German government officials and trade unions have reached a pay deal for more than 2.5 million public sector workers, ending a lengthy dispute and heading off the possibility of disruptive all-out strikes.
The ver.di union had pressed for a hefty increase as Germany, like many other countries, grapples with high inflation.
Interior Minister Nancy Faeser said as the deal was announced early on Sunday: “We accommodated the unions as far as we could responsibly do in a difficult budget situation.”
The deal entails one-off payments totalling 3,000 euros (£2,650) per employee, with the first 1,240 euros (£1,095) in June followed by monthly payments of 220 euros (around £195) until February next year.
In March, regular monthly pay for all will be increased by 200 euros (£177), followed by a salary increase of 5.5%. The agreement runs through to the end of 2024.
Ver.di had originally sought a one-year deal with an increase of 10.5%. The agreement was reached on the basis of a proposal by arbitrators who were called in after talks broke down last month.
He added that the increase in regular pay next year will amount to a rise of more than 11% for most employees.
The union has staged frequent walkouts over recent months to underline its demands, with local transport, hospitals and other public services hit.
Germany’s annual inflation rate has fallen from the levels it reached late last year but is still high. It stood at 7.4% in March.
The past few months have seen plenty of other tense pay negotiations in Europe’s biggest economy, some of which have yet to be concluded.
In a joint show of strength, ver.di and the EVG union – which represents many railway workers – staged a one-day strike last month that paralysed much of the country’s transport network.
EVG, whose members walked out again on Friday, is seeking a 12% rise and has rejected the idea of negotiating a deal based on the arbitration proposal that helped resolve the public workers’ dispute. The next round of talks is set for Tuesday.
And ver.di is still in a dispute with Germany’s airport security companies’ association over pay and conditions for security staff.
In the latest of a string of walkouts, it has called on security workers at Berlin Airport to walk out on Monday. The airport has said there will no departures all day.