EXTRAORDINARY MEASURES - "Kurzarbeit" or compensation in times of partial unemployment (No. 874)

One of the ways to avoid mass redundancies is the introduction of so-called 'Kurzarbeit'. Compensation in a time of partial unemployment is regulated by Section 115 of the Employment Act. This is based on a contribution from the state to employers who, due to a drop in orders or a natural disaster, cannot allocate work to their employees, to the set minimum, and who, at the same time, do not want to dismiss them, for example, because of their qualifications, etc.

In such cases, the employer can apply for a subsidy through the Labour Office. The basic precondition for submitting an application for partial unemployment contributions is the introduction of measures pursuant to Section 207 or 209 of the Labour Code. Thus, the conclusion of an agreement with any trade union (if one works with the employer), or the issuing of an internal company regulation where the employer stipulates that employees (usually only a subsection of them) cannot be assigned work due to a disaster or decline in orders, and that, in conequence, they will be receiving compensatory wages. Compensatory wages may not be less than 60% of average earnings. If the employer wishes to apply for the above-mentioned government contributions, compensatory wages have to be at least 70% of average earnings.

Section 115 of the Employment Act has not yet been applied in practice. As far as we know, there is, for the time being, no government order stipulating more detailed conditions for submitting an application for the contributions in question, including any model. However, the situation may change rapidly in these extraordinary times. We will inform you about any developments.

publikováno 25.03.2020