Partial employment benefit and partial employment benefit with skills enhancement in the framework of ESF (objective 2)

1
Partial employment benefit and partial employment
benefit with skills enhancement in the framework
of ESF (objective 2)

• Measures to maintain and create employment
• 7.October 2009
• Claudia Galehr
• Arbeitsmarktservice Österreich

2
Labour market intention

• Short time work refers to a fixed-term reduction
  of normal working time based on a social
  partners agreement under wage and labour law.
• It aims to maintain employment in times of
  temporary, non-seasonal economic difficulties.
• Partial employment benefit is a service rendered
  by AMS in the context of services for employers
  Support enterprises searching for work force and
  foster the adaptability of workers. Adaptation
  takes place in the form of reducing working hours
  and / or quality training.

3
Short time work

• For every hour droped out employees obtain so
  called assistance instead of wage from employers
• The partial employment benefit compensates for
  these costs based on the level of the
  (fictitious) unemployment benefit plus social
  insurance contributions in form of a flat rate.

4
Preconditions

• Beside other administrative requirements / dates
• Consultations on alternative ways of solving the
  problems with involvement of the works council
  and the relevant social partners with collective
  bargaining power
• Working hour loss is between 10 and 90 of
  normal working time.
• Social partners agreement fixing the framework,
  mainly
• Keep the current number of employees during short
  time work, there is no obligation to agree on the
  status afterwards (according to AMS regulations)
• Agreement on quality training concept responsive
  to the labour market and employers needs to
  improve the chances for sustainable empoyability

5
Financial conditions

• Flat rates based on the level of fictitious
  unemployment benefit plus social insurance
  contribution
• relevant are the respective normal working hours,
  the gross salary plus supplementary grant before
  working short time and the number of children.
• From the 7th month onwards also the employers
  social insurance contribution is fully covered by
  AMS.
• The benefit rates applicable to periods of skills
  enhancement include a 15 supplement to provide
  additional incentives.

6
Duration and target group

• benefits may be granted for an initial period of
  6 month, under certain conditions extended up to
  18 month, since july 09 up to 24 month in total.
• Eligible are all employers except public
  institutions. The scheme is not limited to
  certain industries. Temporary workers may also be
  supported if the enterprise in case is on short
  time.

7
Partial employment benefit with skills
enhancement (since April 2009)

• AMS offers adaptability and training needs
  consultancy to businesses prior to application
  (ESF).
• Lost working time is used for quality training to
  improve sustainable employability of workers as
  well as adaptability of enterprises to changed
  economic circumstances
• A training concept has to be agreed with social
  partners and presented to AMS together with the
  claim for partial employment benefit.
• Training may not only be useful for the present
  job, it has to improve sustainability of career.

8
Partial employment benefit with skills enhancement

• This benefit susidises the costs of quality
  training during partial employment.
• Employees receive assistance to make up for some
  of the pay loss due to reduced working time from
  their employer, in case of training they have an
  additional incentive (15 ).
• Subsidy covers 60 of the course costs, max.
  10.000 per participant

9
Current status

• App. 90 of enterprises effected operate in
  metallurgy, auto and automotive supplier
  industry.
• Partial employment benefit with skills
  enhancement is utilized in only 6 of cases so
  far.
• App. 85 of subsidized workers are male.
• Costs amount currently 220 Mio (2009)
• Impact on unemlpoyment in April 2009 f.e. 35.000
  subsidized cases compared to 260.000 unemployed
  registered
• Planning figures exceed realized cases by 1/3

10
Theory and Practice

• Trade Unions are very powerful negotiators 90
  of wage is normally guaranteed plus no reductions
  in workers claims.It is common to have a
  certain period agreed to hold the stock of
  personnal after short-time-working-periods.
• This means that working short time exceeding 2
  days a week gets quite expensive for enterprises,
  the alternative is to sign (temporary) off.
• Establishing a training concept is often too
  time-consuming in the crisis it means
  negotiations, costs and a loss of flexibility.
  Firms might also be hindered to fulfill orders
  which might come unexpectedly.
• Training has to take place alternative to working
  hours, this is also quite inflexible.

11
Change of unemployment stock in Austria
12
Participants in short time work planned versus
actual cases (stock)
Gray column data incomplete,
cases not cleared yet