Retirement provision continues to raise dust after passage

Ljubljana – The provision allowing employers to unilaterally terminate workers once they have met formal conditions for retirement, passed within the latest stimulus package in parliament on Tuesday, continues to raise dust as trade unions label it inadmissible and clear abuse of crisis legislation. Employer representatives are meanwhile welcoming it.

Trade union representatives said in Wednesday’s statement that the provision encroached upon the labour relationship act and as passed without social dialogue or debate with social partners as part of the Economic and Social Council (ESS).

“It is an apparent abuse of intervention legislation and urgent legislative procedure … and permanent encroachment upon the systemic legislation in an unconstitutional and completely unprofessional way that may drastically increase the number of retired persons in a very short time and put an additional EUR 245 million burden on the pension purse.”

The provision pushes Slovenia back to the company of countries with the lowest labour activity rate for other workers. “The change, of course, will not contribute to greater employability of younger persons,” the unions said, adding that the remaining workers would only work more.

They do not understand the support of employer organisations for the provision, as they believe it means that they have endorsed in the medium term a raise in the contribution rate for pension and disability insurance paid by employers.

The only alternative to this is either reducing the rights from pension insurance or drastically tighter retirement conditions, they said, adding that they would “fight against these two options with all means available”.

The unions thus added that the only solution was a higher contribution rate for pension and disability insurance, and that employers should attribute the possible negative consequences to their associations.

Labour Minister Janez Cigler Kralj is facing particular criticism for failing to do anything to prevent “this inadmissible encroachment upon law and rights of older people”, but instead “endorsing the proposal at the government session.”

The unions claim that the minister has lost his credibility and should resign immediately, while also announcing possible withdrawal from the ESS, an initiative for constitutional review and proceedings before the International Labour Organisation.

Also to be informed about the decision, which in the union’s opinion runs against the European Commission recommendations, will be European institutions, and the Advocate of the Principle of Equality will also be urged to take a position on it.

The Chamber of Commerce and Industry (GZS), on the other hand, said that the allegations that the provision would cause forced retirements en masse were unjustified and incorrect, as employers would want to keep good workers as long as possible.

GZS director general Sonja Šmuc told the press that the measure provides social security to those who had met the retirement conditions, while enabling employers to “construct their teams when certain welfare rights have already been achieved.”

“Employers will never strive for losing the diligent and needed staff. For those who are not diligent and urgently needed, it is right that they do not have unlimited privileges,” said Šmuc, who does not expected mass lay-offs.

If lay-offs happen, it will be because the job is no longer needed, or simply because “an employee has become obsolete”, when they would be replaced by younger people, which is welcome given the unemployment statistics for this age group.

Similarly, the Chamber of Craft and Small Business (OZS) also welcomed the provision, saying that in the current situation, employers are in an unequal position relative to employees, who decided themselves whether to retire or not.

“Both the employer and employee will decide on the labour relationship, which seems like a fairer solution,” OZS president Branko Meh said, adding that young people would get more opportunities for employment.

Meh said this was not forced retirement, which was also underlined by the Labour Ministry, which added that workers who had met the retirement conditions could stay on the job with the employer’s consent if they were indispensable.

The measure is aimed primarily at encouraging employment of young people, which the ministry believes will reflect in an improved economic situation in the country.

Joining in the debate, the Ministry of Labour, the Family, Social Affairs and Equal Opportunities reiterated its position that the measure, which it believes is wrongly termed forced retirement, does not mean workers who are indispensable for a certain company would not be able to continue working in agreement with the employer.

The measure is meant to encourage the employment of the youth after unemployment surged, especially among the young, due to the epidemic, its release says.

The ministry said 90,510 jobless reported to the Employment Service in January-November, up 35.3% from the same period in 2019, while the share of unemployment among the young aged 15 to 29 increased by almost 20%.

“This is the reason why it is important to stop this trend, and the measure was not discussed on the Economic and Social Council because of the urgency of the situation,” the ministry explained.

Mladi Plus, a trade union representing the youth and operating under the wing of the ZZZS confederation, disagrees, accusing the ministry of manipulation. It believes the measure will not result in a single job for young job seekers, and rejects the inter-generational conflict that is being forced on them.

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