Stricter rules for furloughs

Contract suspensions have prevented layoffs, but have also severely diminished incomes

Stricter rules for furloughs

The pandemic’s economic impact has hit employment extremely hard, as after the drastic reduction of economic activity since the outbreak of Covid-19, about a third of the country’s salary workers have remained out of the labor market through the informal form of unemployment that the measure of contract suspension has brought.

That has resulted in a large cut to incomes, with experts estimating that the workers who found themselves furloughed, and for as long as they have had their labor contracts suspended, have suffered an average 30%-35% decrease in their monthly income from their salaried labor.

Just as more and more government officials are speaking in favor of imposing even more eligibility restrictions on which companies that will qualify for contract suspensions as of next month – this time excluding all enterprises that are open – a new survey shows how important the measure has been in saving jobs.

The survey by the National Institute of Labor and Human Resources illustrates that the contract suspension measure, with the simultaneous payment of the special-purpose compensation to salary workers and several other categories of workers, has contributed considerably toward avoiding mass layoffs from enterprises on the grounds of the long periods of time they could not operate for – either by state order or due to the major decline in their turnover.

The survey also shows that over the last 12 months (March 2020 to February 2021), economic activity was drastically reduced for at least seven months and in two separate periods – first from March to April 2020 and partly in May 2020 – and then since the start of the second lockdown in November 2020.

The intermediary five-month period, from June to October 2020, offered a degree of respite, under certain conditions and strict health restrictions for the economy, especially in the Greek economy’s crucial sectors of commerce, food service and tourism. Although this improved the picture of the economy and employment, it has had a negative effect on labor relations and workers’ incomes.

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