Different models of working time accounts in the processing industry


Research Paper (undergraduate), 2016

45 Pages


Excerpt

Table of contents

TABLE OF CONTENTS

TABLE OF FIGURES

1 INTRODUCTION

2. THE DEVELOPMENT OF WORKING TIME ACCOUNTS

3. DIFFERENT TYPES OF WORKING TIME ACCOUNTS
3.1. Short - term A ccounts
Flexitime
Annualised working time account
Traffic light account
Immediately decaying account
Working time corridor
3.2. Long - term accounts
Lifelong working time account Sabbatical

4. TIME RECORDING

5. REGULATIONS FOR WORKING TIME ACCOUNTS
5.1. Working hours act
5.2. Collective agreement
5.3. Works agreement
Codetermination of the works council for the duration of the weekly working time
RESTRICTION OF THE RIGHT OF CODETERMINATION
5.4. Uniform regulation agreed by working contract
5.5. Individual contract
Favourability principle
Compensation period in the individual contract
5.6. Insolvency protection

6. EVALUATION
6.1. DISADVANTAGES
6.2. Advantages

7. CONCLUSION

LIST OF SOURCES

SOURCES OF FIGURES

OUTLINE

Table of figures

Figure 1: Flexible working times

Figure 2: Development

Figure 3: Flexi Law

Figure 4: Example for Flexitime

Figure 5: Work-Life-Balance

Figure 6: Example for Flexitime regulation

Figure 7: Traffic light account

Figure 8: System of traffic light accounts

Figure 9: Traffic light account example

Figure 10: Example for immediately decaying account

Figure 11: Discharge conversation questions

Figure 12: Example working time corridor

Figure 13: Function of the lifelong working time account

Figure 14: Time recording

Figure 15: Codetermination

Figure 16: Insolvency

Figure 17: Evaluation

1. Introduction

The standard labour conditions everyone knows is a full-time job during five days of the week, with 8 hours a day, over a period of around 45 years. But nowadays there is a huge demand for the flexibilization of working time what is the reason for the implementation of working time accounts. 1 “The term working time account [...] comprises multiple of different models for the flexibilization of working time.” 2 When employer and employee both agree in a contract, which prescribes that a part of the employee’s remuneration is not paid out but accumulated to use it later on for paid periods of exemption from work, it is called working time account.3

Every employee has an individual working time account on which the differences between prescribed and actually completed working hours are accumulated. When the employee is working more than prescribed it results in a credit on the account, if the employee is working less it leads to a debt.4

For a successful implementation of new working time models it is of a high importance that desires and needs of employees are considered, and that they have the possibility to get involved in design and organization of the working time. This leads to a higher acceptance of the implemented changes.5

Working time accounts not only enable a higher consideration of the needs of employees and employers but also make it possible to react quickly on operational and economic changes.6 This means that companies have to design factors like payment, working time and working place in a much more flexible way. Due to this flexibilization it is possible to have both, an interesting working life and recreational activities at the same time. A study of the market research company “Dynamic Markets” even revealed that 75% of all participants would be willing to earn around 11% less to have a more flexible working life in return.7

In 1998 the Volkswagen AG was one of the first enterprises that implemented working time accounts. 8 At first only big companies introduced this new system but in the meantime also smaller businesses started to use working time accounts, so that by now the majority of employees in Germany has no fixed working hours anymore. 9

2. The development of working time accounts

The use of working time accounts goes back until only some decades ago in the 1960s, which makes it a quite young idea. The starting point was the introduction of flexitime, which was supposed to enable an increase in business operating time by more flexible working hours. This made it possible to use capital much more efficient and to adapt to market changes much faster. It has to be mentioned that during this time it was not possible to use flexitime as extensive as it can be used nowadays. The reason for this was the long core time and that factors like time debts were missing.10

In the 80s the labour unions claimed a reduction in working time from the “Gesamtmetall”. In return a model was developed which they made it possible to keep up with customer- and seasonal demands and to tackle overcapacities and overtime premiums. In the year 1995, when Volkswagen implemented a model for more flexible working times, the term breathing company came up what expresses that higher demand means longer working hours and less demand results in a decrease of working hours. In 1998 Volkswagen then introduced the Time Asset, which was a forerunner of the Flexi Law. This one was enacted later on in the same year to create clear legitimate boundaries in the area of flexible working times.

The biggest disadvantage of the Flexi Law was that the employers were not obliged to protect the working time accounts of the employees in case of a bankruptcy. This problem was improved by the implementation of the Flexi Law II some years later though. In the year 2000 the Euro Implementation Law was established, which made it possible to use working time credits for the company pension. Three years later the Law for the Change of the Social Security Statute Book and Other Laws11 was introduced to guarantee social law coverage of flexible working times. For instance it prescribes that the employers are obliged to provide sufficient information about bankruptcy protection to the employees. Moreover it states that in case of unemployment the payment of fees can be postponed up to half a year. Two years later a better protection of long-term working time accounts by changes in law was even one of the main goals in the coalition agreement of CDU/CSU and SPD.12

