Employment and Social Affairs
Employment in the natural resources sector
The extractive industry offers industrial jobs, with a variety of different professions and activities. At the end of 2020 over 63,000 persons 1 were employed in the extractive industry. This corresponds to around 0.19% of all employees in Germany who are subject to social insurance contributions. At around 61%, most of the employees worked in the quarried natural resources and other mining products sector, followed by services for mining and quarrying at around 17%.
Compared to the 2016 reporting period (1st D-EITI report), the sector employed about 5,600 fewer workers, mainly due to the phasing out of hard coal mining by the end of 2018.
Employment under the mandatory social security scheme by economic sector:
Persons employed under the mandatory social security scheme as of the reporting date
31 Dezember 2020
No. of apprentices among these employees
Mining and quarryinf in total, including
Extraction of crude oil and natural gas
Quarried natural resources, other mining products
Services for mining and quarrying
Source: Federal Employment Agency (2022), reporting date: 31 December 2020.
* For reasons of data protection and statistical confidentiality, numerical values of 1 or 2 and data from which such numerical values can be mathematically deduced are made anonymous.
Each direct job in the extractive industry is linked to further jobs in upstream and downstream economic sectors. 2
The role of legislation
The German economic system is characterised by the interaction of free market activity and State social policy. However, a pronounced social partnership also exists – especially in the natural resources sector – and it can be used to balance existing differences of interest between employers and employees.
In principle, German legislation regulates a uniform (minimum) level of protection for employees (e.g., working hours, holidays, protection against dismissal, protective rights for young people, pregnant women and severely disabled persons, as well as safety and health at work, etc.). Above this level of protection and within the framework of their collective bargaining autonomy guaranteed by Article 9(3) of the German Constitution, the social partners are free to regulate working conditions independently for the particular company or the respective sector.
The statutory social security system provides protection against life risks such as unemployment, illness, the need for care, accidents, occupational disease and support in old age. Persons employed under the mandatory social security scheme are covered by social insurance; the self-employed are partially covered by this protection. Social insurance benefits are mainly financed by equal contributions from employees and employers. One exception to this, however, is statutory accident insurance, which is financed exclusively by the employer. Tax revenue is also used for financing in some segments of social insurance. The insurance companies are self-governing and guarantee the participation of the social partners.
The role and cooperation of the social partners
One of the main pillars of the social market economy in Germany is co-determination, i.e. the right of em- ployees and their representatives to participate in operational or business decisions. The scope and form of co-determination differ according to the company’s size, legal form and industry.
Corporate Co-Determination is most extensive in mining (see Montan Co-Determination; Montan- MitbestG [Coal and Steel Co-Determination Act] Montan-MitbestGErgG [Supplementary Co-Determi- nation Act]): In this case the supervisory boards are composed equally of shareholder and employee representatives. A labour director responsible for personnel and social matters is also appointed as an equal member of the management. Pursuant to the MontanMitbestG, his or her appointment is dependent on the approval of the majority of the employee representatives on the supervisory board.
For other companies which are managed in the legal form of a corporation and have more than 2,000 employees, the equal representation of employees and shareholders in the supervisory bodies also applies pursuant to the German Co-Determination Act (MitbestG). However, there are two important differences compared to Coal and Steel Co-Determination. If votes result in a tie, the vote of the Chair of the Supervisory Board, which is generally assigned to the shareholder, has the casting vote. This double vote held by the Chairman of the Supervisory Board effectively overrides the parity between employees and the employer that formally exists. In addition to this, the labour director can also be appointed to the Supervisory Board against the votes of the employee representatives. For companies with 500 to 2,000 employees, the 1/3 participation of employee representatives on the supervisory board applies, see DrittelbG [One-Third Participation Act].
Company Co-Determination is regulated in the Works Constitution Act. In every company in Germany with at least five employees, workers have the right to elect a works council. The works council represents the interests of all employees vis-à-vis the employer. It has different participation rights, especially in social, personnel and economic matters. A central instrument in works council work is company agreements, which – like collective agreements – are legally-binding agreements between the employer and the works council and regulate the employment relationship of the employees. Frequent topics are company regulations on working hours, data protection, health promotion, work safety and further training, all of which are tailored to the conditions prevailing in the company. However, the works council must also be involved in the introduction of new technical equipment and working procedures or the development of social plans in the case of planned changes in operations.
