Across the board tariff cuts to all sectors. 25% - largest ever single cut in Australian history to that point.
Australian Government recurrent funding was extended to government schools in 1974. In the same year special funding programs (targeted programs) were introduced for disadvantaged schools [this included disadvantaged Catholic schools, which had previously been excluded by sectarian policies], special education, teacher professional development and innovation. With the establishment of the Schools Commission (1973 to 1988), payments to the states, providing general recurrent grants, capital grants and grants for targeted programs, were authorised on a triennial basis by means of annual States Grants (Schools Assistance) Acts'. In the years following the dismissal of the Whitlam govt., the Fraser govt. reduced spending and reintroduced funding for wealthier private schools, and subsequent governments also altered the state-federal funding ratio for state and non-state schools. However the general model established by Whitlam remained in place until 2009.
Laming (2001): 'Tuition fees were abolished in all universities, CAEs, technical colleges and teachers' colleges in the belief that they were a major obstacle to the entry of prospective students from lower socio-economic backgrounds. At the same time, the Tertiary Education Assistance Scheme was established to pay a stringently means-tested living allowance to all eligible tertiary students, replacing the merit based, but also means-tested, Commonwealth Scholarship Scheme which had been paid to some 17 % of students.'
Introduction of Supporting Mothers' Benefit; Double Orphans' Pension (payable to legal guardian of orphaned children); Handicapped Children's Allowance (for carers of children with a disability); Homeless Persons' Assistance.
In 1973 the govt. abolished means test for pensioners aged over 75.
As part of budgetary measures, the level of existing pensions and benefits were progressively raised by upgrading them to 25% of the average weekly earnings. This was a substantial increase for all payments.
Regional Employment Development (RED) Scheme announced. Initially $ 2 million per month to be spent on improving employment opportunities in areas of high unemployment, with provision for additional amounts up to total $20 million per month.
Authority responsible for administration of the Trade Practices Act, with standing to take action in the Federal Court on a wide range of anti-competitive practices.
This piece of legislation, combined with the 1973 tariff cuts, were a major shift in Australian competition policy aimed at beginning to dismantle the protective state. Implementation of major reform to Australian trade practices. Of note vis competition law: Section 45 prohibited contracts, understandings or arrangements in 'restraint of trade or commerce' where they had 'a significant effect on competitions'. Price fixing provisions were prohibited, except where impact was 'slight'. Price discrimination was prohibited. It also introduced a number of restrictions on 'monopolisation' of markets.
Creation of Medibank, Australia's first national health insurance scheme.
Minimum wage for women to be introduced in 3 stages beginning by 85 % of male minimum wage and reaching equality by June 30, 1975.
Public company tax rates cut from 47.5 to 45.0 %.
In the 1975 National Wage Case, before the Full Bench of the Arbitration Commission, the Commission embarked on an ambitious model that changed the nature of wage fixing after the militant union upsurge of 1969-1973. The Arbitration attempted to prescribe a 'coherent and comprehensive set of principles which included prima facie full indexation and strict conditions on other wage increases' (Hancock & Isaac 1992, p.17). Under the new system wages would rise in line with inflation, adjusted quarterly, and trade unions were free to embark on additional increases through the Commission on the basis of changes to productivity and work value, as well as ''catch up' claims. At the 1975 Congress of the Australian Trades Union Council (peak body of trade unions) wage indexation was retrospectively endorsed by the ACTU. Note: the wage indexation agreement did not apply to over award agreements, and therefore agreements that had been negotiated at a higher rate before the wage indexation precedent over time tended to decline as inflation rose.
Abolition of means test for pensioners aged over 70.
Introduction of a tribunal as an independent source of redress for grievances with social security system.
Subsidies to employers under the National Apprenticeship Assistance Scheme increased (e.g. from $260-$454 to $ 1200 for first-year apprentices under 18 years).
The Minister for Employment and Industrial Relations announced the introduction of the Relocation Assistance Scheme. The Scheme provides for individual grants of up to $ 1 900 to allow for the relocation of unemployed persons and their families to areas where suitable employment/training is available. The Scheme was to begin operation on 1st October 1976 and will be administered by the CES.
Review of Medibank following the Whitlam dismissal and election of Fraser govt. saw significant changes to Medibank over a number of years. Medibank Mark II included a 2.5% levy on income, with an option of taking out private insurance instead of paying the levy. Other changes included the federal government declaring Whitlam-era hospital agreements with the states invalid as well as subsequent new hospital agreements that substantially reduced federal funding for the programme.
Review of Medibank following the Whitlam dismissal and election of Fraser govt. saw significant changes to Medibank over a number of years. Medibank Mark II included a 2.5% levy on income.
Review of Medibank following the Whitlam dismissal and election of Fraser govt. saw significant changes to Medibank over a number of years. Medibank Mark II included a 2.5% levy on income, with an option of taking out private insurance instead of paying the levy.
Unemployment Benefit becomes subject to income taxation.
According to Ey (2012, Appendix B) in 1976, 'Definition of 'suitable work' modified: single people over the age of 18 could be expected to change their locality to find a job, a work test could be failed by a person on grounds of unacceptable dress or appearance and skilled workers who had not found an appropriate job within six weeks would be required to accept any unskilled job even if that involved a reduction in wages or status. Those who became unemployed voluntarily had to wait six weeks before eligible for benefit.  School leavers ineligible for UB until commencement of new school year.  Fortnightly income statements to be lodged in person with Commonwealth Employment Service (CES).'
New claims for UB paid two weeks in arrears. New administrative guidelines for proof of identification for UB.  Legislation amended to preclude payment of benefit to school-leavers for six weeks after they ceased full‑time secondary education.  Alterations made regarding the seven-day waiting period for UB. At the Director-Genera’s discretion, waiting period could begin from date of applicant's unemployment or from seven days prior to application, whichever was the later.  UB recipients required to notify Department of Social Security (DSS) immediately upon starting work. Previously DSS had to be notified within seven days of receiving income, not when commencing employment.' (Ey 2012, Appendix B)
Replacement of the pensions means test with an income test. Overall, this resulted in an increase of the number of people eligible for some pensions.
Payments came to be automatically adjusted twice a year in line with the Consumer Price Index. Previously, payments had been adjusted irregularly on an ad hoc basis. This was briefly reduced to an annual increase between 1978 and 1979.
Introduction of payments to low income families who would not otherwise be eligible for pensions or other payments. Aim to encourage families off of pensions and other benefits by ensuring sufficient income from employment.
Introduction of personal income tax indexation from 1st July 1976.
Across the board tariff cuts to all sectors.
they made a number of legislative changes that were aimed at curbing the capacity of unions to negotiate wage increases outside of the Arbitration system, through industrial action, by 'strengthen[ing] legal sanctions and enforcement mechanisms'. The most significant of these was the 1977 trade practices act amendment which prohibited secondary boycotts and strengthened sanctions.
Extension of supporting mothers' benefit to supporting fathers; assumption of financial responsibility for sole parents in the first six months of eligibility (this latter measure did not come into effect until 1980).
Extension of carers' payment to 'the needy and the marginally handicapped'.
Abolition of compulsion for Medibank to insure, that is, effectively ending the universal model of the original Whitlam legislation
Medibank medical benefits reduced to 75 % of the Schedule fee.
Bulk billing (free medical care) restricted only to those on a Health Benefits card (i.e. those receiving social security benefits) or those deemed by the doctor to be 'socially disadvantaged'.
Introduction of a new simplified rate scale of personal income tax incorporating a three-step scale of effective marginal rates of 32, 46 and 60 % applying to income over $ 3 750, between S 16 000 and S 32 000, and over S 32 000 respectively. The new system will apply from 1 February 1978 for pay-as-you earn and assessment purposes.
The introduction of the Treasury Note (T-Note) tender system was introduced; the price for these securities became market-determined for each issue.
Medibank benefits were limited to the difference between $20 and the scheduled fee.
Beneficiaries expected to accept casual, short-term temporary or part-time work provided it paid the appropriate award or going rate. UB recipients to be interviewed at least once every three months. Payment of UB not made to a person whose unemployment was due to their involvement in industrial action or the involvement of a union of which they were a member. The spouse of such a person could qualify for benefit at the single rate plus additional benefits for children. This new provision applied only while industrial action was taking place. Further tightening of procedures for establishing identity of UB applicants. A beneficiary who refused a job where travelling expenses to and from job was less than ten % of wages paid considered to have failed work test. Previously maximum was five %. Those who refused an offer of suitable work, or who had become voluntarily unemployed without good reason, had benefits postponed for a minimum of six weeks and a maximum of 12 weeks. Previously postponement period had been at Director-General's discretion.' (Ey 2012, Appendix B)
In 1980 the first fees for overseas students were introduced, albeit at subsidised rates. In 1986 universities were further empowered to charge overseas students with the full cost of tuition.
Interest rate ceilings on trading bank and savings bank deposits were dismantled, although some limits remained on fixed deposits.
Income test liberalised. Income above $6 per week to $50 per week reduced UB by 50 cents in the dollar ($3 to $40 for those who were single and aged 16 or 17 years). Only income above $50 per week reduced benefit by $1 for each $1 of income.' (Ey 2012, Appendix B)
"An income tax rebate of 32 % was introduced for those with private health insurance." (Biggs 2004)
"Access to free hospital and medical care was restricted to pensioners with health care cards, sickness beneficiaries, and those meeting stringent means tests." (Biggs 2004)
Federal Death and Gift taxes abolished; the state equivalent of these taxes had been under attrition since 1977. The Asprey tax review of 1975 had recommended that the Federal government take over and centralise the administration of these taxes, however instead they were abolished.
Savings banks allowed to accept deposits of p to $100,000 from trading or profit-making banks; reduction of minimum terms on trading banks for fixed deposits; introduction of Treasury Bond (t-bond) tender system, again making these market-determined. This last measure in effect separated govt. monetary policy from debt management. (Movement to a tender system for marketing Treasury notes and bonds, replacing the previous systems which set yields but not the volume of sales (December 1979 for Treasury notes and July 1982 for bonds)).
Income tests for all unemployment and sickness benefits (SB) standardised. Benefits reduced by 50 cents for each $1 of income above a 'free area' of $10 per week. Benefits reduced by $1 per week for each $1 of income above $60 a week.' (Ey 2012, Appendix B) In the coming years this was adjusted regularly to reflect inflation and wage rate growth (etc.)
The establishment of a Community Employment Programme at a cost of $300 million in 1983-1984 with the objective of creating in a full year 70 000 full-time jobs of an average duration of six months.
Floating of the Australian dollar. 'The floating of the Australian dollar allowed trade liberalisation to be pursued more as a microeconomic (efficiency) objective rather than as a macroeconomic objective as had been the case with the earlier 25 % tariff cut.' (Emmery 1999).
In 1983 the govt. announced that it would allow the entry of more banks into the market, including foreign banks. In 1985 the govt. issued sixteen licences to foreign banks to operate in Australia, and by the last quarter of that year the first foreign banks began to operate in Australia.
Following the defeat of Fraser govt. and election of Hawke ALP govt., there was a return to the original Medibank/universal health insurance model of the Whitlam era, as part of the Accord Mk I social wage agreement (see IR/Accord Mk I entry). Funding arrangements differed and Medibank was rebranded as Medicare, but essential model was a return to original Medibank proposal. Measures included: Bulk billing (effectively free healthcare) restored; Rebate at 85 %, maximum gap $10; Free public hospital;  Medicare Levy set at 1 % of taxable income
The Prices and Income Accord was a wage fixing agreement that had been negotiated between the Australian Council of Trade Unions and the federal Australian Labour Party under the leadership of Bob Hawke and Paul Keating. Employers were not party to the first Accord agreement. Justified as a means of combatting stagflation, the Accord was an agreement for unions to restrict wage demands if the govt. agreed to raise wages in line with inflation. The Accord allowed for the Arbitration Commission to set wages in line with inflation. It also introduced the concept of a 'social wage' into official govt. policy, which included the provision of services such as public health insurance (Medicare) and govt. education spending. The Accord stated: 'The principles of wage fixation should be such as to provide wage justice to employees whilst seeking to ensure that wage increases do not give added impetus to inflation or unemployment. The maintenance of real wages is agreed to be a key objective. It is recognised that in a period of economic crisis as now applying this will be an objective over time.' (cited in Hancock and Isaac 1992 p. 219). It is important to note that while wage fixing was a central issue, the Accord also covered non-wage incomes, taxation, social security, education and investment policy. According to Schwarz (2000), the Accord was a means of bringing wage setting more under the control of the govt. (thus reducing the 'informal' welfare state set by Arbitration and lowering wages), while at the same time expanding the formal welfare state. Essentially, a move towards a corporatist model. The Accord was renewed, with adjustments, regularly throughout the ALP's terms in government, until the ALP was defeated by the Liberal-National Coalition led by John Howard in 1996. Howard abandoned the Accord. A total of 7 Accords were agreed on and implemented between 1981 and 1991;
Shortly after the Accord was instituted, the High Court ruled that the Arbitration Commission had extensive wage fixing powers, enabling it to fully enact the relevant provisions of the Accord. This was important, because wage indexation had been abandoned by the Arbitration Court in 1981. According to Frazer (2002), 'The High Court's approach in the Social Welfare Union case (June 1983) and subsequent decisions allowed this to occur. By treating the meaning of the words 'industrial dispute' in section 51(xxxv) of the Constitution as largely a question of fact and ordinary meaning, the Court allowed the Commission unprecedented discretion to determine which matters it could include in an award, while also expanding the range of workers who could be covered by the federal arbitration system.'
Significant alteration of personal income tax scales, as part of the Hawke-Keating govt.'s Accord commitments to reduce the taxation burden on low and middle income earners. The changes were the first major structural change to income thresholds and taxation rates since the early 1970s.
Reintroduction of asset testing in pension eligibility.
The broadening of the foreign income tax base, in part driven by the opening of the Australian economy, was achieved initially by making most foreign income taxable with a credit for foreign tax paid. However, to reduce compliance costs and reflecting competitiveness concerns, in 1990 dividends from non-portfolio interests in foreign companies and active business profits of branches in comparable tax jurisdictions were made exempt from company tax. Further, to ensure residents could not defer tax by accumulating passive income offshore, attribution regimes (in particular, controlled foreign company and foreign investment fund regimes) were [also] introduced...' (Harmer et. al. 2010).
Fringe benefits and capital gains became subject to tax.
Fringe benefits and capital gains became subject to tax. However, to overcome opposition to this policy, the Hawke/Keating govt. introduced concessions, so that rather than the entire profit of the purchase/resale of share or property, it taxed only profits over the rate of inflation. In effect this opened the way to the substantial practice of negative gearing amongst property owners with a mortgage.
Maximum rebate gap increased to $20; in hospital rebate set at 75 %, with private health insurance to cover remaining 25 %.
UB recipients required to lodge income statements personally. Registration with the CES compulsory. UB recipients over 55 years of age in receipt of benefits for more than one year required to lodge income statements every 12 weeks instead of fortnightly' (Ey 2012, Appendix B)
As a result of a 1984 review into child maintenance, a number of changes were made to the child support and maintenance systems. In early 1987, the tax office took over collecting child maintenance payments from non-custodial parents, which was put into effect from 1988. In addition, a series of measures were enacted, largely aimed at rationalising the system and relieving the burden on the custodial parent. The Child Support Act 1988 made child and spousal maintenance a debt due to the Commonwealth (rather than the custodial parent) and removed the requirement for the custodial parent to bring maintenance legal action in order to receive child support social security benefits. In 1989 further reforms were introduced that allowed for administrative assessment of non-custodial parents' liability (although this only applied to children born after 1989 or whose parents had separated after 1989; the previous cumbersome system requiring a court order remained in place for all others).
Commonwealth Govt. abolished the Authority, which was the operator of Belconnen Mall Shopping Complex. Announced in Commonwealth Gazette in March 1986.
In 1987 the High Court ruled in Re Ranger Uranium Mines Pty Ltd 163 CLR 656 that the Australian Industrial Relations (Arbitration) Commission could adjudicate in matters of unfair dismissal, where previously it could do so only if both parties were consenting. Prior to this judgement unfair dismissal had been principally a matter of the states, although it was sometimes written into Awards and Bargaining agreements.
New wage system, allowing for two separate categories of wage increases. A "first-tier" $10 flat rate increase (2 % of average weekly earnings) was granted in March and an additional $6 was given in February 1988. These adjustments were not tied to the cost of living. Additional "second tier" wage rises, up to a maximum of 4 %, were linked to productivity performance.
Waiting period for education leavers under 21 years of age, without dependants, increased from 6 to 13 weeks. UB recipients aged 18 to 20 years reviewed after 12 months on benefit. An activity test was substituted for the work test after one year on benefit.' (Ey 2012, Appendix B)
Waiting period for voluntary job leavers, those dismissed for misconduct and those who failed the work test standardised and made cumulative. Waiting period increased by two weeks for each occurrence (up to 12 weeks for six occurrences over a three-year period).  RA no longer income tested separately. ... A work intention questionnaire introduced to check on adequacy of job search activities of UB recipients.' Ey 2012, Appendix B
Those in receipt of UB for over two years to be interviewed by DSS and CES to verify entitlements, ensure that rights and obligations were understood and to provide information about community, employment and training services.' (Ey 2012, Appendix B)
Introduction of income test to the previously universal Family Allowances, which was considered both radical and controversial. In the same year the govt. introduced the Family Allowance Supplement for low income working families.
Introduction of income test to the previously universal Family Allowances, which was considered both radical and controversial. In the same year the govt. introduced the Family Allowance Supplement for low income working families, which in 1988 became assessed on the basis of annual income from the previous financial year (rather than income from the last four weeks).
Introduction of income test to the previously universal Family Allowances, which was considered both radical and controversial. In the he same year the govt. introduced the Family Allowance Supplement for low income working families, which in 1988 became assessed on the basis of annual income from the previous financial year (rather than income from the last four weeks).
Act enabling the full privatisation of AMDEL.
Ship-building yards privatised and came under control of private company Tenix Defence. Sale value AU$87m.
Until 1987, Australia maintained a classical company taxation system, under which profits were taxed at the company rate and at personal rates when distributed. In 1987 an imputation system was introduced. Under this system, resident shareholders receive a credit for tax paid at the company level, thereby eliminating double taxation of dividends. Where the resident shareholder's marginal tax rate is below the company tax rate, the excess credit can be used to offset tax payable on other income (for example, wages and salary). Full refundability for most resident shareholders as introduced to the Australian imputation system in 2000. Under the imputation system, Australia's company income tax system operates as a withholding tax on the income that Australian residents earn through Australian resident companies, and as a final tax on (primarily Australian source) income earned by non-residents through an Australian resident company or permanent establishment in Australia'. (Hamer et. al. 2010).
Job Search Allowance (JSA) replaced UB for those aged 16 and 17 years. JSA recipients subject to the UB work test and required to pass an activity test after six months on JSA. Work test involved counselling by CES and offer of suitable training or work. JSA recipients required to have payment continuation forms endorsed fortnightly by CES.' (Ey 2012, Appendix B)
Emmery 1999: ' In 1988, the Government introduced an across-the-board program to phase down all tariffs (except for PMV [passenger motor vehicles] and for TCF [textiles, clothing & footwear] which had their own tariff reduction programs) to either 10 % or 15 % by 1992. '
The White Paper also introduced significant changes in funding procedures: an analysis of the relative funding of institutions and an adjustment package to remove any inequities a single operating grant to replace the existing general recurrent, equipment and minor works and special research grants additional operating grants for enrolment growth to be allocated on a competitive basis, with regard to institutional capacities in key disciplines of national priority, as well as relative rates of student participation and demand in States and regions a shift of research funds from general infrastructure funding to competitive research schemes introduction of the 'education profile' process whereby institutions develop a profile which defines their broad mission and responsibilities, with specified areas of activities and goals. The profile is negotiated with the Commonwealth and becomes the basis on which it receives funding."
Abolition of free education and establishment of a loans scheme. Jackson (2003): 'HECS was established by the Higher Education Funding Act 1988. Under section 38, financial assistance is granted to higher education institutions on the condition that institutions comply with the requirements of the HECS. The scheme requires students to make a financial contribution towards the cost of their course. Students can pay up-front and receive a discount, or they can elect to have the Commonwealth pay the contribution for them and repay the debt through the tax system as their income reaches certain levels.' In addition, 'from 1989 institutions could charge regulated fees for certain types of postgraduate courses. This market was progressively deregulated so that by 1994 universities were able to charge fees for most postgraduate courses and to determine the level of fees they charged.' This measure was imposed on the states through the constitutional requirement re funding requirements outlined in 'Notes on education...'
Consolidated risk-weighted capital requirements introduced for banks, in line with the Bank for International Settlements proposals. Introduced by Reserve Bank of Australia.
New legislation passed the Parliament under which the Australian Conciliation and Arbitration Commission should be replaced by the Industrial Relations Commission. Further changes include the provision for certified agreements between unions and employers, which can be outside the wage fixing principles provided the Commission does not find the agreement to the contrary to the public interest.
Schwarz (2000, p.114): 'The 1988 Industrial Relations Act formalized Accord Mark III, permitting enterprise bargains with the approval of the arbitration court. Enterprise bargains were not allowed to violate minimum standards, including the basic wage.' This was however a partial introduction and did not constitute a shift away from the dominance of the Arbitration system. Initially this was resisted by the Commission, but in 1991 they announced they would consider enterprise bargaining agreements. Note: the Act that established this also replaced the Australian Conciliation and Arbitration Commission with Australian Industrial Relations Commission
Introduction of something like ALMP, but not yet named as such. From Ey, 2012, Appendix B: 'Work effort certificate introduced to be used selectively in conjunction with work intention certificate. UB recipients whose job search efforts were in doubt required to obtain signatures of employers approached about work.'
Privatising of housing services that had overwhelmingly serviced migrants in the post-war period.
First public float of AIDC. 30% of its capital issued as shares for purchase.
Unemployed Benefit recipients required to seek and accept part time work if available, and required to commute to seek or accept work
More substantial move towards ALMP for long term unemployed. 'Newstart Program to improve employment prospects of long-term UB recipients established: up to 40 000 long-term UB recipients to undergo intensive interviews conducted jointly by DSS [Department of Social Security] and CES [Commonwealth Employment Service] staff. Assessment of labour market prospects, referral to training or work opportunities and counselling provided doubling of labour market program places for target group increased CES job placement activity for target group and transition to work incentives provided including payment of an employment entry payment of $100, waiving of UB waiting period where job did not last, and introduction of a broader vocational activity provision allowing for a wider range of activities to be undertaken by target group without loss of benefit.' (Ey 2012, Appendix B)
Regulatory body and disputes resolution service.
Changes in the retirements incomes' policy: easing of transferability of superannuation rights, if a person changes from one fund to another when changing a job.
In 1989 the Hawke ALP govt. introduced a requirement for all employees to have a tax file number. This was done in the interest of 'reducing fraud' and being able to more tightly monitor people's incomes. In addition, it also became used as part of an extensive scheme of 'data matching' that enabled the govt. to monitor the accuracy of information regarding declared income and earnings for recipients of social security benefits.
Beneficiaries expected to accept casual, short-term temporary or part-time work provided it paid the appropriate award or going rate. UB recipients to be interviewed at least once every three months.' (Ey 2012, Appendix B)
Newstart Program extended to recipients aged 55 and over, after 12 months on a payment, largely on a non-compulsory basis. This allows them to access training and employment services through the NS program. Also allowed to participate in Part Time work as an alternative to the requirement to seek FT work.
The domestic airline industry was deregulated, allowing for the entrance of new carriers into the industry and greater competition on routes and fares.
Originally introduced as the Australian Securities Commission in 1991, an independent government body with administrative and enforcement responsibility for the corporations legislation. Recommendation of the Wallis report into securities and finance was to expand its powers and rename it the Australian Securities & Investments Commission (ASIC), an independent Australian government body that acts as corporate regulator. In 2001 the passing of the Corporations Act and the Australian Securities & Investments Commission Act extended ASIC's regulatory powers. ASIC has been the subject of great criticism as it has been involved in several high profile court cases involving major corporate collapses, yet has had very few success stories in these cases.
Act converted CBA from a statutory authority to a public company with conventional share capital, partially owned by the government. (First major privatisation that set in motion privatisation on a large scale).
A set of industry awards setting minimum conditions for employment negotiated at an industry level by one representative union and employer group. Minimum conditions would be as unrestricted as possible, leaving detailed negotiation of working conditions to union and management at the enterprise or work-place level. The AIRC handed down its decision on the Review of the Wage Fixing Principles which included the establishment of a new Enterprise Bargaining Principle. This principle opens up greater scope for work-place bargaining and has the potential to achieve greater flexibility in the wages system in a manner designed to facilitate better productivity performance. The AIRC has also indicated that it supports the basic thrust of the metal industry agreement, but has asked that it be re-submitted under the new principle. The AIRC's decision attracted widespread support from government, employer groups and the trade union movement.
The special benefit is a payment to people who are unable to access other social security payments. Under the Hawke ALP govt. liquid asset tests and an income test (characterised by Carney (2006, p.39) as 'harsh').
Act converted CBA from a statutory authority to a public company with conventional share capital, partially owned by the government. The bank was then privatised through public float in four stages: first float of public shares in 1991; second float in 1993.
Act converted CBA from a statutory authority to a public company with conventional share capital, partially owned by the government. The bank was then privatised through public float in four stages: first float of public shares in 1991; second float in 1993; third float in 1996.
Act converted CBA from a statutory authority to a public company with conventional share capital, partially owned by the government. The bank was then privatised through public float in four stages: first float of public shares in 1991; second float in 1993; third float in 1996; final float in 1996. By July 1996 the govt. had relinquished all its share holdings, making the CBA a fully private entity. On 19 July 1996, the Commonwealth Government sold its 50.4 % shareholding, representing 499.1 million shares, in the Commonwealth Bank of Australia (CBA). The method of sale was a Public Share Offer (PSO), combined with the CBA buying back 100 million shares from the Commonwealth Government. The sale ended over 80 years of Commonwealth Government ownership of the CBA.
The restructuring of the Technical and Further Education College system (which is the major provider of vocational education), to ensure quality and exposure to competition from other providers of training services.
The establishment in 1990 of consistent national standards and accreditation for vocational training by the National Training Board so as to improve labour mobility and the transferability of skills.
Unemployment Benefit replaced by Job Search Allowance (for those aged 16-17 or unemployed for less than 12 months) and Newstart Allowance (for those aged 18+ and unemployed for more than 12 months). 'Recipients to meet requirements of an activity test similar to previous work test but with greater emphasis on vocational training and labour market program participation... JSA activity test also applied to NSA recipients. NSA recipients required to enter into a Newstart Activity Agreement with CES covering activities NSA recipient could be required to undertake, such as job search, vocational training, labour market program participation, paid work experience, job search training or training to reduce labour market disadvantage. UB conditions and rates continued in most cases under new payments. Failure to comply with new activity tests or terms of a Newstart Activity Agreement added to list of situations in which a non-payment period could be imposed. Formal Training Allowance paid by Department of Employment, Education and Training abolished for recipients receiving JSA or NSA.' (Ey 2012, Appendix B)
This piece of legislation allowed for the growing deregulation and privatisation of the telecommunications' industry in Australia. Its measures included the introduction of market competition (in a limited form in 1991, but full market competition in 1997).
This piece of legislation allowed for the growing deregulation and privatisation of the telecommunications' industry in Australia. Its measures laid the basis for the merger of the Australian Telecommunications Corporation and the Overseas Telecommunication Corporation in 1992 (operating at Telecom until 1995, before being renamed as Telstra).
Biggs (2004): Changes in 1991 saw 'Introduction of a co-payment of $2.50 for all direct billed consultations, except concession card holders, and reduction of rebate by $3.50 for non-bulk billing GPs'
Biggs (2004): 'Introduction of a Safety Net (indexed annually) to offset impact on low income earners' (the Medicare Safety Net means that Medicare users with high medical costs have a higher rebate once they have reached a certain payment threshold in a calendar year)
In their 1991 wage case ruling the Commission announced that it would be accepting a more supervisory role, and therefore would refrain from using arbitral powers to resolve disputes over the conduct of bargaining. Such issues would be left to conciliation or to negotiation between the parties. This decision was a decisive shift in the direction of enterprise bargaining (with agreements negotiated between enterprises rather than at an industry level), although it took several years for enterprise bargaining agreements to become widespread. The shift towards enterprise bargaining happened over several years and took several steps before the system was more fully implements.
Special Benefit could only be applied to Australian residents, New Zealand citizens, those who already had a successful refugee status application, and some other limited exceptions. Those who were applying for refugee status and those who were 'illegal entrants' (often with refugee status pending) largely lost access to the Special Benefit, which was applied retrospectively to August 1990. This was later reaffirmed by the Administrative Appeal Tribunal in October 1991.
This piece of legislation allowed for the growing deregulation and privatisation of the telecommunications' industry in Australia. Its measures enabled the immediate privatisation of the AUSSAT, the Australian telecommunication and defence satellite system, which was purchased in full by a private provider Optus in 1991 and also enabled Optus to compete with Telecom in the Australian domestic market.
Emmery 1999: 'This announced the phase down of general tariff rates over four years from 1992 to 1996 from 15 and 10 % to a single rate of five %. In addition, tariffs on PMV would be reduced to 15 % by the year 2000 and for TCF, quotas would be terminated in 1993 and tariffs phased down to a maximum of 25 % by the year 2000. These tariff cuts were to be accompanied by measures to enhance labour market and training programs and to exempt inputs to goods production from wholesale sales tax.'
According to Martin (1999) in 1992, 'Authorised foreign banks were allowed to operate in Australia, but were not allowed to accept retail deposits. Limits on the number of new banks that could be established were removed'.
The Commonwealth Government One Nation package introduced a pooled development fund and offshore banking unit concessionary taxation arrangements.
