Transfer company

A transfer company in labour market policy is an instrument which, in coordination with the Federal Employment Agency, attempts to place employees of a company who are specifically threatened by unemployment into new employment relationships within the framework of a temporary employment in the transfer company. In insolvency proceedings, transfer companies are also used to carry out personnel measures, to restore the profitability of the company and to maintain it in the long term.

As a rule, in consultation with staff representatives and insolvency administrators, a company specialising in transfer companies is commissioned to carry out the transfer company in order to ensure that concrete placement and qualification offers can be made to the employees concerned.

We have collected the most frequently asked questions here.

Is the transfer company a competitor of the employment agency?

Transfer companies are defined in the law in § 110 SGB III and represent an instrument of labour market policy which places employees or groups of employees of a company who are specifically threatened by unemployment into new employment relationships within the framework of a temporary employment in the transfer company or prepares them for new entry into the first labour market. Transfer companies are set up in close cooperation with the Federal Employment Agency using a strict procedure defined by law and are not in competition with the Federal Employment Agency, but complement the labour market policy opportunities to avert unemployment.

What are the advantages of joining a transfer company?

The function of the transfer company in terms of labour policy is to place employees threatened with unemployment. The transfer companies have various instruments at their disposal for their tasks. Further training measures, which are financed by the dismissing company, foundations and, in close cooperation with the Federal Employment Agency, e. g. with funds from the European Social Fund, help the employees in the transfer company to reorient themselves professionally or to qualify in such a way that their chances of being placed are improved.

This means, among other things, avoiding or postponing unemployment, uninterrupted progress of pay points in pension insurance, professional support in vocational reorientation, the financing of further training measures, the possibility of participating in in-house qualification measures, the possibility of applying from an employment relationship as well as risk-free work testing with a potential new employer by putting the employment relationship at rest in the transfer company.

Do I get a salary in the transfer company?

In the transfer company, you receive transfer short-time work allowance (Transfer-KUG) from the Federal Employment Agency. Frequently, the transfer short worker allowance is increased, so that the employees of the transfer company can receive 80 to 100 % of their former remuneration. Payment is made by the transfer company.

Who can join a transfer company?

Any employee who is in an employment relationship subject to social insurance contributions and who can also be placed directly on the labour market. Among other things, employees who are employed on a part-time or short-term basis, employees on a fixed-term contract, employees on part-time contracts for older employees or employees receiving a pension cannot join a transfer company. Special regulations must also be observed for employees on maternity leave who are not allowed to work, during parental leave, sabbatical leave and permanent illness.

Do further special measures (profiling) be required to join a transfer company?

Yes, everyone who would like to have the opportunity to join a transfer company must go through the so-called "profiling”;, an evaluation measure prior to the start of the transfer short time to record possible qualifications and placement points.

Do I have to terminate my employment if I want to join the transfer company?

Yes, this is usually done with a “tripartite contract”. Your employer/insolvency administrator terminates the existing employment relationship with you and the transfer company establishes a temporary new employment relationship with you. Since three parties (employee, employer (also insolvency administrator), transfer company) are involved in the contract, it is also called “tripartite contract”.

Does the entry into the transfer company have a negative influence on a possible subsequent period of receipt of unemployment benefits?

The receipt of the transfer short-time work allowance has no influence on the duration of any subsequent receipt of unemployment benefit I.

Do transfer measures also apply to the restructuring of insolvent companies?

The involvement of transfer companies is increasingly also an instrument for the restructuring of companies in insolvency. Investors who offer a transferring reorganization regularly make it a precondition for the takeover that a certain quorum, often the entire workforce, is transferred to the transfer company, and then some employees selected according to no social criteria are reinstated. In this practice a circumvention of § 613a BGB is partly seen, which is denied however by the BAG in constant iurisdiction.