Frank Schröder

Frank Schröder
Director, Head of Marketing & Communications

Büro Dusseldorf
+49 211 6901-1200

Labour Law Questions in times of the Coronavirus - Short-time work and impact of school and nursery shutdowns

1.    Short-time work

Short-time work is a temporary reduction of the working hours with a proportional reduction of the affected employee’s remunerations (temporary layoff – the employment relationship continues; however, the working hours are temporarily reduced to zero (“Kurzarbeit Null”)).

In order to partially compensate for the loss of earnings the Federal Employment Agency (Bundesagentur für Arbeit) grants the so called short-time allowance (KUG).


  • Temporary (up to one year) economic relief for the business
  • and at the same time maintaining the jobs.

The employee’s working duties as well as the employer’s obligation to pay the remuneration are suspended to the agreed-on extent. The employment relationship continues, only the working duties and the obligation to pay the remuneration are modified. Affected employees are entitled to short-time allowance as compensation.

According to the “German Law on Temporary Crisis Regulations regarding Short-Time Allowance” dated 13 March 2020 short-time work can be applied for under simplified requirements due to the Corona-Crisis. According to article 3 of the law, the law came into force the day following its publication, thus on 15 March 2020.

The Law includes the following simplifications:

  • Deviating from the general regulations, where at least one third of the employees must be affected by the loss of earnings, it is now sufficient, if 10 % of the employees are affected by the measures.
  • The use of working time accounts is not necessary.
  • Any social security contributions the employee bears for employees receiving short-work allowances are partially or full refunded.
  • Employers can also apply for short-work allowance for agency workers.

The stipulated regulations of this law are limited until 31 December 2021.

Short-work allowances are paid for economic reasons or due to inevitable events. The question is whether the virus is an inevitable event. In any case there are obvious economic reasons if supply chains are interrupted or suspended, employees are not able to come to work or there are no more orders as a result of the pandemic.

The short-work allowance amounts to 60 % of the lump sum net wages respectively 67 % in the case of subsistence obligations. You are obliged to inform the respective authorities about short-time work and apply for short-time allowance.

Generally, employers cannot put short-time work into practice unilaterally. The reduction of the contractual working hours leading to the actual loss of work and thus results in short-work allowance entitlements requires a legal basis such as a collective agreement, a works agreement or individual contractual agreements. Therefore, it is necessary to determine whether the legal grounds are given. If this is not the case any employees that are to go on short-time work have to conclude supplements on their employment contracts stating the option of sort-time work.

If a company has a works council, it has the right to co-determine.

2.    Impact of school and nursery shutdowns on existing employment relationships, especially claims for remuneration

If employees cannot come to work due to the shutdown of schools and nurseries, they are entitled to continued remuneration for a “relatively not significant time”, if they are not responsible for the hindrance. This is stipulated in article 616 German Civil Code (BGB). In the current situation this requirement is met. However, employees are only entitled to the continued remuneration if the children are under 12 years of age. Are the children older than 12 years the claim exists without exception if any other kind of care assistance is not possible or if the child in question requires special care due to special circumstances. According to this provision employees are not entitled to continued pay for more than 10 days. At the same time this claim only exists if the other parent is not available.

Of course, the claim for remuneration arising from the employment contract remains unaffected if employees work from home (home-office).

A claim according to article 616 German Civil Code does not exist if this provision is waived in the employment contract.

A claim according to article 615 German Civil Code does not exist in this case as the employee I not in default of acceptance.

According to the most present information issued by the German Federal Ministry the German government is currently trying to find a solution for the whole-time schools and nurseries will be closed for. It is possible that first results may be published today.