Short-time work

Even after more than a year of Covid-19, employees are still dealing with the issue of short-time working, with special regulations for corona-related short-time working. These are updated and adapted on an ongoing basis. We have an overview of the most important questions and answers for affected employees:

What does short-time work mean?

Short-time working means the reduction of working hours for all or part of the workforce due to a loss of working hours either in the entire company or in parts of the company. This loss of working hours must lead to a reduction in working hours for at least 10% (this only applies to corona-related loss of working hours) of the employees. In such cases, the employment agency will cover part of the net loss of earnings. The main aim is to preserve jobs.

For whom can short-time work be ordered?

Short-time work can be ordered for all "normally employed in the company". This also includes employees in mini-jobs. A distinction must be made as to who is entitled to short-time work compensation. This is because not all employees in the company have such an entitlement, but only those who are insured in the statutory unemployment insurance scheme. So anyone who is employed on a mini-job basis and is on short-time work is generally not entitled to short-time work compensation.

Apprentices are in a special position. Employers must exhaust all possibilities to continue the training, e.g. restructuring the learning content or transferring them to other areas of the company. The regular training allowance continues to be paid. However, if the company is closed and it is not possible to continue training, trainees receive their regular training allowance for six weeks. After these six weeks, it is also possible for trainees to receive short-time allowance.

How much is the short-time working allowance?

In the event of a loss of earnings of at least 50%, the employment agency pays 60% (67% for employees with at least one child) of the net salary lost due to short-time working. From the fourth month it is then 70% or 77% and from the seventh month 80% or 88%. The money is paid out by the employment agency to employers, who pass it on to their employees.

Example: An employee's regular net salary of EUR 1,000.00 is reduced by 50% to EUR 500.00 as part of short-time working. In the first three months, the employment agency pays 60% of the lost EUR 500.00, i.e. EUR 300.00. A total of EUR 800.00 remains with the employee.

Short-time work and vacation

Does vacation have to be taken if employers demand it?

Employees on short-time work are generally allowed to take vacation. The question is whether employees may even have to do so at the employer's request in order to prevent short-time work. Vacation leave from the current year is not affected according to a regulation of the Federal Employment Agency. Taking the remaining vacation from 2020 is a prerequisite for applying for short-time work compensation.

Does short-time work affect my vacation pay?

Vacation pay is calculated in accordance with the general regulations on this. According to § 11 para. 1 sentence 1 BurlG, the average earnings of the last 13 weeks before the start of the leave are to be taken as a basis. It is important to note that the unreduced earnings are the basis for the calculation. Reductions due to short-time work during these last 13 weeks are irrelevant for the vacation pay. Employees receive vacation pay in the amount to which they would be entitled under "normal circumstances".

Can I take less vacation because I am or was on short-time work?

This is to be distinguished from the question of whether vacation entitlement can be reduced if employees have worked less due to short-time work. This only concerns the number of vacation days. It has no effect if employees work the same number of days as before despite short-time work. For example, an employee who worked eight hours on five days before short-time work and only three hours on five days during short-time work retains the contractually agreed vacation entitlement in full.

However, if the number of working days is also reduced during short-time working (e.g. only three days a week instead of five), the vacation entitlement for this period must be calculated on a pro rata basis, as is the case for part-time employees (ECJ, judgment of 13.12.2018 in case C-385/17). In cases of zero short-time working (no more work at all), this means that the leave entitlement is reduced accordingly. This applies to both statutory leave and contractually agreed leave.

Example for two months of short-time work zero with 28 days of vacation per year:

28 regular vacation days/12 months actually worked per year = 2.33 days of vacation per month actually worked ->

10 months actually worked * 2.33 days = 23.33 days vacation per year (zero for two months of short-time work)

Change of contract notice to enforce short-time work

Employers can only order short-time work if a corresponding agreement has been made in the employment contract, the works agreement or the collective agreement. In the absence of such an agreement, employers must subsequently reach an agreement on short-time work with each affected employee.

It may happen that some employees do not agree to such an agreement, for example because employees prefer to take vacation with full pay or because continued employment in another area with full pay seems possible.

If no agreement is reached, employers can declare a so-called notice of termination with change of contract. This is a notice of termination combined with an offer to continue the employment relationship under the changed conditions of short-time work. It has not yet been conclusively clarified how such a notice of termination for unilateral implementation of short-time work is to be legally classified. In particular, the question of whether the standards of extraordinary or ordinary termination are to be applied has not yet been conclusively decided by the courts. The decisive factor, however, is that such a change of notice must meet the requirements of a dismissal for operational reasons in terms of avoidability. This means that only if short-time work is the only and last resort to avoid a loss of work can employers effectively terminate employees who reject the offer of short-time work. 

Most notices of termination in connection with short-time working are declared as "extraordinary, alternatively ordinary termination".

As there is still no legal certainty in this area, we advise employees to accept such a dismissal with reservations and to go on short-time work first. If it is later determined that the extraordinary notice of dismissal was invalid, employers must pay the difference to the full wage.

Check now whether you are entitled to the full wage and not just the short-time allowance. Fill out our contact form and arrange a free initial consultation at your preferred time.

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