Germany reinforced its legislation to support investments in training during the operation of the short time work scheme.
Support for up- and reskilling are among the key priorities of the German Government and social partners. Funding support for skilling is essentially foreseen by the Labour Code, Book III, Article 81.
In order to further promote training and upskilling, the German Parliament first adopted the “Law to Strengthen the Opportunities for Qualification and for More Protection in the Unemployment Insurance” (Qualification Opportunities Act - Qualifizierungschancengesetz), which came into force in January 2019. In 2020 the Government undertook additional steps to strengthen and widen the subsidies through the “Work of Tomorrow Act”.
“Work of Tomorrow” Act
In April 2020 the German Parliament passed the “Bill for the Promotion of Vocational Training during Structural Transition and for the Development of Training Support”, or ‘"Work of Tomorrow Act" (Arbeit-von-morgen-Gesetz). The text is designed to improve training funding for employees aiming at developing qualifications to better respond to the changes in the world of work and production.
- enhancing the “Qualification Opportunities Act”, allowing grants from the Federal Employment Agency (Bundesagentur für Arbeit – BA) to be increased by 10%, if at least 20% of a company’s employees are involved in the training;
- increasing the total subsidy amount of an additional 5% bonus if the measure is part of a collective agreement;
- allowing group subsidies as of 2021;
- lowering the minimum required length of training.
The Act included training aid also eligible in the context of transfer companies, irrespective of the employee’s age and level of qualification, as well as in connection with short-time work scheme.
Skilling and Short time work scheme
Short time work schemes (Kurzarbeit) existed prior the pandemic. They proved extremely useful and helped to improve employment levels during the financial crisis of 2008. These schemes were renewed under the “Work of Tomorrow Act” (Arbeit-von-Morgen Act) of 13 March 2020 and will remain valid until December 2021, already described here.
On 16 September 2020 the Employment Security Act – Draft Law on job security as a result of the COVID-19 pandemic (Gesetzentwurf zur Beschäftigungssicherung infolge der COVID-19-Pandemie) was adopted by the Federal Government. If the final text passes through the German Parliament it will enter into force as of January 2021. The Law will extend the possibility to make use of the short-time schemes until the end of 2021. With this text, Germany’s Federal Council of Ministers (Bundeskabinett) choose to regulate, inter alia, the questions of social security contributions and training for employees under the short-time work scheme. For those employees, between July and December 2021, the state will cover 50 percent of the social contributions, unless they are benefiting of training, in which case, the coverage would amount to 100 percent of the social contributions.
In concrete terms, both the employer and the employees can file an application for the full or partial cost of the training to the BA. A voucher is provided to the employee containing information on all the expenses covered (e.g. course costs, travel costs, childcare costs).
The Confederation of German Employers’ Association (BDA) has long been advocating the importance of upskilling in the world of work.
Concerning the new regulation Renate Hornung-Draus, BDA Managing Director – European and International Affairs, said: “the new legislation is to be commended. Indeed, an economic recovery at pre-crisis levels is not expected until 2022 at the earliest, therefore, additional funding and support is meant to reassure companies. The planned deletion in § 106a SGB III that qualification during short-time work "must amount to at least 50% of the lost working time" will ease the opportunities for training during short-time work. However, the promotion of continuing training during short-time work needs to be made more practical and tailored to the needs of companies in short-time work: for most companies, short-time work cannot be planned in the long term, so qualification measures must also be organised flexibly. For this reason, the minimum number of training hours required by this draft law should be reduced to at least 80 hours in order to promote further training measures which are started during short-time work. Apart from this, the requirement of approval of the measure itself should be abandoned, so that qualification offers can also be created at short notice”.
According to Murielle Antille, Head of Government and Industry Affairs at Lee Hecht Harrison (LHH), a global leading Career Transition and Talent Development firm: “this new regulation is a very positive development and we hope, once passed, it is extended in duration and purpose. Such policies and legislation should have a longer-term application, especially if we think to the rapid changes in the labour market requiring new and different skills. Businesses should continue to receive incentives to invest in skilling: this is the best way to favour employment sustainably. We believe in the importance of a company’s capability to identify and build the skills needed today and in the future versus buy them externally through a cycle of firing and hiring”.
She also highlighted that “we would have welcomed a special consideration for those workers whose occupations will not survive in the future as this was included in the draft law under reskilling (“Perspektivqualifizierung”). Indeed, financing reskilling for employee without perspectives in their current profession and thus avoiding unemployment was a bold step that considered the protection of skills versus protecting a job (that has limited future). This issue got discarded during the consultations, but could gain to be discussed in a different context”.