May 20, 2016 / 8:25 AM / 3 years ago

VW agrees to 4.8 percent pay raise for workers at German plants

HANOVER, Germany, May 20 (Reuters) - Volkswagen and Germany’s powerful IG Metall labour union agreed a 4.8 percent pay increase for around 120,000 workers at the carmaker’s western German plants.

Germany’s IG Metall union had sought a 5 percent pay rise over 12 months for the workers at VW, which last month reported a 4.1 billion euro ($4.6 billion) operating loss for 2015 due to the costs of an emissions test-rigging scandal.

Under a collective wage-bargaining deal struck early on Friday, VW salaries will rise by 2.8 percent on Sept. 1, 2016, and by a further 2 percent on Aug. 1, 2017.

Employees will also receive a 200 euros pension contribution. The new wage agreement runs until Jan. 31, 2018.

Part of the deal is also an extended part-time working scheme, which allows VW to cut the number of shifts worked by certain age groups of workers until 2022 in the event of a downturn.

The union, Germany’s biggest, is a trend-setter in national wage bargaining and represents employees at all of Germany’s major carmakers as well as in manufacturing, industrial production and steelmaking. This month it won a 4.8 percent raise over 21 months for 3.8 million German workers. (Reporting by Jan Schwartz; Writing by Edward Taylor; Editing by Maria Sheahan)

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