SA withdraw support for partial-benefits abuse

16. 04, 2020

The employers’ association, SA, has withdrawn its advice to companies stating that they can shift notice period salaries onto public funds made for protecting jobs.SA advised companies to put employees on partial benefits and then lay them off, shifting up to 75% of notice period salaries onto the unemployment insurance.This was in direct contradiction with the stated aims of the partial benefits system, which is to maintain employment relationships and keep people in their jobs.The case arose on Monday, April 13, when Vísir.is reported that Securitas was letting public funds pay their layoff costs in this way. The report revealed that SA had given advice to that effect.In a coordination meeting of labour and government with SA, and in public statements by the social affairs minister and the Directorate of Labour, made yesterday, it was made clear that this was certainly not the intended use of partial benefits. They were established to fund continued employment, not to ease layoffs. SA have now asked businesses in their ranks to “arrange layoffs of part-time workers in accordance with the interpretation of the Directorate of Labour.”The explanatory statement accompanying the social affairs minister’s legislative proposal on partial benefits states: “The aim of the legislative proposal is to encourage employers to maintain employment relations with their workers”. It is clear that the interpretation of SA and employers of the law contravened its explicitly stated purpose.This is not the first case of benefits fraud in the partial benefits system. There have been cases of companies reducing employees’ work ratio to 25%, shifting most of the labour costs onto the Directorate of Labour, but keeping the employees working up to 100%.The case draws attention to the care that must be taken now, when the government takes drastic action to support the labour market.”This case is about using public money in the way intended, in this case to protect jobs, not for its opposite, to fund layoffs. We are surely all in agreement that public money should not be used in untoward ways,” says Sólveig Anna Jónsdóttir, head of Efling.Efling reminds its members that if they are laid off after having agreed to reduced work ratios and partial benefits from the Directorate of Labour, the layoff cancels such an agreement. The employer is then liable for the same wages during the notice period as the employee had before the reduced work was agreed on.