IG Metall said that 75,000 workers in the west of the country would receive the rise, effective December 1. The new deal is valid until at least the end of February 2013. The union had initially demanded a 7-percent pay rise. The agreement with steel companies also ensured that, except for in a few limited exceptions, trainees will be offered permanent positions.
Pay deals in Germany are reached between unions and employers without government intervention and the IG Metall agreement traditionally serves as a basis for other negotiations.
Between now and the end of 2012, salary talks affecting some nine million people in Germany will take place.
The IG Metall negotiations were particularly fraught, involving a warning strike by some 17,500 steelworkers and the threat of more labour action. Finally, after 12 hours of negotiations Monday and into Tuesday morning, an agreement was reached.
“That was a tortuous process,” said IG Metall's chief negotiator Oliver Burkhard.
For years, unions in Germany have accepted low pay rises to keep the country competitive amid the crisis.
Inflation in Germany slipped in October to an annual 2.5 percent, after hitting a three-year high the previous month.