We will also – this should be viewed cumulatively – introduce an elective severance pay arrangement for employees who are laid off for operational reasons. In such cases, the employee should be able to choose between suing for reinstatement and accepting a statutory severance package.
Finally, we want to change the way that companies use social criteria to determine which employees to lay off, so that even in times of economic hardship the most productive employees can keep their jobs. In the future, instead of applying fixed social criteria such as age or seniority, priorities should be worked out between the employer and employee representatives and made binding. This will provide a more reliable basis on which businesses can plan, and it will make it easier to hire new people.
We are pursuing this goal along with another measure. To help start-ups, we will double the maximum length of a fixed-term employment contract to four years. Start-ups will also be exempt from mandatory contributions to professional associations and chambers of industry and commerce for four years.
Our strategy for greater employment is rounded out by measures to eliminate illegal employment, which is still growing at a rate that should embarrass us all.
Of course, we must condemn illegal employment on the grounds of morality and solidarity. But we must also condemn it on account of social and economic dictates. We have already made legal employment more attractive through the Hartz reforms.
Big companies and major concerns are certainly important for our economy. But the engine of growth is, and will always be, small and medium-sized businesses.
Small and medium-sized businesses complain about high non-wage labor costs and bureaucratic regulations. For this reason, we will greatly improve the position of smaller companies in the future. We will radically simplify the tax law for small companies, reduce accounting obligations and thereby dramatically cut their tax burden. The Small Business Act will improve the starting conditions for fledgling entrepreneurs.
People who start their own businesses, and thereby create jobs for themselves and for others, have our respect and our political support.
It is not right – and I would like to make this very clear – that founders of new businesses and many smaller companies have to spend more time talking to bank loan managers than developing and marketing their products.
In this context, we must make clear that regardless of the difficulties in the finance sector –difficulties, I might add, that emerged from management mistakes, not policy ones – institutions working in this sector need to pay more attention to their actual task, namely of offering financing options to small and medium-sized companies, than has recently been the case.
The federal government and state institutions cannot take the place of private finance institutions. They can only offer supplemental services. Therefore, we instituted the “Capital for Labor” program and so-called secondary loans, which can be treated like equity capital in assessments of creditworthiness, to improve loan conditions for the companies. But long-term refinancing options must be provided by private institutions.
It would be a mistake to assume that debureaucratization and greater flexibility can and may only be demanded by one side of society. No, we must also modernize and streamline German law on the craft sector, so that the number of start-ups in this field grows again, so that more jobs are created, and that existing jobs are more secure than they have been previously, for instance, when businesses change hands.
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