Sheffield manufacturers are calling for a German-style part-time work law to reduce redundancies.
They want to see a new employment law introduced that enables employers to reduce working hours and wages to 80 per cent during an economic downturn.
The call came during an event organised by leading law firm Nabarro designed to help local companies export to Germany.
As well as receiving tips on how to trade in Germany, the audience heard how the German government, trade unions and employers’ organisations worked together to keep unemployment in check during the recession.
Under the German ‘Kurzarbeit’ law, the Government part-funds workers’ reduced wages and enables them to work more flexible hours to meet demand.
Thanks in part to the Kurzarbeit, the German unemployment rate fell to a 17-year low during the recession, said Nabarro partner Martin McKervey.
“Without doubt the German economy has recovered far better and faster than ours and this is, in part, due to companies not having to make major redundancy payments and having a skilled workforce ready to step back up to full-time work to capitalise on the upturn when it came, thanks to Kurzarbeit,” said Mr McKervey.
Kevin Parkin, former managing director of DavyMarkham and now chairman of Parkin Limited, said: “In Germany, when workers’ hours were reduced, they were encouraged to spend the extra 20 per cent of their time in training and refresher courses.
“Other European countries have a continuous training mentality that we don’t find here. For example, the French have a training plan agreed with each employee at the start of each year. Such an approach would be of great help to the UK’s manufacturing sector and I fully support the call for the introduction of a new law that enabled us to emulate the German approach.”
Chris Hudson, who runs leading cutlery and promotional goods manufacturer Chimo Holdings, said: “The German view is that economic upturns and downturns are cyclical and to prepare for the bad times. This law helped companies save massively on redundancy costs – in the UK we spent, or wasted, around £14 billion making people redundant.”
Roger Pearson, managing director of Rotherham-based pelleting press manufacturer Sizer, added: “At Sizer and at Newburgh Engineering we already have a ‘short working’ clause in our terms and conditions for such down turns and find it highly beneficial, but for it to become mandatory across the board would benefit companies, the region, the Government, individuals and families to survive a recession with fewer job losses.”