. In the case of the collective wage agreement fund in the textile and clothing industry, for example, employees were prepared to accept a smaller rise in their holiday bonuses.
Table 2 shows that collective wage agreement funds for the financing of continuing training apply only in a few smaller branches, such as forestry and agriculture and in individual sub-divisions within the clothing and textiles industry. The Social Fund in the scaffolding sector encompsses the most companies, has a long tradition and represents the most significant collective wage agreement fund in financial terms.

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The Social Fund in the scaffolding sector

History of the collective wage agreement

In 1981, the Federal Association of Scaffolding Companies and the Federal Guild of Scaffolders concluded a collective wage agreement with the union of the day ("Bau Steine Erden", now "Industriegewerkschaft Bauen-Agrar-Umwelt") on the establishment of an inter-company fund for the financing of various social benefits including continuing vocational training. This was based on a 1975 collective wage agreement governing pay-as-you-go financing in construction occupations. The implementation and financing of training in the craft trade of scaffolding were also ultimately incorporated into the collective wage agreement regulatory framework in the form of the Collective Wage Agreement on Vocational Education and Training in Scaffolding in 1991 (MORAAL/SCHMIDT 1998). This collective wage agreement was accorded general validity by the Federal Ministry of Labour and Social Affairs and thus became binding for all companies in the sector. At the end of the 1970's, the social partners involved in the scaffolding trade undertook the initiative of introducing initial and advanced training occupations. This constituted the first step towards resolving a branch-specific qualifications problem. The skills level of workers in the commercial scaffolding sector, most of whom were unskilled or semi-skilled, was no longer sufficient to meet the increased technical requirements. Advanced training regulations for the qualification of "certified scaffolding foreman" were passed in 1978, followed in 1982 by advanced training regulations leading to the qualification of "certified scaffolding head fitter", the latter being based on a collective wage agreement. The second decisive step towards dealing with the increase in skills requirements was the collective agreement on an inter-company fund for the financing of these advanced training measures. This agreement came about because the companies involved in the sector, which were predominantly of small and medium size, did not believe that they were in a position to implement initial and continuing training completely on their own. A cross-branch approach was felt to be both sensible and necessary in order to solve the problem.

Financing and reimbursement modalities

The Social Fund equally administered by the Federal Association of Scaffolding Companies and the union of the day ("Bau Steine Erden", now "Industriegewerkschaft Bauen-Agrar-Umwelt", IG BAU) commenced work in 1982.
Alongside the costs of initial and advanced vocational training, it also reimburses the costs of further benefits for commercial employees in the scaffolding sector stipulated via collective wage agreement such as holiday bonuses, compensatory wage increases and interim allowances. In order to finance these benefits stipulated via collective wage agreement, companies within the scaffolding sector (not including the Federal State of Berlin) are at present required to pay over to the Social Fund a total amount of 24.2 percent of gross wages.
This includes an amount of 2.5 percent of the total of gross wages which is exclusively available for the financing of vocational education and training. One particular characteristic of the collective wage agreement relating to vocational education and training in the scaffolding sector is that it governs the implementation of and conditions of participation in the advanced training measures as well as covering claims for benefits relating to taking part in the initial and advanced vocational schemes.

The following courses are currently funded:

• Certified scaffolding foreman;
• Course in accordance with the Ordinance on Occupational and Vocational Teaching Aptitude for Vocational Education and Training in the Commercial Sector (Trainer Aptitude Examination);
• Preparatory course for the final examination leading to the qualification of scaffolder pursuant to § 45 Paragraph 2 of the Vocational Training Act. Due to the low level of demand, these courses have not taken place in recent years.

The Social Fund of the scaffolding sector bears the cost of courses including learning materials and examination entry fees, the costs of continued payment of wages plus an additional social insurance expenditure of 45 percent to cover ancillary wage costs, accommodation costs, subsistence costs and travel expenses.

Take up

In 2010, total funds available to the Social Fund for the funding of vocational education and training were €10.2 million. Of this, €8.95 million was paid out for VET measures implemented including €1.76 million for the funding of advanced training for commercial employees in the scaffolding sector.
Funds used to finance advanced training measures in the year 2000 were only €1.27 million. This represents a considerable increase over the past decade. The reason for this growth in the significance of advanced training is due to the fact that the number of commercial employees in the scaffolding sector has also risen over the last ten years. In 2000, the average annual number of employees in the scaffolding industry was 14,800. By 2010, this had increased to an average of 20,000. Scaffolding companies primarily covered their increased labour requirements by recruiting unskilled and semi-skilled workers from the labour market. One of the consequences of this human resources recruitment strategy was that the proportion of unskilled and semi-skilled workers in the scaffolding sector, which in 1990 was still above 80 percent of employees before being successfully reduced to just under 63 percent over the following ten years with the assistance of collective wage agreement based VET funding, rose again to 73 percent in 2010. Although scaffolding companies intensified their training activities in the interests of acquiring skilled workers by increasing the number of training contracts from around 600 to more than 1,000 over the past decade, the main focus of staff acquisition was on the recruitment of unskilled and semi-skilled workers. This meant that the requirement for scaffolding foremen rose (cf. Figure), this being covered by the advanced training measures financed by the Social Fund.

