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NEWS

Resolving the issue of laying off workers through so-called mailbox companies

 

The  Government discussed resolving the issue of laying off workers through so-called mailbox companies with regard to the decision of the Committee on Labour, the Family, Social Policy and Disability of the National Assembly.

 

At  its  18th  urgent  session on 8 July 2010, the Committee on Labour, the Family, Social Policy and Disability of the National Assembly discussed the laying  off  of  employees  through  mailbox companies and decided that the Government   should   examine  whether  the  solutions  of  the  Employment Relationship  Act  and  the  Company  Act  are  appropriate,  and draw up a proposal  for  a  solution  in three months which would provide appropriate protection for employees and their rights.

On  the  proposal of the Ministry of Labour, Family and Social Affairs, the
issue  was  then  discussed at a session of the Economic and Social Council
(ESC), which made four decisions and called on the Government to:

  • establish a working group within the Ministry which will address the
    issue  of  mailbox companies from the point of view of the Employment
    Relationship Act, draft views and proposals and inform the ESC
  • authorise other departments pertaining to the issue, particularly the  Ministry  of  the  Economy  and  the  Ministry of Justice, to draw up
    appropriate solutions relating to their areas of work.

The  Government  has expended great effort to resolve the issue of amending Article  73  of the Employment Relationship Act in a way acceptable both to unions  and  representative  of  employers.  The  compromise  solution  was proposed on the basis of six meetings of the working group between July and October 2010, when the proposal was coordinated.

 

The  goal  of  the  amended  version  of  Article  73 is to restrict to the greatest  extent  possible  abuses  which have spread as a result of taking advantage  of  the  possibility  of  the  employer  changing  (the problems originated  because  employees  are  transferred  from  parent companies to mailbox companies which have no assets, but are then liquidated and workers left without pay or compensation, as the companies have insufficient assets to  pay  off  their liabilities in accordance with the Employment Relations Act).  The  amendments of paragraphs three and five, and the inclusion of a new,  sixth paragraph should provide wider and more effective protection of employees’ rights.

 

So  that workers would not be made redundant via mailbox companies, or that employers  would  not  be converted into mailbox companies, the legislation already  includes  some  solutions,  as  those  companies  which  do not do business  or  use  fictitious  business  addresses  can  be  struck off the companies register, as per the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act.

The Government will propose an inspection council to organise and carry out wide-ranging  inspections  of  so-called mailbox companies in those sectors which  have  been particularly affected, within the scope of its inspection activities.

 

Public Relations Office