Throughout Europe trade unions are negotiating short time work schemes with both employers and governments so that workers are not let go during the COVID-19 lockdown but instead continue to receive their wages or a percentage of their wages.
Trade unions have concluded a number of far-reaching agreements that achieve the triple objective of protecting business, maintaining employment and ensuring that when we come out of lockdown we are in the best position to restart our economies and societies.
There are different types of short-time work schemes and there are numerous arguments in favour:
- Short time work schemes reduce dismissals in a situation of crisis
- Short time work schemes mean that employees retain employment and income which helps them to broadly keep up their standard of living - provided that benefits cover a sufficient percentage of their wages.
- From a macro-economic perspective Short time work schemes help to stabilize the economy because workers retain and are able to spend a large part of their wages
- The state saves money because usually it is less expensive to pay Short time Work Schemes support than to pay unemployment benefits for the workers who otherwise would have been made redundant.
- Short time work schemes help employers to retain their workers who are readily available when the economy recovers; employers therefore save a lot of costs in hiring people when the economy recovers
- Short time work helps employers to adjust working hours to actual demand in situation of cyclical fluctuations
Please access the full briefing note here for an overview of short time work measures adopted during the current COVID-19 crisis.