EMCC European Monitoring Centre on Change

Temporary suspension of employment with re-employment commitments

Austria
Phase: Management
Típus:
  • Income support for workers
  • Working time flexibility
Utoljára módosítva: 17 November, 2020
Név:

Kündigung mit Wiedereinstellungszusage

Angol név:

Temporary suspension of employment with re-employment commitments

Coverage/Eligibility

In theory, this instruments is available to all employees except for civil servants. In practice, it tends to apply to sectors that involve seasonal work, such as tourism and construction.

Main characteristics

An employment relationship may be terminated, either by mutual agreement or by dismissal through the employer, but the employer commits to re-employ the employee at a later point in time (layoff and re-call). These commitments are also referred to as 'suspension agreements' (Aussetzverträge). During the period of unemployment, affected employees can receive unemployment benefits. However, they might be placed in a different job by the Public Employment Service (AMS). If re-employment is promised within a six-week period, employees are exempt from being given placements by the AMS.

The re-employment commitment is legally binding. If it is not kept, compensation for termination of employment (just like in cases of unjustified dismissals) applies.

Funding

  • No specific funding required

Involved actors

National government
Funding via the public employment service (Arbeitsmarktservice, AMS).
Public employment services
During the period of unemployment, the employee receives unemployment benefits from the PES.

Effectiveness

In 2013, 11.8% of all recruitments were re-calls from previous employers (re-employment within six months), predominantly occurring in construction, catering and food services as well as agriculture (Eppel et al, 2015). Temporary layoffs are more common in SMEs, men are more affected than women (ibid).

By May 2009, the number of workers who benefited from this scheme (over 3,500) had increased by almost 50% since May 2008. In July 2009, the number of affected unemployed persons represented an 18% increase from July 2008, involving 26,325 workers. The numbers have decreased slightly during 2010, with peaks during January and February (Hochrainer et al, 2011).

Strengths

This scheme is easy to implement, and is cost efficient at company level. For employers, it is a way to keep specific know-how tied to the company while not having to take care of the costs during suspension.

Weaknesses

From a macro-economic perspective, it is not a very sound model as it does not ensure that non-worked time is used effectively, either regarding the employee's qualification or structural change of the company. Moreover, there is no real obligation to re-employ the worker. The company cannot promise additional payment/bonus when work is taken up again and the unemployed period is not perceived as constituting 'real unemployment'. The employee also experiences a reduction of income due to receipt of unemployment benefits instead of regular income and a loss of special payments (e.g. holiday and Christmas allowances).

A recent study from WIFO (2018) concludes that the practice of temporary suspensions is rather costly. In 2017, the instrument has caused a total cost of €432 million for the state, whereby nearly 14% of the founded employment contracts belonged to the same employer as before the suspension.

In 2020, in light of COVID-19, trade unions and the Chamber of Labour strongly advise employees not to agree on a temporary suspension. Instead, the employers should make use of the adapted version of short-term working programme.

Példák

Kaufmann Holz, KTM (Kraftfahrzeuge Trunkenpolz Mattighofen, Austrian motorcycle manufacturer)
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