European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Section 6 - Remaining in employment Subsection 1 - Short-time working allowance Articles 95-111, 134
The Social code book III provides for three forms of short-time working arrangements ('Kurzarbeit').
In all of these cases, if employers want to introduce short-time work, they must first consult the works council and then apply to the Federal Employment Agency ('Bundesagentur für Arbeit') for approval.
The company has to have exhausted other options that might help to avoid using short-time work, such as granting leave days, use of holiday entitlements of previous years or of 10% of the working time account of the running year.
Short-time work may be set in place if one third of the workforce is affected by a wage drop of over 10% due to a temporary decrease in workload. The workforce in this case is defined as including standard and non-standard workers (excluding temporary agency workers and home workers). In the calendar month for which short-time work support is applied, at least one third of a company's employees (or one of several specific units) must be concerned.
If short-time work is approved by the Federal Employment Agency, the employer pays for the actual working time and the Federal Employment Agency contributes a short-time working allowance of 60% of the missing net wage. This share increases to 67% if the worker is a parent. Short-time working allowances are granted to standard and non-standard workers liable to social security contributions for monthly wages that do not exceed €7,300 in Western Germany and €7,100 in Eastern Germany (2023). Workers with ‘mini-jobs’ are not liable to social security contributions (earning up to €520 per month). An exemption related to the COVID-19 crisis allowing also to include temporary agency workers (holding a work contract with another employer) expired in June 2023. Also trainees are excluded.
The maximum duration of state-funded short-time working allowances is 12 months. An exception allowing to extend this period for up to 28 month expired in June 2022.
While a company is receiving public short-time working support, new employees can only be recruited to sections of the company that are not subject to short-time work. Moreover, it has to be proven that the vacancy cannot be filled by one of the company's current short-time workers. Dismissals during short-time working are possible, but the worker has to return to full-time employment during the notice period, and the employer is then no longer entitled to the public short-time working allowance for that worker.
This measure is a central instrument for preventing dismissals. The measure offers companies cost and productivity advantages by adjusting working time to the market situation and volatile demand. It makes it possible to react quickly and flexibly to volatile production levels by enabling an immediate return to full-time work in case order levels improve. The need for severance payments and costs related to hiring and induction of new staff that may arise in case of dismissals are avoided. At the same time, workers benefit from job security. The public support partly compensates workers for their loss of income and allows them to maintain a level of social security. Drawing a short-time allowance does not affect eligibility periods for unemployment benefits. The Federal Employment Agency supports low skilled workers in undertaking training during the time of short-time working.
The Federal Employment Agency provides monthly and yearly data on short-time work. On average, yearly, there were 14,156 companies applying a short-time work scheme in 2019. This number rose to 318.735 in 2020 and fell again to 250.099 in 2021 and 55.727 in 2022. For workers in short-time work, the yearly average number was 145.276 in 2019 and rose to 2.938.786 in 2020. It fell to 1.851.802 in 2021 and further to 425.571 in 2022.
Eurofound (2015), Germany: Working time flexibility, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/working-time-flexibility/germany
Between the end of 2022 and the first half of 2023, almost 300,000 employees working for ‘big tech’ companies were laid off across the world, making headlines for months in global media. This development has been a shock, considering the high numbers of jobs in well-known tech corporations with a reputation for offering good working conditions and well-paid positions.
The retail banking sector is fertile ground for studying the impacts of digitalisation on work and employment. Financial services are increasingly provided online, without the intermediary of customer-facing institutions. Many banks in the sector have been undergoing serial restructuring since the global financial crisis, and it is one of the few service sectors with stagnant or declining employment.
Since 2011, the Restructuring support instruments database of the EU PolicyWatch has been collecting information on measures that assist companies and workers to anticipate and manage restructuring. This article looks at measures in the database aimed at supporting employees and employers during the COVID-19 pandemic (2020–2022).
Eurofound’s European Restructuring Monitor database reveals the impact of the energy crisis on employment in the EU. Following Russia’s invasion of Ukraine in February 2022, energy prices have hit record highs. The European Commission imposed sanctions and limitations on the import of oil and gas from Russia, which has reacted by reneging on supply commitments to many Member States.
