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Thousands of employees from Germany’s Daimler trim hours to save jobs

Thousands of Daimler employees have agreed to cut their hours and give up bonuses this year to save jobs amid the coronavirus crisis, the German carmaker said Tuesday.

Published: 28 July 2020 15:48 CEST

Thousands of employees from Germany's Daimler trim hours to save jobs

A Daimler employee in Sindelfingen, Baden-Württemberg on April 30th. Photo: DPA

The Mercedes-Benz manufacturer was already grappling with a painful restructuring set to include a major jobs cull before the pandemic sent car sales plummeting.

Daimler said in a statement it had reached a deal with German unions that would see administrative employees and staff in other non-factory areas such as logistics, work two hours less a week and take a corresponding pay cut for one year from October 1st.

READ ALSO: Why people on 'Kurzarbeit' in Germany need to prepare for a tax surprise

Daimler, which employs nearly 300,000 people worldwide, did not say how many employees in Germany would be affected by the deal.

Daimler's German workers have also agreed to forego their annual profit-sharing bonus this year, which amounted to almost €600 per person in 2019, the statement added.

“We want to thank the workforce for their important, temporary contribution to overcoming this crisis together,” Daimler personnel chief Wilfried Porth said.

Workers' representative Michael Brecht called the agreement “a clear contribution to securing jobs and stabilising our financial situation”.

Daimler announced in 2019 that at least 10,000 jobs would be culled as part of the group's efforts to save €1.4 billion by 2022, mainly through voluntary redundancies and early retirement schemes.

READ ALSO: Working in Germany: Where are the most jobs in the car industry?

But German media have reported that number could climb as high as 20,000 as Daimler, like other automakers, faces fallout from weeks of coronavirus lockdowns that halted production lines and kept dealerships closed.

The group posted last week a loss of nearly two billion euros in the second quarter of 2020 owing to the pandemic's impact.

Although sales began to recover as countries eased lockdown measures, Daimler chief executive Ola Kallenius warned that the coming “months and years will be a challenge”.

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Four steps to take straight away after losing your job in Germany

In times of economic downturn, layoffs are far from unusual – but that doesn’t make it any more difficult for the people who find themselves suddenly left without work.

For foreigners in Germany, the situation is even more frightening. You may wonder whether your residence status is in jeopardy, how hard it will be to find another position, and whether you can support yourself while you look for another job.

Though it may be hard to think clearly at a time like this, following these four simple steps will set you in good stead to move forward – and hopefully, it won’t be long before another dream opportunity comes your way.

1. Negotiate your terms

Before signing or agreeing to anything, it’s crucial that you’re familiar with your rights and understand how much notice your employer has to give you and what kind of settlement you may be owed.

Generally, the rule of thumb is that you get half a month of severance for every year you worked at the company. That said, higher settlements can be negotiated in return for signing a termination agreement (Aufhebungsvertrag), so you may want to seek legal advice before settling.

Even during a probationary period, your employer will also have to give you a certain amount of notice before your last working day. During the interim, you can either work for the company or be put on what is known as gardening leave in English, where you stay home but are paid as if you were working.

This can all be negotiated as part of a termination agreement, so you should think carefully about what works best for you and consider speaking to your labour council (Betriebsrat) or a legal specialist before making any firm decisions. You should also be aware that you have no obligation to sign any agreement and can legally dispute the layoff if you want to.

READ ALSO: Can I get unemployment benefits in Germany if I quit my job?

2. Get all the necessary documents from your employer

Once the terms of the layoff are final, ensure that your employer gives you all the necessary documents you need to navigate the next phase of German bureaucracy.

The main two to think about first are the confirmation of work (Arbeitsbescheinung) and the confirmation of your holiday entitlement (Urlaubsbescheinigung).

The first can be sent to the Agentur für Arbeit (jobcentre) as proof of your last job and recent layoff, while the second will help your next employer calculate your vacation days for the rest of the year.

An Arbeitszeugnis, or German letter of reference

An Arbeitszeugnis, or German letter of reference. Photo: picture alliance/dpa/dpa-tmn | Zacharie Scheurer

On top of these documents, you’ll want to ask your employer for a letter of reference (Arbeitszeugnis), which is useful for finding a new job in Germany.

You should also keep hold of your last payslip and statement of earnings (Lohnsteuerabrechnung), which are helpful for tax purposes and may also be requested by the Agentur für Arbeit.

Speaking of which…

3. Register as unemployed with the Agentur für Arbeit

As soon as you know that you are soon to be unemployed, you should register as a jobseeker with the Agentur für Arbeit. To get full unemployment benefits, you usually have to do this within three days of receiving your termination notice or at least three months before leaving.

Depending on what type of residence permit you’re on, you may or may not be entitled to long-term unemployment benefits (ALG II), but most employees are able to get unemployment insurance (ALG I), which covers a proportion of your former salary while you look for a new role.

It’s important to be a little bit careful here, as claiming long-term unemployment benefits (ALG II) can affect any future citizenship applications. Any severance pay you agree to can also result in you losing some months of unemployment benefits, so these are all factors you will have to consider while deciding on the best way forward.

READ ALSO: What happens to your work permit if you lose your job in Germany?

4. Inform the immigration office

If you’re on a residence permit that is linked to your job in some way, like a Blue Card or work visa, you’ll need to inform the immigration office about your change in circumstances as soon as possible.

This should be done in writing, and in German, within two weeks of receiving your termination notice.

You should include all relevant personal information, such as date of birth, residence permit type, and nationality, as well as the date of your final day at work. As proof of the layoff, you should also enclose a copy of your termination agreement or a letter from your employer.

People enter the immigration office

For foreigners who move to Germany and settle in Berlin, a visit to the Berliner Landesamt für Einwanderung (LEA) is ultimately unavoidable. Photo: picture alliance/dpa | Britta Pedersen

In most cases, the immigration office will give you between 3 and 12 months to look for a new job. If they give you a shorter period, be aware that you may be able to negotiate an extension later on if you are struggling to find work through no fault of your own.

Above all, stay positive. Though it may feel like one door has closed, another one is sure to open. This being Germany, you may just have to wade through a sea of paperwork to get there.

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