The business judgement rule was implemented into Corporations Law in 1992, as part of one of the ad hoc arrangements between the states and the federal govt. that existed before 2001. The rule 're-enforce[d] that the duty of care is an objective one, requiring a company officer to exercise the degree of care and diligence that a reasonable person in a like position as the officer of a corporation would exercise in the corporation’s circumstances’ (cited in Legg & Dean 2013, p.405).
Medicare co-payment was very unpopular and fiercely resisted by medical professionals and others, which led to its abolition just three months after it was introduced
Ey 2012, Appendix B: 'independent rate eligibility extended to: those aged 16 or 17 years in substitute care and not receiving state government allowances under 16 year olds aged above minimum school leaving age or over 15 years of age with an exemption from attending school, with an employment history and not living with, or supported, by a parent and those aged 16 and 17 years olds registered with CES as seeking full time work for at least 13 weeks in previous six months.'
Superannuation (self-funded retirement pension through private pension fund) had previously been part of union negotiated awards, and had been gaining popularity in the 1980s. In 1992, the Keating ALP government introduced compulsory contributions by employers into workers' superannuation. The initial contribution rate was 3% and intended to incrementally increase to 9% by July 2002.
Enabled the privatisation of QANTAS, domestic and international air carrier. In Sept 1992 the govt. had enabled Qantas to buy Australian Airlines and thus take over its domestic routes.
Enabled the privatisation of QANTAS, domestic and international air carrier. In Sept 1992 the govt. had enabled Qantas to buy Australian Airlines and thus take over its domestic routes. In March 1993 the govt. allowed British Airways to purchase a 25% stake in Qantas.
Enabled the privatisation of QANTAS, domestic and international air carrier. In Sept 1992 the govt. had enabled Qantas to buy Australian Airlines and thus take over its domestic routes. In March 1993 the govt. allowed British Airways to purchase a 25% stake in Qantas. In 1995-6 the remainder of govt. shares in Qantas were made available for purchase through a share float.
Work test job search reporting requirements for NSA recipients aged 50 to 54 years brought into line with those aged 55 to 64 years. Required to report every 12 weeks instead of fortnightly if not receiving regular private income. If in substantial part-time work, these NSA recipients exempt from usual activity test.  Restrictions on amount of voluntary work permitted under work test changed. Up to six weeks full-time voluntary work per year allowed for those aged under 50 years and unemployed for more than six months. (Previously only part-time voluntary work up to 20 hours per week permitted.) JSA recipients aged 16 and 17 years, receiving JSA for three months or more, able to do full-time voluntary work for six weeks per year, an increase of two weeks. JSA recipients aged 50 to 54 years able to do full-time voluntary work for up to 13 weeks per year, the same provision previously applying to those aged 55 years or older.' (Ey 2012, Appendix B)
Voll 2005, p.538: "'The 1993 Federal provisions made it unlawful to dismiss an employee unless there was a valid reason connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service; and a reason was not valid if the termination was harsh, unjust or unreasonable (Sect. 170DE).
Full privatisation. Previously (1985) SMEC had been brought under the control of a board of directors, which had marked the first shifts towards corporatisation and privatisation.
Public float of the Commonwealth Serum Laboratories
In 1994 the Keating ALP govt. introduced a major reform to the unemployment system in Australia. The Working Nation White Paper was the most extensive reform package to Australian social security since 1949. Around one-third of public assistance programmes for the long term unemployed were moved out of the public service and into for-profit and NfP agencies, subject to a new regulatory body. Central to the arrangement was the government's 'Job Compact', which guaranteed that the long term unemployed who depended on social security payments for more than 18 months would be given access to either employment or training or both. Under the new system of case management all case managers were authorised to recommend the suspension of a client's payment for any noncompliance with the case management process.
In 1994 the Keating ALP govt. introduced a major reform to the unemployment system in Australia. The Working Nation White Paper was the most extensive reform package to Australian social security since 1949. Measures included: introduction of market competition into core unemployment service areas of job counselling and job matching through competitive tender (large public provider was at this stage retained).
According to Ey (2012, Appendix B): 'Deferment periods due to activity test breaches changed to relate to length of time a person unemployed... A two-week deferment of income support applied for the first activity test breach by those unemployed less than 12 months. Subsequent breaches incurred an additional six-week deferment for each breach. Initial deferment period increased from two to four weeks for those unemployed 12 to 18 months and to six weeks for those unemployed over 18 months. Deferment periods could not commence until recipient notified and received two instalments of JSA or NSA after notification.'
In 1994 the Keating ALP govt. introduced a major reform to the unemployment system in Australia. The Working Nation White Paper was the most extensive reform package to Australian social security since 1949. Measures included: individual case management for long-term unemployed clients.
In 1994 the Keating ALP govt. introduced a major reform to the unemployment system in Australia. The Working Nation White Paper was the most extensive reform package to Australian social security since 1949. Measures included: payment for private providers on a fee-for-success basis.
In 1994 the Keating ALP govt. introduced a major reform to the unemployment system in Australia. The Working Nation White Paper was the most extensive reform package to Australian social security since 1949. Measures included: referral of clients to both jobs and subsidised work and training.
Youth Training Allowance replaces Job Seeking Allowance for young people looking for work. YTA and NSA recipients provided with intensive case management, and access to training, education and work experience placements (in the case of NSA recipients, this came into effect 12 months after being on the payment as part of the 'job compact'.
Further requirements that unemployed recipients of social security benefits accept 'suitable' work if offered to them.
Requirements that the unemployed actively look for work, and be able to prove that they have done so.
The AIRC Family Leave Test Case Decision was handed down, allowing employees to have access to their sick leave to care for sick family members, and for employers and employees to agree on more flexible leave arrangements, with provisions later in 1995 for employees to have access to aggregated sick leave and compassionate leave to look after a sick family member.
The Government announced reforms to private health insurance arrangements. The reforms will enable insurers to negotiate contracts with individual doctors and hospitals and to market products, which, for the first time, will cover out-of-pocket medical and hospital costs. Complementing this reform will be the development of casemix-episodic payments, which will allow funds to compare hospitals more easily in terms of price and quality, and reforms to strengthen the hand of the consumer.
Income tests were changed to deal predominantly with the income of the individual. Each member of a couple in receipt of an allowance now has his or her income-test free area of A$ 30 per week and a 50 % withdrawal rate on the next A$ 40 per week. The withdrawal rate, which applies to all further income of the individual until their entitlement is exhausted and then to their spouse’s income before any personal income test is applied, was reduced from 100 % to 70 %. These changes significantly reduced METRs for couples with low earnings potential, although METRs remain high.
Privatisation of approx. 2029 km of gas transmission network, as the Moomba-Sydney Pipeline was sold to East-Australia Pipeline Limited (owned by AGL Ltd. (51 %) and a Canadian-Malaysian consortium (49 %)).
The Australian Postal Corporation Amendment Bill 1994 came into law permitting bulk mail customers to interconnect at designated points with Australia Post's network and receive discounts based on the avoidable costs of so doing; the Bill also introduced interconnection for outgoing international mail on the same basis as for domestic mail.
In essence the development of the National Competition Policy was aimed at centralising competition policy in the federal govt. and moving it away from the states. The National Competition Policy was broad reaching, but had a number of key aspects, including: introducing principle of competitive neutrality into commercial activities involving state-owned enterprises, in order to address competition distortions arising from various policy privileges.
In essence the development of the National Competition Policy was aimed at centralising competition policy in the federal govt. and moving it away from the states. The National Competition Policy was broad reaching, but had a number of key aspects, including: expanding the role of the Trade Practices Commission (renamed the Australian Competition and Consumer Commission).
In essence the development of the National Competition Policy was aimed at centralising competition policy in the federal govt. and moving it away from the states. The National Competition Policy was broad reaching, but had a number of key aspects, including: establishing a new regulatory regime to prevent enterprises that controlled an "essential facility" with natural monopoly characteristics from abusing their market power.
Each partner in a couple in which one partner is unemployed has been entitled (subject to a means test on their joint incomes) to halve their income support: the allowance paid to the spouse of the jobseeker was named the ‘‘Partner Allowance’’. In July 1995, these entitlements were separate; with the income of one spouse below the level at which his or her individual entitlements are exhausted (A$ 248 per week from September 1996) not affecting the entitlement of the other.
After the introduction of the Superannuation Guarantee, the Keating govt. introduced a phased increase in Age Pension eligibility for women. Between 1995 and 2004 the eligibility age for women rose from 60 to 65.
Commonly known as the 'Vanstone' reforms (after Minister for Employment Amanda Vanstone), in 1996 the newly elected Liberal-National Coalition govt. abolished large sections of Working Nation, mostly notably the training aspect. They also increased the private provider share from 30% to nearly 50% of the market, and terminated the role of the independent regulator by marking the govt. itself would become the supreme regulator through the Department of Employment, Education, Training and Youth Affairs. Payments to contractors became results-driven and were allocated increasingly on the basis of job placement rather than services fees. Private contractors now had the role of finding and filling job vacancies, in addition to helping job seekers prepare for work. Amalgamated NSA and JSA into a single payment, the Newstart Allowance.
Across the board tariff cuts to all sectors. ' Whereas the average effective rate of protection in the manufacturing industry had been over 35 % in the late 1960s, by the mid 1990s this had fallen to about 5 %.' (Borland 2001, pp.2-3).
Further measures in this round of changes included 'the introduction of an increased, differential rate of HECS contribution to apply to students undertaking new courses after 1 January 1997 [that is some courses more expensive than others, based on demand as well as earning potential following graduation]... ; lower repayment thresholds for HECS... [which] were applied to all those with an existing HECS debt as well as new students... ' (Jackson 2003)
From 1998 universities were able to charge up front, full fee places for domestic undergraduate students. Jackson (2003): ' This only applied to students above the target number of Commonwealth-funded places, with the number of fee-paying Australian undergraduates being initially limited to 25 % of the total enrolment of Australian undergraduates in any one course.' The introduction of HECS; fees for international students, and domestic upfront fee places meant that they are now more reliant on student contributions than they were even before the Second World War, when they were mostly small, elite institutions.
Under changes in the Workplace Relations Act, the following categories of employees became eligible for unfair dismissal protection: Commonwealth public sector employees; Territory employees; Federal award employees employed by a constitutional corporation; Federal award employees who are waterside workers, maritime employees or flight; crew officers; Victorian employees (as Victoria had ceded its industrial powers to the Commonwealth). However, according to Voll (2005, p.538-9) unfair dismissal continued to not apply to the following categories of employees: '• Employees engaged for a fixed term • Employees engaged for a specific task • Employees on probation for a period, determined in advance, of 3 months or less, or, if more than 3 months the period is deemed reasonable • Casual employees engaged for a short period • Employees engaged under a traineeship • Employees with earnings of more than $60,000 (adjusted annually for inflation)'. Voll (2005, p.539) also argues: 'The essential difference between the provisions of the 1993 Act and the 1996 Act was that the 1993 Act provided for two criteria that could lead to the finding that the dismissal was ‘unfair’ and the employee could succeed by establishing either of the criteria, while the 1996 Act used the ‘a fair go all round’ principle. The two criteria were, firstly, that there had to be a valid reason for the dismissal and that the reason was not valid if the dismissal was harsh, unjust or unreasonable and, secondly, the process of dismissal had to be procedurally fair. The ‘a fair go all round’ principle of the 1996 Act attempted to ensure that in all aspects of the dismissal both the employee and the employer were accorded a ‘fair go’.'
Banks, building societies, credit unions and life companies allowed to provide retirement savings accounts products.
Schwarz (2000): 'The Liberal–National coalition government elected in 1996... tried to pass a bill very similar to the New Zealand Employment Contracts Act. This bill would have permitted unrestrained individual contracting, removed minimum conditions, banned industrial unions, and lowered the minimum size required for registration. However, lacking a majority in the Senate, the coalition was forced to retain an ongoing institutional role for the arbitration court. The court continued to impose minimum conditions (in the form of a ‘no disadvantage’ test [an EBA cannot disadvantage a person as against the conditions in the Award]) on enterprise bargains but lost its ability to do this for individual contracts (i.e. so‐called ‘Australian Workplace Agreements’). These individual contracts replaced the old non‐union enterprise bargains of the 1993 Act and allowed small and medium‐sized businesses to escape existing unions or prevent unionization. So far [in 2000] the new law has not significantly undermined either the award system or the ALP's version of enterprise bargaining.' The Act also limited what could be ruled on in Arbitration to classification of employees; hours of work; rates of pay; piece rates, tallies and bonuses; various forms of leave (e.g. annual and long service leave); public holidays; allowances; penalty rates; redundancy pay; notice of termination; dispute settling procedures; stand down provisions; jury service; pay and conditions. It also expanded the enterprise bargaining system.
In addition to other notes on this Act, it enforced 'voluntary unionism [i.e. attempted to abolish closed shops], provides for non union contracts between employers and workers and for individual contracts (Australian Workplace Agreements).' (Frazer 2000) It also transferred jurisdiction of the Industrial Relations Court to other courts, mainly the Federal Court. In effect it massively curtailed the ability of the Australian Industrial Relations Commission to act as anything other than a court of last resort in industrial disputes..
Following the introduction of market competition into the telecommunications industry throughout the 1990s, the govt. owned telecommunications company Telstra was privatised in three stages through a public float. The first sale (referred to as 'T1') occurred in 1997; T2 occurred in 1999; T3 in 2012. The govt. retained 17% of Telstra shares through a 'Future Fund' that provided superannuation and pensions to public servants; between 2009 and 2011 the Future Fund desposed of all of its Telstra shares, effectively completing the privatisation.
Privatisation of Commonwealth superannuation management fund.
Privatisation of the govt. service that provided lenders' mortgage insurance, which allowed home buyers to purchase homes with a smaller mortgage deposit. Justified on the basis that it had a competitive advantage b/c of govt. guarantees, which distorted the market and it was assessed that there was little public benefit in maintaining a state-run mortgage-insurance company.
Howard govt. announced in 1996 budget measures the intention to privatise DASFLEET, which had been preceded by a 1996 Department of Finance review of DASFLEET’s financing and operations. Sale took effect the following year.
Act allowed for the quasi-privatisation of Australian airports. The airports continued to be owned by the Commonwealth of Australia, but were leased for extended periods of time (making them effectively under private ownership) - for example, the Brisbane Airport was leased for a period of 50 years with an option of a 49 years extension. The privatisation of these airports occurred in several waves: in May 1997 the Brisbane, Melbourne and Perth airports were privatised.
Act allowed for the quasi-privatisation of Australian airports. The airports continued to be owned by the Commonwealth of Australia, but were leased for extended periods of time (making them effectively under private ownership) - for example, the Brisbane Airport was leased for a period of 50 years with an option of a 49 years extension. The privatisation of these airports occurred in several waves: in January 1997 the Avalon (Geelong) airport was privatised.
Act allowed for the quasi-privatisation of Australian airports. The airports continued to be owned by the Commonwealth of Australia, but were leased for extended periods of time (making them effectively under private ownership) - for example, the Brisbane Airport was leased for a period of 50 years with an option of a 49 years extension. The privatisation of these airports occurred in several waves: Essendon Airport in September 2001 .
Act allowed for the quasi-privatisation of Australian airports. The airports continued to be owned by the Commonwealth of Australia, but were leased for extended periods of time (making them effectively under private ownership) - for example, the Brisbane Airport was leased for a period of 50 years with an option of a 49 years extension. The privatisation of these airports occurred in several waves: in April 1998 airports were privatised in Adelaide, Alice Springs, Canberra, Coolangatta, Darwin, Hobart, Launceston, Mt Isa, Parafield, Tennant Creek, Townsville, Archerfield, Jandakot and Moorabbin.
Act allowed for the quasi-privatisation of Australian airports. The airports continued to be owned by the Commonwealth of Australia, but were leased for extended periods of time (making them effectively under private ownership) - for example, the Brisbane Airport was leased for a period of 50 years with an option of a 49 years extension.
Deferment period as penalty for administrative breaches replaced by rate reduction period, which reduced payment by 16 % for 13 weeks. Activity test breaches could be imposed for failure to attend an interview or complete a labour market program, and for non-declaration of income from remunerative work.' (Ey 2012, Appendix B)
Initially 'trialled' in 1997, in 1998 'Work for the Dole' was introduced requiring 18-24 year olds who had been unemployed for six months or longer to undertake compulsory work experience. In April 1999, this was extended to the unemployed aged 17-18 who had left school and were unemployed for more than 3 months. By 2003 mutual obligation requirements dictated that anyone under 39 yo on unemployment benefits for more than six months were required to participate in approx. 15 hrs. activity per six months unemployed. According to Fowkes (2011) the principle form of activity for such job seekers was work for the dole. In 2005 it was extended to Indigenous communities and in July 2006 to disability payment recipients with a partial capacity to work and sole parents with children aged eight years or over.
The telecommunications market was fully liberalised in July 1997. In line with the requirements of the NCP, regulation was separated from the commercial activities of Telstra, the incumbent telecommunications operator.
Announcement of a tariff freeze from 2000 until 2005. This represented 'a retreat from earlier programs of Australian commitments to programs of steady reductions in tariffs'. This 'pragmatic' approach was a shift away from the commitments made as part of APEC commitments (Findlay and Chunlai, 2000). The government instead sought to prepare industries from the adjustment to lower tariff levels through a provision of substantial performance-based incentives, in which govt. assistance would be provided for companies that committed to technological innovation. In 2005 there was a 5% reduction for PMV tariffs, before another was freeze and the extensions assistance program to the period 2005-2010. Tapered tariff reductions resumes from 2010.
Greater scope to customise wages and employment conditions for apprentices and trainees to suit the enterprise's needs and to suit different types of training. Approving authorities were established to implement flexible minimum wages in agreements.
Single rate of pension benchmarked to 25% of MTAWE, legislated by Howard Liberal govt. - govt. policy from 1983 to 1996 - was to adjust single pension rates to MTAWE in addition to automatic indexation adjustments linked to CPI. Although the rate of payment was raised several times during the Hawke & Keating ALP governments, it was not automatic.
In order to encourage people to work longer and mitigate against population ageing, the Howard Liberal govt. introduced an increase in the age at which people could access their superannuation, from 55 to 60, which would be phased in between 2015 and 2022.
Second public float of AIDC, enabling full privatisation and abolition of AIDC as a publicly owned body
Australian National Railways Commission (AN) operated all Commonwealth and non-urban South Australian lines and the railways of Tasmania. Over the course of 1997/8 the govt. sold AN's interstate freight and interstate passenger services to three operators. Infrastructure was taken over by the newly-established Australian Rail Track Corporation.
Youth Allowance introduced to replace Youth Training Allowance for most young people aged 15-20 years and unemployed. Mutual Obligation arrangements particularly enhanced for young people: Young unemployed people aged 18 to 24 years receiving payment for six months required to undertake an additional activity in return for receiving payments (see also entry on introduction of Work for the Dole)
Major overhaul of employment system by Liberal-Nationals Howard govt.. The Job Network system incorporated a number of different measures, including the total dissolution of the Commonwealth Employment Service and the placing of its services out to competitive tender. Organised on 'work first' principles, 'Over $1 billion was stripped from the labour market program budget when it was implemented. More expensive government interventions, particularly job creation efforts, were abandoned. Competitive tendering, performance rankings of contracted providers and contract fees linked to outcomes were used to create a system that operated with many of the features of a market (albeit one with a single customer), placing upward pressure on outcomes' (Fowkes 2011, p.6). Emphasis placed on value for money. Role of Job Network providers was explicitly to monitor the activities of the unemployed and to ensure that they were undertaking adequate measures to look for work, emphasis on the activity for the unemployed, now called 'mutual obligation'. Penalties for noncompliance increased, and there was a steady increase in the application of these penalties. Contractors were to be given a star ranking, and part of their ranking was based on how often they reported noncompliance.
Wallis also recommended that 'the blanket prohibition on foreign takeovers of the four largest banks be lifted'. (Hanratty 1997). This recommendation also applied for the largest insurers. The govt. (and subsequent govts.) rejected lifting the blanket prohibition on banks, but did lift the ban on the two largest insurers. (This ban does not prevent the banks from acquiring smaller banks, and has been criticised as anti-competitive.)
Implementation of Wallis Report reforms, which recommended: 'a single prudential regulator, the Australian Prudential Regulation Commission (APRC) [formed as the Australian Prudential Regulation Authority], be formed for the entire financial system to provide integrated and consistent supervision of financial institutions for safety purposes. A single prudential regulator offers regulatory neutrality, greater efficiency and responsiveness, greater resource flexibility, economies of scale and lower costs in regulation, and more flexibility to cope with likely future changes in the financial system. Bank supervision would be taken away from the Reserve Bank of Australia (RBA) and given to... [APRA], while the supervision of building societies and credit unions, now done by the state-based Australian Financial Institutions Commission (AFIC), would also be incorporated into [APRA]... [APRA has] a close cooperative relationship with the RBA, with RBA officers having places on the [APRA] Board.' (Hanratty 1997). The Reserve Bank of Australia continued to deal with monetary policy and systemic stability with the Payments System Board considering payments systems regulation. The Corporations and Financial Services Commission (renamed and expanded from the Australian Securities & Investments Commission (ASIC)) was to deal with market integrity, consumer protection and corporations.
Central to the Wallis Report was 'The proposal that all types of investments should be freely available in principle to any investor, so that certain complex products previously restricted to wholesale investors should also be made available at a retail level. Rather than maintaining such restrictions, the Wallis Committee sought to protect the interests of retail clients by imposing additional disclosure and consumer protection obligations on financial product issuers or intermediaries when offering products to retail clients, or when providing them with financial services.' (Peckham 2015). When this was implemented it was accompanied by a series of regulations regarding the required provision of a Financial Services Guide, a Product Disclosure Statement, and other provisions. This opened up a series of previously regulated sectors to retail investors, most notably superannuation.
The Corporate Law Economic Report Program (CLERP) 1 recommended 'clarification' of the business judgement rule, which dramatically undermined the previous rule. According to Dean & Legg (2013, p.406), 'The Explanatory Memorandum to the CLERP Bill 1998 stated that ‘the fundamental purpose of the business judgment rule is to protect the authority of directors in the exercise of their duties, not to insulate directors from liability’. The Explanatory Memorandum also stated that the proposed statutory formulation of the business judgment rule would ‘clarify and confirm the common law position that the Courts will rarely review bona fide business decisions’. Furthermore, under the proposed CLERP legislation, provided directors fulfilled their requirements, they would have an explicit safe harbour for any breach of their duty of care and diligence, and the merits of their business judgments would not be the subject of review by the Courts. The business judgment rule would therefore act as a rebuttable presumption in favour of directors which, if rebutted, would still require a plaintiff to establish that the directors breached their duty of care and diligence.'
Privatisation of national court recording service
Privatisation of Australian Multimedia Enterprises Ltd.
Australian Defence Industries, principle supplier to Australian Defence Force, privatised.
Agency tasked with administering the transmission of the Aus. govt.'s network of broadcasting stations. Acquired by Macquarie Bank Ltd. and rebranded as Broadcasting Australia.
Privatisation of ANL had been discussed since 1991, but was not put into effect until 1998, when French company CMA CGM purchased from the Aus. govt. ANL's shipping containers and trading name. Previously (1984,) the Australian federal govt. had sold ANL's passenger shipping fleet to the Tasmanian state govt.
A wage top-up for full-time apprentices and trainees was introduced in 1998.
Medicare Levy Surcharge of 1 % for those with household income over $100,000 who do not have private health insurance
Private Health Insurance Incentive Scheme commences providing a capped means test rebate for hospital and ancillary health insurance.' (Biggs 2004)
The Workplace Relations Legislation Amendment (Youth Employment) Act 1999 came into operation. It permanently exempts junior rates of pay from anti-discrimination provisions of the Workplace Relations Act 1996 (the Act). The legislation also extends the exemption to traineeships and apprenticeships, which were previously excluded from the exemption.
Introduction of new Carer Payment to subsume previous payments. The payment is made 'to a person providing full-time care and supervision at home for either a 'disabled adult' who scores on stipulated high disability rating under an objective assessment instrument, or for a 'profoundly' disabled child (as very narrowly defined).' Carers for less disabled people may qualify for a lesser payment called the Carer Allowance (Carney 2006, p.41).
Outcomes of the Ralph Business Tax review enacted into the Australian tax system included: significant exemptions from capital gains taxation for superannuation purposes and those aged over 55 years, as well as venture capital projects by non-resident tax exempt pension funds.
Outcomes of the Ralph Business Tax review enacted into the Australian tax system included: significant changes to capital gains taxation that saw only 50% of capital gains incomes for individuals taxable, from October 1999.
Outcomes of the Ralph Business Tax review enacted into the Australian tax system included: company tax rate to apply to other entities that are taxed like companies, e.g. trusts from July 2001.
Outcomes of the Ralph Business Tax review enacted into the Australian tax system included: simplification of taxation system and some tax cuts for SMEs, including the ability to write off assets costing less that $1000 immediately and increased capital gains concessions.
Outcomes of the Ralph Business Tax review enacted into the Australian tax system included: the removal of accelerated depreciation and moving to effective life depreciation from September 1999.
Outcomes of the Ralph Business Tax review enacted into the Australian tax system included: company tax rate lowered from 36 to 34 % for 2000-1 and to 30 % thereafter.
Following the NCC’s review of the Australian Postal Corporation Act 1989, the Government announced a package of reforms that will increase competition in postal delivery services. These reforms, which come into effect in July 2000, introduce open competition on price and delivery for mail weighing more than 50 grammes and for incoming international mail and the ability to compete with Australia Post on service, but not price, for mail below 50 grammes.
AWRAP was a body to identify the research & development needs of wool industry. In 2001, fed. Govt. led a significant restructure and transformed AWRAP into Australian Wool Services, which had two major subsidiaries, The Woolmark Company (TWC) and Australian Wool Innovation (AWI). In 2002, AWI became an independent company, and in 2007 it purchased TWC and branding from AWS.
AWRAP was a body to identify the research & development needs of the wool industry. In 2001, fed. Govt. led a significant restructure and transformed AWRAP into Australian Wool Services, which had two major subsidiaries, The Woolmark Company (TWC) and Australian Wool Innovation (AWI). In 2002, AWI became an independent company, and in 2007 it purchased TWC and branding from AWS.
2001 Budget included welfare package that included: standardisation and extension of all Mutual Obligation and Work for the Dole requirements for those on unemployment social security payments under the age of 49 years; new recipients of Widow Allowance required to attend annual interviews with social security agency Centrelink to help them transition back to work; introduction of Community Participation Agreements for Aboriginal and Torres Straight Islanders receiving unemployment payments and living in remote communities.
Based on a white paper from 1997 (which the Howard govt. was initially unable to secure support for) in 2001 the govt. passed substantial reforms to the research funding programme in Australia, which linked 'performance based funding for research and research training in universities,' as well as introducing a new quality verification framework (Jackson 2003). The same year the govt. introduced the Postgraduate Education Loans Scheme (PELS), to fund postgraduate full fee places. The PELS programme had higher interest associated with it than the HECS scheme.
Workplace Relations Amendment (Termination of Employment) Act 2001 reinforces disincentives to speculative and unfounded claims in the context of termination of employment. Two additional Bills of 2002 aim at exempting small businesses and short-term casual workers from unfair dismissal law.
Since 1971 criminal liability could apply to corporations when a criminal act was committed by the 'directing mind' of a corporation. The sections of the 2001 Commonwealth Criminal Code governing corporations put some important limitations on this. It provides that where '"intention, knowledge or recklessness" is a fault element of an offence, that element must be attributed to a corporation that "expressly, tacitly or impliedly authorised or permitted the commission of the offence". Importantly, Div 12.3(2) of the Code provides that "authorisation or permission" may be established by a number of means including: (c)proving that a corporate culture existed within the body corporate that directed, encouraged, tolerated or led to non-compliance with the relevant provision; or (d)proving that the body corporate failed to create and maintain a corporate culture that required compliance with the relevant provision. "Corporate culture" is defined under Pt 2.5 (s 12.3 (6)) of the Code as an "attitude, policy, rule, course of conduct or practice existing within the body corporate generally or in the part of the body corporate in which the relevant activities take place".' (McConvill & Bingham 2004, p.214).
Introduction of working credits, which allowed recipients of Newstart Allowance or Youth Allowance to build up 'working credits' which then could be counted against their income free test area. Aimed to encourage recipients of these payments to engage in more part time or casual work.
No new applicants for the Mature Age Allowance or Partner Allowance social security payments: People who would have previously qualified for these payments (unemployed people between 50 and pension age) required to go to Newstart Allowance (general unemployment payment). Although they are not subjected to the Work for the Dole aspect of Mutual Obligation, they are required to attend appointments with a Job Network provider and to actively look for work.
Recipients of the Parenting Payment subject to new transition to work requirements that were phased in between July 2002 and July 2003. According to the Department of Social Services (2001), People on 'Parenting Payment whose youngest child is at least six years of age will be required to attend annual interviews with a Centrelink Personal Adviser... People who are receiving Parenting Payment with a youngest child aged between 13 and 15 years, will be required to undertake an activity such as job search, education, training or community work for around six hours a week to help them prepare to return to work. Parents will be reminded of their requirements after six weeks and their Centrelink Personal Adviser will review activities each three months. Each will be encouraged to develop a Participation Plan.'
Tightening of eligibility requirements for Disability Support Pension. Social security agency Centrelink started to use external assessors, and doctors no longer required to comment on a claimant's work capacity. Instead assessed as part of Centrelink assessment procedures. Concurrently, the number of employment assistance places in the Disability Employment Services expanded.
FreightCorp (NSW) combined with federally owned freight rail services (NRC) and sold to Patrick Corporation & Toll consortium, and rebranded as Pacific National.
