Parliament passes labour market stimulation package

In July 2009, the Austrian parliament passed a package of measures seeking to prevent a rise in unemployment as a result of the current economic recession. The measures include a further extension of the short-time working rules, flexibilisation of part-time working rules for older employees and the training leave regulation, as well as the establishment of a re-employment scheme for young employees. The social partners have generally welcomed the initiative.

On 9 July 2009, the Austrian parliament endorsed a package of measures designed to stimulate the national labour market. The measures follow a labour market package introduced in early 2009, which had failed to generate the desired effects. The latest measures aim to prevent a rise in unemployment due to the current economic downturn. This legal initiative was launched by the current social-democratic and conservative coalition government, in close cooperation with the core social partner organisations.

The measures outlined came into effect retrospectively or will take effect between June and September 2009. The following sections describe the core provisions of the labour market package.

Working time amendments

Among the measures is an amendment to the rules on working time. In Austria, short-time working may be introduced by collective agreement, works agreement or individual agreement between an employer and employee. The employer may receive a special subsidy (Kurzarbeitshilfe) from the competent Labour Market Service (Arbeitsmarktservice, AMS) office, if the relevant bargaining parties have concluded a collective agreement on the payment of a compensatory short-time allowance during a period of short-time working (AT0903029I). The amendment provides that the maximum term for the adoption of short-time working arrangements is, following an initial extension from February 2009, to be further extended from the current 18 months to two years, albeit on a temporary basis only. Moreover, from the seventh month of adoption onwards, the employer is exempt from the payment of social insurance contributions on behalf of the employees affected. Instead, the AMS is obliged to pay these contributions. This measure aims to render the scheme more attractive to employers, in order to prevent them from making some of their employees redundant. The scheme is now largely aligned with the current short-time working rules in Germany.

Changes to part-time work for older employees

The measures also include an amendment to the rules on part-time work for older employees (Altersteilzeit). In 2000, in order to favour the labour market participation of older people, a scheme to facilitate part-time work for older employees was introduced. The aim of this progressive retirement scheme is to keep older employees in the active working population by offering them the opportunity to reduce their working time without substantial losses in income and social security (AT0110203F). In order to maintain the scheme’s attractiveness during the economic crisis, it has been decided to abolish the employer’s obligation to employ additional workers to fill the working time freed up by those employees participating in the scheme (AT0209202F). Furthermore, the possibility of flexible distribution of work over the period of part-time employment has been re-introduced within a certain timeframe.

Flexibilisation of unpaid training leave

The flexibilisation of the unpaid training leave (Bildungskarenz) scheme has also been introduced. Under the current scheme, the employer and employee may agree to arrange a period of between three and 12 months of unpaid leave for the purpose of further training. During the scheme, the employee involved is entitled to be paid a further training allowance (Weiterbildungsgeld) by the AMS. On a temporary basis, unpaid training leave may now also be arranged for a period of only two months. Moreover, the length of time for which a worker has to be employed by the same employer before using the scheme has now been reduced from one year to six months. The aim of this measure is to improve the skills of employees who would otherwise risk losing their job during the economic recession.

Re-employment scheme for young workers

A further measure concerns the introduction of a special re-employment scheme for young employees (Jugendstiftung). The scheme seeks to provide further training and retraining opportunities for employees aged between 15 and 25 years who have been made redundant by either temporary work agencies or small and medium-sized enterprises (SMEs), both of which have been particularly affected by the current economic recession. The re-employment scheme aims to re-integrate these employees as soon as possible into other segments of the labour market. About 2,000 young workers are expected to take part in the scheme.

Extension of unemployment support allowance

An extension of the so-called unemployment support allowance (Solidaritätsprämie) has also been implemented. This scheme provides for compensatory benefits from the unemployment insurance paid to employees who agree to accept a reduction in their working hours accompanied by a corresponding reduction in pay, making it possible for unemployed persons to be hired. The amendment has now extended the set of potential beneficiaries from those who are long-term unemployed and older unemployed persons to apprentices who have just passed their final exam.

Social partners welcome measures

The measures included in the labour market stimulation package have been largely welcomed by the main social partner organisations. Nonetheless, the trade unions and employer organisations differ somewhat in their detailed assessment of each measure.

Georg Adam, Department of Industrial Sociology, University of Vienna

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