Freedom of association and the right to collective bargaining are guaranteed in Germany by the German Basic Law in Art. 9 GG. Collective agreements are concluded by one or more employers or employers’ associations with one or more trade unions. They are solely binding for their members (tariff commitment). However, it is common practice for employers bound by collective agreements to allow non-unionised employees to participate in the appropriate collective agreement by referring to individual collective agreements. Many companies that are not bound by collective bargaining agreements also orient themselves on existing collective agreements. In 2018 3 28% of the natural resources sector companies 4 were bound by collective agreements; 26% by a regional collective agreement and 2% by a company collective agreement. However, the collective agreements only apply to 49% of the employees in the sector, with 41% being subject to the conditions of a regional collective agreement and 2% to those of a company collective agreement.
The demanding activities of the extractive industry require well-trained specialist personnel. Approx. 72% of the employees have a recognised vocational qualification 5 another 11% have an academic qualification 6, e.g. in engineering.
Vocational training in Germany is essentially provided through the dual vocational training system, in which training takes place in parallel at two places of learning. The trainee concludes a training contract with the company and learns the necessary practical skills and competences on the job. The second pillar of the system is the vocational school, which provides general and job-related theoretical knowledge. The duration of the training depends on the profession involved and varies between 2 and 3.5 years. During this time, the trainee receives a training allowance from the company. The successful completion of the course qualifies the candidate to directly exercise his or her profession as a qualified specialist.
The industry trains personnel in a number of different trades, including mechatronics technicians, electronics technicians, industrial and process mechanics, processing mechanics, mining and machine operators, mining technologists and industrial clerks. On the reporting date (31 December 2020)), there were 2,300 trainees among the employees of the extractive industry. This is a training rate of 3.6%, which was below the German average of 4.8%. A look at the individual sectors reveals a relatively differentiated picture for the extractive industry. For example, training rates in the quarried natural resources industry vary from less than 2.5% to 6.3 % (2020), because the importance of training occupations varies and the proportion of semi-skilled workers varies accordingly.
Gainful employment plays a central role both in social and individual terms. There is no doubt that work is seen as the main source of livelihood, and that earnings are the most important component of personal income for employees. The average gross monthly earnings of full-time employees in the sector in 2019 amounted to €4,159 per month, and an additional €471 was paid monthly in special payments. The average monthly income in the extractive industry is thus a good 3.42% higher than the average in the manufacturing industry and a good 3.75% higher than the average income of full-time employees in Germany as a whole. 8 Due to the deductible income tax and the proportionate social insurance contributions to be paid, the individual net wages of employees are significantly lower than the gross wages.
The average paid weekly working time was 39.7 hours, which was relatively high compared to the manufacturing industry as a whole (37.2 hours).
The principle of equality between men and women applies in Germany. This principle also applies to wage determination and it means that gender pay gaps in particular must be further reduced. The Act on the Promotion of Pay Transparency between Women and Men (EntgTranspG) has been in force since 2017. This continues the principle of equal pay (equal pay for women and men for equal work and work of equal value) which is already standardised in the General Equal Treatment Act (AGG) and includes an individual right to information for employees, reporting obligations for large companies and the request to large private employers to carry out company audits of the pay structure. The average gross monthly earnings of women in the extractive industry was €4,187, which amounts to 91.6 % of the male employees’ earnings (€4,573) and is thus above the average ratio of 84.3 % in the manufacturing industry as a whole.
Diversity and equal opportunities
Different life experiences and work horizons of employees make a significant contribution to the economic success of companies. By consciously promoting diversity, companies can tap into an important success and competitive factor that has a positive impact on both companies and their workforces.
Diversity can be measured by a number of quantitative indicators, such as the proportion of women in all workforces and management, the proportion of foreign workers and the age structure of the workforce.
In 2020, the proportion of women among employees in the sector who are subject to social insurance contributions was 13.7%. The proportion of foreign employees was 6.3% of the total staff. 9
The proportion of female supervisory board members in the industry is very low at 10.7%. Only 4.4% of the board members of German extractive companies are women. Compared to other sectors, the extractive industry must act to increase the proportion of women in the workforce and in management positions. It should be noted here that the employment structure in the extractive industry has traditionally been characterised by male-dominated technical training occupations and courses of study. 10
At 60.8% the 25 to under 55 age group represented by far the largest proportion of the workforce, followed by the 55 to under 65 group at 30.7%. 7.4% of the employees were in the under 25 group, while 1.1% were over 65.
