Pandemic predicted to cut a million medium-sized jobs in Germany

More than a million jobs could be lost this year in small- and medium-sized enterprises -- the backbone of the German economy -- due to the coronavirus pandemic, a study showed Thursday.

Pandemic predicted to cut a million medium-sized jobs in Germany
An employee in Torgelow, Mecklenburg-Western Pomerania in July. Photo: DPA

In its annual survey of the “Mittelstand” sector, the public investment bank KfW estimated that SMEs could shed some 3.3 percent of their workforce by the end of the year, equivalent to some 1.1 million jobs.

There are an estimated 3.8 million such companies in Germany — predominantly family-run businesses specialised in sectors such as manufacturing, often for the export market.

They employ around 60 percent of workers — 32.3 million in 2019 —  and its share in Germany's overall economic activity is more than 71 percent.

READ ALSO: Working in Germany: How is the pandemic affecting jobs?

KfW said that the coronavirus pandemic was leaving “deep marks” on the SME sector.

“Worries and uncertainty are always high. Sales are breaking down more than in the financial crisis,” it said.

The historic recession into which the virus lockdowns plunged Europe's biggest economy and the anxiety about the recovery are impacting the outlook this year for SMEs, KfW wrote.

“More than one out of every two SMEs — some two million companies — are expecting a drop in revenue,” with a 12-percent drop expected for the sector as a whole, equivalent to 545 billion euros.

KfW signalled that companies were also holding off investments projects due to “uncertainty and tight funds”.

By the end of August, Germany had already lost 670,000 jobs, with “very pessimistic” macroeconomic forecasts pointing to a difficult final quarter.

Earlier Thursday, data showed consumer confidence had sunk heading into November as fears rise of further restrictions to curb the spread of the pandemic.

As part of a vast support plan from the German government, KfW has paid out 55 billion euros in aid since April to companies in difficulty.

The current climate of “great uncertainty” must be countered by “targeted economic policy measures”, the study concludes.

READ ALSO: Pandemic to 'cut thousands of banking jobs' in Frankfurt

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Reader question: Is it ever legally too hot to work from home in Germany?

Germany has regulations on working during a heatwave - but does that also apply to people who work remotely? We take a look.

Reader question: Is it ever legally too hot to work from home in Germany?

The number of people working from home shot up during the Covid pandemic, and though employees no longer have the right to work remotely by law, many have chosen to stick with more flexible arrangements and set up a home office at least part of the week.

This is great news for people who enjoy a lie-in more than a long commute, but there are some downsides. One major issue is that it’s not always clear how Germany’s strict employee protection rules actually apply in a home setting. The rules for working during a heatwave are a good example of this.

How does Germany regulate working in extreme heat? 

By law in Germany, employers are responsible for creating a safe environment for their workers. This means that they should try and keep the temperature below 26C at all times and are legally obliged to take action if the temperature goes above 30C. 

That could include putting blinds on the windows to prevent the glare of the sun, installing air conditioning systems or purchasing fans. In some cases – such as outdoor manual labour – it could also involve starting and finishing earlier in the day. 

And in really high temperatures, employers may simply decide to call the whole thing off and give their employees a ‘hitzefrei’ day – basically a heat-induced day off – to go and cool down in a lake. However, business owners are generally given free rein to decide how hot is too hot in this instance (except in the case of vulnerable workers). 

READ ALSO: Hitzefrei: Is it ever legally too hot to go to work or school in Germany?

Do the heat rules apply to ‘home office?’

Unfortunately not. In most cases in Germany, the company isn’t directly involved in setting up the workspace for an employee that works from home, aside from possibly providing a laptop or phone for remote use. 

“The occupational health and safety regulations regarding room temperature do not apply in this case,” labour law expert Meike Brecklinghaus told German business publication T3N. “This is because the employer does not have direct access to the employee’s workplace and in this respect cannot take remedial action.”

That means that on hot days, it’s the employee’s own responsibility to make sure the environment is suitable for working in. 

woman works from home in Germany

A woman works in her living room at home. Photo: picture alliance/dpa | Daniel Naupold

One duty employers do have, however, is to instruct their workers about the best way to set up a healthy work environment at home, for example by giving guidance on how to regulate the temperature. 

“In the end, it is the employee’s responsibility to maintain his or her workplace in a condition in which he or she can perform his or her work without the threat of health impairments,” Brecklinghaus explained.

What can home office workers do in hot weather?

There are plenty of ways to keep flats cooler in the summer months, including purchasing your own fan, keeping curtains or blinds drawn and ventilating the rooms in the evening or early morning when the weather is cooler.

However, if heat is really becoming a problem, it’s a good idea to communicate this to your employer. This is especially important if you have a health condition that makes it more dangerous to work in hot weather. 

In some cases, you might be able to negotiate for the employer to pay for the purchase of a fan or mobile air conditioner as goodwill gesture. If possible, you could also arrange to travel to the office where the temperature should be better regulated.

Another option for early birds or night owls is to arrange more flexible working hours so you can avoid sweltering at your desk in the midday sun, although this of course depends on operational factors. 

READ ASO: Jobs in Germany: Should foreign workers join a union?