Troubled firms may be let off from labor contracts

The leadership of the Labor Ministry is considering introducing an “exemption clause” for the obligatory implementation of a sector-specific collective labor contract for companies on the verge of shutting down. It is possible that such a regulation will be included in the draft law for investment incentives to be tabled in Parliament this week.

According to the proposals and scenarios on the table, the social partners (employers, unions and employees) will be able to agree on exemptions for enterprises facing debt or survival problems to act outside the sectoral contract. In order to safeguard the jobs of those employed by those firms, the regulation will also include a clause for protected employment by those companies.

In any case, sources say, the exemption clause will not allow employers to reduce the salaries paid to below the minimum wage, which is currently set at 650 euros per month. Moreover, the ability of social partners to intervene for the exemption of a company from the collective labor contract will only be granted under specific conditions. One of them may be that the unemployment rate in the troubled company’s region is above the national average.

Exemptions may also be granted to startups, as well as to companies in the social economy sector.