Insider Economy Fears of wave of redundancies

Fears of wave of redundancies

There are fears of a wave of redundancies which will put a strain on the Redundancy Fund in a repeat of the crisis of 2012-13, Theano Theiopoulou reports for Phileleftheros.

The government has introduced a number of schemes to help people remain in their jobs, paying part of the wages of a number of employees of companies which have either had to suspend their operation by decree of which have seen at least a 25% drop in turnover.

These benefits are contingent on companies not firing any of their employees.

However, the effective economic standstill resulting from the lockdown has raised fears that these may not be enough to cushion companies gradually resuming operations.

A wave of dismissals will put a strain on Redundancy Fund. In 2012, when unemployment hovered near 12%, a total of €54.58 m was paid in redundancies, while in 2011 when unemployment was 8% a total of €31.11 m was paid.

The biggest sum was €99.77 m in 2014, up from the €90.67 m in 2013.

A total of 10,919 applications were approved in 2013 and 10,704 were approved in 2014. In 2015 and in 2016 when unemployment was 15% and 13%, the fund paid out €57.61 m and €4.73 m.

In 2016, the fund paid out €42.73 m, in  2017 €28.14, in 2018 a total of €17.32 m and in 2019 €20.08 m.

The sectors customarily most affected by unemployment during economic downturns are processing, construction, commerce and hotels.

According to the latest available information, the fund’s reserves at the start 2017 was €348.99 m and at the end of the same year €389.56 m.

The fund covers employees made redundant. There are criteria, including 104 weeks of continuous employment at the same employer.

It is financed exclusively by contributions from employers.

 

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