New regulation of bad-weather allowance

In June 1999, the German federal government and the collective bargaining parties in the construction industry reached an agreement on the principles of a new regulation of the bad-weather allowance, in order to reduce the level of "winter unemployment" at building sites.

On 6 June 1999, in discussions chaired by the Chancellor, Gerhard Schröder, the German federal government and the collective bargaining parties in the construction industry - the German Building, Agriculture and Environmental Union (IG Bauen-Agrar-Umwelt, IG BAU) and the employers' associations, Hauptverband der Deutschen Bauindustrie (HDB) and Zentralverband des Deutschen Baugewerbes (ZDB) - reached an agreement on the principles of a new regulation of the bad-weather allowance (Schlechtwettergeld).

The bad-weather allowance was originally introduced in 1959 as a special form of short-time working allowance for construction workers during the winter period. Between 1 November and 31 March each year, the state provided a bad-weather allowance through the Federal Employment Service (Bundesanstalt für Arbeit) in the event of an temporary work stoppage due to bad weather. The aim was that the payment of the bad-weather allowance should prevent construction employers from making their workers redundant in such circumstances.

In 1996, however, the former conservative-liberal coalition government decided to withdraw the state bad-weather allowance. As a result, Germany saw a sharp increase of unemployment in construction during the winter of 1996/7. In the following years, the collective bargaining parties in construction tried to find various substitutes for the state allowance. In 1997, the IG BAU trade union and the HDB and ZDB employers' associations signed a collective agreement on the bad-weather allowance which provided that temporary stoppages during the winter period should be compensated partly by the employees and partly by the employers (DE9706215F). Based on the principles of that collective agreement, in November 1997 a new law on the "promotion of all-year-round employment in construction" became valid, introducing a so-called "three-pillar model":

  1. employees have to cover the first 50 hours of any temporary stoppage either from the time credit in their individual "working time account" or from their annual leave;
  2. the 51st to the 120th hour of a temporary stoppage has to be compensated by the employer, in the event that the employee has no more credit in his or her working time account; and
  3. from the 121st hour of a temporary stoppage, compensation payments are provided by the Federal Employment Service.

IG BAU, however, was still dissatisfied with the new system and called for the reintroduction of a bad-weather allowance similar to the original system. After the Social Democratic Party (SPD), which had always supported IG BAU demands, came to power in September 1998, it put the aim of reintroducing a comprehensive bad-weather allowance in its coalition agreement with the Greens (DE9811281F).

The new bad-weather allowance provisions, agreed in June 1999, do not merely reintroduce the original regulation but represent a compromise, which includes some improvements for employees. According to the new joint agreement between the federal government and the construction social partners, a "three-pillar model" will be maintained, with all parties having to make a contribution. The new rules are as follows:

  1. the employees' contribution will be reduced from 50 to 30 hours of any temporary stoppage, and should be taken more from time credits in working time accounts than from annual leave;
  2. the 31st to 100th hour of a temporary stoppage is compensated by employers through a special fund into which all employers must pay 1.7% of the paybill. Unlike under the former regulation, this employers' fund must now also meet employers' social security contributions during this period; and
  3. from the 101st hour of a temporary stoppage, compensation payments are provided by the Federal Employment Service.

Furthermore, the new agreement confirms the ban on employers making redundancies during the winter period for weather reasons. If an employer breaches this ban, it must pay the redundant workers' unemployment benefits.

Finally, the Federal Employment Service will provide a new "winter payment" of DEM 2 per hour for those employees who use their annual working time credits to compensate for more than 30 hours of temporary bad-weather stoppage.

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