Social Dialogue in Times of Crisis: Intersectoral Agreement on Short-time Working in Austria

1. EUROFOUND Conference „Studies on the EU and other Global Economies: The Role of Social Partners in Tackling the Crisis, 1 December 2011 Social dialogue in times of crisis: Intersectoral social partner agreement on short-time working schemes in Austria Bernadette Allinger FORBA (Working Life Research Centre, Austria)

2. Overview • Signs of the crisis in Austria – economic and labour market data • Social dialogue during the crisis: Social partner agreement on short-time work (STW) • Outcomes

3. Signs of the crisis in Austria • Pre-crisis situation in Austria: lowest unemployment rate since 2000 with 5.8% (national calculation), GDP growth in 2007 at 3.7%, in 2008 still at 2.2% • Austria was hit by the crisis in autumn 2008, intensified by mid-2009; GDP decreased by 3.6% in 2009; Exports fell by 20% in 2009 • Unemployment rate increased by 22.6 percentage points (48,100 persons) to 7.2% from 2008 to 2009 • Employment groups concerned most: males, youth, migrants and lowly qualified

4. Development of economic growth (Source: Eurostat)

5. Development of unemployment(Sources: Eurostat, Statistik Austria) Quelle Eurostat

6. Short-time working schemes I Negotiations took place at three levels: • tripartite national level: improvement of framework conditions (extension from 12 to 18, then 24 months; combination of STW+qualification; increase of STW allowance for employers from 7th month onwards) – very good negotiating atmosphere • bipartite cross-sectoral level: framework agreement (90% replacement ratio) – good negotiating atmosphere • bipartite company level – partly controversial negotiating atmosphere

7. Short-time working schemes II Provisions of the STW scheme: • Any employer in private sector can make use of STW schemes if: temporarily affected by unforeseeable economic problems which are not due to seasonal variation • PES to be informed six weeks prior to envisaged introduction of the scheme • Reduction of working hours must not go below 10% or over 90% of the standard working hours • Employees’ wage losses due to reduced working hours are (partly) compensated by means of a STW allowance (Kurzarbeitsbeihilfe) or a further training allowance (Beihilfe zur Qualifizierung, 15% higher)

8. Short-time working schemes III Conflicts at cross-sectoral level: • Employers tried to sideline trade unions’ consent to company-level implementation process (like in Germany) – not successful • Wages to be paid: PES 55%, employers to cover gap (workers to receive at least 90% of former income – excl. SMEs) • Retention period shortened at employers’ demand

9. Short-time work take up Source: Federal Ministry of Labour, Social Affairs and Consumer Protection (BMASK)

10. Outcomes • Between 80,000 and 90,000 jobs were saved during the crisis, of which varying estimates say that between 10-30% can be attributed to STW • STW as cost effective measure: one unemployed person costs as much as three persons on STW • No mass redundancies • Growth in unemployment significantly lacked behind the contraction of the GDP • Temporary agency work went up immediately after crisis (after a decrease with onset of crisis) • Lowly qualified workers hit particularly hard – made redundant first

11. Thank you!