Such contracts are to be concluded in order to prevent labour shedding and mass redundancies during the course of the procedure for the granting of extraordinary benefits from the Wage Compensation Fund or of the procedure by means of which workers are registered in the "mobility lists".
- Law 608/96 (Art. 6).
3.2.4.3. Contents
The social partners reach collective agreements providing for working-time reduction and a corres-pond-ing cut in collectively agreed wages, whereby the reductions are to take effect either horizon-tally or vertically. In both cases the government provides a quarterly allowance which is divided bet-ween firms and the workers for whom the working-time reduction has been agreed. Under the terms of Law 608/96 (Art. 6), in the case of contracts concluded subsequent to 14.6.1995 the amount of wage compensation granted to workers amounts to 60% of the wage lost due to working-time reduction. Employers who have concluded a job-security agreement are granted a reduction in their social security contributions for workers affected by working-time reduction (25 or 30% for Objective 1 and 2 areas of EEC Council Directive 2052/88 of 24.6.1988; 35 or 40% when the agreement leads to working-time reduction in excess of 30%).
3.2.4.4. Financial resources
The wage compensation provided for in job-security agreements aimed at avoiding redundancies is paid from a special fund under the extraordinary CIG.
The reductions in contributions are financed from the means earmarked for this purpose in the Employ-ment Fund (Law 608/96). The Employment Fund has received new financing for the years 1995, 1996 and 1997 (Law 451/94, Art. 12, § 4).
3.2.4.5. Institutional support
Firms interested in the allowance are to make their application to the regional labour directorate. The application is checked and passed on to the Ministry of Labour, which verifies it and, where appropriate, issues a certificate of approval. The allowance is then paid out by the INPS.
3.2.4.6. Duration
Under the terms of Law 236/93 (Art. 5), the date of expiry for job-security agreements was 31.12.1995. However, as noted above, under Law 451/94, new financing for the Employment Fund was approved for 1995, 1996 and 1997 (Law 236/93, Art. 1, § 7). Thus, interested firms may submit an application up until the end of 1997.
3.2.4.7. Effects
In view of the fact that companies may apply for a job-security agreement up to the end of 1997 and that the agreements have a duration of two years, the measure will continue to have effect until the end of 1999.
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