The Slovenia Times

Towards a More Flexible Labour Market


The planned changes to the employment relationship act aim at encouraging employers to hire in order to improve the flexibility of the labour market while keeping or even upgrading the level of protection of employees, according to him.

"The goal is to find a middle line which would pursue both objectives," Vizjak says, adding that it is important that the legislation does not encourage workers with secure jobs to abuse this and decrease their performance or make them not work at all.

Regarding measures to reduce the unemployment rate, the minister says that unemployment is a consequence of the state of the economy. "This is not an event that happens on its own. An economic crisis and lower economic activity result in unemployment."

Measures will focus on boosting economic activity by disburdening the economy - both in terms of red tape and taxes - encouraging private investments with tax breaks and adjusting active employment policies.

Instruments which help the active ones find a job will be given advantage. All those who find it hard to get a regular job will meanwhile be included in public works and social entrepreneurship programmes, according to Vizjak.

The main problem of the Employment Service is the amount of time between the registration and the moment the institution starts dealing with the case. In the meantime, the unemployed receive certain transfers from the state, he notes.

"Our goal is that those registered as unemployed start to work as soon as possible, at the latest after two months, if there is a job for them," Vizjak says, adding that he expected from the management of the Employment Service to make the institution more efficient.

The minister believes that the number of unemployed persons will stop growing, as it already doubled between 2008 and 2011. "The influx will not be as big in the coming years, at least we hope it will not."

This means that the Employment Service will have more time to deal with new job seekers. Red tape at the service also has to be reduced, as numerous reports have to be made for each job seeker, which does not make sense, Vizjak adds.

As the custodian of millions of euros dedicated to welfare and labour policies, the minister argues that employers should be encouraged to hire and that the unemployed should be incentivised to take a job instead of staying at home.

Undeclared employment and work is another problem which requires different approaches. One of the approaches is to secure more and better jobs, because only this leads to legal forms of employment.

Companies meanwhile have to be disburdened both in terms of red tape and taxes, and oversight has to be tightened, according to Vizjak. He notes that consumers are partly to blame for the scope of the grey economy in Slovenia, which according to some estimates stands at EUR 2bn a year.

Regarding a future pension reform, the minister says that the goal is to extend the active age and raise the actual retirement to 40 years of service for men and 38 for women. Early retirements are a problem as well, he adds.

Vizjak believes that the introduction of a cap on social security contributions of employers is a good measure to relieve the burden on the "productive workforce in the country". But he also understands criticisms against the measure.

Individual indicative pension accounts, one of the ideas of the new government, are meanwhile only a means of making the pension system more transparent, they are not a transition away from the principle of solidarity, he says.


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