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Cutting a firm’s use of labour by reducing hours of work below a normal working week rather than laying some workers off. The merit of this is that it keeps the firm in contact with all its workers, so that more labour can be obtained very easily when it is needed. It is likely to be more acceptable to the workers than redundancies if alternative jobs are difficult to obtain. Short-time working also keeps workers in practice, so that their skills are maintained. It is normally only used when the demand for labour is expected to recover.
Reference: Oxford Press Dictonary of Economics, 5th edt.
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