In 2009 the Flexi Law II was enacted, which is also called the Law for Improvement of the Framework for the Protection of Flexible Working Time Regulations and for the Change of Other Laws.13 It was supposed to compensate present problems of the first Flexi Law. One reason for this new law was that the current regulations for agreements on value account credit balances often caused uncertainties, especially in-between social partners and in relation to social security. Another problem was that the actually obligatory bankruptcy protection was neglected what resulted in a loss of credit balances of many employees. Moreover it was not possible to maintain the credit balances for example in case of a change of the employer. These problems were the key factors in the second Flexi Law, which introduced new regulations for a better handling of flexible working times and credit balances and decreased the current risks for employees a lot.14

The importance of flexible working time regulations kept increasing and in 2009 even the central associations of the social insurance agencies and the Federal Ministry of Finance took a stand on the topic what caused a lot of discussions. Therefore the central associations of the social insurance agencies created a question and answer catalogue which mainly refers to “the employer’s contribution share of the credit balance, the usage of the credit balance for the company pension as well as the combination of old-age part-time plans with further credit balance agreements.” 15 Two years later it was then possible to have an up to three months long exemption during which the employee still receives normal remuneration and obtains a normal employment relationship. Like already mentioned before, the company has to increase its production during times of high demand. Therefore employees have to work additional hours, which can be accumulated on their working time accounts and be used for exemptions later on. This new regulation was implemented by a change in the fourth book of the Security Statute Book and Other Laws put through by the CDU/CSU FDP coalition.16

In 2012 the government then released a statement in which it evaluated how beneficial the Flexi Law II and credit balances actually are. Moreover it was mentioned how the Flexi Law II for one of the globally most advanced working time systems and that credit balances are a good tool to adapt to the changing business world. The government also promised that in the future it is going to provide more information about working time accounts and how they can be used to design the working life more flexible and efficient. 17

By now lots of different types of working time accounts have developed. They can help to handle current problems like for example the threatening demographic change or the economic crisis in 2009. Companies, which were already using working time accounts at this time, profited a lot from the thereby given flexibility and were able to avoid dismissals. Additionally it enabled them to prevent or postpone the introduction of short-time work. All in all the working time accounts helped to weaken the devastating effects of this crisis on the labour market and to support it.18

Like already mentioned working time accounts, especially lifelong systems, are a very good possibility to react to the demographic change. Operational processes have to be changed because of the increase of the retirement age to 67 and because of the missing governmental subsidy for partial retirement since 2010. The employees can accumulate time or parts of their wage as a credit balance on their working time accounts during their working life what enables them to retire by the initial retirement age of 65 anyway. The over the years accumulated credit on their account makes it possible to compensate the proportional losses that they suffer due to an earlier retirement.19

To sum up there are lots of different factors which forward and speed up the flexibilization of working times, along with the development of working time accounts. Globalization leads to changed conditions on the labour market, higher price pressure and a global adaption of working times. The demographic change goes hand in hand with working times adapted to age, longer working employees, the desire of more flexibility and the threatening lack of specialists. Moreover the change in values puts focus on things like an increasing importance of a good Work-Life-Balance and the significance of work in general. All these factors clearly show how important working time accounts actually are. 20

3. Different types of working time accounts

Basically there are two main forms of working time accounts: the short-term accounts for a time of less than a year and the long-term accounts for more than a year.21

3.1. Short-term accounts

Flexitime

The Flexitime is the oldest form of working time accounts. There are two different types of Flexitime: The simple one and the qualified one. When the simple Flexitime is used the employees are able to determine beginning and end of their working time within a certain time frame and at a prescribed number of working hours per day. This means that there is a core time during which all employees are obliged to work and a frame working time during which the rest of the hours can be completed. The qualified Flexitime allows the employees even more freedom because they cannot only choose beginning and end of their daily working time but also the duration.22 This means that there is no core time during which the employees are obliged to work. They only have to comply with their prescribed working time per week, month or year. By this overtime payments can be avoided and it allows the employees to design their working- and free time in a much more flexible way. In return for this granted freedom the employees are obliged to consider the companies’ operational issues and not only their personal interests when planning their working schedule. When an employee works less or more during a month his wage remains the same anyway because it is independent from the actually completed working hours. The working time account helps to control and to record the number of working hours an employee has completed and is also part of the personnel file. How many hours an employee actually worked is then either written down or captured by a check clock. For employees working in a company using the Flexitime system it is advisable to use the credit on their accounts for bridging days to have an extended weekend. It is also really important that the employees of a department plan their working time in a way so that the minimum staffing is always fulfilled. It has to be mentioned that it is not always possible to use Flexitime. In some cases, like for example in assembly line work or shift work, the working time cannot be designed flexible, as well as for minors or pregnant women which have prescribed maximum working times and break regulations. Moreover it is not possible to attend trainings beyond the core working time and there are no supplementary payments for late working hours. When an employee cannot attend work because of death or illness of a family member he has no claim for paid release from work. If he falls sick himself though he still receives normal remuneration but the balance on his working time account is reduced. It should also be mentioned that the social security contribution is determined according to the height of the wage. When an employee is dismissed or dead and he has a negative account balance this does not affect the social security. But if the account balance is positive it is paid out and therefore also social security has to be paid.23

