Berlin Should Russian President Vladimir Putin turn off the gas tap in Germany, it could be that time again: Entire branches of industry would have to reduce their production almost overnight or stop it altogether, and millions of employees would suddenly have little or nothing to do. And companies would probably resort to short-time work en masse again to prevent layoffs.
Together with the Federal Ministry of Labor and self-government, the BA therefore wants to develop an instrument “that takes effect just as quickly as short-time work in the event of longer-lasting crises, but does without the time-consuming individual billing,” said the outgoing BA boss Detlef Scheele recently in an interview with the Handelsblatt . The BA’s think tank, the Nuremberg Institute for Labor Market and Vocational Research (IAB), has now thought about what such an instrument could look like.
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For example, the state, in consultation with the parties to the collective agreement, could define a state of emergency for which simplified short-time work rules apply, write the IAB researchers Enzo Weber and Yasemin Yilmaz in their analysis. Some countries, such as France, Italy, Belgium, Spain and the Czech Republic, have classified the pandemic as “force majeure” and have implemented special regulations.
>> Read here: BA boss Detlef Scheele in an interview: “I don’t want to be a job center consultant who has to explain it”
The federal government could, for example, use a “generally recognized event with extraordinary and serious effects” – such as a gas supply stop – as an opportunity to declare such a state of emergency and thus enable the BA to dispense with the standard case-by-case assessment of short-time work. However, a normal, limited recession would not be classified as force majeure.
Retaining the jobs could be a condition
Individually, the simplified regulation could be limited to sectors, fields of activity, regions and companies that are particularly affected. These could be companies that the authorities close down in a pandemic, or chemical companies that have to cut production due to a gas supply stop. The regular short-time work regulations would continue to apply to the other sectors of the economy.
In order to prevent abuse, companies could be obliged to keep the short-time work documents for a certain period of time for spot checks. A complete follow-up check would be omitted.
At the peak of the pandemic, catering establishments had to close in droves and send their employees on short-time work.
(Photo: imago images/Kirchner Media)
With this regulation, however, the hours lost by individual employees would continue to be considered. In the corona pandemic, the conditions for short-time work benefits were relaxed. In order to be able to apply for help, it is sufficient if ten percent of the workforce is affected by a loss of work. It’s usually a third.
>> Read here: These ten sectors would be hit hardest by a gas supply ban
Deviating from this, it would also be conceivable to grant companies a flat-rate subsidy on their operational wage costs if they suffer previously defined sales slumps as a result of force majeure. In contrast to direct reimbursement for lost sales, the companies concerned have an incentive to avoid redundancies.
Weber and Yilmaz write that job retention should also – at least to a certain extent – be a condition for employers to be able to claim the benefit. In order to avoid deadweight effects, wage costs should not be reimbursed in full.
Just like the beginning of an event that justifies the special rules for short-time work, politicians must also define its end in order to enable a plannable exit. Otherwise there is a slight risk of delaying necessary labor market adjustments. Instead of just financing downtime, politicians should set incentives to combine short-time work with qualification, the IAB researchers suggest.
More: The chief economist: more harm than good for the economy – short-time work has side effects