High Inflation Could Overturn Trade Collective Agreement

Last year, the social partners agreed that the trade KV agreement for 2026 would become void and need to be renegotiated if the inflation rate reaches 3 percent or more during the period from October 2024 to September 2025.

Trade KV Agreement at Risk Due to High Inflation

The quick inflation estimate for September published by Statistics Austria on Wednesday showed 4 percent. This would mean the rolling inflation over the last twelve months would be around 3 percent. However, Statistics Austria will not publish the final inflation figures for September until October 17. Then, the social partners will decide on the further course of action.

Last year, the union and the Chamber of Commerce agreed on a staggered salary increase for 2026 depending on inflation. Specifically, the agreement for the trade KV 2026 was as follows: Up to a rolling inflation of 2.3 percent, salaries would have been increased by 0.5 percent above the inflation rate. With an annual inflation of 2.4 and 2.5 percent, 0.4 percent would have been added. At 2.6 percent inflation, the increase would have been 0.3 percent, at 2.7 percent only 0.2 percent above inflation was planned, and at 2.8 percent only 0.1 percent. At 2.9 percent inflation, only the inflation would have been compensated. For a rolling consumer price increase of three percent or more, the social partners had agreed on renegotiations.

The trade sector in Austria employs around 450,000 employees and apprentices as well as 120,000 workers. After several years of real sales declines, the first half of the year was somewhat better. "It is a positive signal, but not yet a trend reversal. It remains a difficult situation," said WKÖ trade chairman Rainer Trefelik recently. He also referred to the collective agreement below inflation in the metal industry. However, the GPA union does not see it as a model for other sectors. "The crisis agreement in the metal industry was a sector-specific issue," said GPA head Barbara Teiber.

(APA/Red)

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