Abbildung in dieser Leseprobe nicht enthalten

Figure 4: Example for Flexitime, http://2.bp.blogspot.com, (11.06.16)

Annualised working time account

The annualised working time accounts comprise a much longer period of time than the Flexitime accounts. This makes it possible to distribute the prescribed working time quite flexible throughout the compensation period so that in the end the yearly account balance complies with the prescribed annual working time and crosses the zero line once a year.24

A good example for the use of annualised working time accounts is the company “Galeria Kaufhof”. For the German department store chain it is really beneficial to use this kind of working time account because the business they are in is very seasonal. Especially during Christmas time they achieve the highest sales numbers what means that more employees are needed to handle the increased amount of customers during this season. Annual working time accounts make it possible to let the employees work more hours during times of high demand and to reduce working time when there is less demand. By this employees are able to balance plus and minus working hours on their working time account over the year. The by the annual working time accounts given flexibility is not only really helpful to react quickly on changing demands but also to improve the employees’ Work­Life-Balance and to secure workplaces in case of an economic downturn.25

In the Distribution Centrum Frechen of Galeria Kaufhof the employees work five days a week, even if the company is opened for 6 days. The employees are obliged to work in between four and ten hours a day, depending on the current volume of work. To determine the needed staff a forecast of the stock turns is worked out every week. At ten o’clock of every working day the employees are then informed about the exact number of working hours they have to complete during the day, which can differ +1 to -2 hours from the actually planned working time. Electronic time recording captures the completed working time. During the first half of the year there is a lower demand what results in less working hours for the employees and therefore to a decrease of the balance of their working time account. This means that this time period is a good opportunity for recreational activities, longer holidays or more time with the family. During the second half of the year the demand increases along with the working hours so that the balance of the working time account is increasing again.26

It has to be mentioned though that the use of such working time accounts goes hand in hand with a higher administrative effort. Moreover it leads to uncertain working times for the employees because of the daily adaption to the work volume what makes it harder to coordinate leisure and working time. The internal communication is of a high importance and the key to an acceptance of the working time accounts by the employees. Furthermore employers should try to consider private appointments of the employees during the planning phase.27

[...]


1 cf. Wininger (2011), p.13 ff.

2 Original: „Unter dem Begriff Arbeitszeitkonto wird im Allgemeinen eine Vielzahl verschiedener Modelle zur Flexibilisierung der Arbeitszeit gefasst.“, Palenberg (2013), p.20

3 cf. Palenberg (2013), p.20

4 cf. Uppenbrink, http://www.uppenbrink.de, (15.05.16), p.1

5 cf. Wininger (2011), p.18

6 cf. Palenberg (2013), p. 1

7 cf. Wininger, (2011), p.10 f.

8 cf. SKT-Beratung, http://www.skt-beratung.de, (19.06.16)

9 cf. Uppenbrink, http://www.uppenbrink.de, (15.05.16)

10 cf. Palenberg (2013), p.6 ff.

11 Original: „Gesetz zur Änderung des Sozialgesetzbuches und anderer Gesetze“, Palenberg (2013), p.11

12 cf. Palenberg (2013), p.7 ff.

13 Original: „Gesetz zur Verbesserung der Rahmenbedingungen für die Absicherung flexibler Arbeitzeitregelungen und zur Änderung anderer Gesetze“, Palenberg (2013), p.12

14 cf. Palenberg (2013), p.12 f.

15 Original: „dem Arbeitgeberbeitragsanteil im Wertguthaben; der Wertguthabenverwendung für die betriebliche Altersvorsorge sowie der Kombination von Altersteilzeitmodellen mit weitern Wertguthabenvereinbarungen.“, Palenberg (2013), p.14

16 cf. Palenberg (2013), p.13 ff.

17 cf. Palenberg (2013), p.15 ff.

18 cf. Palenberg (2013), p.18 f., p.27

19 cf. Palenberg (2013), p.18 f., p.27

20 cf. Wininger (2011), p.18

21 cf. Uppenbrink, http://www.uppenbrink.de, (15.05.16)

22 cf. Best-Zeit IW Köln, http://www.flexiblearbeitszeiten.de, (27.05.16)

23 cf. Arbeitsratgeber Deutschland, http://www.arbeitsratgeber.com, (29.04.14)

24 cf. Uppenbrink, http://www.uppenbrink.de, (15.05.16)

25 cf. G2P Datenbank, http://www.good-practice.org, (01.06.16)

26 cf. G2P Datenbank, http://www.good-practice.org, (01.06.16)

27 cf. G2P Datenbank, http://www.good-practice.org, (01.06.16)

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Details

Title
Different models of working time accounts in the processing industry
Author
Year
2016
Pages
45
Catalog Number
V941406
ISBN (eBook)
9783346271730
ISBN (Book)
9783346271747
Language
English
Tags
different
Quote paper
Melissa Doose (Author), 2016, Different models of working time accounts in the processing industry, Munich, GRIN Verlag, https://www.grin.com/document/941406

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