Deutsche Bahn, union agree flexible work hours in 'historic' deal

(Reuters) -German national rail operator Deutsche Bahn and union GDL on Tuesday struck a wage deal giving train drivers the option to reduce their weekly working hours, ending months of dispute with a pact they say could be a model for other unions.

Under the agreement, the state-owned firm will set up a "working time corridor" allowing train drivers working shifts to gradually scale down to 35 hours per week by 2029, from an average of about 40, while keeping wages unchanged. Those who work beyond 35 hours would get 2.7% more pay per extra hour.

For example, train drivers working a 40-hour week would earn around 14% more than those working 35 hours.

"With self-determined weekly working hours, the railway professions will become more attractive overall and performance will be rewarded," said Deutsche Bahn's head of personnel Martin Seiler.

GDL chairman Claus Weselsky said: "With this wage agreement, we have achieved a historic breakthrough and are thus setting an example for other trade unions in this country."

Germany has seen a wave of industrial action in recent months, as high inflation and staff bottlenecks soured wage talks, affecting national rail, air travel and public transport.

FLEXIBILITY PRAISED

Economists praised the agreement for its flexibility as employees will be free to choose whether to work more for higher wages or the other way around, depending on their situation.

"This is better for dealing with the shortage of skilled workers than a forced reduction in weekly working hours," said Clemens Fuest from top German economic institute Ifo.

Enzo Weber from the Institute for Employment Research (IAB)described self-determination in the length of working hours as "the future" of labour.

As part of the agreement, which runs for 26 months retroactively beginning on Nov. 1, 2023, both parties agreed a peace obligation that will bar strikes until the end of February 2026.

Both sides also settled on a 420-euro ($455.66) salary increase in two parts, and on a 2,850-euro one-off inflation compensation.

Deutsche Bahn posted a 2.4 billion euro net loss in 2023 after investing a record amount in ailing infrastructure, but said it would return to profitability next year.

($1 = 0.9217 euros)

(Reporting by Klaus Lauer and Christian Kraemer, writing Andrey Sychev, editing by Miranda Murray and Bernadette Baum)