German chem employers welcome move to extend short time work

26 November 2009 15:48  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s government on Thursday decided to extend its short time work programmes, a move that was welcomed by the country’s chemical industry employers.

Many chemical producers relied on the government-subsidised programmes to cut hours while avoiding job reductions during the crisis.

Chancellor Angela Merkel’s government passed a regulation allowing employers to put workers on short time work for up 18 months from next year. The current programme was due to expire at the end of this year.

Germany’s chemical employers group BAVC welcomed the extension, it said.

“This continued government support is necessary, because we have not yet reached the end of the economic crisis,” Sebastian Kautzky, a spokesman for the Wiesbaden-based group, told ICIS news.

Under short time work schemes, employers reduce hours and wages, with workers being partly compensated for the loss in wages by payments from government unemployment insurance.

Overall, some 1.4m German workers were on short time work in June 2009, according to the government’s latest available data.

In the chemical industry, over 700 production sites were using short time work.

Economists have warned that short time work may mask the true level of unemployment in Europe’s largest economy.

Without a perceptible improvement in the economy, workers currently on short time work could eventually lose their jobs, they said.

Meanwhile, BAVC’s Kautzky said with the economic and chemical industry outlook still remained uncertain, his group did not see any scope for wage increases in the upcoming 2010 collective bargaining round.

Chemical union IG BCE said earlier this week it would demand a wage hike for the industry’s 550,000 workers next year to reflect the contributions and concessions workers had made during the crisis.

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By: Stefan Baumgarten
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