Activity test breach penalties changed— penalty period for a first activity test or administrative breach shortened if recipient complied with activity requirements. Penalty period reduced from 26 weeks to 8 weeks for an activity test breach penalty and from 13 weeks to 8 weeks for an administrative breach penalty. Reduced breach penalties not available if recipient failed to start a job as planned; declined job interview offer; became voluntarily unemployed; dismissed from employment for misconduct; knowingly or recklessly declared incorrect earnings from employment; or failed to submit a satisfactory jobseeker diary.' (Ey 2012, Appendix B)
Jackson 2003: 'From 2005 Commonwealth operating grants for universities will be based on a new funding formula based on student numbers and discipline mix. Funds per student place will be increased by 2.5 % in 2005, 5.0 % in 2006 and 7.5 % in 2007. These increases will be conditional on institutions complying with the Commonwealth's model for institutional governance ('National Governance Protocols') and workplace relations policies. Around 25000 marginally funded places will be converted to fully funded places in the three years to 2006 07. An additional 1400 places will be provided in 2007... Students attending regional campuses will attract additional payments for the institution depending upon the location and size of the campus.' The linking of funding with workplace relations forms was significant, as, in order to receive these grants, Universities had to introduce a series of workplace measures that were strongly linked to the WorkChoices industrial relations scheme, placing more emphasis on individualisation and attempting to break down unionisation.
The Nelson reforms were a large reform package that significantly altered tertiary education in Australia, in a number of ways. Regarding HECS and tuition rates (from Jackson 2003): 'From 2005, institutions in receipt of Commonwealth supported places will determine their own student contribution level for each course they offer within ranges set by the Commonwealth. Currently there are three HECS bands, each with a fixed rate of student contribution. From 2005 these fixed rates will be replaced by ranges. The top of these ranges will be 30 % higher than the projected level of HECS for each band for 2005 under current arrangements. The bottom of each range will be $0. Institutions will be able to set the student contribution at any point within these ranges. In addition, a fourth band will be established called National Priorities, which will consist of education and nursing courses. The range for this band will be from $0 to the current level of HECS for Band 1 ($3854). The minimum repayment threshold for HECS will be raised to $30 000 by removing the two bottom repayment bands. This means that those with a HECS debt will start paying 4 % of their income when they reach $30 000, whereas they now pay 3 % when their income reaches $24 365. In addition, the maximum rate of repayment will be raised to 8 % where income exceeds $60 000 (the top rate is currently 6 % where incomes exceeds $43 859). The Government has also reduced the discounts for upfront payments (from 25 to 20 %) and voluntary repayments (from 15 to 10 %).'
Introduction of tax concessions and other benefits for voluntary employee contribution to superannuation. Most significantly, for low income earners the govt. pledged to make a co-contribution for any voluntary employee contributions; initially, this was pledged at $1.50 for every $1 contributed up to $1500/PA, and in 2013 this was lowered to $1 for every $1 up to $1000/PA.
A package of reforms was implemented to improve the competitiveness of Australian managed funds and companies with offshore operations, and reform other aspects of the international taxation rules. The reforms included reducing the commercial constraints and compliance costs arising from the controlled foreign company and foreign investment fund rules, as well as extending the ecxemption for non-portfolio dividends and branch profits to all foreign countries'. (Harmer et el 2010).
To remove regulatory inconsistency arising from the existence of both State and national regulators in the energy sector, Council of Australian Governments (COAG) agreed to establish a single Australian Energy Regulator (AER) on 1 July 2004, with initial responsibility for economic regulation of electricity wholesale and transmission networks and key rule enforcement functions.
The Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 amended the 2001 Corporations Act to add more regulations regarding auditing and disclosure, in the wake of several corporate collapses and the HIH Insurance Royal Commission. Under s297 of the Corporations Act, corporations were required to provide a 'true and fair view' of the financial position and performance of the entity. The amendments contained in the 2004 required that where compliance with accounting standards would not give a true and fair view, they would be required to include additional information in the notes to the financial statements. Directors required to include in their director's report 'their reasons for forming the view that the additional information is needed for the purpose of giving a true and fair view; and the location of the additional information in the financial report.' (Pierson 2004).
Under the 2001 Corporations Act, 'the directors of an entity are required to declare: that the financial statements and the notes comply with the accounting standards, and give a true and fair view; whether in the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and whether, in the directors' opinion, the financial statements and the notes are in accordance with the Corporations Act, including whether they comply with accounting standards and give a true and fair view.' (Pierson 2004, 206). In 2004 additional requirements were added that enshrined in law the best practices principles of the ASX. These were that the CEO and/or CFO of a company be required to declare in their certification of financial statements that: 'in the opinion of the person making the declaration: the financial records of the entity for the financial year have been properly maintained in accordance with s 286 of the Act; the financial statements and the notes comply with the accounting standards; and the financial statements and the notes for the financial year give a true and fair view.' (Pierson 2004, 206). As noted previously, this was legislating best practice as legal requirement.
"In Australia the previous Auditing and Assurance Standards Board, referred to as the AuASB, a body of CPA Australia (CPAA) and the Institute of Chartered Accountants in Australia (ICAA) through the Australian Accounting Research Foundation, controlled by a joint standing committee of the two professional bodies, was placed under federal government control through treasury under the oversight of the Financial Reporting Council. The FRC provides the AUASB with its strategic direction, as well as appointing AUASB members, approving and monitoring the AUASB's business plans, budgets and staffing arrangements (AUASB Annual Report 2005/06, chairman's report).1 In essence, the federal government said that the profession was no longer capable of setting its own standards to protect the public." (Jubb and Houghton 2007). Accordingly, the reconstituted body's role was now to: "* make auditing standards under section 336 of the Corporations Act 2001 for the purposes of the corporations legislation; * formulate auditing and assurance standards for other purposes; * formulate guidance on auditing and assurance matters; * participate in and contribute to the development of a single set of auditing standards for worldwide use; and * advance and promote the main objects of Part 12 of the Australian Securities and Investments Commission Act 2001." (Jubb and Houghton 2007). This move was essentially strengthening the govt.'s role in overseeing auditing practices after several high profile corporate collapses in the early 2000s. The process also saw a rewriting of the standards re auditing, with an exposure period for the auditing standards (from 1 July 2006) set at 45 days.
According to the Australian Treasury: 'The Financial Reporting Panel operated between 2009-2012. The Panel's primary function was to resolve disputes between ASIC and companies concerning accounting treatments in their financial reports. The Panel was established under the Corporate Law and Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 and aimed to remove the need to initiate legal proceedings in Court in order to resolve disputes about financial reporting matters. The FRP was designed to provide an efficient and cost effective way of dealing with disputes, the opportunity to be heard by persons with relevant expertise, and remove concerns of courts' limited understanding of accounting standards....Due to lower than expected referral rates the Financial Reporting Panel closed on 1 October 2012. Disputes are now resolved between the parties or dealt with in proceedings before a court.'
After initially being blocked by the Senate, the co-payment proposition was passed this year.
"Under Medicare Plus new MBS items introduced for certain allied health and dental services from 1 July." (Biggs 2004)
A new law of March 2004 empowers the Australian Industrial Relations Commission (AIRC) to make interim orders to stop or prevent industrial action.
Increased compliance measures for those receiving social security payments. This included greater data matching across govt. depts. to ensure recipients correctly declaring employment income; expanding the number of compliance reviews in a year; introducing a 'keeping the system fair' campaign; requiring recipients of the Parenting Payment (Single) to personally visit a Centrelink and attend an interview to verify their relationship status whenever they notify of a changed address.
"ComLand was established on 13 June 1999 to take over and prepare for residential property development of the former munitions manufacturing and storage sites at Edgewater and Waterford Green at Maribyrnong in Melbourne and St Marys in Western Sydney. The sale process consisted of a potentially two-stage tender process, in which the first stage was restricted to Lend Lease, because of that firm's joint venture arrangement with ComLand." (Dept. of Finance, 2003-4, Chapter 4)
A series of changes was implemented to the telecommunications regulatory framework to promote competition and enhance the adequacy of services for consumers, including the operational separation of Telstra.
Significant reduction in protection against unfair dismissal. On the one hand the legislation represented a centralisation of the unfair dismissal system, so that most employees in Australia would be covered by federal rather than state unfair dismissal laws, and federal law overrode state unfair dismissal law. However, on the other hand, it also significantly narrowed the scope of what could be considered unfair dismissal and altered the test to take into greater account the perspective of employers. In addition, a company now had to have more than 100 employees for unfair dismissal laws to apply. Unfair dismissal laws did not apply to companies where there was a bona fide operational reason for dismissal; the High Court repeatedly upheld this in unfair dismissal cases following the passing of the legislation. In effect unfair dismissal protections were greatly diminished for most workers in Australia, although they continued to be protected by unlawful dismissal laws (which narrowly covered issues of discrimination and notice periods).
Represented a major overhaul of the existing industrial relations system. There were a series of changes in this legislation that will be outlined in several entries as they effected different parts of the IR system. In general there was a centralisation of the industrial relations system in relation to incorporated corporations, replacing the separate State and federal system with a single federal system. The WorkChoices legislation allowed for an increase in the use of Australian Workplace Agreements (AWAs), which were individual workplace contracts between employees and their place of work; union representation was not required to negotiate an AWA. AWAs were intended to replace EBAs, although they were largely unsuccessful in this because of the resistance mounted by the trade union movement. It also streamlined EBAs and allowed 5 year EBAs to be negotiated instead of 3 year agreements.
The WorkChoices legislation stripped the Australian Industrial Relations Commission of its ability to determine minimum wage rates, which became vested in the Australian Fair Pay Commission, which was not required to include trade union representation and had less transparency over decision making. It further side-lined Award Agreements by not updating them. It also removed the 'no disadvantage' test that had meant AWAs and EBAs could not be negotiated that would have seen employees at a disadvantage when tested against the Award. Instead the government created and regulated a five minimum workplace conditions that had to be met and that applied to all industries.
Although formally recognising the right to strike, the WorkChoices legislation increased restrictions on allowable industrial action. Industrial action could only be legally taken in strict circumstances, usually in a bargaining period (i.e. when negotiating an EBA); mandatory secret ballots and strict electoral procedures were introduced for taking industrial action; pattern bargaining and industry-wide industrial action were outlawed. Note: these restrictions were retained in the Fair Work Act (2009)
The establishment of the Office of the Australian Building and Construction Commission (ABCC) was intended to play a significant role in the policing of the construction industry unions. Alleging widespread illegal activity in the industry, the Howard govt. introduced a govt. office that could (and did) investigate the construction industry unions for unlawful industrial action; coercion; wages and entitlements; breaches of the National Code of Practice; sham contracting, and right of entry for union officials to enter workplaces. Previously individual companies had needed to legally challenge the union on a case by case basis, and were vulnerable to industrial actions and a variety of secondary boycotts that skirted the edges of legality. In effect the ABCC made it harder for the unions to take such action, because the government itself (rather than the company) took a more central role in cases, and was empowered to impose significant fines on both unions and individual workers or union officials in the industry. Under the Rudd ALP government, the ABCC was abolished and replaced by the Fair Work Building and Construction Commission (an independent statutory body), which retained many of the same functions of the ABCC, although there was some reduction in the fines it could impose.
Further tightening of eligibility requirements for those receiving Disability Support Pension, which had previously been rejected by the Senate in the 2002-3 budget. New disability claimants now assessed to be able to work for 15 hours a week (previously 30) would be put on Newstart rather than the Disability Support Pension. This meant that they received $40-50 p/w less than the DSP and were subjected to Mutual Obligation requirements.
Like DSP recipients, sole parents on the parenting payment would lose entitlement to the Parenting Payment and be put on Newstart when their youngest child turned 8 (6 in the case of couples). Again, this was a drop in the rate of payment and saw them subjected to Mutual Obligation requirements to look for part time work.
The surcharge on superannuation contributions is abolished which will increase incentives to make additional contributions.
Very long-term unemployed people with a pattern of work avoidance could be required to undertake full-time Work for the Dole for 50 hours pf.' (Ey 2012, Appendix B)
Rather than adjusting thresholds as previous governments had done (usually well-behind inflation, leading to substantial bracket creep), in 2006 the Howard government announced the first income tax cut for a number of years. The highest income tax rate went from 47% to 45%, and the next highest went from 42% to 40%. There was also some adjusting of thresholds, so that the top income tax rate would embrace only 2% of taxpayers. Minor incremental changes to thresholds for lower income earners.
As part of the Northern Territory Emergency Response Act, welfare provisions change for Aboriginal people in the Northern Territory. Income Management (or 'welfare quarantining' as it is colloquially known) was introduced for Aboriginal people in the NT and Cape York, and a section of their income from social security payments was put into a special account, accessed by a BasicsCard, and that could only be spent on 'priority goods and services'. Certain goods - such as alcohol, tobacco and pornographic materials - cannot be purchased on a BasicsCard.
Indigenous persons in the Northern Territory and Cape York can be breached and have their payment suspended and then cancelled if a recipient's child does not comply with school attendance or school enrolment requirements.
The 2007 “Simplified Superannuation” reforms introduced significant changes to the superannuation system, including the abolition of the taxation of superannuation benefit. The asset test taper rate for the Age Pension was halved in September 2007.
Superannuation benefits paid from a taxed fund to people aged 60+ became tax free.
The development of a national high school curriculum was originally proposed by John Howard, who was criticised harshly for a lack of political neutrality in the process. Following his defeat at the 2007 election, Howard's 2006 plan was shelved. In April 2008 ALP prime minister Rudd announced the establishment of a national curriculum board to implement a national curriculum (to replace the existing state-governed curricula). The first stages were implemented in 2013.
The Model Law exists to provide collective action across jurisdictions when an insolvent entity straddles those jurisdictions. The central aims stated in the preamble are to facilitate cooperation between the courts of different states, to create greater legal certainty for trade and investment, to protect the interests of all creditors and other interested persons (including the debtor through the fair and efficient administration of cross-border insolvencies), to protect and maximise the value of the debtor's assets and to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment. Essentially this means providing for collective actions across jurisdictions with the purpose of facilitating an orderly restructure or winding up.' Australia's laws are quite general, upholding the existing common law framework but also allowing for a large level of flexibility in their implementation (Goldman 2011, 20).
The government has prompted Telstra to accept a financial agreement involving structural separation between the management of its copper network and its other commercial activities. The proposed reform seeks to allow a superfast national broadband network (NBN), managed by a public company, NBN Co, to be deployed with a bold programme of public investment totalling AUD 43 billion (3.25 % of GDP) over eight years.
In significant part the Fair Work Act reinstituted the previous system of unfair dismissal (rather than unlawful dismissal). According to the new regulations, 'unfair-dismissal claims may be made after 12 months’ employment in firms with fewer than 15 employees and after six months in firms with 15 or more employees.' (Garnett and Lewis 2010)
Further alteration of the business judgement rule following Court cases relating to the collapse of OneTel Ltd. Legg and Dean 2013: in his judgement 'Austin J held that ASIC had failed to prove its case that Mr Rich and Mr Silbermann had contravened s 180.63 [the business judgement rule]. At the heart of this decision was his Honour’s conclusion that the rational belief required as an element of the business judgment rule in s 180(2) does not have to be reasonable. In other words, a director can invoke the business judgment rule if he shows that he arrived at the business judgment after a reasoning process ‘whether or not the reasoning process was convincing to the judge and therefore reasonable in an objective sense’.' (415). Onus of proof unambiguously put on the party claiming liability.
Deregulation of pathology services to reduce government controls over pricing and to introduce more competition in the market.
In order to encourage practices to continue to bulk bill, a subsidy was introduced for pathology services that would not charge patients upfront feeds (in 2015 the federal govt. announced it would be abolishing this subsidy in July 2016).
The Fair Work Act 2009 was a Rudd ALP govt. initiative and replaced the WorkChoices legislation of the Howard era. However, although it discussed in terms of abolishing WorkChoices, in reality the reforms to the legislation were not as significant as such a claim suggests. Rather, the legislation regulated collective bargaining, in particular instituting a series of 'good-faith' bargaining under which enterprise bargaining could occur. It removed Australian Workplace Agreements (although common law individual employment contracts may continue to operate) and put emphasis back on to Enterprise bargaining. The Act continued to outlaw pattern bargaining and it removed the legal distinction between union and non-union agreements.
The Fair Work Act streamlined the Award system (as a system that regulates the minimum employment standards) by reducing the number of Awards and modernising them. In effect this was a partial move away from Howard's abandonment of the 'no disadvantage' test and the reimplementation of a safety net, however it did not move back to the old Award system and allowed the govt. more of a role in the setting of minimum conditions through the establishment of the National Employment Standards, which existed alongside the modern Awards.
Eligibility also restricted for those who had not completed year 12 and not enrolled in full time education or training (Youth Allowance).
A job seeker who, without reasonable excuse, failed to attend an activity, job interview or interview with their employment service provider, committed of a ‘connection failure’ and could be penalised the equivalent of one work day of their basic rate of payment. Intentional and persistent failure to comply with obligations considered a ‘serious failure’ resulting in an eight-week period of non-payment' (Ey 2012, Appendix B).
Rudd ALP government increases pensions by $30/wk. in addition to changing the way that pensions are benchmarked. According to Swoboda (2014) p.6, 'The 25 % of average weekly earnings was adjusted to 27.7 % for single people and 41.76 % for couples. A new prices measure called the Pensioner and Beneficiary Living Cost Index (PBLCI) was added to the pension indexation process, which will be used if the increase in the PBLCI is greater than that for the CPI.'
As justification for the associated cost of raising the pension, the Rudd government cut costs to pension spending elsewhere by announcing that from July 2017 the qualifying age for the Age Pension will increase by six months every two years until it reaches 67 years of age on 1 January 2024.
Act that introduced reporting changes to reporting and auditing. The Act introduced a three-tier system in which the third tier (company limited by guarantee with an annual income of $1million or more) had to comply with full auditing conditions, and in general extended reporting and auditing conditions. It also streamlined directors' reports and introduced a rule that members must elect to receive reports. All companies except quite small ones in the first tier (revenue less than $250 000) must lodge reports will ASIC. The Act also introduced new dividend rules that replaced the profits test with a solvency test, thereby allowing a company to pay dividends from sources other than profits providing they met certain criteria. Largely this act 'removed red tape'.
Tightening of eligibility criteria for those claiming independent status (that is, people under the age of 20 seeking to be recognised as independent of their parents). Earnings threshold for independent status raised.
Gradual implementation of increase in the rate of superannuation guarantee from 9 to 12 % by 2018. This was subsequently altered in 2014 by the Liberal Abbott govt., which stalled the rise for three years, so that it would be 10 % by 2018 and 12 % by 2022; in 2015 the same govt. announced the stall would be increased to seven years and the SG would not reach 12 % until 2025.
Changes to breaching penalties and procedures for those receiving social security payments for unemployment: Immediate suspension of payments for job seeker failing to attend a scheduled appointment or activity. Payment reinstated and paid back, when job seeker attended rescheduled appointment or resumed required activity. Payment suspended for job seeker failing to attend rescheduled appointment or resume required activity without reasonable excuse until they did so, without back payment.
Removal of regulations regarding the number of students who can enrol in any given course in any given year. Funding now to follow students, "demand driven". Resulted in an increase in the number of students enrolled.
In the case Metz Holdings Pty Ltd & Ors v Simmac Pty Ltd & Ors (2011) it was found 'directors were... personally liable for representations given by the company, despite the fact they were not personally parties to the contract. The court found that no fault was required on behalf of the directors to prove liability and that the directors were not protected by the limitations in the contract which applied to the company.' (Jaque and Briffa 2011).
The 'two-strikes' law is essentially an added accountability measure. It means that an entire company board can face re-election if shareholders disagree with questions of executive remuneration. The election is triggered by two consecutive remuneration reports are rejected by 25% or more by shareholders at an annual general meeting. This triggers a 'spill meeting' in which individuals who were directors when the directors’ report was considered at the most recent AGM will be required to stand for re-election.
As of 1 January 2013 recipients of the Parenting Payment would cease to be eligible for the payment once their youngest child turned six years old, in the case of partnered parents, or eight, in the case of single parents. Most of these parents would instead be moved onto Newstart, the general jobseekers allowance' (Crawford 2014, p.3.) This change overwhelmingly impacted single mothers, and subjected them to the Newstart Mutual Obligation requirements
Following the Wallis Reforms there were a number of very high profile collapses of financial companies, the highest profile of which were Westpoint, Storm Financial, Trio Capital and Opus Prime. According to Peckham (2015), these reforms included measures aimed at clearer regulations re disclosure: 'the imposition of a statutory duty on individual financial advisers to act in the best interests of the client when providing personal advice to retail clients; a suite of provisions imposing a ban on conflicted remuneration in the context of financial advice – broadly, the effect of the ban is to prohibit, with limited exceptions, any benefit given to a licensee, or representative, who provides financial product advice to retail clients, that could reasonably be expected to influence the financial product advice or product recommendations given to those clients; and a ban on the charging of asset-based fees on borrowed amounts, in circumstances where a licensee or representative provides financial product advice to a retail client.'
Clarified business judgement rule, reducing liability for company secretaries but concurrently increasing penalties for non-compliance.
Expansion of Income Management to certain sections of the non-Aboriginal population in five designated Local Government Areas with high rates of unemployment.
As of 1 January 2013 recipients of the Parenting Payment would cease to be eligible for the payment once their youngest child turned six years old, in the case of partnered parents, or eight, in the case of single parents. Most of these parents would instead be moved onto Newstart, the general jobseekers allowance' (Crawford 2014, p.3). This change overwhelmingly impacted single mothers, and subjected them to the Newstart Mutual Obligation requirements
The Resource Super Profit Tax (RSPT) was originally announced by the Rudd government in response to the Henry Tax Review (Rudd adopted as policy only 4 of the Review's 138 proposals). The RSPT was to be levied at 40% on 'super profits' and applied to all extractive industries, including sand and quarrying as well as mining. The tax was to pay for pensions, tax cuts for small business and infrastructure projects. There was also to be a cut in the corporate tax rate from 30 % to 28 %. However the RSPT met with significant opposition from sections of Australian society, especially mining companies. After Rudd was replaced by Gillard as Prime Minister, the policy was substantially altered and renamed the Mineral Resource Rent Tax. The much-amended policy eventually saw a tax package passed with a 30% tax levied on 'super profits' above an annual income of $75mill. (Ultimately the revenue raised from this tax was quite low, and it was repealed in 2014 after the Liberal-National Coalition took govt.)
Union negotiates enforceable agreement at sector level and has veto power over company agreements. The pact concerns procedures for wage-setting and contains a ceiling regarding maximum wage. The government participates directly in wage bargaining (tripartite bargaining, as in social pacts), legal provision for mandatory extension available, regularly applied and affecting significant share of the workforce.
Monetary: Credit Control Agreements extended until 31st December, 1974, including limitation of bank credit expansion to 1 % per month; coupon rate for new bond issues fixed at 8.5 %
Increased family allowances becomes effective.
Fiscal reform adding about 2.5 % to disposable income in the form of income tax reductions (amounting to Sch. 8 billion)
A new "Price Act" replaces the 1957 Price Control Act and the 1959 Anti-profiteering Act. The new Price Act specifies the responsibility of the Ministry of Commerce and Industry in monitoring and partly codetermining formation of domestic prices.
Measures have been taken to develop securities markets
Some specific entry barriers to the banking system are levied.
Increase in social security contributions of 1/2 percentage point for both employees and employers and reduction of Federal grants to social security fund.
Comprising increased tax credits for wage and salary recipients and an increase in the tax free income allowance for business
This law, updating earlier legislation to take account of the evolving political and economic environment, effectively increased competition among commercial banks and provided for the free determination of interest rates as well as permitting banks to agree on interest rates on deposits.
Increase in tax-free income allowance for business
Income tax reduction (by Sch. 4; billion in 1979)
Deposit rates or lending rates are freed
Special programme to reduce youth unemployment
Abolishment of restrictions exist on the expansion of bank credit, moderate freeing of credit controls and liberalisation of security markets
Nationalbank decided to cancel direct credit control through credit ceilings as from end-February to do away with structural distortions in the banking sector. The growth limit for consumer credits, however, was maintained.
Special construction programme for regions with high unemployment (increase in public investment by Sch.2.75 billion in 1982/83, of which Sch.0.8 billion for road construction)
Increase allowances for handicapped children
Income tax deduction for capital investment in industry
Income tax reduction, amounting to Sch. 6 billion (0,5 % of GDP) in 1982
Second step of income tax cuts (amounting to Sch. 3 billion in 1983)
Rise in unemployment insurance contributions (by 0.4 percentage points)
The unemployment insurance contribution was raised by 1 % age point to 4 %
Rise in pension insurance contributions for self-employed
Abolition of the trading capital tax (Gewerbekapitalsteuer) in three stages, beginning in 1984
Reduction of the tax on corporate capital by 10 %
Increase in tax allowance for retained earnings for small scale enterprises from 15 to 20 % of total profits.
Income tax reduction about Sch. 3 billion (0,25 % of GDP) in 1983
The basis for the pension is to be progressively changed from the average wages earned in the last five years at work to those of the last ten years
Major measures comprise a rise in contribution rates by 0,5 percentage point for both employees and employers in 1985
Tax on interest income is lowered by 2.5 percentage points to 5 %.
Reduction of 'hospital beds for acute incidents' due to efficiency programmes
Ending of the double taxation of dividends, first as company profits and then as dividend income.
The most important of the changes is that the banks increase their resources so as to establish a capital ratio of at least 4,5 % of total assets including a requirement for reserves of 1,5 % of assets as a provision for losses. Since the capital ratio on the new basis is currently around 2,5 %, the establishment of such a ratio will require a substantial increase in capital and reserves. The principle of increasing the capital ratio is generally accepted, with a transitional period of ten years. The target ratio has to be achieved progressively during this period. Other amendments to the law are also aimed at reducing the degree of risk in the banking system.
Changes in the computation of pensions and pension increases from 1986 onwards.
Civil servants' contributions to the pension fund are increased by 1/2 a percentage point to 8 1/2 per year
Tax on interest income is to be abolished
The amount of severance pay ranges from two months' wages for a worker who has completed 156 weeks of employment to twelve months' wages for a worker having worked over 1300 weeks. The Insolvency (Wage Guarantee) Act is amended to provide, inter alia, that employers are to pay a supplement; when it has been paid, no claim to severance pay can be made in case of insolvency (amendment of s. 12(1)(Z) and addition of subs. Z5 to s. 1(3)).
The number of licensed branches was increased from 46 to 52, the main, often explicitly-stated, reason being to protect the "incumbent" firm from unfair or ruinous competition.
The purpose of the law is to protect employees contracted out to work for others. In particular, agreements which work to the disadvantage of the employee are outlawed.
Billing concentrates on achievement oriented service rather than on default pricing/ lump sum treatment
The rate of contribution to the public pension insurance was further increased
The assessment period for early retirement was further lengthened, while contribution-free years related to higher education were only partially taken into account
As a part of the restructuring of the nationalised industries (ÖIAG) a partial privatisation took place: until 1988 the partial privatisation amounted to Sch. 5 billion, including 15 % of the shares in ÖMV, 18 % of the ÖIAG participation in Siemens Austria, 48 % of the Austrian Airlines, etc. (see table 4 on p26 OECD Economic Surveys Austria 1988/1989) and the sale of some peripheral companies.
Corporation tax rate lowered to 30 % (single rate)
The top marginal rate for personal income tax has been lowered from 62 % to 50 % and the bottom rate from 21 % to 10 %.
Personal income tax brackets reduced to five with the top marginal tax rate lowered to 50 % and the bottom marginal tax rate to 10 %
The tax base (for PIT) has been broadened by curtailing tax allowances and exemptions. However, preferential treatment of the 13th and 14th month salary has been maintained.
Introduction of a withholding tax on interest income at a rate of 10 %
Amendment to the Unemployment Law improving entry conditions for long-term unemployed.
Amendment to the Unemployment Law improving entry conditions for youth
Competitive legislation applies also to State monopolies.
Redefinition and qualitative widening of the concept of a "market-dominating firm".
Mergers involving the acquisition of 25 % or more of another company's capital are allowed, but must be registered if they result in market dominance.
Further steps in dismantling exchange controls included the liberalisation of long-term capital movements.
The new Stock Exchange Law enters into force with tighter provisions for supervision and investor protection.
Compulsory diagnosis and service documentation: Creation of an economically efficient and cost outcome oriented basis for a financial payment for the stationary hospital care treatment
For the age group 50 and older, UB duration is increased to 52 weeks if the unemployed has been employed for at least 468 weeks within the last 15 years.
Both employers' and employees' contributions to the unemployment fund are to be lowered from 5.2 % to 4.4 % in the second half of 1990.
Corporation tax rate lowered to 30 % (single rate); p422
Nominal tariffs on nearly 2 000 goods have been unilaterally reduced by some 30 % on average as of 1st January, 1990, bringing Austrian tariff levels, on average, closer to those of the EC.
International capital flows are eased: Capital outflows are allowed to flow freely or with minimal approval restrictions
Some savings deposits are freed from the tax on interest income.
Virtually all foreign exchange controls have been dismantled as of 1st January 1990, but residents' deposits with banks abroad and loans to foreign banks still require permission. (Liberalisation of long-term capital movements.)
Increases transparency and flexibility at the stock exchange and establishment of an "Options and Futures Exchange" in order to broaden financial markets.
Increase of RR for those with previous income exceeding 12,610 but below 27,000 ATS. This change essentially ensures that the RR is faded out from a level of 47% to a level of 1% over the income range 10,000 ATS to 27,000 ATS instead of the range from 10,000 ATS to 12,610 ATS
Social security pensions to be increased 5 % as of 1 January 1991 and minimum pensions for singles to be raised to Sch 6 000 (Sch 8 600 for couples).
