The employers' associations of the construction industry and the building trades' rejection of the arbitration award escalates the collective bargaining conflict in one of Germany's largest sectors. On Friday in Berlin, they announced their refusal of the proposal by arbitrator Rainer Schlegel, former president of the Federal Social Court, which provided for a pay increase. Subsequently, the Industrial Union of Construction, Agriculture, Environment (IG Bau) immediately announced massive strikes that could affect the sector with about 930,000 employees.

IG Bau Chief Robert Feiger explained that the union would now pursue its original demand for a wage increase of 500 euros per month following the rejection of the arbitration proposal. The arbitrator's decision had provided for a flat increase of 250 euros from May, and a further 4.15 percent in the West and 4.95 percent in the East after eleven months. IG Bau had accepted this staggered approach, but is now facing a reassessment of the situation.

Jutta Beeke, Vice President of the Main Association of the Construction Industry, and the head negotiator for the employers, Uwe Nostitz, criticized the arbitration award. Beeke complained about the unequal distribution of increases among different wage groups, while Nostitz pointed out structural deficiencies, such as illogical gradations in training allowances.

The dispute comes at a time when the German construction industry is already weakened by the housing crisis. With an annual turnover of about 162 billion euros in 2023, the sector is a crucial pillar of the German economy, which is now under additional pressure due to ongoing tariff conflicts.

The main construction industry, which for years bolstered the German economy during the real estate boom, currently faces significant challenges. Recent developments suggest that disputes between collective bargaining parties will continue, which could further exacerbate the situation in an already tense sector.