Government unveils job protection plan

2009-06-07



At its meeting on 2 June the government approved a package of measures intended to protect jobs in the face of the economic downturn. According to government experts, they should help subtract even up to two percentage points from the overall increase in the jobless rate caused by the crisis.
The plan envisages various incentives and forms of assistance for companies, designed to avert mass lay-offs. Some will apply to all firms regardless of financial condition. Thus, businesses will be able to adjust employees’ working hours flexibly to the level of orders without the need to pay overtime rates, by balancing their working hours over a longer period, up to one year (and not over a week as now) and/or by introducing individual working-day schedules. At the same time, companies experiencing “temporary financial difficulties” – i.e., firms whose orders collapsed by at least 30% over the four preceding quarters – will be allowed to reduce employees’ working hours and wages by up to 50% for up to six months. They will also gain the opportunity to send employees on a special state-subsidised temporary paid leave as production is halted due to lack of orders, again for up to six months; during that time, workers will be paid the equivalent of the statutory minimum wage (PLN 1,276 or €281 gross), almost 50% of which will be financed by the government (the equivalent of the jobless benefit, which as of 1 June amounts to PLN 575 or €127 gross). And they will become eligible for state aid equal to up to 70% of the jobless benefit per employee and available for up to six months.
Two other proposals again apply to all firms. One should please the unions: it sets a cap of two years for the maximum duration of definite-term contracts. Finally, the plan introduces tax-deductibility of sums transferred to company employee-training funds (but they must be spent by the end of the following fiscal year).
The measures will apply for two years. The proposals will now be submitted to the Sejm. They will take effect after the summer holidays at the earliest.