Over the past decade, a total of more than 1,750 employees have taken part in a course financed via the Social Fund and leading to the qualification of certified scaffolding foreman (around 1,450 employees) or in a trainer aptitude course (approximately 300 employees). The increased need for continuing training is, however, primarily taken up by companies which, due to the activity profile they pursue, require employees with higher levels of skills. This includes companies which operate in the fields of industry, load bearing or suspended scaffolding or in the scaffolding of historic buildings. This meant that in 2010 only 160 scaffolding companies used the Social Fund to refinance the advanced training of their employees.

 

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Areas of potential offered by the branch fund

To which extent to the benefits of inter-company collective wage agreement funds as emphasised by BAHNMÜLLER (2009) actually apply to the Social Fund in the scaffolding sector? Given the fact that the changed skilled worker needs in the scaffolding sector were the ultimate reason for the establishment of a collective wage agreement fund for the financing of continuing training, alignment towards branch specific skills requirements became a central regulatory object of the collective wage agreement governing vocational education and training in the industry. This meant that the social partners used the collective wage agreements as a vehicle for determining both the financing modalities and the continuing training measures (e.g. certified scaffolding foreman) which were to be financed via the collective wage agreement funds. To such an extent, the fund acts to provide a structure for skilled worker training. Notwithstanding this, the question which arises in terms of future perspectives is whether a collective wage agreement restriction to only three fundable advanced training measures will cover the training requirements in the branch.

A second benefit of the Social Fund is the establishment of inter-company support structures. Scaffolding companies, which are normally small and medium-sized, would not be in a position to offer their employees the necessary advanced training were it not for the organised cooperation with inter-company vocational education and training centres that takes place via the Social Fund. With regard to the independence of continuing training financing from economic development, we have already remarked that the connection between payments of contributions and number of employees is at least one area in which available funding is reliant upon the economic situation of the branch. As far as the scaffolding sector is concerned, however, this has also meant that the available VET financing from the Social Fund has also increased in line with the growth in personnel. At the same time, the proportion of the fund used for advanced training also continued to rise, especially in years of economic crisis such as 2009.

One further benefit of financing advanced training via the Social Fund tends to be of a more branch specific nature. The scaffolding sector continues mainly to employ unskilled and semi-skilled workers, who have once again been recruited in greater numbers over the course of the last decade. The increase in the participation in advanced training which this has triggered makes it clear that the Social Fund also has a labour market policy function. Although the collective wage agreement governing vocational education and training does not include any quantifiable right to continuing training for such workers, employees have a right under the collective wage agreement to funding and to financial protection during participation in advanced training in circumstances where a company decides to provide such training to its staff. The societal advantage here is that the training of unskilled and semi-skilled workers is integrated into the contract of employment. In contrast to state labour market funding, such training takes place before impending or actual unemployment. At the same time, costs are borne by all companies in the branch without any requirement for state funding. The example of the Social Fund shows that collective wage agreement funds for the financing of inter-company continuing training exhibit considerable labour market policy potential, although this is still underestimated and under-exploited, including in the scaffolding sector.

The overall reduction in the proportion of employees without vocational qualifications in the scaffolding sector since the Social Fund has been in existence demonstrates that the recognition that qualified employees are needed to meet increasing requirements is gaining ground, albeit slowly. The collective wage agreement based regulation of inter-company fund financing of advanced training in the scaffolding sector is likely to have encouraged the decision to pursue company-based continuing training, especially in companies offering a specialised range of services.

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Literature

• BAHNMÜLLER, R.: Tarifpolitik und Weiterbildung - neue Entwicklungen und alte Fragen [Collective wage agreement policy - new developments and old issues]. WSI-Mitteilungen [Institute of Economics and Social Science Reports] (2002) 1, pp. 38-44
• BAHNMÜLLER, R.: Tarifverträge als Instrument der beruflichen (Weiter-)Bildung in Deutschland. Die Rolle der Gewerkschaften in der beruflichen Bildung. Deutschland - China im Vergleich [Collective wage agreements as an instrument for (continuing) vocational training in Germany. The role of the trade unions In vocational education and training. A comparison between Germany and China]. Shanghai 2009
• BAHNMÜLLER, R.; HOPPE, M.: Überbetriebliche und betriebsbezogene tarifvertragliche Qualifizierungsregelungen in Deutschland: Ein Überblick in 13 Punkten [Inter-company and company related collective wage agreement based training regulations in Germany: a summary in 13 points]. BIBB Congress 2011, Berlin 2011 - URL: www.bibb.de/dokumente/pdf/ak_5-1_bahnmueller.pdf (last updated: 03.02.2012)
• BISPINCK, R.: Qualifizierung und Weiterbildung in Tarifverträgen. Bisherige Entwicklung und Perspektiven [Training and continuing training in collective wage agreements. Previous development and perspectives]. In: DOBISCHAT, R. et. al.: Lernzeiten neu organisieren [Reorganising learning times]. Berlin 2001, pp. 153-180
• MORAAL, D.; SCHMIDT, G.: Die Sozialkasse im Gerüstbaugewerbe: Ein tarifvertraglich geregeltes Finanzierungsmodell der Aus- und Weiterbildung [The Social Fund in the scaffolding sector: a financing model for initial and continuing training regulated via collective wage agreement]. In: GRÜNEWALD, U.; MORAAL, D.: Modelle zur Finanzierung der beruflichen Weiterbildung Beschäftigter und Arbeitsloser [Models for the financing of the continuing training of employed and unemployed persons]. Berlin 1998, pp. 122-130
  

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Last modified on: April 25, 2012