A substantial range of goods has been freed from administrative price control. The remaining price controls cover electricity, gas, block heating, pharmaceuticals and (until June 1992) scrap iron.
Full liberalisation of foreign exchange controls
Foreign exchange operations are fully liberalised
Liberalisation of issues of securities while obliging borrowers to publish prospectuses for public issues of securities. the issue-authorisation requirement has been abolished, while disclosure requirements and investor protection have been tightened. New issuing procedures have been introduced for government bonds, with fixed quotas being replaced by competitive yield tenders, and a market-maker system established.
The majority of share of equity ownership of domestic banks by non-residents is allowed; or equal treatment is ensured for both foreign banks and domestic banks; or an unlimited number of branching is allowed for foreign banks
Special bonus for those workers and employees who do not retire before normal retirement age
In 1994, new rules regarding agricultural collection and distribution will be established, and grain prices and bread prices will fall, for which farmers will be compensated by markedly higher transfer payments.
An amendment to the Market Regulation law lowers, as of 1 July, the producer price of milk and allows, as of 1993 and 1994, respective deviations of up to 3 and 4 % from recommended prices for dairy products
As compensation, a "women's package" will be put into effect as of 1 January 1993. This includes the right to part-time work for women with children between 1 and 4 years of age.
Various health care insurance contributions (and other fees) are raised.
Reform concerning efficient financing of health care insurance and social security contribution
As compensation, a "women's package" will be put into effect as of 1 January 1993. This includes an extension of the right to child-care-leave to 2 weeks, the right to compensatory damages for gender-specific discrimination or sexual harassment in the workplace.
As compensation, a "women's package" will be put into effect as of 1 January 1993. This includes equal pay for equal work.
The Metal and Mining Workers union agrees with employers to a 3.9 % increase in the minimum-wage
After more than four years of negotiations, the Social Partners agree on the introduction of a 5-day work week in the tourism sector, while allowing for flexibility in working hours during peak tourist seasons.
After more than four years of negotiations, the Social Partners agree on  allowing for more flexibility in working hours during peak tourist seasons.
In the framework of the Family Package, the financial assistance benefit is to be raised as of January 1993, progressively with the number of children
Raise in unemployment insurance contributions from 4.9 to 5.3 %.
Social security health contributions for employees are raised by 0.5 percentage points.
As of January 1, 1993, unemployment insurance contributions will be raised from 4.9 to 5.3 %. Various health insurance contributions and fees are also raised.
The basis for calculation of benefits will be the fifteen highest-earning years.
New types of pensions are introduced: early retirement (as from age 55)
A job can be held while drawing on a "normal" old-age pension, although above earnings of Sch 7 000 per month, the pension is reduced
New types of pensions are introduced: "sliding pension" (for women as of age 55 and men 60) whereby working time is reduced while partial pensions are drawn (70 % of the full pension for a 20 hour week, 50 % for a 28 hour week).
The retirement age for women will, starting in 2018, be raised over a ten year period to the retirement age for men.
Child-care ecducation  counts towards working period  for up to 48-months
The federal participation in important companies has been allowed to decline below the earlier critical limit of 51 % through issuance of additional equity to the private market. Proceeds from privatisations are estimated (gross) at Sch 6 billion.
The capital gains tax on interest income is raised from 10 to 22 %, and converted into a final tax with no further liabilities. At the same time, an amnesty on tax arrears is extended.
And the single income earner and single parent tax deductions will be raised
Apprentices will receive free public transport
The definition of "suitable job-offer" is tightened.
The amendment to the Cartel Law introduces a limit on mergers, in view of the approach to EU membership.
Various measures have been taken to enhance competition notably in the retail sector. The reform of the Price Law has lifted administrative controls on a substantial range of goods.
In the event of lay-offs of workers over 50, a written justification to the labour office and compulsory contributions to older-worker retraining programmes may be required.
The "Employment Contract Adjustment Law" comes into force. When a company is taken over, the existing employment contracts have to be taken over too. This does not apply if the company is sold in bankruptcy.
Interest rates are largely liberalised: deposit rates or lending rates are freed but the other rates are subject to band or only a part of interest rates are determined at market rates
Compulsory introduction for the documentation of medical service (only for hospitals financed by the public) similar to a Diagnosis Related Groups (DRG)
Pension entitlements will require at least 25 years of paying into the system, with four years' credit given for time-off for raising children. The basis for calculation of benefits will be the fifteen highest-earning years.
Small businesses, defined as having yearly turnover of Sch 300 000 (as opposed to 40 000 formerly) obtain relief from die VAT through the "small amounts rule". Businesses with yearly turnover of up to Sch 3 million (hoteliers up to Sch 5 million and small retail traders up to Sch 8 million) qualify for VAT and income taxation at a flat rate.
Monthly incomes of up to Sch 11 500 are made tax free, and the general income tax credit is raised from Sch 3 800 to Sch 8 840. Low income earners will be refunded up to 10 % of their social security paid-in contributions (negative tax)
The 1994 amendment to the Market Regulation Law comes into effect: the grain and fertilizer charges are eliminated.
Minimum reserve requirement, bearer instruments will be treated as securities, and registered securities will be treated as bank deposits. Savings and loan (building society) deposits remain free of minimum reserve requirements, but obligations arising out of registered bonds will be subject to such requirements.
Banking supervisory are moderately less regulated, (if) most banks are privately owned and/or the percentage of public bank assets is from 10 % to 25 % and the majority of share of equity ownership of domestic banks by non-residents is allowed; or equal treatment is ensured for both foreign banks and domestic banks; or an unlimited number of branching is allowed for foreign banks.
Wages and salaries in the metal-working and electrical engineering industries are raised by 1/2 %. The collectively-agreed minimum wage is raised by 3.8 %, on top of which is granted a one-time "conjuncture-premium" of Sch 2 000.
Unemployment insurance contributions are raised by 0.5 percentage points.
20 % + 1 share of the remaining 70 % holdings in ÖMV was sold to 51 % of the stake held by ÖIAG in VA Technologies, a mechanical engineering firm (amounting to Sch. 6.8 billion)
The corporate tax will be raised from 30 to 34 %, and the payroll tax from 2 to 3 %, while the tax base for the latter will be widened
To help pay for the estimated Sch 28 billion in tax receipt shortfalls due to the above measures, the corporate tax will be raised from 30 to 34 %, and the payroll tax from 2 to 3 %, while the tax base for the latter will be widened.
Corporate tax from 55 % to 30 %, which was at the time the lowest in OECD countries (even in the U.S. it was 34 %) the three top marginal rates (55, 50 and 40 %) have been dropped, with the 30 % bottom rate becoming the standard rate
The following taxes on businesses are abolished: wealth tax, professional tax ("Gewerbesteuer") and the special tax on banks. Share dividends and dividend payments of limited partnerships are made subject to a final tax of 22 %.
The Labour Market Service Law transfers labour market management from the central government to the Labour Market Service (AMS), a service enterprise with its own legal status. Labour market placement by private agencies is allowed. The rules for financing of the AMS are established in the Labour Market Policy Financing Law. The personnel and material expenses of the AMS will be reimbursed by the central government in a lump sum; as to support payments, the AMS acts as an official agency directly in the name of and on the account of the central government.
The tariff partners in the metal industry agree on wage increases for workers and salaried employees: from November onwards minimum wages are increased by 3.8 %, and actual wages (Istlöhne) by 3.8 % or by a minimum of Sch 650. In addition, a lump-sum payment of Sch 2 500 is paid. Workers become entitled to immediate sickness benefits to be paid by employers for up to six weeks. Under certain conditions normal weakly working time can be extended to 56 hours without an obligation to pay overtime.
Salaries in the trade sector are raised by 3.6 %, while the minimum salary is raised by 4.6 %. In the public sector, salaries are raised by 2.9 %.
Abolition of the special pre-retirement benefit (Sonderunterstützung), higher than the normal Unemployment Benefit and available from the age of 54 for women and from the age of 59 for men.
Unemployment Benefits for those with high incomes are cut
Minimum age supporting for older unemployed in a few special sectors is raised.
Entitlement for Unemployment Benefits and Special Help for long-term unemployed is restricted.
A ‘‘bonus malus’’ regulation promoting employment of elderly employees comes into force. For companies hiring unemployed aged 50 or older, unemployment contributions are reduced or eliminated.
A ‘‘bonus malus’’ regulation promoting employment of elderly employees comes into force.  If an elderly employee is made redundant the company is required to pay a fine to the unemployment insurance system.
More restrictive rules on early retirement pension contributions of the self-employed and farmers will be raised to the liability of the central government to the pension scheme will be lowered from 100.2 to 100 %.
A substantial number of formerly state-owned enterprises have been privatised, the number of state-owned industrial firms having declined from 139 in 1988 to 79 in 1995. For banks the corresponding numbers are 72 and 43 respectively.
A programme by the Labour Market Service to reduce long-term unemployment comes into force. Companies hiring registered long-term unemployed obtain a refund of 20 % of the gross wage for up to one year.
Establishment of the regulatory framework for introducing competition into the market for telecommunications.
If an employer lays off an employee of over 50 who has been working for the company for at least 10 years, the employer has to pay a special unemployment contribution until the employee reaches age 55 (for women) or 60 (for men).
Country-wide introduction of an efficiency-oriented financing of the funds hospital with a Diagnosis Related Groups (DRG). The purpose is to make a transition towards a more performance-related system (Leistungsorientierte Krankenanstaltenfinanzierung – LKF). For this purpose, a minimum basic data set has been documented for all inpatients in 20 hospitals across the country since 1989. Executive authority for implementation of DRGs lies within the KRAZAF. Most acute care services are reimbursed prospectively since 1997. Doctors working in the hospitals are salaried, for patients with private insurance, payment of services is by a separate fee-schedule
The tariff partners in the construction sector agree on a yearly working time model which allows the extension of regular working time to 45 hours in the summer. Working time in excess of 39 hours is compensated by reduced working time in the winter. Holiday payments by employers are increased.
Stricter controls for invalidity schemes
Increase in the minimum age for early retirement on account of reduced working capacity.
Following the new telecommunications law, which came into force in August 1997, key regulations under the responsibility of the new regulatory authority (Telekom Control Kommission and Telekom Control GMBH) were established during 1998. In the process, 50 licences for fixed network (voice telephony and leased lines) were granted in 1998 and another three licences in mobile telecommunications.
New regulations on shop opening hours in retailing come into force which allow for extended opening hours; Extension of shop opening hours, allowing shops to remain open für a maximum of 66 hours a week between 6 a.m. and 7.30 p.m. every weekday and until 5 p.m. on Saturdays.
Complete opening of the gas market by autumn 2002.
A new telecommunications-law becomes effective which establishes the regulatory framework for introducing competition into the market for telecommunications
Telecommunication liberalisation laws in force.
Complete opening of the electricity market by autumn 2001.
Relaxed restrictions on opening large-surface shopping centres to protect local shops.
Employees with an uninterrupted work spell of at least three years who have arranged with their employer a leave of absence for further education obtain income support from the labour office for up to one year (Bildungskarenz). Income support is also given to employees without further-education if the employers hire unemployed persons during their leave of absence (Freistellung gegen Entfall des Arbeitsentgelts).
The member state hosting a posted worker must ensure he is protected by the minimum standards in article 3(1). These are, working time (hours, holidays, pay), standards applicable to agency workers, health and safety, pregnancy and maternity protection, discrimination law, in the building and construction trades, collective agreement standards that 'have been declared universally applicable' across a geographical area
Compulsory payment of patient card (in German: Krankenschein/ equivalent to the EU health insurance card and co-payment for rehabilitation cures and service cure treatment (e.g. cure treatment for 3 weeks)
The rights of work council become stronger and influence economic and social rights, including codetermination on some other issues.
In the metal industry, a tariff agreement comes into force which increases effective wages (Istlöhne) by 2.1 % and allows for wage flexibility at the company level and specifies more flexible working time practices. The agreement is valid until the end of 1999.
A new labour time law comes into effect which increases from eight weeks to one year or more the period during which the maximum allowable working time is calculated.
The unemployed are eligible for continued receipt of unemployment benefits (Arbeitslosengeld) and unemployment assistance (Notstandshilfe) even if they accept temporary employment
Social security coverage extended to occasional jobs.
Several measures related to the 1997 pension reform come into force: survivors' pensions are reduced.
Several measures related to the 1997 pension reform come into force: disability pensions are reduced.
For early retirees the earnings base for pension computation is increased to the eighteen "best years" of a person's work history. To be phased in between 2003 and 2020.
Introduction of an annual pension adjustment formula to take into account changes in life expectancy.
Pensions for civil servants to be annually adjusted applying the adjustment factor of the general pension system.
The pension calculation base for civil servants is changed from the last salary to the same calculation base as the general pension system.
The degree of self financing – as opposed to financing out of the government budget – in the pension insurance for self-employed and for farmers is increased by Sch 250 million annually.
Over the entire contribution period pension rights are accumulated at a uniform rate of 2 % of the calculation base for each year of insurance. For each year of early retirement the above percentage is reduced by 2 percentage points up to a maximum of 15 % or 10 percentage points.
Several measures related to the 1997 pension reform come into force: mainly designed to postpone retirement time
Individuals nursing family members who give up employment can still be covered by the pension insurance under related specific conditions.
Pension claims arising from raising children are increased. The law will be implemented in January 2000.
The criteria for taking-up a part time pension have been relaxed with respect to the required reduction of working hours. A new form of part-time pension is introduced, requiring a shorter contribution period.
The federal government sells its share in Creditanstalt bank to Bank Austria
Partial opening of the Electricity sector to competition.
A new law for the electricity sector (Elektrizitätswirtschafts- und -organisationsgesetz, ELWOG) came into force designed to partially open the sector to competition
The revised investment funds law (Investmentfondsgesetz) comes into force extending the range of permitted financial investments.
New legislation comes into force restructuring the Vienna Stock exchange into a private stock company.
Expansion of health insurance for persons in minor employment positions
The dominant level(s) at which wage bargaining takes place moves from sectoral or industry level to the sectoral or industry level, with additional local or company bargaining.
The dominant level(s) at which wage bargaining takes place moves from the national level to sectoral or industry level.
Recipients of unemployment benefits working in the shadow economic will be sanctioned as though they have worked illegally for the entire month except if they can prove the opposite.
The eligibility conditions for early retirement in case of reduced capability to work (invalidity pensions) are sharpened by extending the required contribution period within the previous 180 months from 36 months to 72 months.
Measures to restrain access to pensions on account of reduced capability to work by raising the period of sickness to 20 weeks. For the public sector, the approval procedure has been tightened by increasing the number of months of contribution prior to retirement.
In accordance with the EU directive, a new law for the electricity sector (Elektrizitatswirtschafts- und -organisationsgesetz, ELWOG) came into force in February 1999, designed to partially open the sector to competition from this date onwards. The law determines that networks are obliged to grant access to generators and eligible customers. Large consumers (with a consumption of more than 20 GWh/year) are already allowed to conclude supply contracts with any electricity supplier.
The union negotiates enforceable agreement at sector level and has veto power over company agreements: "Minimum wages are set by (sectoral) collective agreement or tripartite wage boards in (some) sectors"; Social partner set impulses for the entire economy
The dominant level(s) at which wage bargaining takes place moves from sectoral or industry level with additional local or company bargaining solely to the sectoral or industry level.
Main confederation(s) represent(s) the affiliates politically and is routinely involved in consultation with government – either through bipartite or tripartite contacts. Main confederation moves from score 2 to score 1.
Introduction of higher part-time employment among older workers by providing financial support to working time reductions for older employees by subsidising compensation of those claiming part-time work (Altersteilzeit).
Young people will be entitled to unemployment benefits only if the AMS is unable to find a job or a suitable active labour market measure.
Improving the incentive/disincentive system (Bonus-Malus-System): now employers need not pay any unemployment insurance contribution whatsoever when recruiting workers aged 50+ (before they had to pay half of the contribution rate, and no contribution for workers aged 55+), and the basic amount for calculating the Malus-penalty (to be paid by an employer for terminating the employment contract of a worker aged 50+ and having worked for this employer for at least 10 years) has been doubled.
Entitling workers over the age of 45 and participating in training organised by the National Employment Agency (Arbeitsmarktservice, AMS) to receive unemployment benefits for a prolonged period (78 weeks), if they have made contributions to the unemployment insurance scheme for 15 years out of the previous 25. Unemployed people over 50 will have to have worked 9 contributory years over the past 15. Further education benefits will top up unemployment benefits.
The energy liberalisation act passes Parliament, envisaging the full opening of the electricity and gas markets
Companies are obliged to report all dismissals of workers over the age of 50 who have been employed in that company for at least six months to the public employment services (AMS) at the time of dismissal. The AMS must take measures in order to find employment for the worker concerned in the company concerned or elsewhere.
Older employees in certain age-groups who are employed in a company with fewer than 5 workers may contest a dismissal in the courts within one week from the announcement of the dismissal if the dismissal is seen as "socially unjustified" and the worker has been employed in the company for at least 6 months. A dismissal is regarded as "socially unjustified" if it injures the "essential interests" of the employee.
Legislation comes into force to induce higher part-time employment among older workers by providing financial support to working time reductions for older employees by subsidising compensation of those claiming part-time work (Altersteilzeit).
The routine involvement of unions and employers in government decisions on social and economic policy displays less involvement and moves only to a partial concertation, irregular and infrequent involvement
Minimum pay increase of 3.7% in the metalworking sector, leading to a minimum monthly wage of ATS 15,870. Actual pay will increase by 3.4%, with a minimum monthly increase in cash terms of at least ATS 650. The new pay arrangements are valid for both blue- and white-collar workers.
Introducing a uniform net replacement rate system providing for 55% of previous net earnings. Income groups below the equalisation supplement reference rate (Ausgleichszulagenrichtsatz) receive up to 60% of previous earnings if single and up to 80% (including family supplements) if married. Discontinuing the upward re-evaluation of unemployment benefits and unemployment assistance.
Abolishing the benefit suspension provisions (Ruhensbestimmungen) for old-age pensions to enable people to draw pension benefit while still working.
Jobless people born in 1940 as of 2000, in 1941 as of 2001 and in 1942 as of 2002 (men) or 1945-1947 as of 2000-2002 (women) who do not receive any unemployment assistance for lack of distress may accrue ficious qualifying periods (as long as they meet all the other eligibility criteria for unemployment assistance) and thus entitlements to unemployment-induced early retirement under the public pension scheme.
Some provisions to obtain sick pay are relaxed
Raising the employment spell necessary to qualify for unemployment benefits from 26 to 28 weeks
Giving self-employed the option to enter a voluntary unemployment insurance scheme.
Reducing widow and widower pensions: widows and widowers will receive between 0% and 60% of the deceased spouse's pension, rather than the previous 40%-60%. In addition, the formula for calculating the pension of widows and widowers will be considerably worsened, leading to substantial cuts in pensions.
Abolishing early retirement on the grounds of reduced working/earning capacity and introducing new regulations under invalidity pension schemes concerning the right to pursue the occupation for which one has been trained (vocational protection for people aged 57 or more)
Increasing the entry age for early retirement: the earliest age at which employees may take early retirement and receive a state pension – on grounds of a long contribution history or of unemployment, or to receive a partial pension (Gleitspension) – is increased by 18 months to 56,5 years for women and 61,5 for men
Reducing pension levels for early retirement: Reducing by 3% per year the pension entitlement for workers who retire before the normal retirement ages of 60 for women and 65 for men (before it was 2%). Persons who retire after the normal retirement ages will receive a pension increment (Steigerungsbetrag) of 4% for every year worked after normal retirement age (previously 2% - 5% depending on the retirement age). If the employee's pension entitlement is already 80% of the maximum (i.e. 80% of the insured employee's former annual earnings up to the earnings limit liable to social insurance contributions – the Bemessungsgrundlage) the annual increment is 2% and increments may not bring pension entitlement up to more than 90% of the maximum.
New legislation came into force allocating federal ownerships in the postal and telecommunication sectors under the roof of Austria’s public sector industrial holding (ÖIAG). The ÖIAG was commissioned to sell a large share of federally-owned entities over the next couple of years, according to a pre-specified plan. Substantial privatisations followed, comprising inter alia almost 30 % of Austria Telekom and all federal shares in Austria Tabak. Also, in October 2000 the government decided on a list of 30 entities within the federal administration to be spun-off until the end of 2003 from the government sector into the public enterprise sector. Further sales of shares in Telekom Austria and the Vienna airport takes place, lowering the government owned share to 47.8 % and 8.9 %, respectively.
The privatisation of the Postal Savings Bank is completed. Further sales of shares in Telekom Austria and the Vienna airport takes place, lowering the government owned share to 47.8 % and 8.9 %, respectively.
The tax reform 2000 and the second phase of the family benefits package come into force. They lower the tax burden on wage and other personal incomes.
Introducing the obligation for regional AMS offices to ensure that people having difficulties in entering the labour market are offered a suitable job within 4 weeks, or are given the opportunity to participate in a training or reintegration programme. This applies in particular to people wishing to take up wage work while on childcare benefits or afterwards.
The introduction of a tuition fee for university students takes effect with the beginning of the winter semester 2001/02; its proceeds will partly be distributed to the universities for investment purposes.
Waiting period after recruitment before older workers benefit from special dismissal protection increased from 6 months to 2 years.
Planning services including new patient care levels and binding structural quality criteria
Compulsory introduction for the documentation of medical service for all hospitals
Minimum pay increase of 3% in the metalworking sector. The new monthly minimum pay rate stands at ATS 16,346 (€ 1,187). In contrast with previous years, the new metalworking agreement does not include a 'distribution option' whereby companies may – on the basis of an agreement between management and works council – allocate part of the pay increase flexibility to particular groups of workers, in return for awarding a greater total pay increase.
A (nation-wide) agreement between the central organisations of the trade unions and the employers is reached and signed and implemented and contains a settlement on wages and prepares for or implemented by the legislation. Pact or agreement contains, and/or is predicated on, concessions (or promises) regarding employment protection legislation (labour law).
For unemployed younger than 45 years the level of unemployment benefits is now determined by earnings in the last job preceding the unemployment spell, rather than by earnings in a higher paying occupation dating further back.
The maximum duration of unemployment benefits has been temporarily extended to 78 weeks for unemployed aged 60 and older (subject to a certain contribution period) for a transition period up to the end of 2003.
A four-week waiting period for receipt of unemployment benefits has been introduced for unemployed who have terminated their employment.
The federal government’s ownership in the postal and telecommunication sectors is transferred to the public sector industrial holding company (ÖIAG). The continuation of the privatisation programme leads to the sale of an additional 30 % of Austria Telekom and all shares in Austria Tabak.
Extending the capacity of qualification courses for young people from 2000 to 3000 places. These courses target young people who have failed to find an apprenticeship. In addition unemployed people up to the age of 24 who left education early will be entitled to join special qualification programmes. The expenditure for these measures will be covered by the reserves of the public Employment Service.
Increasing the number of active labour market measures that regional AMS (public employment services) must provide
Raising from 9% to 20% the educational allowance (Bildungsfreibetrag) – which is a financial claim that companies can make for training expenses. At the same time, an alternative option has been introduced: the educational premium (Bildungsprämie) of 6% is targeted on low profits or losses, especially start-ups.
All consumers have the free choice of gas suppliers
This reform has brought Austrian competition law closer to the international mainstream, although certain special features have been preserved.
Introduction of: performance-related elements of funding and the allocation of students’ tuition fees to their university
Freedom to contract with any form of enterprises to curb efficiency
New university employees have no longer the status of tenured civil servants but are salaried employees of the respective university
Employees leaving the company should – if dismissed by the employer after at least 3 years of service – have the option either to take the severance payment at once or to save the entitlement towards a future pension. Importantly, entitlement should be maintained also in the case of resignation by the employee, as well as in short term employment.
The "Economic Stimulation Act" comes into force. It facilitates the activity of private employment agencies and of agencies hiring temporary workers.
Reform of the severance pay system: right to a severance pay upon contract termination after three years with the same employer replaced by retirement accounts, removing the specific costs of dismissals. All private sector employees should be entitled to severance pay from the first day of employment onwards. Entitlement should apply regardless the reason for the termination of the employment relationship. These funds are financed by companies, obliged to contribute 1.5377 % of monthly pay for all employees to a separate fund for this purpose from the beginning of the employment relationship until the end.
Efficiency-oriented financing of hospitals after including case studies
Minimum wages for the temporary agency workers are set to: €1990,64/month for a technician, €1618,23 for a qualified skilled worker, €1411,15 for a skilled worker, €1255,84 for a qualified worker, €1188,90 for a semi-skilled worker; and, €1046,25 for an unskilled worker. The minimum wage is applicable even if the worker is not actually hired out. Moreover the level of pay must be based on the collectively agreed pay due to comparable employees of the user company for doing comparable work. In any case, the pay must not be lower than the collectively agreed minimum wages for the agency work sector.
Abolishing the pre-existing ban on night work for women
Reforming the unemployment benefits insurance system ad raising the generosity of the system: Having exhausted childcare benefits (Kinderbetreuungsgeld) and no job, people are now generally entitled to draw unemployment benefits provided they meet all the other criteria (willing and able to work, out of work). Moreover, unemployment benefits may also be claimed by people who have lost their previous job while on childcare benefits.
New apprenticeships will be eligible for an annual apprenticeship bonus of EUR 1000 per apprentice, resulting in a tangible incentive for increased take-ups of apprenticeships.
Employers providing apprenticeships receive a payment of €1000 per apprentice employed for the next 3 years.
Employers providing apprenticeships will not have to pay occupational injury insurance contributions in respect of the apprentices. In addition, employers' unemployment insurance and health insurance contributions for apprentices will be dropped for the first two years of their apprenticeship.
The AMS, the Austrian PES, will gear office reorganisation and processes to the needs of its clients. The streamlining potential to be exploited in the current programming period through process optimisation and 3-zone office layout will primarily be used.
The AMS, the Austrian PES, has been obliged by law to enable unemployed persons under 25 and over 50 to participate in some training or re-integration programme if they cannot be offered any suitable job within three months.
Dismissal protection only applies to older workers having worked for two full years in a company in order to reduce obstacles to the employment of older people
Private job placement agencies are allowed to deliver services as temporary work agencies.
Restrictions on temporary employment in tourism and agriculture are eased.
Cancellation of the unemployment insurance contributions (-6%) for women aged 56+ and men aged 58+. As of the 60th year, this reduction in non-wage labour costs will be further trimmed by cancellation of the surcharge levied under the Act on Wage Compensation from the Insolvency Contingency Fund (IESG) (-0,7%) and cancellation of the contributions to work accident insurance (-1,4%) and to the Family Burdens Equalisation Fund.
Pension Reform 2003: The premium for later retirement will be increased by the same amount, up to a maximum of 10 %.
Pension Reform 2003: The annual accrual rate (contained in S) will be reduced to 1.78 % (instead of 2 %), so that the full replacement rate of 80 % of past real wages (W) will be reached after an insurance history of 45 years or more (instead of 40 years).
Pension Reform 2003 civil servants: A reduction in the annual accrual rate.
Pension Reform 2003: The accounting period (Durchrechnungszeitraum) for the pension base (W) will be gradually increased to the best 40 years of earnings for which contributions were paid (instead of the best 15 years). The extension is phased, with 12 months annually, starting in 2004 and finalised in 2028. The crediting of child care periods in the pension base (W) will rise from € 640 by 50 % in 25 years. Times for caring for dying relatives or seriously ill children are taken into consideration in the accruals period (Familienhospiz). – The minimum age (61.5 for men and 56.5 for women) for early retirement on account of long-term insurance contributions (35 contribution years for both men and women) will be increased in steps until 2017 to the statutory retirement age of 65 for men and 60 for women. Within the transition period, the deduction (A) for every year of earlier retirement will be increased to 4.2 % (instead of 3 %), up to a maximum of 15 % of the pension. – The premium for later retirement will be increased by the same amount, up to a maximum of 10 %. – Starting in 2004, maximum losses implied by the transition to the new system are capped such that they cannot exceed 10 % at the maximum.
The early retirement age will be gradually raised to the statuary age of 65 for men and 60 for women between July 2004 and the year 2014. Early retirement on account of unemployment will be abolished.
For civil servants with long-term tenure, early retirement at age 61.5 is only possible with discount. Increase of the percentage deduction for early retirement from 3 to 3.36 %.
Pension Reform 2003: Early retirement on account of unemployment will be abolished.
The creation of a new permanent right for occupational groups doing particularly heavy work. Individuals having worked for more than half of their contributory service under particularly demanding conditions may go into retirement at the age of 55/60.
Increase of the minimum retirement age: for men, the age will increase from 61.5 years to 65 years; for women, the age will rise from 56.5 years to 60 years. The increase will be phased in gradually beginning July 2004, and by 2017, early retirement will be eliminated.
Pension Reform 2003 civil servants: Stepwise increase in the retirement age to 65 years.
Introducing more incentives to approximate the de facto and the statutory retirement age in the medium-term rather than have older workers leave the labour market prematurely.
The transition period for the retirement rules of the 2003 pension reform was extended to 2013 for certain groups.
Pension Reform 2003: maximum losses implied by the transition to the new system are capped such that they cannot exceed 10 % at the maximum
Preferential taxation of retained profits by sole proprietorships and business partnerships was introduced. Retained profits up to a maximum yearly amount of € 100 000 subject to a minimum retention of seven years are taxed at half the personal average income tax rate.
Reduction in employees' income taxes, implying a reduction in the number of tax brackets from four to three, at a slightly lower level on average. Moreover, any gross income below a threshold of € 15,770 per year will be exempt from any income tax.
Abolition of the 16-day limit per calendar month and of maximum net income earned in brief employment spells within a calendar month, to be credited towards unemployment benefits claimed for the remaining days of such a calendar month. Temporary employment spells are now defined as dependent work or self-employment lasting less than four weeks. This simplification should foster the use of all available and offered vacancies by unemployed.
