As German Companies Collapse, Transfer Societies Lure Workers with a Path Back to Employment
15.06.2026 - 08:33:28 | boerse-global.de
The number of Bavarian workers signing up for transfer societies—state-backed programs that retrain and place employees after mass layoffs—has more than tripled in two years. In September 2023, 680 people used the tool; by September 2025, that figure had jumped to 2,156. The trend mirrors a broader push across Europe to keep people employed rather than simply cutting them loose when employers go under.
At the Mahle plant in Neustadt an der Donau, where the entire factory is shutting down, roughly 250 of the 350 employees moved into a transfer society. Participants receive a "transfer short-time allowance" (Transferkurzarbeitergeld) worth between 60 and 67 percent of their standardised net salary, for up to twelve months. Research from the IAB and the IWH shows that joining such a society improves the odds of landing a new job—though no direct income advantage over other jobseekers has been statistically proven.
Insolvency cash comes with hard deadlines
When a company enters insolvency, the Federal Employment Agency steps in with insolvency money (Insolvenzgeld), covering net earnings for up to three months. But employees must act fast: the application deadline is two months after the insolvency procedure is officially opened. Any outstanding salary claims also have to be filed in writing with the insolvency administrator, respecting the administrator’s own deadlines. Experts warn that claims must be documented precisely, or they risk being lost.
Easier firings, but no automatic severance
The general protection against dismissal under the Kündigungsschutzgesetz remains in force even during insolvency. However, Section 113 of the German Insolvency Code (InsO) gives the administrator a lighter touch: notice periods are capped at three months to the end of a calendar month, unless a shorter contractual or statutory period applies. There is no statutory right to severance pay in a bankruptcy. Any redundancy payment depends on a social plan or individual agreement—both of which become harder to extract when the employer has no money.
A separate danger lurks if the employer failed to pay social-security contributions. That can create gaps in pension entitlements or sickness-benefit claims, hitting workers long after the insolvency is over.
Europe rewrites its restructuring rulebook
The EU Directive 2019/1023 has already spurred changes across the bloc. Poland, for example, enacted a novella on 23 August 2025 that shifts the emphasis toward rescue rather than liquidation. A new mechanism called the "Cross-Class Cram-Down" lets a restructuring plan be imposed even when certain creditor groups resist. Early-warning systems have also been introduced to catch companies before they tip into insolvency.
Germany is taking a preventive route. In June 2026, the IHK in Cottbus will hold an event at the city's start-up centre focusing on business valuation and the legal transfer of company ownership. The aim is to head off insolvencies that arise simply because succession or leadership issues were never resolved.
