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Celerity

(42,672 posts)
Mon Apr 6, 2020, 01:57 PM Apr 2020

Austrian short-time work model: a labour-market policy for the many, not the few



Job retention plus well-compensated short-time work is better for employers as well as employees than redundancy. Maybe after the crisis we can reopen the debate about working time.

https://www.socialeurope.eu/austrian-short-time-work-model-a-labour-market-policy-for-the-many-not-the-few

A growing number of countries are facing unprecedented disruptions to everyday life. The rapid spread of the coronavirus has led to a shutdown of vital functions of economies around the world. While the countermeasures to reduce infections are largely undisputed among experts, the ways to deal with the economic crisis are manifold. In particular, skyrocketing unemployment poses a major challenge for most countries. But in Austria, the social partners have negotiated a new model of subsidised short-time work which could become an international exemplar.

Relationship maintained

The short-time work model allows a reduction in working hours while maintaining the employment relationship and granting almost full wage compensation. It even includes the possibility of a temporary reduction to as few as zero hours. Employees only have to carry out on average 10 per cent of their normal working time over a period of three months and it is possible to work that as a block, for instance at the end of the period. After these three months, it is possible to prolong short-time work for another three months if necessary. Depending on the former income level, the model grants compensation of between 80 and 90 per cent (including special remunerations).

Thus, the short-time work grant from the Public Employment Service Austria (AMS) is much higher than regular unemployment benefits, which comprise 55 per cent of previous net income. In comparison with other countries, the Austrian short-time work model seems to be very attractive, as the replacement rate is high and the same across all sectors. In Germany, the net replacement rate varies between the regular benefit payment of 60 per cent and up to 67 per cent. In Norway, workers can be put on leave and receive full payment for the first 20 days and then between 80 and 62 per cent depending on the salary. In Ireland, the net replacement rate equals 70 per cent, in Denmark 75 per cent and in the United Kingdom about 80 per cent.

Fully insured

Every company in Austria, independent of its size or branch of activity, can implement this short-time work model. The public sector will refund all additional costs and the company will only pay for the actual working time. Employers also benefit because the wages and the social-security contributions for the lost hours are omitted, beginning with the first day of short-time work, while employees continue to be fully insured. To reduce windfall effects and to prevent misuse, all applications to the AMS have to be approved by the social partners. If there is an elected works council (Betriebsrat) in the applicant company, a plant-level agreement (Betriebsvereinbarung) specifying details of the short-time work is required. Otherwise, employers have to reach an individual agreement with each employee. All agreements on reduced working hours stipulate a minimum retention period of one month after the reduced hours. The retention period after short-time work applies only to those employees who were affected by short-time work, not to all employees of the company.

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