Introduction of a single maximum limit on earnings liable to social insurance contributions for economically active people, instead of the current differing limits for various categories of people.
Introduction of a DC individual 'pension account' for each working person, granting at the age of 65 a pension of 80% of pensionable earnings and calculated on a period of 45 years of contributions
The new General Pension Law (Allgemeines Pensionsgesetz, APG) unifies legislation and harmonises the rules (up to remaining differences in contribution regimes, which are however budgeted) for all private sector occupations
New Labour Market Package involving: support for women entering the labour market
Introduction of additional skills training and employment measures specifically targeted at young people, women and those seeking a job after long-term career breaks.
Introduction of combi-wages, in the form of in-work-benefits for long-term unemployed, younger than 25 and older than 45.
Youth support programmes (subsidies for basic qualifications and apprenticeships).
Major deregulations and improved access for the herein (trustee business/ Chartered Accountant/ Balance Sheet Accountant) regulated professions
The national system of cartel notifications was abolished and a system of legal exception was implemented. Mergers have to be notified to the FCA instead of the Cartel Court but the latter remains the institution which will take decisions in cartel matters. Two of the threshold levels which demand such a notification have been raised. Cooperative ventures will be subject to merger control if they permanently fulfil all functions of an independent economic entity. The Cartel Court has to stop infringements of the Cartel Act and to give instructions to the concerned enterprises. Instead of this it can also declare commitment declarations of the concerned enterprises binding if it can be expected that these commitment declarations will prevent further infringements.
Aligning national law concerning the Cartel Act with EU law
Main confederation(s) represent(s) the affiliates politically and is routinely involved in consultation with government – either through bipartite or tripartite contacts. Main confederation moves from score 1 to score 2.
Decentralisation of collective bargaining in the metal industry
Those whose contribution record is longer than 37.5 (40 years for women, 45 years for men) are eligible for early retirement at a smaller discount rate.
The statutory retirement age is 65 years. For persons with an insurance contribution record of at least 37.5 years, retirement is possible between 62 and 68, with a pension deduction or supplement, respectively, of 4.2% for each year of early (late) retirement (corridor pension).
Pension claims at entry into retirement are proportional to average monthly earnings over the best 40 years of earnings. The annual accrual rate for pension claims is set such that the size of the pension amounts to 80% of life time income after 45 years of insurance contributions
New Labour Market Package: youth support programmes (subsidies for basic qualifications and apprenticeships)
New scheme to encourage employers to increase the number of apprenticeships available to school leavers. Each employer will receive €400 per month per additional apprenticeship for the first year, € 200 for the second, and € 100 for the third year.
Integration allowances and employment projects for people re-entering into the labour market. Measures contribute toward allowing women to continue their careers at the same level of qualification and income following interruption in employment for family.
Making available about €285 million for training and further education measures, to be developed in close consultation between the AMS (the Austrian public employment) and the companies.
The government programme for the current legislative period schedules the merger of the Federal Cartel Prosecutor with the FCA. Furthermore the recent reforms of competition law are being evaluated.
The routine involvement of unions and employers in government decisions on social and economic policy displays more involvement and moves to full concertation, regular and frequent involvement
Providing for the extension of collective agreements in the private social sector, in order to guarantee homogeneous minimum working standards and wages in this sector
(Directive 2002/15/EC). This Directive establishes minimum requirements in relation to the organisation of working time in order to improve the health and safety protection of persons performing mobile road transport activities and to improve road safety and align conditions of competition. Member states were requested to implement this Directive by 23 March 2005.
Strengthening activation policies: Maximum commuting time set at 2 hours per day; Minimum working time increased from 16 to 20 hours; Sanctions for undeclared work by unemployed tightened; obligatory for unemployed persons to accept job offers from external partners of the PES and possible to place unemployed persons in jobs in socio-economic enterprises.
Inclusion of bogus-self employed freelance contractors in the severance pay scheme applying to all employees and extending to them the protection in the event of the employer’s insolvency – in other words, in the case of insolvency, the freelance contractor is granted eligibility to receive insolvency guarantee payments to offset outstanding pay entitlements.
A (nation-wide) agreement between the central organisations of the trade unions and the employers is reached and signed. The agreement is negotiated between unions and employers and implemented without government involvement or legislation (“autonomous agreement”). The pact includes wage settlements – it references national wide minimum wage of 1000 Euros for full time employees.
Increase of minimum and actual wages of 3.6% and 3.5% respectively in the metalworking industry, plus an additional one-off payment of up to 200 €, depending on profitability at individual company level. The new agreement is based on Austria's traditional 'wage formula', which means that pay is calculated on the basis of two main parameters: the prospective national inflation rate and productivity of the current and next year. The metalworking industry traditionally opens the Austrian autumn bargaining round and sets the tone for subsequent negotiations in other sectors and branches of the economy.
The Austrian parliament passed an amendment to the Austrian Constitution, which explicitly recognises the central role of the social partners in the country’s system of policymaking. In the amendment, the government makes an explicit commitment to promote the industrial relations actors, in particular the chambers. The central role of social partners in Austrian society is acknowledged as such and enshrined in the Austrian Constitution. Codification of already existing judicature.
Introduction by the PES of a ‘comeback cheque’ for long-term unemployed people. This replaces the previous integration subsidy given to employers for hiring a long-term unemployed person. The subsidy is converted into a cheque for the unemployed person to use as a marketing tool when applying for a job. Particular age groups are eligible for the subsidy, which is negotiated between the PES and the employer.
Extension of compulsory unemployment insurance coverage to economically dependent workers, with a ‘free service contract’ (freier Dienstvertrag). Accordingly, the employer and freelance contractor each contribute 3% of the latter’s gross income to the unemployment insurance fund, which grants the worker eligibility to receive unemployment benefit on losing his/her job.
Introduction of a monthly minimum pay rate of € 1,000 for all pay grades and in all sectors of the economy, to be implemented by the sectoral bargaining parties by 1 January 2009 at the latest. This minimum pay rate relates to regular full-time work of more than 35 hours a week and does not include any form of additional pay.
Legalisation of working arrangements in simple household support activities, implying that private caretakers are covered by labour legislation and social insurance. In the interim, the Government has decided on a temporary model of financial support to partly cover additional costs under certain specific circumstances.
Support of unemployed persons dismissed since 1.11.2008 as a result of restructuring of enterprises, closure of enterprises, decrease in work-loads, and closure of part of the manufactory sectors. 30 000 unemployed are envisaged to be trained and 24 000 of them to get back to work afterwards.
Regional programmes for promotion of employment: projects initiated by companies that aim at creating new jobs are supported (direct subsidy) by the government ("Unternehmensbezogene Arbeitsmarktförderung").
Specific qualifying measures for women, focussing on non-traditional professions for women. Apart from supporting apprenticeships, the attendance of technical and senior technical colleges is supported by the AMS (PES).
Special programme for professional education according to specific regional demands. This programme was developed as a response to the crisis 2008 and targeted in 2009 a total of 6.422 unemployed - of which 4.131 women (64%), a total of 10.000 persons is envisaged for 2010.
New Life-Long-Learning Strategy with the objective of improving the quality of the labour force through stimulating employers and the employees to invest in attaining new knowledge corresponding to the new requirements during the whole professional life.
Supporting employers and employees during short-time work: planned training and retraining of 150,000 persons, at least 64,000 of whom would be employed and over 10,000 of whom would start their own business.
Integration of people with disabilities is carried on: additional means made available for 2008.
New regulation of temporary employment agencies: improving the employment possibilities of different groups of people through creating more flexible forms of labour opportunities.
Single parents or partners on low incomes may apply for an extra grant in addition to childcare benefits of € 6.06 per day
Unemployment insurance contributions of workers earning less than € 1 100 per month (3% of their gross wages) were abolished, and those of workers earning between € 1 100 and € 1 350 per month were reduced.
Increase of pensions (0.2 percentage points)
Extension of the special retirement scheme (Hacklerregelung)
Reduction of the statutory corporate tax rate from 34 to 25%. Introduction of group taxation allowing a group headquartered in Austria to deduct losses incurred elsewhere from domestic profits. Introduction of preferential tax treatment for the purchase of domestic shares acquired to integrate a firm into a group (50% of the purchase price can be written off over 15 years).
Cut in the personal income and wage tax (reduction of the entry tax rate from 38.3 % to 36.5 %; reduction of the middle tax rate from 43.6 % to 43.2 %, increase of the tax thresholds for the lowest and highest income segment)
Increase until € 2300 in the personal income tax allowance of parents in lower income brackets (as a work incentive)
Measures to support families with children, such as an increase in the tax credit for children, the introduction of a tax allowance for children and tax deductibility of childcare costs.
Increase of the annual income tax free income threshold from 10,000 Euro to 11,000 Euro.
Youth employment package: "guarantee for apprenticeship training and reform of apprenticeship subsidies". State guarantee for apprenticeship training: "All school leavers looking will be guaranteed an apprenticeship placement".
Youth employment package: guarantee for apprenticeship training and reform of apprenticeship subsidies: The employer is offered 3 months apprentice wages in the first year, 2 months in the second year and 1 month in the third year. Alternative subsidies are available for new companies or those who have not offered apprenticeships for a considerable period.
Introduction of a special re-employment scheme for young employees (Jugendstiftung). The scheme seeks to provide further training and retraining opportunities for employees aged between 15 and 25 years who have been made redundant by either temporary work agencies or small and medium-sized enterprises (SMEs), both of which have been particularly affected by the current economic recession. The re-employment scheme aims to re-integrate these employees as soon as possible into other segments of the labour market. About 2,000 young workers are expected to take part in the scheme.
The three-tier degree structure – Bachelor, Master and Doctor degree – promoted by the Bologna Process, is now compulsory for all newly introduced degree courses.
Training leave is made more attractive. Employees can take leave of between 3 and 12 months and receive an allowance equal to the amount of the unemployment benefit to cover the cost of living. The new aspect of this model is company-based training: companies have now to organise training according to their particular needs and provided by external training institutions. Half of the training costs are funded by the provincial government. This model is intended to encourage companies to invest in the training of employees and give them an incentive to keep their employees during the economic crisis.
Short-time work benefits or “subsidies for skills training” can be awarded for periods of training during hours not worked since the STW reform in 2009. The STW benefit rates applicable to periods of skills enhancement include a 15% supplement to provide additional incentives. In 2009, around 8 000 persons (out of 67 000 affected by STW) participated in a training measure during the STW period. Subsidies for skills training were granted for approximately 3 100 persons in 2009 and for more than 1 100 persons in 2010.
A modified in-work benefit (Kombilohnbeihilfe) was introduced. It is targeted at handicapped persons. The new in-work benefit is granted in form of a monthly wage top-up of € 300 (full-time) or € 150 (part-time) as an incentive to take up low-paid employment. With the introduction of a new, federally harmonised social assistance in 2010, there is an allowance of 7% to 17% of the minimum income that is not counted towards the assistance for at least the first 18 months of employment. The exact details are laid down by the Länder.
Reorganisation of early retirement schemes for “heavy workers”, in combination with the disability pension scheme.
Within this initiative wages and non-labour costs are subsidised by the AMS. 2/3 of the payroll costs will be financed by the AMS for a maximum period of 12 months for more than 4,000 jobs are to be created at municipal level but also with church or charity institutions.
Introduction of entry-pass level exams serving as admission restrictions.
Employment protection for handicapped people is eased in order to bring more handicapped people in employment, notably by increasing the qualifying time for special protection from dismissal for (eligible) disabled people from 6 months to 3 years.
A new means-tested minimum income scheme was implemented in three Austrian provinces in September 2010. The other six provinces were expected to introduce the scheme, which replaces the social assistance scheme, over the last quarter of 2010. Everyone with a legal claim to unemployment benefit, unemployment assistance, social assistance and pensions, and whose income is below a specified income support threshold, will receive the means-tested minimum income of €744 a month.
Entitlement period for unemployment benefits is extended up to 78 weeks after undertaking a vocational rehabilitation measure.
The retirement age for those with a very long employment history ("Hacklerregelung", allowing the retirement of men who contributed for over 45 years and of women who contributed for over 40 years) will be increased by two years as from 2014, to 62 for men and 57 for women.
i) Legal obligation for a representation of interests for young people in inter-company training institutions, comparable with the council of confidence for young people in companies; (ii) Extension of the possibility to count also training periods abroad to the period of apprenticeship; (iii) Leaving out the requirement for mutually equalising foreign examinations and training with apprenticeship examinations.
Austrian employees are, conditional on the consent of their employer, entitled to unpaid leave for further training and/or education. To facilitate the opportunity to pursue further training/education, the requirements were loosened in 2009 for a limited period of time (until 2011). This temporary change of regulation was well received, especially in the light of the current economic crisis. Consequently, it was decided that the facilitation of the access to (unpaid) leave for further training and/or education should become permanent: the minimum duration of the employment relationship is now six months (instead of one year), the minimum period for training/ education was reduced to two months (instead of three); under certain conditions, seasonal workers were made eligible for this opportunity to further training and education as well. The change in the law went into effect on 1 January 2012.
Anti-wage dumping and social dumping law: Legislation was first introduced in 2011 in anticipation of the end of the transitional restriction for workers from the new Member States to access the Austrian labour market. The most important part of the new legislation specifies that underpayment of workers is no longer considered a matter of civil law. Employers who pay their employees less than required by collective agreements now violate administrative law.
While elder workers were supposed to be exempt from paying unemployment insurance contributions, this measure was suspended for workers aged 58 years and more until the end of 2015 and for workers of 57 years or more until the end of 2017. Through this measure a total amount of EUR 800 Mio for 2011 to 2015 is expected. 41% of this will be used for insolvency-funds, which faces financial problems due to the increased number of insolvencies and workers concerned during the crisis. Another 41% are budget for active labour market measures and the rest is used to cover the deficit in spending for labour market activities.
Restriction of access to special early retirement regimes for people with a long period of contributions (Hacklerregelung) and the disability retirement scheme were further restricted
The shift from short-time work without training to short-time work with training becomes easier
The additional non-wage labour costs for employers are taken by the state from the 5th month of the allowance period (instead of the 7th month) resp. from the beginning of the period in the case of short-time work combined with training. The reform refers to short-term work agreements in 2013.
The introduction of the ‘Fee for the employer’s termination of a work contract’ (Auflösungsabgabe) was part of the austerity package, the so-called ‘Stability Package 2012-2016’ which was decided in parliament on 28 March 2012. It came into effect by the beginning of 2013. If an employer terminates a work contract (open-ended; for fixed-term contracts with a duration of at least 6 months) which is subject to unemployment insurance contributions, a fee of 113 € (for 2013) has to be paid.
Giving those employed on temporary agency contracts equality with full-time staff and guarantees better working conditions. The new Act brings Austrian employment legislation into line with the EU Directive on temporary agency work (Directive 2008/104/EC). Around 75,000 temporary agency workers – approximately 58,000 men and 17,000 women – are affected directly by the new regulations. The new Act also establishes a fund for further training and special social needs of temporary agency workers who are unemployed. The fund is financed from contributions of temporary work agencies and the State, and run by Social Partner representatives and is operational as of 2014
For new entitlements to the part-time scheme for older workers from 1st of January 2013, relevant regulations were reformed. Older workers who continuously reduce their working time are entitled to part-time work not only until an entitlement to regular pension but until the statutory retirement age (women 60 years, men 65 years). The maximum period of part-time for older workers is 5 years. The administration of the part-time scheme for older workers is in the responsibility of AMS.
The entitlement to paid childcare leave has been extended to so-called patchwork families. From 1st of January 2013 onwards, parents who do not live in the same household with their biological child are entitled to one week paid childcare leave (or two weeks for children below the age of 12 years). The entitlement also includes: 1) non-natural parents but living in the same household with the child of their partner (registered partner or partner in life); 2) former spouses after divorce, even without common custody; 3) same-sex relationships.
Demand-driven supply and power density in acute inpatient and outpatient care is redefined.
Development of organisation and control mechanisms at the federal and state levels are based on the principle of results-based management: supply and financial targets are set and constantly monitored to introduce a cost system of measurable goals
The proportion of outpatient care structure with opening times to off-peak and weekend times and the proportion of interdisciplinary models of care in ambulatory care structure is expanded.
Targeted expansion of health promotion and prevention
The maximum period of the short-time allowances (granted in 2013) can be extended to 24 months (instead of 18 months)
In case of long lasting illness and thus inability to work, self-employed are entitled to receive sick pay from the 43rd day of inability to work up to 20 weeks. The benefit amounts to 27.96 Euros per day.
“Come back plus” (Programme “Reife Leistung”): Programme for unemployed persons 50+ or disabled persons; wage subsidy from the PES for max. 1 year
Women in Crafts and Technology "FIT": Labour market policy programme to increasingly qualify women in handicraft and technology, i.e. non-traditional professions, and thereby sustainably improve their income and labour market opportunities; reduction of gender segmentation in the labour market. The programme offers certified qualification in technical professions – training in apprenticeships, technical vocational schools and colleges or universities of applied science, preparatory and supporting measures, basic technical qualification, counselling and supervision during the training.
Establishing provisions to facilitate part-time work in order to pursue further education (so-called educational part-time – Bildungsteilzeit), including the introduction of a part-time education benefit paid by the unemployment insurance. It is part of a larger package called “Act to Amend Social Laws 2013” (Sozialrechtsänderungsgesetz 2013) and deals with various issues. Into force on 1 July 2013.
Introducing care leave or “part-time” care leave of one month up to three months, allowing the respective worker to take care of the relative in need and/or to organise for further care. If the worker and employer agree on care leave, the worker who reduces or temporarily suspends his/ her working time is entitled to a so-called “care benefit” (Pflegekarenzgeld) by the social security provider in order to at least partially make up for his/ her loss of income. The calculation of the benefit is based on the calculation of the worker’s unemployment benefit. Into force on 1 January 2014. Current provisions on paid care leave are often insufficient, as they only cover a very short period of time (generally, one week).
Anti-wage dumping and social dumping law updated :The maximum period of the short-time allowances (granted in 2013) can be extended to 24 months (instead of 18 months)
Anti-wage dumping and social dumping law updated: The maximum period of the short-time allowances (granted in 2013) can be extended to 24 months (instead of 18 months).
Programme “Aufstieg”: Reduction of sick leave started mid 2013.
Supplement for recipients who attend public employment services training schemes
Temporary invalidity pensions will gradually be abolished for people who are under 50 on 1 January 2014. Instead, people will be provided with support for health rehabilitation and/or professional rehabilitation, for which substantial new funds have been allocated, or by health rehabilitation. An important element of the reform will be a standardised assessment of work capacity for which two centralised "competence centres" are to be established. The effectiveness of this measure will rely on effective coordination of two large actors, i.e. the Public Employment Service and the Pension insurance Funds.
Early retirement pension for people with long insurance records ("Hacklerrente") is rendered more difficult: it can be requested only as of the age of 62 (men) and 57 (women) years.
A sector-specific approach to prevent early retirement and to reduce the number of disability pensions was achieved by the social partners in the construction sector. Among others a transition allowance for older unemployed construction workers and a bonus, paid to employees and employers if older worker are being employed until their retirement age, were introduced. This measure could have innovative character as social partners take (financial) responsibility for older workers in their economic sector. These measures are financed primarily by the social partners, so public budgets are relieved and, as recipients of the transition allowance will be treated as employed, wage tax and social security contributions will be paid.
A system of mandatory hospital planning was introduced to remedy the estimated surplus of hospital beds and to reorient hospital provision towards areas which were underserved
Agreement on collective reduction of working time
Rules on supplementary severance payment for older workers.
Agreement reforming the collective bargaining system in Belgium, including role of work councils in firms
Minimum subsistence allowance introduced for all Belgian adults. This "minimum" income is linked to the consumer price index and to changes in a general standard-of-living index ("bien-être"). As at 1st 1, 1975, this minimum is set at B. Frs. 72 000 per household.
Certain unemployed persons were given access to training and retraining schemes. Arrangements for continuing the payment of net wages during the training period are under study.
Certain unemployed persons undergoing vocational training were made eligible for a retraining allowance.
The price freeze was lifted and the system of prior notice of price increases by producers and importers was reintroduced. Notice of every price increase has to be lodged with the prices board 3 months in advance. If the sector or firm decides not to follow the board's recommendations, the price increase has to be announced 2 months before being put into effect. These regulations now apply to enterprises and distributors with an annual turnover of at least 7.5 million francs (as against 5 million francs formerly).
Stipulating the rules and procedures of collective dismissals
The law provided for an almost total de-specialization of savings institutions, hence losing their privileged status.
Constitution of a "Security pool" at the RGI to compensate depositors in the event of a bankruptcy.
The Conseil National du Travail (National Labour Council) concluded a new collective agreement establishing a guaranteed minimum average income per month. This income was set at 15 500 francs per month with effect from 1.1.1975. The agreement (index-linked) was to enter into force on 1.8.1975, but provision was made for this time limit to be extended up to 1.7.1976 in sectors of activity where there was considerable leeway to be made up.
The compensation scheme for workers dismissed as a result of closedowns was broadened.
Arrangements for the grant of employment premiums to small businesses (under 10 dependent workers) were fixed. The amount of the premium was set at B. Frs. 15 000 per annum per worker.
Change in the legislation governing social security of workers. Under the new scheme there are only two payment ceilings: B. Frs. 22 950 for family allowances and unemployment benefits and B. Frs. 37 925 for white-collar workers' pensions and for sickness and disablement insurance benefits. There is no longer a ceiling in respect of blue-collar workers' pensions, medical treatment and annual leave.
Workers over 60 years of age and laid-off workers to receive an allowance in addition to unemployment benefits. The years during which this supplementary allowance is paid count as years of service for the calculation of pension rights.
With effect from 1.1.1976, the retirement age was lowered from 65 to 64 years in the case of men who had worked for at least 45 years.
Flat-rate deduction from the value of enterprises' and distributors' stocks allowed in order to avoid taxing nominal corporate profits attributable to rising prices. This deduction represented a loss of approximately B. Frs. 12 billion to the Treasury. Interest on business loans made completely tax deductible. Interest subsidies for investment loans increased by a further 2 %. Small and medium businesses also receive supplementary aid for investments if they are carried out within 24 months.
The rate of employers' contributions to the family allowance scheme has been lowered from 10.5 % to 10.25 %.
In the context of the policy of budgetary austerity, a selection procedure for education via an entrance examination was introduced.
Foreign students whose parents were not living in Belgium would be required to pay a contribution, the amount of which would be determined according to the level of teaching and the subsidies received by the establishments.
The Office central de la petite épargne was wound up and its tasks transferred to the Banking Commission, in line with the recommendations of the De Voghel report (Commission Gouvernementale, 1970).
In both private sector and public sector agreements, wage increases over and above those linked to the consumer price index not allowed to be passed on in the form of price increases in 1977.
If a wholly unemployed person agrees to take up a new job that is less well paid than his previous post, the unemployment benefit to which he might be entitled was to be calculated as if he was still in the better paid job. This also applies to unemployed persons taking on part-time jobs involving four hours of work per day.
With effect from 30th 3, 1976, and until 12, 1976, each worker is required to pay 50 % of any wage increase obtained under collective agreements into a solidarity fund. The employer is required to pay an equal amount into the fund. (The solidarity fund pays early retirement benefits to dismissed workers aged at least 62 in the case of males and aged at least 58 in the case of females).
Young job seekers registered as job applicants to be entitled to unemployment benefit provided they have applied for a training course and have not turned down the course offered to them.
A supplementary allowance for pensioners and disabled persons was introduced.
The minimum annual income for the elderly was increased from B. Frs. 42 823 to B. Frs. 58 920 for single persons and from B. Frs. 48 047 to B. Frs. 66 381 for married couples.
With effect from 30th 3, 1976, and until 31st 12, 1976, any worker fulfilling the prescribed age requirements (62 years for men, 58 for women) 5, on request, obtain the early retirement pension, provided that the job he or she has vacated is filled by a worker aged under 30 recruited from outside.
The prescribed age limits for entitlement to the early retirement pension were lowered from 62 to 60 for men and from 58 to 55 for women.
The arrangements concerning the early retirement pension extended until 12 1977.
In order to release new jobs for young workers, the early retirement pension scheme was extended to private firms employing 50 persons or more in the case of voluntary departures, provided that the job vacated were given to a young worker
Partial changes in the income tax regulations. In 1977, the impact of inflation on personal income tax to be fully compensated in respect of incomes of less than B. Frs. 250 000; only part, and degressive, compensation for incomes of between B. Frs. 250 000 and 500 000.
The exemption limits for personal income tax were raised and special measures introduced in favour of families.
In 1977 employers will not be asked for their part of social contributions connected with time spent by their employees in recognised training.
Until 31st 12, 1976, private or public enterprises employing 100 persons or more are required to take on a number of trainees equivalent to 1 % of their establishment for a period of six months. In no case 5 a worker be dismissed and replaced by a trainee under this scheme.
Hiring of unemployed persons by the public authorities. The scope of this measure has been progressively extended to certain educational establishments, private non-profit institutions and certain social bodies. Unemployed persons hired by this procedure maintain their unemployed status and draw a higher allowance. The number of persons involved has risen from 18 400 in 1977 to 32 000 at end-8 1979.
Textile industry can recur to employment credit on condition that it keeps employment at 90 % for a year and it collaborates to the restructuration of the sector. This employment credit of B.Frs. 20 000 per employee is extended by banks, but the interest is paid by the Government.
An employment premium granted to employers who increased the number of jobs in their enterprises; the premium is equivalent to six months' employers' contributions to the National Social Security Office.
A premium of B. Frs. 30 000 to be granted to all enterprises with fewer than 100 workers on their payroll if they volunteer to take on one young trainee through the National Employment Office for a period of at least six months. This measure was made retroactive to 1st Apr, 1976.
All persons on early pension must compulsorily be replaced by a young worker aged under 30.
All persons working in enterprises employing at least 20 persons and aged 60 for men and 55 for women are now entitled to an early retirement pension until they reach the legal retirement age. The amount of the early pension equals the unemployment benefit to which the worker would be entitled plus half the difference between the forgone wage and the unemployment benefit.
According to the new regulations, enterprises are required to take on one trainee per 50 workers on their payroll, the proportion of trainees to the number of employees thus being raised from 1 to 2 %. The trainee, who must be chosen from among job-seekers aged under thirty who have never had a job, will from now on receive a wage equivalent to 80 % of the normal agreed wage corresponding to the skill level of the job, starting on the first day of the course. The wage and social security contributions of the trainee are paid in full by the employer.
The special temporary plan ("cadre spécial temporaire"). This measure provides for the hiring of wholly-unemployed persons to do jobs of public benefit. Each worker is hired on a six- to twelve-month contract with the possibility of an extension
The number of training courses for young people went up from 12 000 in 1977 to about 25 000 in June 1978, this being not far short of the target of 27 000 set for the year as a whole
If a fixed-term contract is renewed more times but there is no interruption of the employment relationship due to worker, the parties are deemed to have concluded a regular contract
Defines notice periods in case of dismissal both for manual and non-manual workers (which is significantly greater for the latter). In case of non-manual workers it consolidates unfair dismissal which in line with previous legislation only applies to manual workers, and shifts the onus of proof on employers.
Following a round of tripartite negotiations in the summer, measures were enacted at the end of 10 for the purpose of encouraging industrial and commercial firms in the private sector to reduce their working week and increase their workforce. The general principle underlying these measures53, is that premiums will be paid to firms in which the working week does not exceed 38 hours on 31st 12 1980 and which have taken on additional workers in order to increase their workforce.
The definition of "unemployed" becomes more restrictive
Devolution of responsibility for preventive health care, health promotion, implementation of hospital accreditation and planning, and coordination of home care from national (federal) level to regional level
Increase of lowest pensions and equalisation of minimum benefits for males and females, and limitation of price indexation of very high pensions.
Retail prices (other than prices of oil products) were frozen for one month on 1st 4. The freeze was phased out over the period to 10 1981.
Recovery plan of 10th 2: purchasing power of wages in excess of B.Frs. 35 000 per month was frozen for two years, and the growth of purchasing power of wages below that level was limited to 1%; the minimum wage was to be raised by 5% on 5th 4 1981 and by 3% on 1st 1 1982.
This arrangement was amended in the private sector by the bipartite agreement signed on 13th 2 for the period from 1st 1 1981 to 31st 12 1982, whereby: collective agreements concluded prior to 30th 12 1980 were to be implemented in full and upon expiry to be followed by a twelve-month freeze on real wages: in the absence of a collective agreement, the bipartite agreement provided for: a) a reduction of the working week by 1 hour without loss of pay where the working week exceeded 39 hours; b) where the working week was 38 hours or less, the possibility of negotiating either a 1% increase in real wages for each of the next two years, or a reduction of the working week by one hour by the end of 1982.
Extension from 3 to 6 months of the waiting period for young unemployed persons prior to award of benefits
Reduction of insurance cover for persons unemployed for more than one year who are not heads of families.
Trimming of highest pensions; abolition of certain combinations of pensions
Reduction of social insurance contributions for small and medium-sized businesses; exemption from corporate tax of 5% of taxable profit if earnings are reinvested.
Introduction for two years of a special "solidarity" contribution at progressive rates on public service salaries, in return for employment stability (from 0.9 % to 2.7 % of earnings above B.Frs. 40 000); This contribution has been introduced for two years, but could be extended if the number of unemployed exceeds 300 000.
Higher earnings ceilings for contributions; increased contributions from self-employed persons
Employment measures: recruitment in the public service of long-term unemployed
Royal Decree No. 181 of 30th Dec establishing a Fund to use for employment purposes the 3 % additional wage restraint imposed on firms that did not subscribe to the collective agreement providing either for a 5 % reduction in working hours and a 3 % increase in recruitment or for alternative schemes that would have a similar employment effect.
