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Organizationally Independent Unit

Definition, Explanation

Employers, according to § 216 b SGB III, are allowed to found organizationally independent units (beE, betriebsorganisatorisch eigenständige Einheiten) in order to render major staff related changes in a socially responsible way. Such independent units are supported financially by the federal labour agency.

The organizationally independent unit can be subsidiary to the company, or in a new company. The independence feature, however, dictates that there must be a clear distinction between the employees that remain in their positions and those who have changed into the organizationally independent unit.

Organizational forms similar to organizationally independent units:

• as an extern unit that is either newly founded or is integrated as an additional independent unit into existing companies:
  • Transfer companies
  • Employment- and qualifying companies
  • Training and development companies
  • Absorption companies
  • Run-off companies,
• or as an intern unit: Organizationally independent unit

Those companies are distinct from the social and communal employment companies who implement government programs caring for problem groups in the job market, e.g. long-term unemployed.

The employees in an organizationally independent unit do not perform directly productive work, but work on their qualification in order to have better chances of new jobs.

The organizationally independent unit, be it an intern or an extern, is one prerequisite of companies for being granted transfer short time work money, for each employee. The Transfer short time work money is granted by the labour agency for a duration of maximum 12 months and amounts to 60 %, or 67 % for parents living with at least 1 child, of the employee’s last post-tax income. Often, that income is completed by the employer, up to 80 %. The financing of employees’ qualifying measures is shared by the employer and the labour agency.

The employees’ changing into the organizationally independent unit is formalized by cancellation agreements with the old company and a fixed-term employment contract with the organizationally independent unit. There is no obligation to sign the cancellation agreement, for an employee. In an organizationally independent unit, an employees foremost mission is to get qualified and to apply for new jobs. If no successful new employment is realized out of the fixed-term employment (1-2 years), then the employee will turn into a regular unemployed, when that one ends. The employee will receive regular unemployment benefit on the basis of the last post-tax income in the employment prior to the fixed-term employment in the independent unit, outside holiday pay and Christmas-money. By constructing an organizationally independent unit, a company prevents dismissals for operational reasons, and do not have to pay severance money for the respective employees.

Tips, Checklist

• Think it through very well, whether you want to sign the cancellation agreement. Especially if you are under special dismissal protection and therefore have a good chance to win a dismissal protection trial, this is an important possibility for the decision
• Negotiate with your employer, taking into consideration a dismissal with a high severance payment as an alternative to the cancellation agreement, if you see good chances of finding a new job, or even have found one already
• Sort out the kinds of qualifying measures you will be supported in. Are they useful?
• Ask what your working conditions in the organizationally independent unit would be 
• Do not let yourself be pressured into signing the cancellation agreement quickly

Last update: 08/03/2010