Climate policy and structural change
The Federal Government has committed itself to implement the climate goals of the Paris Agreement. In support of this commitment, lignite production and coal-fired power generation in Germany will be phased out by 2038 at the latest, in addition to the cessation of hard coal production in 2018. The fall of the Berlin Wall brought profound changes to lignite mining in Germany’s eastern regions; the workforce in the lignite coalfields in the east was drastically reduced at the start of the 1990s.12 In order to find a socially just way to organise the decision to phase out coal and the associated structural change, one of the methods adopted by the Federal Government was to establish the Commission for “Growth, Structural Change and Employment” 13, which examined proposals on the organisation of the structural change in Germany from the point of view of energy and climate policy. The objective of the commission was to maintain and create new good jobs in the regions concerned that were covered by collective agreements, to ensure a secure and affordable supply of electricity and heat at all times, and to maintain and further develop the coal-mining areas into regions that would remain habitable and attractive.
The subjects covered in the Commission’s comprehensive dialogue were the requirements of climate policy, security of energy supply and competitiveness.This social consensus on the use of coal was confirmed in July 2020 by the German Bundestag and Bundesrat and was subsumed in the Act to Reduce and End Coal-Fired Power Generation (Kohleverstromungsbeendigungsgesetz – KVBG). A societal compromise was thus achieved. Coal mining and coal-fired electricity generation are usually located in structurally-weaker regions and account for a considerable proportion of industrial value added in these areas. One industrial job creates around two more jobs in the regional industry-related or services sector. 14
The extraction of lignite through opencast mining influences the economic, ecological and social structure of the municipalities it directly affects as well as the municipalities in the coalfield adjacent to the opencast mine. The principle of the polluter pays applies regarding the influence and use of infrastructures. The mining companies must organise and pay for compensation and also relocation and resettlement. Since the start of German lignite production in the early 1920s, 120,000 people have been relocated. 15
Villages are still affected by resettlement. The owners of the affected areas are compensated by the companies for the resettlement. The same applies to property owned by the municipality. New municipal facilities are built in agreement with the municipalities affected. Rare cases of compensation for expropriation under mining law 16 are set out in law (Art. 14(3)3 GG in conjunction with §.84 ff. BBergG).
The amount of compensation payments are determined directly by the parties affected in the case of an agreement under private law; it is only in rare cases when expropriation/a surface lease is required that it is undertaken by the authorities after valuation by an expert. It can be examined by a court. The agreement on the path to phase out lignite influences the extension and adaptation of opencast mines. New buildings envisaged for infrastructure purposes can be dispensed with, if applicable.
The lignite coalfields 17 are being supported by the Structural Strengthening of Coal Regions Act18 that came into force on 14 August 2020 so that the coalfields can still exist as successful economic areas and compensation is provided for the loss of employment (see chapter 8). The Federal Government has also made a legal commitment to create 5,000 jobs in federal authorities and other federal institutions in the coal regions until 2028.
The sites of the former hard coal power plants receive funding within the scope of the Structural Strengthening of Coal Regions Act. Here up to €1 billion is planned by 2038. In addition, the former lignite mining regions of Helmstedt and Altenburger Land will each receive €90 million.
The new “STARK” funding programme 19, which is not directed towards investments, is intended to support the objective of transforming the coal regions in an economically, ecologically and socially sustainable way and to make the coal regions model regions with an international profile for greenhouse-gas-neutral, resource-efficient and sustainable development.
In order to cushion the social impact of phasing out coal, the Federal Government followed the recommendations of the Commission for “Structural Change, Growth and Employment” and also introduced an adaptation payment for employees aged 58 years and older. The adaptation payment is paid for a maximum of five years and makes it easier for older employees to take early retirement. Details of the adaptation payment under the Act to Reduce and End Coal-Fired Power Generation (KVBG) were set out in separate adaptation payment guidelines of 3 September 2020 issued by the then Federal Ministry for Economic Affairs in agreement with the Federal Ministry of Labour and Social Affairs and the Federal Ministry of Finance.