Royal Decree No. 185 of 30th Dec instituting a special scheme for small and medium-sized enterprises for the use of wage restraint to promote employment. In aggregate, employment in the SMEs was set to rise by 2.5 % in 1983 and remain at the 1983 level in 1984.
Prices were frozen at their 15th 2 level across the board until 31st 3 and then selectively for the remainder of 1982.
First rationalisation and planning programme for secondary education to organise more efficiently the provision of education
Incentives for private households to invest in shares
Increase in the patient's contribution to health costs; reduction in sickness allowances.
In 1982, the Hospital Act of 1963 was modified to contain costs by improving the efficiency of hospital bed use, and the National Council for Hospital Facilities was established.
A moratorium on the increase in hospital beds was introduced, which stated that the number of beds available as of July 1982 should not be exceeded.
A patient day quota was imposed on hospitals. Beyond this quota, patient days were only partially reimbursed.
Royal Decree No. 179 of 30th 12 permitting derogations to certain social laws in the context of a collective labour agreement reducing working hours by at least 5 % and providing for compensatory recruitment of 3 %.
Royal Decree No. 180 of 30th 12. The flat-rate system of indexation introduced in 2 was extended into 1983, until there were two adjustments to public sector wages on the basis of this system. Proportional indexation at 100 % to resume, but on the basis of a "smoothed" index, i.e. the arithmetic mean of the consumer price index for the last four months.
Act of 11th 4 1983 laying down "competitiveness norms" for 1983 and 1984: labour cost increases in Belgium compared with the year-earlier average could not exceed the weighted average rise in Belgium's seven main partner countries.
Freeze on wage indexation (except for the minimum wage) until 5. For the rest of 1982, wages will be adjusted upwards at a flat rate equal to the index-linked increase in the minimum wage. Other incomes will be subjected to the same restraint through a "solidarity" contribution.
A 4 % reduction in benefits paid to unemployed heads of household; a 6 % reduction in unemployment benefits paid to cohabitants.
Replacement of unemployment benefit for young people by a waiting-time allowance; this waiting-time benefit is smaller than their previous allocation
Royal Decree of 12th 4 1984 increasing the minimum subsistence levels. The (annual) minimum subsistence levels at 1st 1 1985 and 1st 1 1986 would be respectively: - For couples living under the same roof: BF 102 853 and BF 104 910. - For persons living on their own or single parents with dependent minors: BF 74 052 and BF 75 533. - For all others: BF 51 430 and BF 52 459.
Corporation tax was reduced from 48 to 45 %. Tax incentives were introduced to encourage investment in Belgian shares, and also the creation of new companies or increases in capital by existing companies (tax exemption up to 1 3 %). The special "solidarity" corporation taxes were discontinued, the effect to be felt mainly in 1983.
Special 10 % tax on incomes in excess of Fr 3 million, the proceeds being used to finance unemployment insurance
Pension contributions paid by employees raised from 6,25 to 7 %
Compulsory education extended to the age of 18 (with possibility of part-time training after 16 years)
The tax levied at source on property investment would represent the full amount due for fiscal 1985-1996 inclusive for property acquired new in 1984 or 1985 (subject to VAT) or constructed under a building permit issued between 1st 7 1983 and 30th 6 1985.
The rate of tax at source on share income was raised from 20 % to 25 % though now representing the full amount due; this increase applied to income due or paid from 1st 1 1984. This measure aims at widening the tax base to incorporate an increased share of transfer incomes.
The tax exemption on savings deposits was raised from BF 30 000 to BF 50 000.
Increase of teaching hours and longer training curriculum for teachers
Possibility to create "adaptation classes" and other innovations for pupils with special needs
There was a two-tier foreign-exchange market – an official one, through which all current account transactions must be conducted and in which the exchange rate is determined by the mechanisms of the EMS, and a second one for private capital movements, in which the rate is set freely. Since 1984 permission to switch from one market to another has been granted more and more frequently, and the "free" and "official" exchange rates became by the early 90s virtually identical.
In 1984 (Mainil Law), the fixed-rate system was replaced by one calculated proportionally on professional income. The calculation is the same as that for private sector employees, but the revenues are still fixed prior to 1984.
Pensions can be taken as from age 60, but the pension for men is reduced by 5 % annually up to age 65.
A worker on paid study-leave may be dismissed only on grounds unrelated to this circumstance.
Obliges the Fonds d'indemnisation to pay a transition severance to workers who lose their job after company closure.
Micro-economic supervision of all public credit institutions was centralised with the Minister of Finance. A government commissioner was also appointed to each public credit institution. In addition, all public credit institutions, except the ASLK-CGER, were subject to a "specialised" guardian Minister, operating alongside the Minister of Finance.
Starting in 1985, attempts were made to better control what seemed to be an excessive use of diagnosis testing (clinical biology). A national budget for this item was introduced, combined with a data management system to identify high prescribers.
Act enabling the Government to introduce a twin competitiveness norm for 1985-86.
Gradual lowering of tax rates by 2.25 percentage points. Partial indexation of tax scales in 1986 and full indexation from 1987. An increase in the minimum taxable income from BF 100 000 to 120 000.
Price controls eased: small and medium-sized enterprises with a turnover not in excess of BF 30 million henceforth exempted from the obligation to announce price increases, with the exception of a few sectors.
In the education sector, cuts in jobs, school building expenditure, subsidies, operating appropriations and school transport
Method of setting the official discount rate changed. Henceforth it is set every Wednesday by the monetary authorities on the basis of the three-month Treasury certificate rate. The recent reform of the method of setting the discount rate, aimed at greater flexibility, is expected to help control the impact on the asset composition of the Central Bank of foreign exchange market intervention.
Hospital financing was significantly reformed with the introduction of prospective financing in the sector. Towards the better allocation of resources between hospitals by putting less emphasis on historical costs and more on activities, functions and performance
Joint industrial agreement making possible a return in 1987 to free bargaining of real wages; the government reserves the right to intervene in wage formation should unit output costs in Belgium rise more rapidly than in the main competitor countries.
Different dispositions for temporary workers
New method of calculation of Unemployment Benefits excluding certain categories of unemployed from benefits.
Self-employed and wage earners are no longer allowed to draw their pension before the age of 60 and the retirement age is set at 65 for both men and women.
Introduction of Local Employment Agencies (PWA/ALE) organising and monitoring occasional domestic work by long-term unemployed people.
The law defines the concept of Temporary Work and Temporary Work Agency. Temporary work is allowed in three situations: as a replacement for a permanent worker, temporary and exceptional peaks of work, unusual work. Temporary agency workers enjoy the same terms and conditions of employment and the same salary than permanent workers in the user enterprise. Temporary workers are always hired on a fixed-term contract and are then covered by the general labour laws.
A five-stage increase in the guaranteed minimum pension is agreed upon.
A 7 % increase in all private sector pensions is approved.
The option available to women to retire at age 55 is withdrawn.
A single insurance scheme covering blue-collar and white-collar workers, shopkeepers and tradesmen, farmers and professionals is introduced.
System of price controls replaced by one of prior notification.
The new text entrenched the principles of an earlier compromise (the so-called School Pact). This pact allowed both public (state) and private (Catholic) schools to expand with public money and stipulated that material considerations should not hinder parental choice between both types of schools. Furthermore, cost-free access to both types of schooling, within ‘a reasonable distance’ was to be offered throughout Belgium.
Since 12 1988 stockbrokers have been authorised to set up as "sociétés de bourse", stock-exchange companies, and, under a new bill still at the drafting stage, credit institutions and insurance companies will gradually be allowed to acquire a stake in their capital. Starting in 1992, such companies will be created from scratch. Even if commissions are not yet freely negotiable, rates are likely to become degressive. Ultimately, they should ideally be set by market forces.
The Unemployment Benefits replacement rate is lowered markedly by the tax reform.
Exclusion from the right to benefits and changes including aggravated penalties for false statement concerning the composition of the household.
BF 91 billion of personal income tax reductions were granted covering a wide range of changes, including an overhaul in the treatment of one-earner couples (BF 29 billion), a modification of the treatment of two-earner couples (BF 37 billion), an increase in the standard deduction (BF 16 billion), more generous exemptions for dependents and childcare (BF 7 billion) and a reduction in both the number of rates as well as their levels (BF 3 billion). -> While the lowest rate was increased from 23.9 to 25 %, the top rate was reduced from 72 to 55 %. The number of rates was cut from 13 to 7. The reform was financed by increases in indirect taxes and broadening of the personal and corporate tax bases.
Introduced mechanisms aimed at making them financially accountable for their new responsibilities, including education. In 1993, the French Community defined regions as responsible for the administration of vocational education and adopted the Charter of March 1993 for dual education and training defining the respective roles of schools and companies.
Credit controls fully liberalised due to the full liberalisation of direct credit/ reserve requirements
The Belgian and Luxembourg authorities have undertaken to abolish the two-tier market by the end of 1992. The banking sector has thus been able to expand its international activities more or less unimpeded.
The fee-for-service system for hospital patients was replaced by a daily rate and a fee per admission
Law to Safeguard Competitiveness which requires the social partners to submit an assessment of the competitive position of the country and recommendations to the Government at regular intervals.
The standard rate was cut from 43 % on 1989 income to 41 % for 1990 and to 39 % for 1991 (that tax base was broadened, the reform had a positive net-revenue contribution of BF 10 billion in 1990)
Gradual elimination of Sabena's monopoly of air transport. However, it is rather timid: rivals' entry is to be excluded unless there exists a certain minimum volume of traffic on the route, and use of aircraft bigger than a specified size is to be forbidden, as is service to or from major European airports.
In the event of unjustified dismissal, the worker is entitled to compensation in lieu of notice corresponding to the duration of the notice period plus compensation assessed at a flat rate.
The law of December 1990 reformed the stock market. Stockbrokers were now obliged to set up as stock exchange companies (with stricter rules concerning own funds), while credit and insurance institutions were allowed to acquire stakes in this type of company. The powers of the Banking Commission were extended and it was transformed into the Banking and Finance Commission. Stock-market transactions will become more transparent; new products will be created to entice Belgian and foreign investors; the stock market is opened to new participants and capital requirements for bourse operators will be raised.
The legal framework for sickness funds of 1894 was replaced by the 1990 Sickness Funds Act, which stipulates the tasks of the sickness funds within and outside the compulsory health insurance, the basic rules for their functioning as well as their supervision. This Act was introduced because of political demand for stronger democratisation of management and more financial transparency.
The government was allowed by Parliament to fix a global budget for health care expenditure with, in the case of target overruns, obligatory corrective mechanisms – such as automatic downward fee adjustment and obligatory refunding by high-cost providers.
An important reform was carried out in the psychiatric sector, aimed at cutting back on psychiatric hospital beds and substituting these with new provisions aiming to stimulate the social integration of patients
Breakdown of inter-industry wage negotiations.
The extra funds will be used to reduce long term unemployment, to retrain older workers, to increase the minimum wage by BF 500 in 1991 and BF 400 in 1992.
An Agreement between the employers’ federation and trade unions is stipulated: Unemployment Benefits for people aged between 50 and 55 are increased.
The Government decides to increase employees' pensions from 1 to 3 % according to the retirement date, with effect on 10 1st. This measure will cost BF 1.3 billion in 1990 and BF 5.3 billion in a full year.
Early Retirement is made less attractive
The Council of Ministers approved the restructuring of the public credit institutions (IPCs) into two full-service groups. While the completion of this reform should encourage greater competition in the financial-services sector, the role the government has to play in this market remains unclear; although the IPCs are the conduit for cross-subsidisation of the housing sector, housing subsidies could easily be given in a more direct fashion.
Private placement (40 %) of Sabena Airlines in 1990, worth approximately US$110 mn.
The withholding tax on interest payments on new financial assets was reduced from 25 to 10 %
The agreement also provides for an increase in the employers' social security contributions of 0.07 % of the overall wage bill.
Establishment of the "Fonds d'Impulsion pour la Politique des Immigrés" (FIPI, or Fund to Promote Policies for Immigrants) introducing the "Zones d'Action Prioritaire" (ZAPs, or priority action zones) to undertake supportive action with aim of achieving social integration than of boosting attainment at school
First competition law. Creation of a supervisory body with specific tasks in order to enforce competition law in Belgium. Aligns Belgian competition policy with EU law. Provides a new and solid base for competition policy. The abuse principle puts the burden of proof on companies. Subjects mergers and acquisitions to the scrutiny of the competition authorities via a mandatory notification requirement.
International capital flows from partially liberalised to fully liberalised
The hospital financing system has drastically changed. Different measures have been taken in order to better account for the activities of hospitals and to progressively diminish the historical component of the budget. Moreover, incentives have been created to improve hospital efficiency.
A fixed budget for each subsector of health care was introduced into the health insurance system. If the budget limits were surpassed, correction mechanisms would be activated. This cost-controlling reform represented a fundamental change in government policy towards health care from the previous demand-led funding strategy.
Since 1 1 1991, both men and women in the private sector pension scheme can freely chose to retire between the ages of 60 and 65, irrespective of the number of years worked.
The Loi du 21 mars 1991 restructured certain public-sector enterprises, transforming them into “autonomous public undertakings” (EPAs), and in the same year the Loi du 17 juin 1991 reorganised the banking and insurance sector, ordering the merger of state-owned institutions into two companies, the “Caisse Générale d'Epargne et de Retraite – Banque” and the “Caisse Générale d'Epargne et de Retraite – Assurances” (and their subsequent merger, in May 1995, in the state holding company “Société Fédérale de Participations”).
Compulsory employers' and employees' social security contributions are slightly increased.
Abnormally long periods of unemployment are subjected to stricter regulations
Increase in monitoring of the availability of unemployed to take up “suitable job offers” is increased. The "interruption de chomage" system, allowing the full-time unemployed to claim a temporary dispensation from job-search for social or family reasons, is made stricter: entitlement is reduced and the benefits are lowered.
Regulated ordinary full-time secondary education by addressing topics concerning the creation and maintenance of educational institutions, the calculation and usage of the number of periods-professors, the use of promotion within establishments, the counting of pupils, and the inter-institutional consultation committee
Workers on temporary redundancy situation cannot be substituted.
New system for out-patient tests was introduced, with sharply reduced fees, strict monitoring of individual prescription behaviour, and the request that heavy prescribers provide an explanation
The number of daily unemployment benefit payments that can be combined with part-time employment is limited to a maximum of 13 per month. The maximum wage at which it is possible to cumulate benefits and wages is reduced.
Minimum age for early retirement is increased from 55 to 56.
A Royal Decree of April 10, 1992, coordinated the income tax legislation into an Income Tax Code 1992, hereinafter abbreviated CIT1992 or, generally, CIT. The main regulations implementing the provisions of this Code are embodied in the Royal Decree of execution of the 1992 Code of August 27, 1993, hereinafter abbreviated RD-CIT 1992 or RD-CIT.
Eligibility for Unemployment Benefits is tightened and linked more closely to work.
Employer's social contributions are cut, especially for low-skilled workers and young people
Introduction of personalised support plans (plans d’accompagnement des chômeurs) for the unemployed younger than 46. The plan includes evaluation of skills and job prospects, monitoring, counselling and retraining. Regular evaluation of ALMPs and labour market programmes.
By ministerial decree of 20.4.1993, the obligation to give prior notification of price increases was abolished, in line with the principle of the freedom to set prices. Most price controls are abolished, except those on electricity, gas, oil, water, medicines and certain insurance policies. Large companies are still required to inform the Ministry of Economic Affairs about their price changes.
A deregulation of interest rates on bank deposits and bank loans
De-specialization of credit institutions – i.e. deposit banks, savings banks and public credit institutions. No legal distinctions between various categories of "banks".
Law of 11 January 1993 on preventing use of the Financial system for purpose of money laundering and terrorist financing.
The Second Banking Directive partly inspired by the German model of universal banking. It allowed the acquisition by banks of insurance and investment firms as well as the creation of financial conglomerates.
A more extensive reform of the budgetary procedures was introduced in the system of compulsory health insurance was thoroughly reformed. This reform created a new management structure for the RIZIV-INAMI, a stricter budgetary procedure and expenditure control, and measures to reinforce the financial responsibility of the care providers. Reform of the RIZIV-INAMI management structure, introduction of a stricter budgetary procedure and expenditure control and measures to reinforce the financial responsibility of care providers.
Rise in minimum wage, changes in categorisation
In particular, the period during which school-leavers are not entitled to Unemployment Benefits is extended.
A new method for calculating pensions is introduced, with a longer base period.
The law that gave the impetus to divestments was the Loi du 22 juillet 1993 “portant des dispositions fiscales et financières”, which authorized the sale of shares held in the Société Nationale d'Investissement (SNI) (Article 98) and in the Société Fédérale de Participations (Article 99) to natural persons or legal entities, either domestic or foreign, following approval by the Council of Ministers. Article 100 provides that the government, by decree, establishes the methods of financing, control and issuance of securities (as well as the transfer, liquidation or dissolution of the companies in question).
In the context of the privatisation programme launched by the Government in 1993, the Belgian-Dutch insurance and banking group Fortis acquired a large stake in CGER Bank and CGER Insurance. Fortis acquired sole control over CGER Insurance, while it secured joint control of CGER Bank. Almost US$1.5 bn in revenues were raised through this sale.
The public credit institutions' privatisation process was put in motion. This was based on the law of 22 March 1993, under which public credit institutions became subject to the same legal and regulatory framework as other credit institutions. In the following years, most of the public credit institutions were sold to private financial groups.
Social security contribution reductions for employers hiring unemployed over the age of 50. Larger reductions in social contributions are introduced provided the result is a net creation of jobs (plan d'entreprise and plan sectoriel); New Hiring Plan targeting the long-term unemployed (Plan avantage à l'embauche) involving reduction in social security contributions; Youth Hiring Plan: reduction in social contributions if hiring young people
New Hiring Plan targeting the long-term unemployed (Plan avantage à l'embauche) involving reduction in social security contributions
Social security contribution reductions for employers hiring unemployed over the age of 50.
Larger reductions in social contributions are introduced provided the result is a net creation of jobs (plan d'entreprise and plan sectoriel)
Integrated all the higher education programmes into one system with one overall institutional and legislative framework, i.e., Higher Non‐University Education, (Hoger Onderwijs Buiten de Universiteit – HOBU). Universities also acquired more autonomy regarding budget allocation within the operational lump‐sum payment system. Following a merger operation, there are now 22 university colleges instead of 164 previously.
Fixed-term contract can be now renewed but no more than four times.
Introduction of a new kind of contract ("emploi-tremplin"): for specific categories of workers (aged less than 30 years and with less than six months of experience) the employment relationship can be terminated on the basis of a shorter notice period (one month in case of dismissal and one week in case of voluntary separation).
Notice periods for high-income white collars are made subject to negotiation (only permanent workers).
Primary and secondary markets were made available to all investors, including households
The sickness funds were made partially financially accountable for their health care expenditure via a new payment system based on expenses and on the risk profile of their members. This measure aimed to contain costs by giving incentives to the sickness funds to limit unnecessary health care consumption by their members. In mid-1994 it was decided that starting in 1995, mutualités (health funds) would be progressively more responsible for their budget shortfalls, in line with the following time schedule: 1995-96 15 % of the shortfalls; 1997-98 20 % of the shortfalls; from 1999 25 % of the shortfalls. However, mutualités would not be responsible for shortfalls caused by ‘‘exogenous factors’’, such as lower income received from the social security sector, increases in health expenditure due to wage increases granted to nursing staff and epidemics. The mutualités were left free to decide how they would finance their share of any shortfalls, with an increase in contributions being considered as the most likely solution.
Diagnosis-related groups (DRGs) were introduced in the hospital budget in order to financially reward or penalise those hospitals which make use of their beds in more or less efficient ways.
The age limit for early retirement is lowered to 55, subject for special conditions, for two years.
It introduces and increase the reductions in employer's social security contributions targeted at groups at the lower end of the labour market which were introduced by the global plan.
These measures resulted in the merge of secondary schools with less than 400 pupils, revised the options and reduced the amount of teaching through a reform of the way in which the NTPP was calculated.
Definition of fixed wage scales for all teachers
It modifies the organisational structure of the stock exchange by creating an independent Management Committee (Comité de direction); it empowers the King to modify the rules governing the prospectus (to be supplied by a company before its listing), so that its approval by the Banking and Finance Commission can be given more expeditiously and at lower cost
It modifies and tightens the rules concerning the statute and supervision of investment firms; from 1996 onwards, domestic credit institutions, as well as foreign credit institutions and investment firms, will be granted direct access to the stock exchange
To mitigate the impact of the increase in co-payments and preserve as much as possible the principle of free access to health care to everyone, the government took a number of accompanying measures, including: – a widening of the definition of especially vulnerable social groups – widows, invalids, pensioners and orphans (VIPO) whose incomes do not exceed a certain amount will enjoy special treatment concerning co-payments; – the introduction of yearly co-payment ceilings for other especially vulnerable social groups (franchise sociale et fiscale) above which patients pay no co-payments.
With effect from 1995, however, the ‘‘gestion globale’’ (global management) of the social security system abolished the distinction between contributions and tax revenues for each branch of the social security taken separately. There are no longer, therefore, any specific contributions for health insurance, since this scheme is an integral part of the social security system.
The Government decides to sell 50 % of the société nationale de crédit à l’industrie (NMKN-SNCI) to the previously privatised bank ASLK-CGER for BF 4.6 billion.
Rules governing the exclusion from the unemployment schemes on grounds of abnormally long periods of unemployment are tightened.
Conditions under which older unemployed are exempted from job search are eased.
Stronger incentives for people interrupting unemployment are introduced (interruption de chômage).
As of 8 1996, Proximus (75 % Belgacom, 25 % Airtouch) and Mobistar, a subsidiary of France Telecom and the group Telinfo, shared the market.
Improvement and enlargement of the competences of the Conseil de la concurrence
New work patterns and improved rights for part-timers
The integration of the Belgian stock market with other European stock markets. In 1996 the Brussels Stock Exchange created the EURONM market in partnership first with the French, German and Dutch markets, and then also the Italian market. The stock exchanges in the three Benelux countries have establish a partnership agreement which, among other things, has sharply reduced the requirements for companies listed in one country to be listed in the other two countries, thereby significantly increasing the liquidity of stocks traded in each one of these markets.
The Practice of Medicine Act empowers the Federal Minister of Public Health to limit the number of physicians that may practise under the national health insurance system.
Creation of worker council in companies with European dimension
Parliament approves three framework laws (lois-cadres): on promoting employment and the preventive safeguarding of competitiveness; on the budget and Belgium’s participation in EMU; and the modernisation of the social security systems. These laws will give the Government special powers to legislate by Royal Decrees in the areas of the budget (until 8 1997), reform of the social security system (until 4 1997), and wage settlements (no time limit).
As trade unions and employers’ organisations fail to conclude an inter-professional agreement for the period 1997-98, the Government fixes the maximum wage increase for the coming two years at 6.1 %.
Under the law on promoting employment and the preventive safeguarding of competitiveness, the government, on account of the failure of the trade unions and employers’ organisations to conclude an inter-professional agreement, sets the maximum nominal increase in per capita wage costs at 6.1 % for 1997 and 1998.
As negotiations with the social partners broke down, the Parliament gave power to the Government to legislate by decrees. The new law regarding wages includes a mechanism to keep wage and labour cost growth in line with the weighted average increase in the three major trading partners in the EU – i.e. Germany, France and the Netherlands.
After a first sale in 1994, a 49.9 % stake in Belgacom was sold to the ADSB Telecommunications consortium. This single operation raised the most proceeds of the entire period since the beginning of the process (almost US$2.5 bn, about 30 % of total proceeds). In 1996 about US$3.5 bn in sales proceeds were raised.
The initial public offer (16.60 % of capital) of the Belgian gas treatment, transmission and storage monopoly Distrigaz is to be mentioned. The Belgian government later sold its remaining share in the company, but retains one golden share in addition to other specific voting rights.
Initial public offer of Crédit Communal de Belgique (which merged with Crédit Local de France in 1996 creating DEXIA).
Full privatisation of Société nationale d’investissement and Crédit à l’industrie; disposal of 50 % of the shares of the holding Crédit communal/Dexia; Completion of the privatisation of the Credit Agricole: the Banque Bacob acquires the last block of shares of the former public credit institution.
A further, progressive reduction in employers’ social security contributions
Very long-term unemployed individuals (five years, or on minimum-subsistence benefits for three years) can be employed under a standard employment contract for a half-time post (a scheme known as "Smet jobs") in tasks which are no longer commonly performed (petrol pump attendant, parking attendant, supermarket reception, etc.). In this plan, the unemployment benefits are used as a wage subsidy for jobs that are no longer done because they become too expensive. The employee must be hired with a normal contract of employment as a part-time worker on either 50% or 80% full-time contractual hours. The employee receives a maximum of 120% of the sectoral minimum wage.
Employers hiring long-term unemployed people (or people in comparable categories, such as unemployed people receiving the minimum subsistence-level benefits) are eligible for a reduction in social security contributions for two years. The reduction is higher if the period of unemployment or the period of benefit receipt is longer, or if the unemployed person is more than 50 years old.
Integrating all the legislation regarding elementary education into one single coherent framework and giving all local schools greater autonomy and responsibility for their own organisation, thereby abolishing the compulsory division into year classes and grades and replacing the compulsory curriculum subjects by learning areas
First work-experience contract (Première Expérience Professionnelle, PEP) for young people who have been unemployed for at least nine months, which offers six months of work experience (renewable for a further six months). Employers benefit from a reduction in their social security contributions and the young person's pay is made up partly of unemployment benefits and partly of a supplement paid by the employer.
Reduction of restrictions on temporary work.
A first step was taken in the prospective financing of pharmaceuticals in hospitals through the introduction of a fixed sum for the prophylactic use of antibiotics for surgical interventions.
The income of a working spouse is not taken into account for the calculation of the unemployment benefit, but it is for the minimum income support.
Tightening of the entitlement to unemployment benefits for part-time workers (in order to avoid abuse by voluntary part-time workers asking for these benefit).
The reforms also include the guaranteeing of a minimum pension amount for each year of employment in which the recipient was employed for at least one-third of normal working time. This minimum pension amount is calculated based on the current guaranteed minimum monthly income for a 21 year old.
The option of taking an early pension from age 60 is to be maintained providing workers can show proof of a minimum of 20 years of employment up to 1997. This qualifying period will be even longer in future with a progressive increase to 35 years by the year 2005.
The modernisation of the system will also include the establishment of a partial pension which will be available to beneficiaries who have reached the age of 60. This measure has not been implemented yet.
The pension scheme for salaried employees has undergone important changes applicable to pensions due on or after 1 July 1997. The objective of the reform is, among other things, to provide equal treatment for men and women by progressively raising the retirement age of women in order to align it with that of men, namely 65 years. This alignment will be completed by 2009.
Unemployment benefits and minimum subsistence allowances (or, more specifically, the saving of these) have also been used to create additional jobs for the long-term unemployed in the public sector, in cooperation with the regions and local authorities.
Complete liberalisation of the telecommunications market
Creation of "Centres for Pupil Guidance"
Introduction of positive discrimination into schools with large numbers of pupils in great difficulty, the allocation of additional resources to schools, and the adoption of conventions for the socio-professional insertion applied to dual education and training structures
Further to the Renault case (related to the sudden announcement of the closure of the Renault plant in Vilvoorde in 1997), some changes to the procedure for collective dismissals were introduced clarifying the obligation of employers to consult with workers’ representatives and creating an obligation on employers to analyse and formally respond to any proposals from workers’ representatives. In addition, sanctions for non-compliance are strengthened to include the reimbursement of any subsidies paid by the federal Government to the employer to create jobs.
With the law of 17 December 1998, the NBB now has an explicit legal basis for exercising macro-prudential supervision. On 1 January 1999, it also took over the functions of the RGI. The main prudential function of the RGI was the management of the “Protection Fund for Deposits and Financial Instruments”. The Protection Fund’s task is to give financial compensation to depositors and investors who have suffered damages following the bankruptcy of a credit institution or investment undertaking.
All beneficiaries of compulsory health insurance are covered either under the general scheme or the scheme for self-employed workers.
The medical profession, through one of its unions (Absym), declared the 1998 fee schedule no longer in force, thereby ending the so-called Pax medica. The fee schedule (‘‘nomenclature’’) had been negotiated, as every year, by representatives of the medical profession and the mutualités (Commission médico-mutualiste). This decision of the medical profession gave practitioners the possibility of setting their fees on an entirely free basis – albeit with an unchanged level of reimbursements.
The market for letters and parcels above 350 grammes was opened up in 1999, the limit is scheduled to come down to 100 grammes in 2003.
According to the explanatory memorandum to the law of 26 April 1999, the reform aims to clarify the respective responsibilities of the various organs, allowing better control of operations and practices that impact on the Belgian market and restore the balance intended by the legislature of 1991. This reform was accompanied by budgetary resources approved by the Government on the proposal of the Minister of economic Affairs. The main changes concern the reform the institutional aspects (Corps of rapporteurs, the Competition Service and the Competition Council) and procedures relating to restrictive practices, concentrations and questions.
Saint‐Eloi Agreements about budget breakdown on real school enrolments and economic growth
Tightening the notice period of blue-collars
The global medical file was introduced in 5 1999 on a limited basis (for persons over 60 and for specific medical consultations) and its range will be progressively extended.
Increase in the unemployment benefit for singles.
Measures aimed at reducing labour supply: 1) schemes that enable workers to withdraw temporarily from the labour market (career breaks); 2) or to finish their career early (early retirement and half-time early retirement schemes).
Cutting individual social security contributions for full-time workers earning up to 115 % of the statutory minimum wage, and prorata cuttings for part-time workers on the basis of the hours worked. The reduction, corresponding to € 82.5 per month for full-time employees earning up to € 1150 per month, is progressively withdrawn falling to zero for salaries of € 1350 and above.
