Luxembourg's Economic Committee has granted requests for short-time work (partial unemployment) for 6.140 employees for August 2022.

It is a tool meant to be used during times of economic downturn that allows companies not to employ all or some of their employees without having to terminate their contracts. The Employment Fund covers 80 per cent of short-time workers' salaries and up to 2.5 times the amount of the minimum wage.

The proposal of the two ministers provides that in companies which, following a shortage of gases, must temporarily reduce or stop their activities, with an impact on the employment of employees, employers may resort to partial unemployment “to maintain employment and, therefore, (…) avoid layoffs,” says a joint statement from the Ministries of Labour and Economy.

This option is valid only if a large energy-consuming company's possible reduction or stoppage of production follows a government decision based on an emergency or even a load shedding plan imposing reduced gas consumption.

They underlined that the situation is certainly not yet, but that must be prepared for any eventuality and already reassure companies and employees.

Europe’s precarious gas supply situation and its impact on businesses and the world of work has been a prime focus for markets in the last months. It is becoming an increasingly relevant topic as winter approaches.

Even if not all member states are exposed to the risk of Russian gas shortages to the same extent - International Monetary Fund estimated that Central European countries, such as Hungary, the Czech Republic and Slovakia, face a risk of Russian gas shortages of up to 40 per cent of their consumption, while for Luxembourg the decline in growth should not exceed 1 per cent –, joint actions at European level remain necessary alongside national policies.

However, the impact this context has on the world of work and employment and the resulting labour policies to support businesses remain a priority for national governments.