Mediators, Lothar Späth, the former premier of the state of Baden-Württemberg, and Herbert Schmalstieg, the former mayor of Hanover, will lead arbitration talks in Frankfurt on Saturday to resolve the simmering labour conflict.
Talks between unions and employers collapsed earlier this month over longer working hours, prompting the need to appoint independent mediators to solve the crisis and hopefully avert a crippling nationwide strike. Earlier negotiations had stalled due to demands by public sector trade union Verdi for an 8 percent pay increase this year, the biggest since 1992.
The government offered 5 percent over 24 months for a longer working week and an incentive bonus, a proposal dismissed by union officials as being worth no more than a quarter of their demands.
Verdi called limited nationwide strikes this month, disrupting buses, flights, refuse collection, kindergartens and other services in Europe's largest economy.
Verdi says wages for public sector workers have risen more slowly than salaries in private industry. Employers argue that cities and towns are burdened with higher wage costs than private sector businesses.