STRATEGIES FOR PROTECTION OF WORK PLACES Budapest, 2-3 July 2012 Mato Lalić

2 Short-time work - Introduction In order to facilitate the current situation in the labour market, new provisions on short-time work were brought The most important is the future combination of short-time work and further education Short-time work is a means to protect the workers from the layoffs and to keep their workplaces An unemployed person costs three times more than a worker on short-time work (approximately 3,000 vs. 926 euro)

3 Short-time work - Overview Legislation Company level agreement Agreement between the relevant trade union and the Chamber of Commerce Directive of the Employment Institute which applies to the whole country

4 Short-time work Short-time work is used only in the case of economic crisis or natural disasters The employer has to discuss the situation with the Employment institute and with the work council (if there is no work council then with the trade union). The trade union must be informed about these discussions. There has to be a written “agreement on short- time work” signed by the trade union and the Chamber of Commerce.

5 Short-time work The agreement on short-time work regulates: –To which workers it applies to, –Duration of the short-time work, –Keeping of all the employees during the short-time work, –Duration of the period in which the workers should not be dismissed, namely even after the short-time work is terminated, –The exact number of reduced working hours, –The amount of the compensation fee during the short-time work which should be paid by employers and workers –Educational measures

6 Short-time work If the conditions are met, the Employment Institute secures compensation fees for the employer who introduced short-time work, and the employer pays compensation fees to workers for the time that they are not working due to the short-time work. The compensation fee for short-time work has to be at least equal to the compensation fee that the worker would receive for the same number of hours if he/she was unemployed. In companies with work councils, trade unions can organise that workers receive even less reduced salaries. For the hours that were worked normally, workers appropriately receive full wages.

7 Short-time work – an example Normal working hours = 100%, for example 2000 € Working hours are reduced for 50% The salary which is appropriate to the working hours 1000 € Appropriate amount of the compensation for the unemployment About 550 € Payments up to 90% Contribution paid by the worker

8 Short-time work In general, short-time work is limited to 6 months, and in case of justified reasons, it can be prolonged up to 18 months New regulation provides that during the short- time work working hours can be reduced from 10 to 90% within one period* (in 13 weeks). During the short-time work and a certain period after it there no dismissals are allowed.

9 Short-time work In general, during the short-time work no overtime should be allowed During the short-time work, workers can normally use their holidays The workers which get ill during the short-time work continue to get the compensation fee as if they were working. That is valid as long as they have a right to receive that compensation.

10 Short-time work Changes of legislation: –short-time work is prolonged up to 18 months (3 x 6 months) –accounting period of 4 weeks is prolonged to the period in which the short-time work is allowed –opportunity to link the short-time work with education –older workers cannot be in unfavourable conditions (the implementation of the short-time work is impossible without the agreement between the social partners, if a considerable number of workers are above 45 year old) –detailed regulations in future through a directive of the management board of the Employment institute

11 Short-time work From January to June 2009 the short-time work was introduced in – 251 company – with 61,950 employees

12 Package II – to overcome the crisis in the labour market From 12 May 2009 Content: –Reform of the right to work part-time before retirement –Money for education during the short-time work –Solidarity fund for the employed –Prolonged transitional period during which the compensation fee is received –Availability of the users of special allowances

13 Part time work before retirement For companies with less than 20 employees, regardless of the variation, 90% compensation rate without employing replacement workers For companies with more than 20 employees: –The same variations as until now, with 90% compensation rate 90% and replacement workers can be employed –In the case of the continued variation: Replacement employment possible only after the first half of the agreement on the part time work before retirement, 90% compensation rate In the case of replacement employment which is effective immediately: the compensation rate is 100% Without replacement employment: the compensation rate is 50% The age for the right to work part time before retirement: for men - 58, for women - 55 Maximum duration: 5 years

14 Education resources during the short- time work Generally, it relates to the compensation fees during the time when the worker is freed of work to get education Variation 1: the worker gives the initiative –The agreement on part time work and the request to the Employment institute for the compensation fee during part time work used for further education; duration of such measure is at least 8 hours a week, including the work before and a after it Variation 2: the employer gives the initiative –On the basis of the passed threshold, analogue to the system of early warning (5 agreements within 30 days in the case of up to 100 workers, then 5% of workers, and in the case of more than 600 workers, then minimum of 30 workers) –In the case of the passed threshold of the obligation to consultations with the Employment institute with the aim to have an educational concept with the inclusion of the work council

GERMANY The goal is to overcome the crisis by short-time work -Package of measures II: to have a comprehensive support and to facilitate the use of the compensation fees for the short- time work. -Additional support from the National Employment Institute will be given to all who secure vocational training for their employees during the short-time work. -Good for the companies and for the workers. It doesn’t matter if it is a small enterprise, an online agency or a big enterprise: the combination of short-time work and education can overcome the shortage of work without the need to lay off the workers – up to 18 months.

GERMANY Employment Institute: -Pays for the short-time work, compensation fees of 60 to 67% of net salary. -Pays for 50% of all contributions and taxes on salary, together with the compensation for the short- time work -Takes over, along with the short-time work compensation, 100% of contributions and taxes on salary for the workers who take additional education -Participates in education costs for workers – for example training for some vocational skill, or a course in a foreign language that is needed for work.

GERMANY IG Metall from 1 May % increase of salaries, for the period of 13 months -Employment of trainees on full-term contracts -Co-determination of work councils for the employment through contract agencies

SLOVENIA -To save workplaces, it was agreed to introduce short-time work, as follows: -if reduced for 4 hours – 60 euro -if reduced for 8 hours – 120 euro and the education of the employees was enabled (IT, foreign languages, etc).

CROATIA -Some agreements were reached in order to prevent dismissal of workers and cancellation of collective agreements -In 2 companies the salaries were reduced for 10% for the period of 3 months, and then it was prolonged to 6 months -In one company it was agreed that the salaries were reduced for 10%, but at the same time a retroactive compensation was agreed upon -All decisions are made by the referendum of all employees at the workers’ assembly -In the Inex company a pay freeze was agreed. The referendum of the employees rejected that agreement, and the employer got scared and agreed to start new negotiations on the increase of salaries.

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