Cabinet approves welfare deal for OKD employees

The Czech government has agreed special social welfare payments for soon to be laid-off employees of the OKD mining company, which was declared bankrupt earlier this week.

Photo: archive of OKD

Miners and other staff are to receive CZK 7,000 to CZK 8,000 a month for a period of three months to five years, depending on their age and the number of years they were at OKD.

The minister of finance, Andrej Babiš, had expressed reservations over the Ministry of Industry and Trade scheme. However, the cabinet gave its unanimous backing to the plan in a vote on Wednesday.

Prime Minister Bohuslav Sobotka described the move as an important step in helping people in the North Moravia and Silesia region, which suffers from relatively high unemployment.

Mr. Babiš said he was opposed on principal to the state providing assistance to a private company, pointing out that workers in the glass and textile industries had not received such special treatment when they lost their jobs.

The finance minister said, however, that he had voted for the miners’ welfare plan as an exceptional case in view of the insolvency and specific nature of OKD, which has around 10,000 employees and is some CZK 17 billion in debt.

Industry and Trade Minister Jan Mládek said the payments would be conditional on the recipients proving that they were actively seeking new employment; this demonstrates the state’s interest in them bouncing back from the closure of OKD’s mines, he said.

Mr. Mládek added that imminent closure of OKD was an acute problem in one part of the country and the cabinet had a duty to help the region and the workers who were being made redundant.

The Ministry of Industry and Trade had first proposed that employees at OKD’s dozens of suppliers also receive the special welfare payments. However, that idea was scotched.

Opposition leaders have criticised the creation of special legislation to help employees at a single company, with TOP 09 chairman Miroslav Kalousek saying that it amounted to discrimination against all other workers.

The president of the Czech Confederation of Industry, Jaroslav Hanák, told Czech Television that while there were at present 12,000 free jobs in the Moravian Silesian Region, the structure of requalification on offer may not meet the wishes of miners and other OKD staff.

While there are 1,000 places in the automobile industry, it is unclear whether the OKD workers will apply for them, take early retirement or pursue other opportunities, Mr. Hanák said.

Meanwhile, municipalities in the area have expressed fears over their budgets, which OKD’s collapse will hit hard. Karviná, which is home to 90 percent of the firm’s staff, is looking at a fall-off of tens of millions of crowns in taxes. OKD had also contributed to arts and sports in the area.