Measures have been introduced which provide young people with the opportunity to combine work and training (employment/training contracts and apprenticeships combined with wage-earning occupational activity).
Introduction of : 1) a one-off payment of € 743.7 paid to single parent families taking up employment after a long period of unemployment; 2) a one-off payment of € 743.7 paid to long-term unemployed persons accepting a job which requires them to travel far (more than 12 hours in total travel + job); 3) a higher amount of unemployment benefits based on the previous (higher) salary for older unemployed persons (aged 45 and over) accepting a lower-paid job. The increased family benefit given to long-term unemployed persons is maintained during the first two quarters of taking up employment and continues if the new job lasts less than six months.
Benefit recipients taking up employment at around the minimum wage can keep for a transition period the social security advantages – such as family allowances – linked to their previous status.
Activation programme for the reintegration of the unemployed benefiting from the minimum guaranteed income (minimex), including: 1) an increased state subvention for no profit organisations hiring beneficiaries of minimum guaranteed income; 2) activation allowances for employers in the social sector hiring difficult to employ unemployed or beneficiaries of the minimum guaranteed income; 3) specific reintegration temporary work contracts (intérim d'insertion)
Activation allowances for employers in the social sector hiring difficult to employ unemployed or beneficiaries of the minimum guaranteed income
Obligation for public and private employers with more than 50 employees to recruit a quota of at least 3% for private employers and 1.5% for public employers of young people eligible for a "First Job Agreement". The First Job Agreement can take the form of a) an open-ended or fixed-term contract of at least one year and for at least half-time work; b) a part-time contract combined with training; c) an apprenticeship in an occupation normally carried on by waged workers or a vocational reintegration agreement. Under this scheme, employers' social security contributions are significantly reduced, while employers who keep on unqualified young people
Specific policies have been adopted to encourage young and older people to enter successfully or to remain in the labour market: for example "Percours d'Insertion", "Convention de Premiere Emploi", "Groupments d'Emploveurs" and "Interim d'Insertion".
Improved co-operation between the federal government and the social security system financing unemployment benefits in implementing the “plans d’accompagnement des chômeurs”.
The 300 PMS and Centres for Health Supervision in schools (MST Centres) merged into 75 Pupil Guidance Centres (CLBs) and were scaled up.
Specified the initial training (defined as 13 skills) required by "instituteurs" (primary school teachers) and "régents" (secondary school teachers).
Tightening the rules concerning notice period and compensation in case of unjustified dismissal for blue-collar workers. Until now, blue-collar workers have shorter notice period and lower compensation in the event of dismissal.
In 2000, the authorities approved the fusion of the Belgian, French and Dutch stock markets. This process has resulted in the creation of EURONEXT.
2001 budget – a one-off adjustment had to be made with respect to the compulsory public health insurance to correct for the systematic underestimation of expenditure in previous years.
Concerning pharmaceutical expenditure (which represents 25 % of total expenditure), 65 % of any budget overshooting will be supported by the pharmaceutical industry itself.
In 2002, a reform of hospital financing has shifted the focus from reimbursement of costs to reimbursement per pathology, basing hospital budgets on their pathology mix and on a normative average length of stay per pathology. This system, where only so-called “justified beds” are financed, gives hospitals incentives to contain costs.
In a context of expected favourable macroeconomic prospects and while other countries were also in the process of reform in their tax systems (e.g. France, Germany, Netherlands, Luxembourg) the Belgian authorities decided to carry out an extensive multi-tier reform of the direct tax system. The 2001 personal income tax reform includes in particular the following measures: 1) a tax credit for low labour income earners; 2) the streamlining of the marginal tax rates on medium income tax brackets; 3) new work-related tax-deductible expenses; 4) a reduction of the top marginal tax rate from 52% to 50%; 5) higher tax exemptions on the income of married double-income earning couples alongside the tax exemptions for unmarried double-income earning couples; 6) separate taxation of non-work related income; and 7) increases in the tax allowances for dependent children.
Awarding to employers: 1) a single reduction of employers' social security contributions corresponding to € 800 per worker and per working hour cut, to be followed by 2) a reduction of social security contributions after one year from the introduction of the cut in working time and varying according to the level of cuts (from € 250 to 600 per worker and per year).
Extension of the plan d’accompagnement des chômeurs to persons older than 46.
Introduction of a voucher system for the provision of "local services" to households (domestic help, etc.), allowing both non-governmental organisations (NGOs) and normal companies to supply services at prices that compete with those of the underground economy. The State bridges the financial gap between the companies' labour costs and the preferential price paid by the user.
In the gas market, transport and retail have been unbundled and the eligible part of the market broadened in 7 2001 and now covers some 58 % of the total market. Consumers will get free choice of suppliers in 10 2006. In spite of this progress, the market share of new suppliers is still small (5 %). The Flemish region decided to bring the date of full eligibility forward to 2003.
The new section allows the Competition Council to exercise the jurisdiction conferred on national authorities by the EC Regulation 2790/1999 of 22 December 1999 on the application of Article 81 (3) of the Treaty to categories of vertical agreements. Article 7 of this Regulation provides that the competent national authority may, under certain conditions, withdraw the benefit of the exemption for all or part of the national territory. The current wording of Article 53 will also allow the Competition Council to implement the reform of Regulation No. 17, which aims to enable national authorities to apply Article 81 (3) of the EC Treaty
Introduction of a specific form of temporary agency work in the construction sector. Sectoral temporary work agency will have to be accredited and monitored by the industry's social partners. To ensure that safety and the length of assignments are kept under control, temporary agency workers will be registered with these agencies and will have to undergo 16 hours' safety training before taking up their first job. Temporary agency work is permitted only for a maximum period of two years per worker. Agency workers have the same social benefits and rights as workers in the construction sector.
A system of reference pricing was developed in 2001, and entered into effect at the start of 2003 as the basis for reimbursement. In a number of well-defined cases, the reference price is lower than the administrative price.
New legal framework for the financial participation of workers in the employer's profits, allowing for the introduction of profit-sharing schemes either through a collective agreement or through a "participation deed". Benefits received within the framework of a profit-sharing scheme will be limited to 10% of pay bill.
The level of unemployment benefits after the first year of unemployment has been raised from 44% to 45% of the reference wage for single unemployed persons. For the first year, the rate of the reference wage remains unchanged (60%).
The Government of Belgium is in the process of strengthening the second-pillar pension system through legislation on complementary pensions (Loi sur les pensions complémentaires – LPC). Currently about one-third of the active population in Belgium is covered by a second pillar pension plan. The reform is intended to stimulate the development of pension coverage, and would apply to employed persons and the self-employed.
Personal income tax reform • reduces the number of tax brackets  • institutes a top marginal tax rate of 50 % (by eliminating the top two brackets of 55 and 52.5 %) • tax exemptions will be identical for married and unmarried couples • tax exemptions for replacement income will be calculated per person, and the tax base will be labour income only – make refundable the income tax reductions for dependent children; – grant a supplementary reduction to solo parents; – increase the income ceiling for the means test for solo parents; and – exclude part of the support payments they receive from the other parent in respect of their children from the assessment of their income.
Granting training vouchers to encourage companies, particularly SMEs, to invest in the training of their staff. Training organisations must be approved by the Flemish minister responsible in order to guarantee the quality of training provided. Each voucher will have a value of € 30 and 50% of this will be met by the Flemish government. In order to allow the largest possible number of companies to benefit from the scheme, each one will be able to claim a maximum of 200 vouchers a year. A similar scheme was introduced in Wallonia in 2000.
Older long-term unemployed (50 aged and over) coming back to work receive an income supplement, which can be combined with the new wage. The objective is to encourage the older workers to find a new job, even if the rate of pay is less than before.
Introduction of number portability in mobile telephony and improved rules of transparency; a pip will warn users that their call is being switched to another network.
Only big customers (buying more than a threshold level) are allowed to choose their supplier freely for the time being. About half of the electricity market has this eligibility at the moment. Complete freedom of choosing one’s supplier is expected to be implemented at the latest date allowed by the EU directive (11 2007) except for the Flemish region that has decided to bring complete liberalisation forward by one year, i.e. to 7 2003.
The law of 2 August 2002 radically reorganised prudential supervision in Belgium. As part of that process, the Banking and Finance Commission and the Insurance Supervision Office were merged on 1 January 2004 to form a single supervisory body, the Banking, Finance and Insurance Commission (CBFA). Moreover, cooperation with the NBB was significantly reinforced and institutionalised. In addition, as foreseen in the law of August 2002, a Financial Stability Committee was established in 2003. It comprises the members of the NBB’s and BFIC’s boards, and is chaired by the governor of the NBB. It deals with all matters of common interest, such as the overall stability of the financial system, the coordination of crisis management and the management of synergies between the two institutions.
Raising the "integration" income by 4 % and introducing a projet d'intégration to accompany it, especially for the young.
The level of unemployment benefits after the first year of unemployment has been raised from 35 % to 40 % of the reference wage for cohabitant unemployed and from 45 % to 50 % for single unemployed persons.
Introduction of a partly exemption (50 %) from payment to the Tax Administration of withholding tax on salaries of researchers employed by universities, colleges, the FNRS/NFWO and the FWO-Vlaanderen. In 2005, it has been decided to increase the rate of this exemption. The exemption has several times been extended to other categories of researchers (with different rates of exemption).
Reduction of employers' social security contributions for every employee aged 58 or more
Encouraging young unskilled workers (i.e. young people who do not have a certificate of higher secondary education and are above compulsory school age) to undergo additional training or training leading to a qualification.
New scheme to help young people start up in self-employment or start their own business. The scheme is aimed at young people under 30 who have not yet been self-employed, who have been unemployed for at least three months and who, as a precondition, accept support supervised by bodies accredited by the Participation Fund. The period of support lasts for six months and consists of a monthly payment of € 375.
Reform of "service vouchers" scheme (titre-services/ dienstencheques), which subsidises the employment of people to carry out household tasks. The scheme: 1) Will be managed at federal level; 2) Will be enlarged and made more flexible, with the number of available vouchers significantly increased; 3) Will be restricted to employing people to perform cleaning, ironing, shopping and transport of people with mobility difficulties; 4) Employment on open-ended contracts for a minimum of half normal working hours will be considered the norm under the scheme. However, fixed-term contacts involving a minimum of 3 consecutive hours' work per day will be offered during the first 6 months.
All companies become eligible to choose their gas and electricity provider in Flanders. Liberalisation is to be extended to the general public on 17.
Cross-border rail freight opened to competition on 15 3.
Decree of 10 July 2003 concerning the landscape of elementary education and formation of "scholengemeenschappen" (school communities) in 9 of 10 elementary schools
Provision of equality of treatment between private and public sector employees in the area of notice periods on termination of the employment contract, aimed at employers and workers that are not covered by the Law of December 5 1968 on collective agreements and joint committees.
The new law allows for the possibility that a national agreement between doctors and health insurers makes the payment of certain pre-specified budgetary amounts conditional upon the achievement of well-defined performance objectives, such as restrictions on the volumes of medical services provided or on medical prescriptions. The dates on which the conditional amounts will be paid out, as well as the date by which a specific objective must be achieved, are set by the Insurance Commission and made known beforehand.
Introduction of a "working credit bonus", generating a financial benefit added to the net salary of those on low incomes. The benefits of the credit will be reduced only slightly as the income from employment rises.
Under the terms of a collective bargaining agreement, the food sector becomes the first to introduce a social pension plan, as of 1 4 2004, in accordance with the law on supplementary pensions. "Definition of retirement scheme for managers in the public sector. They are to be subject to the same pension scheme as salaried workers and contribute to a supplementary pension scheme."
Corporate tax reform: Reduction from 39 and 28 % depending on the company's turnover to 33 and 24.5 %, reinvested profit is no longer taxable, the federal tax deductibility of regional taxes was eliminated.
A tax deduction will be introduced, while the cost of the vouchers will not change
Replacing the old system of monitoring unemployed people with a new one featuring an individual approach to supervision. Introduction of a system of regular check-ups for people receiving unemployment benefits for more than 18 months (12 months in areas with a low rate of unemployment and 24 months in areas of high unemployment). Long-term unemployed are frequently invited for an interview. During these interviews, the federal employment office checks the efforts the unemployed has made to find employment. Where useful, training or counselling can be offered to long-term unemployed. Unemployed who no longer actively look for work or refuse training or counselling can lose part of/ all their unemployment benefits. The objective is to improve the employability of the jobless through training and counselling or ultimately through financial sanctions (unemployment benefits are replaced by social aid fixed at subsistence level, which implies a cut in income up to 17.6%).
Fixed bread prices are abandoned in Belgium
The competition authorities are being remodelled to enhance their effectiveness and to cope with the extra competencies they took over from the EC (control of market power abuses and cartels) in 5 2004. An autonomous and independent organisation is being created comprising an investigative branch (Competition Service) and a decision-making branch (Competition Council), with reporters ensuring the liaison between the two parts of the organisation. At the same time, the way in which market concentration is regulated is being revised so that it will be less resource-intensive for the competition authorities. Nevertheless, the increase in staffing from 23 persons to 39 is unlikely to be sufficient to carry out these responsibilities adequately – such staffing levels are very low by international comparison.
Workers unemployed as a result of a collective lay-off following company restructuring will receive a reduction in their SSC of € 400 per quarter for maximum three quarters after reemployment. This measure is aimed at encouraging such workers to look for a new job after the collective laid-off.
Provision for the setting-up of an employment cell in case of collective lay-off as a result of company restructuring within the restructuring company to provide counselling, training or placement of former employees.
From partially to fully liberalised: In 2004, financial sector supervision of banking, finance and insurance was merged into a single supervisor (the Banking, Finance, and Insurance Commission, CBFA), to further strengthening the supervision of the increasingly complex and continuously evolving strategies of the bancassurance groups and of the trend towards greater cross-border activities. The creation of a single supervisor should increase the quality of supervision as well as improve consistency of supervision across sectors (Cihak and Podpiera, 2006). Moreover, the Financial Stability Committee (FSC) was created, bringing together all the board members from the CBFA and the National Bank of Belgium, in order to complement micro-prudential surveillance and macro-prudential analysis. This includes the global stability of the financial system, crisis management co-ordination and co-ordination of the supervision of financial conglomerates.
Enlarging the limit of healthcare budget.
The federal government has created the Federal Centre of Expertise within the Ministry of Public Health in order to provide technical and scientific analysis in support of decision-making. It became operational in 2004. The centre will facilitate a more systematic use of health technology assessments, a tool which also allows for a better planning of supply.
Increase in the "guaranteed income for the elderly" by € 40 per month over 4 years (€ 10 per year) for couples and by € 60 per month over the same period for people living alone.
Belgacom and of the airport operator Brussels International Airport Company (BIAC). The two transactions – respectively 5.3 % of capital to institutional investors for around US$685 mn and 70 % of capital to the Australian’s Maquarie for US$457 mn – eased Belgium to be one of few European countries to have ended 2004 with a balanced budget for the fifth consecutive year.
An increase in the number of work experience jobs in the 'social sector' for long-term unemployed people: a further 200 such jobs will be created giving the low-skilled long-term unemployed people another chance
Setting up of an improved system of co-operation between regional PES, which will now start exchanging information on vacancies and co-ordinate their efforts in cross-border collective redundancies.
Thresholds for pre-notification are significantly increased
Extension of the obligation to pay a redundancy allowance (indemnité de fermeture) in case of company restructuring to companies employing between 10 and 19 workers (from previous 20 employees' threshold). Eligible workers must have an open-ended contract and one year service in the company. Basic allowance is currently set at € 128,69 per year of service in the company, plus a supplementary allowance paid to workers over 45 of age per year spent in the company, up to maximum € 2.573,80 in total. Provision of the possibility to extend this obligation to companies with at least 5 workers through collective agreement.
Since 2005 quarterly assessments on the total spending take place. This has allowed the government to take timely measures to limit nominal spending increases to 2.5% in 2005. The following year, real growth in health spending is expected to be less than 3%.
A "bonus" (weerwerkpremie) of €150 a month for 12 months for older workers made redundant during restructuring processes aged 50 or over and with at least 25 years' service, and subject to a number of preconditions, as an incentive to resume work quickly.
Reform of the system of the "Guarantee of income'' allowance. According to this system, a job seeker taking on a part-time job can still benefit from a part of the unemployment allowance, in such a way that he/she earns more than with unemployment benefit only.
Anglo-French consortium comprising Centrica PLC and Gaz de France acquired a majority shareholding (51 %) in Belgian public power company SPE (Société de Production d’Electricité). Municipalities controlling the company have collected over US$900 mn.
Gradual introduction of the "employment bonus" in 2005-2007, which consists of a degressive reduction in individual SSC. The objective is to avoid job traps and make work pay, by increasing net earnings without involving higher labour costs for the employer. The employment bonus replaces and improves the system of rebates in individual SSC for low-wages and the tax credit for low-income workers (introduced in the 2001 tax reform). The objective is to stimulate employment by lowering labour costs, to make employment more attractive for low-income workers and to avoid 'unemployment traps'. In the previous system, the reductions in SSC dissipated quickly when income was rising.
Extension of the arrangements for students during summer holidays, to draw more young people to the labour market.
Further 1,000 work experience jobs for young people in part-time vocational training;
Speeding up the creation of a system of recognition of workers' acquired competences, enabling those lacking the appropriate diploma to prove that they are capable of doing a certain job.
Regional Agreement on Employment, including: Further 1000 training opportunities to be organised yearly with the help of sectoral organisations to absorb waiting lists for training schemes for occupations market by so-called bottleneck vacancies.
A six-month allowance (allocation d'établissement) paid by the Participation Fund (Fonds de Participation) to help unemployed people aged at least 30 to set up their own business.
Further reductions of employer's social security contributions, equal to €1,000 per quarter during the 16 quarters following hiring (from previously 8), for particularly low-qualified unemployed young people under the age of 26, low-qualified young people of foreign origin and low-qualified young people with disabilities
Moreover, one part of the salary is taken on board by the state in the form of a work allowance of € 350 per month during the first six months following hiring (Activa Start Programme). Employers in the private sector can deduct this amount from the next salary.
Employers who apply a staff management which takes into account the age and who valorise the potential of older workers can introduce a request for subsidy by the federal ministry of employment.
Rules on the weekly closing day and evening opening hours have been simplified. The number of Sundays on which shops can be open has been increased.
Improving institutional set-up and aligning Belgian law to EU law
In 6 2006 the Council of Ministers adopted a draft law – anticipating European regulation – that allows depositors to close a bank account or a saving account without incurring fees and be reimbursed for any banking fee paid in advance for future services.
A system of lump sum payment per hospital stay applies for pharmaceutical specialties administered in acute hospitals
GPs moving to areas of low GP density can receive up to EUR 35 000 of direct subsidies and interest-free loans, as well as free administrative assistance for the first 18 months of activity
Increase in the minimum wages paid to all workers under the service vouchers scheme
Beneficiaries of unemployment benefits can continue receiving increased family allowances for a period of two years (instead of six months) when finding a new job. An income ceiling cannot be exceeded.
The eligibility conditions for receiving the income supplement when going back to work have been eased. The claimant must no longer receive the seniority allowance (i.e. have worked as a wage earner for at least 20 years and be unemployed for at least one year).
Raising the ordinary early-retirement age from currently 58 years at 25 years seniority to 60 years in 2008 (30 years of seniority) and increasing the required seniority to 35 years of services by 2012. Some exceptions continue to hold, such as for workers in occupations that are considered to be arduous. (Solidarity Pact between Generations)
Lump-sum reduction in the personal income tax introduced by the Flemish government for workers established in the Flemish Region. First targeted on low-income workers, it will be increased to all workers in 2009. The reduction amounts to € 125 in 2007, € 150 in 2008 and € 200 in 2009.
A traineeship paid by the unemployment service and aimed at the integration of unemployed people into the company (stage d'insertion). The traineeship will be at least part-time and will last minimum two months.
New system of allowances for the vocational training of unemployed people having no access to other unemployment benefits. These include a training allowance (allocation de formation) for the individual vocational training of employees in the enterprise.
In 2007, the regional PES created “Synerjob” to enhance cooperation and mobility between regions.
Under the Federal Government´s state Cross Government policy, addresses social determinants of health and explicitly refers to reduction of health health inequalities in the agreement of of 21 December 2007 and agreements on this occasion, the Government intends to take responsibilities to provide to the country and effective governance dynamic.
Raising the minimum wage in two phases: the guaranteed minimum monthly wage for people aged 21+ will increase by EUR 25 on 1/4/2007and a further EUR 25 increase will follow on 1/10/2008, equating to a gross increase in the minimum wage of 4%.
Giving employees a tax friendly wage bonus. This is a new variant on en existing formula where employees can share the results of their employers, such as the profit or share participation. The maximum bonus is EUR 2,200 net on a yearly basis. Above that, there is a taxation of 33%, for employee and employer jointly, which is redirected into the social security.
Tightens access conditions to normal early retirement. From 2008 on, early retirement will only be accessible for workers that are 60 years old with 30 years of seniority (or 58 years old with 35 years of seniority). From 2012 onwards, these criteria will be tightened further.
Additional measures to discourage early retirement: companies have to make other options available and contribute to the costs of early retirement; 'time credits' for non-work activities were reduced; lower implicit taxation through a 'work resumption supplement' for over-50s; reduced employers' social security contribution for elderly low-income workers.
Raising the number of years' service used to calculate an employee's right to take early retirement at 58 or 60 years of age, to a career of at least 30 or 35 years respectively.
Social security contributions for low wage employees were reduced. Flat cut in employers’ SSC cuts for elder workers has a bigger impact on older low-income earners than on older high-income earners.
Creation of new 750 non-qualified jobs in SME and Spin-off entreprises.
Employers hiring older workers receive an annual premium of EUR 400-1 000 during the first year. An additional subsidy is offered to companies that engage in a diversity plan that includes older employees.
Walloon Region – Subsidies for newly employed under coaching scheme (MIRE) for mobility costs; Means-tested subsidies for kindergarten expenses, flat contribution to mobility costs (50 euros/month) for 6 months.
To stimulate the demand of older workers, the Flemish employment premium 50+ has been installed in 2006. Employers who hire older jobseekers can obtain a financial incentive on top of federal reductions. From 11 2009 the premium was increased to between 400 to 1500 Euros per month (during one year) for each unemployed 50+ that is offered a contract for an indeterminate period.
Flemish school leavers that become unemployed will be offered earlier intervention, such as job mediation and job counselling.
Opening up the basic PES services to (dismissed) employees: training vouchers, career guidance (upgrading of ESF-trajectories), specified ESF-call training.
Action plan for youth: 26 actions centred on five lines of action to improve professional experiences for the unemployed, reduce dualities at school, improve competences of the unemployed and implement a tailored counselling for each unemployed person.
The Flemish government and the social partners established in a declaration "Together for 50+" the following pillars for increasing the employment rate of older workers: career guidance, job mediation.
In both Flanders and Wallonia, numerous new incentives have been implemented to stimulate job search and mediation for younger unemployed.
Opening-up access to Walloon PES training for interim workers and non-renewed contractual workers, as well as for temporarily unemployed workers on the same conditions as unemployed ((speed coaching and small income support)+ reimbursement of 1 euro/hour and mobility costs for training)
New initiatives to enhance skills: encouraging (vocational) training schemes for jobseekers, in particular the action plan literacy
Wider obligations to provide outplacement when massive lays-off (adopted 16-01-09). Currently, companies of more than 20 workers dismissing workers have the obligation to provide outplacement services to workers above 45 years during 6 months with the creation of a "cellule pour l'emploi". This obligation would be extended to workers under 45 years (outplacement services during 3 months) and to temporary and interim workers who worked in the company for more than 1 year. For companies with less than 20 workers, it is not an obligation but it's possible to create a "cellule pour l'emploi" as well. It is compulsory for ex-workers to register to this outplacement services, and it will reimburse: 2000€ (for +45 years) if they accept a new job, 1000€ if not and half of it if -45 years old i.e. 1000€ when accepting new job, 500€ if not. In addition to this, employment (wage-) support is available for companies that take over staff laid off by other companies.
Regarding health, there are specific measures under the Federal Poverty Reduction Plan: 1. To fight against the refusal of hospitalisation of patients who cannot advance payments; 2. To improve the third party paying system for healthcare providers by simplifying the administrative steps and by accelerating pay-out; 3. To organise a direct billing of patient contributions towards the compulsory insurance organisations, for the patients who benefit from the Maximum Billing System; 4. To minimise costs for patients and where necessary to reduce them, including the hospital bills; 5. To improve the information on the preferred reimbursement mechanisms; 6. To simplify the access to the OMNIO status and to examine the possibility to automate the access to this status; 7. To encourage the use of the ´health card´ in the Public Centres for Social Well-Being; 8. To give care providers the possibility to communicate more easily with their social practices (conventions, application of the third payer system); 9. To encourage general medicine in the most disadvantaged and rural areas; 10. To develop pilot projects, such as ‘Experience Experts’, in hospitals; 11. To support collaboration between the services for social integration and mental health in order to avoid the abuse of psychiatric intervention to solve social problems; 12. To continue the National Food and Health Programme to further promote a healthy and balanced diet. One of the measures of the Federal Poverty Reduction Plan is the development of the ‘Inter Federal Poverty Barometer’. This instrument aims to give the phenomenon of poverty a higher level of visibility within Belgium. Regarding the Health theme, this Poverty Barometer includes two sub indicators on health: (1) postponement of healthcare treatment due to financial reasons and (2) negative self reported health.
Establishment of ceilings for sectoral and company-level negotiations, beyond automatic wage indexation, concerning tax-free bonuses for employees. 125 euro ceiling for 2009 wage bargaining negotiations 250 euro ceiling for 2010 wage bargaining negotiations. Temporary measure (until the end of 2010).
Inter-sectoral collective agreement for the period 2009–2010. The first series of measures aim to increase workers’ net income by a maximum of € 375 for the next two years without increasing costs for employers. This net increase will be realised through: 1) an increase in the value of lunch vouchers; 2) an increase in travel compensation (undertaken for work purposes); 3) an increase for employers, from 60% to 75%, in the payment of public transport tickets for workers to travel from home to the workplace. Automatic indexation of gross income remains unchanged. A second series of measures ensures that social benefits, such as pensions and unemployment benefits, will follow the rise in the cost of living and will also be increased. Workers who are temporarily unemployed because of the economic crisis will receive higher benefits. On the other hand, employers will benefit from tax reductions on labour costs and financial incentives in order to recruit long-term unemployed people.
Extension of tax incentives for overtime work (partial exemption from payment of the withholding tax for employers and tax reduction for employees). The incentives will apply to a maximum of 130 hours in 2010, instead of 65 hours currently. Increase in the rate of the partial exemption from payment of the withholding tax on premiums for shift and night work, from 10,7% to 15,6% in 6 2009.
The wage agreement increased the wage subsidy for overtime, night and shift workers, researchers as well as for all workers.
Unemployment benefits for the initial periods of unemployment have been raised starting
Companies have to make other options available and contribute to the costs of early retirement; “time credits” for non-work activities were reduced; lower implicit taxation through a “work resumption supplement” for over-50s; reduced employers’ social security contribution for elderly low-income workers; in Flanders, an employment premium for hiring elderly workers was introduced.
Nationalisation of the Belgian assets of Fortis
The no-tax area is increased by 165 € (250 after indexation), i.e. from 6.150 to 6.400, for the low and middle income earners, that is, for those tax-payers whose gross salary doesn't exceed 22.870 €.
As from 2009, all working people who reside in the Flemish region will receive a job discount higher than originally planned: everyone who lives and has an income from work in Flanders will receive a EUR 250 tax reduction. The government has decided to raise the job discount for the lowest incomes that deserve special attention to EUR 300 per working person.
Social security contributions for low wage employees were reduced.
New legislation on adult education (modular system, e-learning) is being passed. The budget for training vouchers has been expanded.
The ability to impose administrative penalties was strengthened in 2009. The regulator has the ability to block the non-compliant offers with the ex-ante obligations.
The number of competition inspectors has been gradually increasing in 2009-10.
Sets the rules for companies to create effective prevention policies regarding drug abuse
The most important measure to contain the rise in unemployment was a substantial expansion of the existing reduced working time scheme for blue-collar workers, which in mid-2009 was supplemented with two temporary schemes for white-collar workers and workers subject to collective reductions.
Increase in the unemployment benefits for the initial periods of unemployment leading to increase degressivity in benefits level over time: wage ceiling +300€ for the first 6 months of unemployment (leading to a ceiling at 2206€); +150€ from the 7th month until the 12th of unemployment; +0.8% after 12 month of unemployment.
Flemish capital enters into capital of KBC. The bank is allowed to issue bonds of the Flemish government.
The targeted tax reduction of EUR 200 to low-wage workers was increased to EUR 250 (EUR 300 for low-wage workers)
Older jobseekers (aged over 50) do no longer need to demonstrate 20 years of professional experience to benefit from activation policies.
Measures were also taken to strengthen job search incentives. Firms with more than 20 workers and that engaged in collective dismissals were required to provide counselling for all workers, including those on temporary contracts.
Demand for younger workers was stimulated via the Win-Win plan which introduced full or partial exemption from social security contributions for younger workers, where the degree of exemption depends on age, education level, and length of unemployment. The Win-Win plan also targets older unemployed and long-term unemployed.
New administrative guidelines on personal supervision for jobseekers are strengthening the labour market management of Public Employment Agencies, together with private partners for training/ work integration. New offices (Potentia, Exaris, Instant A, Inter S) created for social temporary work (Potentia) to support young jobseekers (18-30) with very limited skills (not having completed secondary education) under reinforced job coaching programmes.
Flemish public employment agency (VDAB) extended its activation policy to unemployed people over 52 years.
Increase to 70 hours a month (instead of 45) of maximum hours for work placement participants.
