The fast fashion retailer Primark wants to pay its employees in Germany 5.3 percent more wages from October 2023, write Christiane Wiggers-Voellm, Managing Director of Primark Germany and Austria, and Benjamin Weidmann, Head of People & Culture Germany and Austria, in a letter to the workforce. The collectively agreed trainee remuneration is also to be increased by 5.3 percent from October 1, 2023.
With this step, the company is reacting to the particularly lengthy and controversial current collective bargaining negotiations in the retail sector. “We know that the current situation demands a lot from all of you financially and we would like to ensure some improvement now, even if there is no collective agreement yet,” said Primark. Primark also emphasizes that this increase is voluntary and without recognition of a legal obligation. It can also be credited towards a later collective agreement, even if it comes into force retroactively.
Primark is following the recommendation of the German Retail Association (HDE), which suggested to its members not to wait for a collective agreement, but to voluntarily increase wages by 5.3 percent. Rewe, Aldi, Lidl, Kaufland and the Otto Group also followed the recommendation.
So far, collective bargaining, which is being conducted separately in each federal state, has not resulted in an agreement. In July, employers called for a tariff increase of 5.3 percent from August and a further 3.1 percent in May 2024 for a period of 24 months. In addition, there should be a voluntary inflation compensation of 450 euros, which is exempt from all taxes and duties, but which companies can also refuse.
The Verdi union is demanding, among other things, a flat rate increase in hourly wages of 2.50 euros for a period of twelve months and a minimum wage of 13 euros. “A 5.3 percent wage increase in 2023 with continued inflation and rising prices is a slap in the face for retail employees. That’s 92 cents an hour for a saleswoman, and that means a loss of real wages,” says Verdi chairman Frank Werneke, rejecting the HDE proposal.
According to Verdi, the next collective bargaining will take place at the end of October 2023.