Kurzarbeit
Encyclopedia
Kurzarbeit is a short-term, recession
-related program operating in several European countries in which companies have entered into an agreement to avoid laying-off any of their employees by instead reducing the working hours of all or most of their employees, with the government making up some of the employees' lost income. If an employee agrees to undergo training programs during his or her extra time off, they can often maintain their former income.
In the case of Austria
, the introduction of Kurzarbeit requires a special arrangement between what are called the 'social partners' of Austrian collective bargaining (which is to say, the Chamber of Commerce
and the labour unions), who negotiate on behalf of the employer and affected staff the scope of the Kurzarbeit arrangement in terms of the staff covered, the maximum period of its application, the conditions for any lay-offs during the arrangement, and the scope of any professional training or re-training courses included.
In 2009 the German
government had budgeted 5.1 billion euros on the programme, which replaced some of the lost income of over 1.4 million workers. The program was favorably cited in a 2009 Organisation for Economic Co-operation and Development
(OECD) report, which stated that it had saved nearly 500,000 jobs during the recession. Besides helping to avoid mass layoffs, proponments of the program also cite its keeping skilled work groups together and avoiding the atrophy of their skills during extended layoffs, while critics have expressed concerns about its expense and that it might prop up non-viable firms.
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
-related program operating in several European countries in which companies have entered into an agreement to avoid laying-off any of their employees by instead reducing the working hours of all or most of their employees, with the government making up some of the employees' lost income. If an employee agrees to undergo training programs during his or her extra time off, they can often maintain their former income.
In the case of Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, the introduction of Kurzarbeit requires a special arrangement between what are called the 'social partners' of Austrian collective bargaining (which is to say, the Chamber of Commerce
Chamber of commerce
A chamber of commerce is a form of business network, e.g., a local organization of businesses whose goal is to further the interests of businesses. Business owners in towns and cities form these local societies to advocate on behalf of the business community...
and the labour unions), who negotiate on behalf of the employer and affected staff the scope of the Kurzarbeit arrangement in terms of the staff covered, the maximum period of its application, the conditions for any lay-offs during the arrangement, and the scope of any professional training or re-training courses included.
In 2009 the German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
government had budgeted 5.1 billion euros on the programme, which replaced some of the lost income of over 1.4 million workers. The program was favorably cited in a 2009 Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
(OECD) report, which stated that it had saved nearly 500,000 jobs during the recession. Besides helping to avoid mass layoffs, proponments of the program also cite its keeping skilled work groups together and avoiding the atrophy of their skills during extended layoffs, while critics have expressed concerns about its expense and that it might prop up non-viable firms.