Delivering training and support for under-25 long-term unemployed who have not received an offer from Flemish public service for employment (VDAB).
Measures aimed at increasing the language capabilities of the workforce. Language vouchers for unemployed persons linked to increased collaboration with the Flemish Employment office (VDAB), concerning language training oriented to the needs of business as well as in-company training courses. Measures also devoted to giving to some unemployed a minimum of competence in French.
Both blue and white collar workers affected by temporary unemployment can benefit from training provided by authorised public services, coupled by extension of traineeships and bonus for young people older than 18 years.
People aged 45 or over, made redundant as a result of restructuring, are offered re-training as supervisors.
The 4 2010 law authorised tied sales (except in financial services) and relaxed somewhat the restrictions on sales with a loss and at low profit. The black-out period was also reduced and limited to clothing. Restrictions on opening of large outlets were relaxed by scrapping the necessity to assess the impact on existing businesses.
2010-11 a chief economist and deputy chief economist were appointed, allowing the authority to start a non-case related investigation for the first time. The competition body has prepared draft legislation to introduce administrative sanctions for individuals.
1) Harmonising the conditions of dismissal, by increasing the length of notice given to blue-collar workers and decreasing it for white-collar workers. For contracts starting after January 1st 2012, blue-collar workers will receive longer term of notice. Current period is multiplied by a factor of 1.15. For employees earning a gross annual salary higher than 30,535 Euros, the new term of notice is one month per year of service (included the current one). Nothing changes for employees earning less than 30,535 Euros gross annually. 2) For blue-collar workers, the first day of illness, also called a missed day, is not paid at all, whereas it is paid in full for white-collar workers. The agreement addresses this discrepancy by applying the same treatment to blue-collar workers. 3) Improving the situation for blue-collar workers regarding holiday benefits, with the goal of developing one single calculation method for all workers.
Changing some rules governing the representativeness and participation of social partner organisations in the national social dialogue: 1) the representation of employers in the National Labour Council (CNT/NAR) and the Central Economic Council (CCE/CRB) – the two key national concertation bodies in Belgium – has been officially extended with the inclusion of the most representative employer organisation from the so-called not-for-profit or social profit sector.
People aged 45 or over, made redundant as a result of restructuring will continue to receive EUR 1100 per month in form of unemployment benefits.
The national Employment Office (ONEM) introduced an allowance for older employees who, at their own request and with a loss of income of at least EUR 205, transfer from arduous task to lighter duties with the same employer.
On April 1, a new law went into effect that seeks to discourage employers' use of certain early retirement programmes in Belgium by increasing the contribution rate for participating employers.
The temporary out of work benefits scheme 'waiting allowance' is now called 'vocational development benefit' and is changed from 1st January 2012 as follows: The waiting period before getting the allowance (currently 6, 9 or 12 months dependent on age) is increased to 12 months for all new applicants, regardless of age, and is turned into a "vocational development phase" during which proactive steps must be agreed to with the aim of finding employment or participating in an "individual employment plan". For so-called "non-priority" people who live with a partner and for the over 30s who have not contributed enough in social security payments, the length of this benefit is limited to 3 years. The over 30s who, during the last two years, have worked at least half a year (156 days) are entitled to this benefit without time limit. Following this, they keep the benefit if the requirements are met at the end of each half-year.
Since 2011 the legal liberalisation of the postal market has been completed. USO (universal service obligations) providers are to be selected based on competitive tenders for a period of 10 years.
The federal energy regulator’s powers and competencies were reinforced somewhat in 4 2011.
1) The principle of availability to work is extended to 60 years old in 2012 and 65 in the areas where there is a low rate of unemployment. Both supervision of unemployed people and ensuring they are actively available are intensified and extended to the unemployed over the age of 50 (up to 55 in 2013 and 58 in 2016) and to the (so-called) early retirees. 2) The notion of "suitable employment" becomes stricter from 2012. It will no longer be possible to refuse a suitable job within a minimum distance of 60 km of one's home (currently 25 km). 3) The current six-month timeframe during which an unemployed person may refuse a job which does not correspond to his previous employment or training is reduced dependent upon age and number of years worked.
Early retirement pension age and required career length are gradually raised in the schemes for employees, the self employed and civil servants: the age to access to anticipated pension scheme will increase progressively from 60 to 62 years between 2013 and 2016. The condition of the minimum career is also gradually rising from 35 years in 2012, 38 years in 2013 to attain 40 years by 2015. 40 years of work will be necessary instead of 35 for men and 28 for women (from 2012 for the new collective agreements, from 2015 for current and renewed collective labour agreements), with same minimum age as before (60 years). For long-careers, minimum age is raised from 58 to 60 years and minimum career length from 38 (35 for women) to 40 years; for heavy manual trades, minimum age is raised from 58 to 60 years and minimum career length from 35 to 40 years. In case of company restructuring, minimum age is fixed at 55 in all cases (instead of 50/52/55) with same career length requirements as before (10/15 or 20 years). In case of a company in difficulty, the minimum age is fixed at 52 years from 2012 + 6 months per year to reach 55 years in 2018, as from 50/52/55 before. The cost of early retirement to employers will be increased by changing the social security contributions payable by employers according to the age at which early retirement is taken.
Dismantlement of Dexia Group and nationalisation of Dexia, which becomes Belfius
Employees social security contributions are now gradually phased in with income, from zero at the minimum wage (EUR 1 415 per month) to the standard rate of 13.07% (at around EUR 2 200 per month).
The insertion allowance has been limited to three years and search efforts are checked every six months with the possibility of temporary suspension of benefits. In Flanders, a programme focussed on workplace-based learning was created to improve the employability of young unqualified jobseekers. In Wallonia, support for young employed will be more personal and start earlier.
Introducing a strengthened monitoring of the young unemployed benefiting from integration allowances, with a regular evaluation of their job search efforts. In case of a negative evaluation, the right to the integration allowance may be suspended.
The fiscal “work bonus” has been reinforced, to the tune of EUR 17 per month at the gross wage level of EUR 1800.
Tailored ‘package’ to young people who had been unemployed for more than six months. In comparison to existing measures the WIJ programme consisted of a personalised approach with individual counselling, as well as the possibility for work experience in a real workplace setting. The measure consisted of an integrated set of activities that supported the young person’s labour market integration. Activities included: 1) Group sessions with orientation and competence building; 2) Work experience in a real work place or training, for example through traineeships, vocational training or other federal measures such as the Instapstages Programme offering apprenticeships; and 3) Qualification/certification for the acquired skills. These could be awarded by an educational organisation, the participant’s mentor or the counsellor. The activities were accompanied by intensive individual coaching, as well as follow-up/counselling during the first three months of employment.
1. All new companies seeking authorisation must now pay the National Employment Office (ONEM/RVA) a guarantee of EUR 25 000. This guarantee is refunded on the voluntary cessation of business or in the event that authorisation is withdrawn, following the deduction (where applicable) of monies owed by the service voucher company to the National Employment Office, National Social Security Office (ONSS/RSZ) or tax authorities. 2. The penalties applied in the event of violation of the rules governing service vouchers are now included in the Social Penal Code. Depending on the seriousness of the offence, a penalty corresponding to level 2, 3 or 4 will be applied. Since 2011, the criteria for authorisation as a service voucher company have gradually been tightened and checks have been increased.
Three new obligations for employing temporary agency workers : 1) The interim workers will have to be informed on internal vacancies; 2) They must have equal access to infrastructures and services available to permanent employees; 3) They have to be subject to the internal rules concerning the protection of pregnant women and the periods of breastfeeding, the equal treatment between men and women and the fight against discrimination.
Measures to monitor and to address gender pay gaps at both company and sectoral level: 1) Enterprises with more than 50 employees will have: a) to report the wages of male and female employees in the ‘social balance sheet’ that all Belgian companies are required to include in their annual accounts; b) should make a two-yearly analysis of their pay structure. The conclusions of this analysis have to be submitted to the company’s Works Council and have to include the wages, social benefits, supplementary insurances and other fringe benefits, measured as full-time equivalents, and broken down by gender, blue/white-collar status, job level, seniority and level of qualification; c) must appoint a mediator (such as a union representative) within the company, who can independently search for a solution if any employee thinks they are a victim of wage discrimination. 2) To protect employees in smaller companies (less than 50 employees), sectoral Joint Committees will have to develop specific measures such as gender-neutral job function classifications. These must be submitted to the Federal Public Service for Employment, Labour and Social Dialogue which will assess them against the already existing checklist for gender neutrality in job evaluation and classification, developed by the Institute for the Equality of Women and Men (a Federal Public Institute, created to guarantee and promote the equality of women and men).
Real wage freeze for the period 2013 -2014 (i.e. no wage increases allowed on top of wage indexation).
Reform of the wage indexation calculation formula, by means of methodological interventions on the measurement of price pressures by the health index. This includes the introduction since January 2014 of chain-linked weights in national inflation calculations, allowing for changing consumer behaviour being faster reflected in price indices. The VAT rate on electricity for households will be reduced from 21% to 6% as from April 2014. This reduction will contribute to lower inflation and thus reduce the indexation of wages and labour costs.
Strengthening of the degression of the unemployment benefits, as of 1 November 2012: the net replacement rate has been increased during the first six months (to 65% of the gross salary capped at a reference gross wage of EUR 2370.8 euros for the first three months, and 60% of the same reference wage for the next three months) and remains at the same level as before the reform for the following six months (60% of the gross salary capped at EUR 2209.6). After this first year, unemployment benefits undergo a steep decrease by periods, before falling, after maximum three years depending on family composition and previous job tenure, on a lump sum slightly higher than social assistance benefits (EUR 474.4 cohabitant; EUR 711,6 single; EUR 948,7 with dependent child). These new rules apply to almost all beneficiaries, with the exception of: unemployed with a minimum of 20 years of employment (23 years from 1/1 2014); unemployed with children; single unemployed from 55 years old and above; and unemployed with reduced work capacity of 33%.
Modification of the company supplemented unemployment benefit: Strengthening the age and seniority conditions to be fulfilled in order to benefit from the unemployment benefit with firm’s supplement.
Temporarily modifying some of the rules introduced early in 2012: Between 2012 and 2017, the age restrictions 60 years old and 40 years of career) will not be applied for persons having had a heavy job. The limits will stay respectively at 58 and 35.
A new Belgian Competition Act (the Act) was adopted on 3 April 2013. This new Act establishes an independent Competition Authority with a simplified structure and introduces significant procedural changes in competition proceedings. The new Competition Authority becomes an autonomous legal entity, managed by a board of directors consisting of the president of the Competition Authority, the Prosecutor General, the Chief Economist and the General Legal Counsel.
New cross-sectoral agreement on temporary agency work. Changes relate mainly to the use of temporary agency work and daily work contracts: 1) employers have been also allowed to use temporary agency work as a way of employing workers on a trial basis before offering them a permanent contract; 2) daily work contracts are now permitted for the ‘flexibility needs’ of the ‘customer-user’. There has to be proof that the flexibility provided by daily work contracts is needed. ‘Customer-user’ employers must consult their works council or a trade union delegation, explaining why such contracts are necessary. If there is no works council or union, they must inform the Social Fund for temporary agency workers (Fastt). The joint committee of the customer-user employer is expected to deal with any problems, and unresolved cases should be referred to the Labour Court. 3) A new condition allows the hiring of temporary agency workers for the ‘reason of insertion’. Temporary agency workers can now fill vacant posts for a maximum of six months. After this ‘trial period’, a permanent contract can be offered but it is not compulsory. The law has been drawn up to avoid the increase of ‘precarious jobs’ by forbidding companies to use temporary agency workers for the purposes of labour market insertion for longer than nine months in total, for the same vacant job. 4) New procedures to monitor the temporary agency workforce now oblige ‘customers-users’ and temporary work agencies to notify trade unions when temporary agency workers are employed in companies.
The scope of insertion that will permit employers to use temporary agency work is fixed. This measure also allows the employer to engage definitively the temporary worker for the same function at the end of his employment contract. Thus, the use of TAW contract as a de facto trial period has been included in the list of legitimate reasons (as a result of the July 2013 Collective Labour Agreement). In order to prevent abuse, businesses recruiting via TAW have to fulfil some extra conditions as outlined below: 1) a maximum of three consecutive temporary agency contracts are allowed for each vacancy; 2) each contract must last for a minimum of a week and a maximum of six months; 3) if a temporary worker is recruited, they must be given a permanent contract and the temporary period counts towards their seniority calculations; 4) if a trial period precedes recruitment, any temporary period of employment has to be counted as part of it. As well as making agency work a legitimate recruitment tool, a number of other legal changes have been made: Consecutive daily contracts are no longer accepted, unless the nature of the job can justify this practice; Every six months under the new rules, the employer must inform the works council, the union delegation or the sectoral Fund for Social Security on the number of agency workers it employs, their working hours, and the reasons for their employment; The bargaining partners also agreed to changes to the ‘48-hour regulation’. This set a time limit of two working days after an employee’s arrival in the workplace for a labour agreement to be signed.
In case of notice by the employer, the harmonised build-up of notice periods will progressively evolve during the first 5 years of service on a quarterly basis during the first 2 years and on an annual basis afterwards. From the 5th to the 19th week the notice period increases of 3 weeks per year; from the 20th year it increases by 2 weeks and from the 21st year by one week per year. Reduced notice periods for workers with less than 6 months of employment are abolished. The notice period given by the employee is equal to half the notice period to be given by the employer, with a maximum of 13 weeks. Some less favourable exceptions remain for specific sectors: 1) A permanent exception for construction workers working on mobile sites. 2) A temporary exception applicable for 4 years in several other sectors, mainly affecting blue-collar workers working in the apparel industry, the wood works and furniture industry, the diamond industry, etc. Acquired rights would to some extent be taken into account but the build-up of additional notice period rights would be identical for all. The shorter notice periods built up by blue-collar workers under the current rules, will be compensated by the government. To this effect, the draft law foresees a new “dismissal compensation” equal to the difference between the compensation in lieu of notice granted on the basis of the new rules and the compensation granted according to the current rules. The budget for this additional dismissal compensation will come from the abolition of the existing fiscal exemption (introduced in 2011) on part of the compensation in lieu of notice. No more trial period. Only student employment contracts and temporary agency work continue to foresee a trial period, which is now fixed at 3 days at the beginning of the contract.
The health spending ceiling is 3% real annual growth in 2014.
The health spending ceiling has been tightened from 4.5% real annual growth to 2% growth in 2013
Second revision of the health index calculation formula, enacted in the course of 2014. On top of the regular basket update and recalibration of the weighing system, several innovations to the way in which the index is calculated with the aim to better reflect consumption patterns and changing market share of products and services in the retail sector and the telecommunications sector. At the same time, effective inflationary pressures have been brought down by fostering competition in a number of sectors (especially energy and telecommunication).
The Belgian social partners agreed to gradually upgrade the lower minimum wages for workers younger than 20 years old (whose minimum wage is now determined following a degressive scale depending on age), in order to eliminate the age-based difference in 2015.
The income of occasional employees in the catering industry will be taxed separately with a flat rate of 33%.
In case of mass redundancies (reduction of workforce by more than 10 %), special compensation payments are not mandatory (yet).
Lay-offs for economic reasons made possible.
Compensation is equal to the minimum wage plus 20 % of the difference between the minimum wage and the average wage received during the last 6 months before dismissal.
Depends on age and the length of previous employment, the maximum duration of benefits is 12 months.
Those laid off for economic reasons and students in search of a first job.
When no longer eligible for unemployment benefits unemployed receive social assistance paid by the municipalities.
Paying lump sum of non-employment benefits if unemployed person starts working as self-employed.
Bulgaria abolished all quantitative import restrictions and made the granting of import licences automatic except for a small group of goods on the negative list (such as military equipment). Export bans and licensing requirements were retained for 21 items.
As temporary safeguard measures, the authorities imposed a 20 to 30 % export tax on 26 goods (mostly industrial raw materials and clothing) and a 15 % import surcharge on most imports. The export tax was abolished in June 1991.
Provided national status to all foreign investors, allowing for 100 % foreign ownership, setting very low entry barriers, and offering easy registration. In addition, the law provided for unrestricted profit repatriation, supported also by foreign exchange legislation. Tax incentives were offered for large investment in priority areas.
At the beginning of 1991 more than two thirds of goods by sales value were still subject to direct price controls. On February 1, most of these restrictions were eliminated. Except for energy prices (these were nonetheless raised in February and July again, although coal, district heating, and electricity for household remained heavily subsidised).
The price of 14 essential products continued to be projected by the Government (should their prices rise over the projected level the Government intervenes).
The Bulgarian competition authority, the Commission for the Protection of Competition (CPC), was founded in 1991 by the Law on the Protection of Competition.
The BNB became, by and large, an independent body, with the responsibility of pursuing macroeconomic stabilisation and regulating commercial banks. Although the Law grants the BNB complete authority over credit expansion, including credits to the government, the Parliament has compelled the BNB on several occasions to extend credits to the Ministry of Finance.
Wage bargaining was decentralised to bilateral bargaining between management and unions on the enterprise level.
Signed by the social partners and the government. Unions promised to abstain from industrial action, and to discourage their structures from it at lower levels as well. The government agreed to introduce social protections for the population. The agreement included: an increase in the basic interest rate; a liberalisation of prices over several stages; a fixed ratio between minimum wages and the social minimum wage, with a mechanism for fixing the social minimum wage; wage bargaining at the enterprise level; a revised mechanism for indexation; provisions for other social security and training benefits; and changes in labour and social legislation.
Under the provision of decree 56, small-scale privatisation was possible until July, when its legal basis lapsed. In total, fewer than 70 shops and petrol stations were privatised.
Proposed an elaborate procedure for the restitution of agricultural land through so-called ‘‘municipal land commissions’’.
Restitution was either in kind, or through securities for property that had been substantially upgraded or extended.
Out of the 14 goods subject to "price projection" the price of 7 was freed in May.
As temporary safeguard measures, the authorities imposed a 20 to 30 % export tax on 26 goods (mostly industrial raw materials and clothing) and a 15 % import surcharge on most imports. The import surcharge was abolished in July 1992.
Allows equal access of foreigners to the enterprises in the privatisation process.
Firing workers is illegal if the employer did not provide explanation to the fired worker.
Temporary contracts become permanent if the worker works 5 days after the end of the temporary contract.
International capital flows from partially repressed to partially liberalised.
In addition to usual functions, banks are guaranteed the right to manage capital investment funds, directly acquire up to 10 % of the stock of a nonfinancial enterprise, and can acquire even more stock with permission of the BNB. According to this law, the capital adequacy ratio of the bank must conform to the Basel criterion of more than 8 %. Base capital must also be at least one eighth of the sum of all big loans (exceeding 15 % of equity capital). Any single loan is not permitted to exceed 25 % of capital, with further restrictions on the volume of loans to ‘‘insiders’’.
Provided for the limited presence of foreign banks in Bulgaria.
Abolishes normative texts from the Labour Code that prescribe workers' self-government.
Social dialogue acquired formal legal status in Bulgaria. It defines representativeness criteria employers organizations: minimum 2 branches with minimum 50 employers each; and regional organs in minimum 50 % of district cities, with each regional structure minimum 10 employers.
Social dialogue acquired formal legal status in Bulgaria. It defines representativeness criteria for unions: minimum 50 union organizations with at least 5 members at the workplace level in each branch, and regional organs in minimum 80 % of district cities, with at least 50 union workplace organizations, with minimum 5 members in each district.
The statutory replacement rate was fixed at 60 % of insured earnings. The benefits, however, are also subject to minimum and maximum caps relative to the minimum wage: the upper cap was set at 140 % of the minimum wage, whereas the lower cap was set at 90 % of the minimum wage.
Indexing old-age pensions with inflation.
Restituted agricultural land can now be sold immediately. Other provisions made it easier to treat agricultural land as a commodity.
Several restitution laws were passed during 1992 which affect a large proportion of small shops, industrial and residential property, and agricultural land. Industrial enterprises and shops nationalised in 1947 are to be returned to their former owners, and shops which were confiscated after 1973. The issue of compensation has not been settled yet.
Simplified the procedure, and provided for the creation of ‘‘liquidation commissions’’ for dividing up the property of former co-operatives.
Various state agencies are entitled to initiate privatisation deals: the ministries, the Privatisation Agency, the Council of Ministers, and municipalities (for municipally-owned enterprises). All state-owned enterprises are divided in several categories. Small state-owned enterprises (with asset value below BGL 70 million (US$ 3 million) are to be privatised by the line ministries. Larger enterprises (over 50 % of state assets) are handled by a special government body: the Privatisation Agency. This agency, which is managed by an Executive Director and works under a Supervisory Board appointed by the government, also serves as a co-ordinating body for ministerial and municipal-level privatisation.
The law also provides for lists of enterprises that are exempted from privatisation, or which can be privatised only with the special permission of the Council of Ministers. These lists are determined each year by the Parliament with the adoption of the annual privatisation programme.
This law provides for a wide range of privatisation methods: auctions, tenders, direct negotiations, debt, equity swaps, public offering of shares, management and employee buy-outs, and sales of separate parts of enterprises.
Amendments to the Law on personal incomes, progressive rates from 18 to 50 % (18, 20, 24, 28, 32, 38, 44, 50), with non taxable minimum income.
The government introduces the idea of active labour market policies (ALMPs).
The prudential regulations on capital adequacy of 1993 set minimum capital requirements at BGL 200 million (US$ 7 million at the time) for a domestic banking licence and BGL 500 million (US$ 16 million) for a licence to also conduct operations abroad.
Prescribes minimum requirements according to 11 ratios that measure various aspects of liquidity.
The regulations on loan classification created a division of loans into four categories: regular, doubtful-type A, doubtful-type B, and uncollectible.
Starts the first program of ALMPs – program for temporary employment.
Credit controls and reserve requirements fully liberalised.
Opened the doors to foreign green field and infrastructural investments.
Limiting cases in which dismissals can be appealed to courts.
Credit controls and reserve requirements liberalisation partially reversed.
The Bulgarian government launched a mass voucher privatisation program. A specific feature of the Bulgarian mass privatisation programme is that it combines cash and mass privatisation for the same enterprises, while incorporating several concessions for employees.
International capital flows from partially liberalised to partially repressed.
Banking sector entry from fully to partially liberalised.
Increases the leverage of the government over the BNB by empowering the Parliament to remove the Governor and Board of the BNB with a qualified majority.
As opposed to the limited schemes announced by the BNB in December 1995 and March 1996, the law protects all depositors with personal accounts through 100 % state guarantees. Corporate accounts are insured 50 %.
The new deposit insurance law was amended in October to exempt banks in conservatorship from servicing their deposits. Claims of depositors, which are still covered by the law (100 % personal and 50 % corporate insurance), can be obtained only after a final bankruptcy decision.
The revised law expands greatly the power of the BNB to regulate commercial banks. A special section on insolvency grants the right to the BNB, and only the BNB, to file bankruptcy proceedings against commercial banks, after which the insolvency of the bank must be established in court. Additions to the law empowered the BNB to replace the management or supervisory boards of banks even without documentation of explicit violations. The BNB may also place commercial banks believed to be ‘‘near bankruptcy’’ into ‘‘conservatorship’’, whereby the activities of the bank are essentially suspended, and the institution is placed under the control of an appointed ‘‘conservator’’.
Only one collective agreement in each enterprise and branch.
Benefits are calculated by multiplying the ratio of the individual's wage to the average wage, a length-of-service-factor, and the average wage in the economy over the preceding three years.
The state announced a special emergency privatisation programme, involving 18 of the most profitable Bulgarian companies and 25 % of the Bulgarian Telecommunication Company, as a means toward meeting the eventual claims of depositors.
Offers newly-privatised firms, including those sold to foreign investors, major tax holidays during their first years of existence.
Until 1996, the Bulgarian tax system gave numerous benefits to private firms relative to state-owned firms. A tax reform implemented in 1996 removed almost all of these special benefits, creating close to identical conditions for private and state firms. As an exception, the excess wage tax has been maintained only for firms with over 50 % state ownership.
Initial steps in trade liberalisation implemented during 1997 to 1998.
Grain and other agricultural prices were partially liberalised in 1997.
The official Bulgarian stock exchange started operations in October 1997.
The BNB may also place a bank ‘‘near insolvency’’ in ‘‘conservatorship’’, under which its activities are temporarily suspended and subject to BNB-appointed management. The new law shortens the maximum length of time during which a distressed bank may be ‘‘saved’’ in this way from 6 to 3 months.
The right of BNB to close a bank, revoke a banking license and the petition the courts for bankruptcy in case of insolvency is strengthened and simplified. Neither the court nor the bank in question can actively contest the decision of the BNB any longer. If the documentation is properly prepared, the court must simply declare the bank insolvent (or liquidated) and appoint a receiver to carry out the bankruptcy and liquidation procedures.
The new law makes banks, as well as borrowers, clearly liable and subject to legal prosecution for various types of inappropriate lending.
Reduced the lower cap of unemployment benefit from 90 to 80 % of the minimum wage. The higher cap was increased from 140 to 150 % of the minimum wage.
The duration of benefits rises gradually from 4 months with up to maximum of 3 years of service to 12 months with more than 25 years of service.
The maximum duration of benefits is 3 months.
Possibility of benefits for self-employed professions.
Minimum employment spell required for eligibility is 9 months.
Restricted access to workers who had paid social security contributions.
The new formula implemented in April 1996 was abandoned temporarily.
In 1997, the Privatisation Agency hired international consultants, with funding from foreign donors (EU-PHARE, USAid) and institutional creditors (World Bank), to manage and speed up the sale of ‘‘pools’’ of enterprises within a single industry.
As late as September 1996, only an estimated 18 % of arable land subject to restitution had been restituted, while actual legal titles had been issued for only about 6 % of the land. With the help of important amendments to the Land Act of 1991, which have both strengthened ownership rights and extended the terms for claiming property, land restitution is again moving ahead. By the end of 1998, 79.6 % of arable land subject to restitution had reportedly been restituted, although still only 24 % of landowners have apparently received deeds.
A ‘‘Strategy for Accelerating Privatisation’’, adopted by the new government in May 1997, expressed the goal of privatising 38 % of all state assets by 1998 and a further 15 % in 1999. (These targets were quite ambitious, considering the fact that only an estimated 20 % of state assets had been privatised in the entire period from 1991 to 1997.) The programme excludes from mandatory privatisation the largest power generating stations, the gas and electricity distribution network, and a number of other utilities.
Major amendments to the Privatisation Law were made in October 1997, April 1998, and August 1998. First, the threshold book value that determines which companies are to be sold by the PA was increased, initially from BGL 70 million to BGL 350 million, and later to BGL 1 billion. Second, the rule requiring mandatory prior evaluation of companies to be privatised has been eliminated. An important amendment allows employees of enterprises the right to use vouchers for up to 10 % of payment in MEBOs. They can also make payments in instalments under special conditions: 10 % down and future payments in nine equal instalments during the next nine years. Employees also received free of charge 10 % of the shares of firms slated for mass privatisation.
Personal tax, new progressive scale, from 18 to 29 %
As of 1998, export taxes and quotas have been removed for all but a few agricultural products (living animals and hides).
Bulgaria's trade regime was liberalised step-by-step between 1998 and 2001. In 1997 Bulgaria's trade regime was still highly restrictive (7 out of 10 rating under IMF Trade Restrictiveness Index), but was thoroughly liberalised by 2001 (2 out of 10 rating under IMF Trade Restrictiveness Index).
Increases the powers of the Commission of the Protection of Competition, defines its prerogatives in merger cases, and states that its decisions can only be appealed before the Supreme Administrative Court. An important exception is made, however, as regards the CPC’s decision to approve or block mergers and to grant or refuse exemptions for anti-competitive agreements. Here, the CPC is severely limited in its ability to appeal such decisions to the Supreme Court.
Electricity tariffs will rise by an average 3.57 % from 1 January 1999, and then by 7.9 % from 1 July 1999, 1.7 % from 1 January 2000, and 7.8 % from 1 April 2001. Average price hikes are calculated on the basis of electricity prices for both households and industrial consumers. Coal and heating prices were raised by 30 % from 1 September 1998.
Creates the National Health Insurance Fund, which is answerable to parliament which approves its annual budget. It has 28 regional offices. The state, employers and insured individuals were presented equal in rights in the NHIF supreme governance body (the Assembly of Representatives).
By mid-2001 a Health Insurance Fund financed hospital care will be launched, based on a national framework agreement and bilateral agreements with hospitals, both public and private. (By mid-2000 hospitals will have to be incorporated as separate corporate entities.)
Reform measures through 1998 included allowing the provisions of private health services, establishing medical associations, privatising most pharmacies, and devolving the responsibility for selected health care services to municipalities.
Primary care will be financed by the Health Insurance Fund, based on a national framework agreement with the representative body of primary health care providers, and by July 2000 it will conclude bilateral service provision contracts with doctors.
In mid-1998, the PA appointed a sale agency for the pool National Electricity Company (NEK), which includes 22 hydroelectric power plants and three thermal power plants. NEK’s restructuring is aimed at separating design activities, engineering operations, consulting, and equipment repair services into separate companies.
NEK is to privatise on its own at least one big thermal power station by the end of 1999, all coal mining enterprises by 1999-2000, and other state assets in electricity production and distribution by 2001. The high-voltage network and the Kozlodui nuclear plant will remain under state ownership.
A second round of pool privatisation was launched in 1998-99, remunerating consultants on a success-fee basis and extending participation to domestic advisors. In both rounds, some pools included one firm only.
Following a first wave, launched in 1996, vouchers were issued again to all Bulgarian adults in late 1998, upon payment of a small registration fee.
An additional social security payroll tax of 6 % will also be levied for the creation of a National Health Insurance Fund.
A licensing regime for foreign trade operations involving agricultural products was eliminated as of 1 January 1999.
Setting minimum health standards for labour.
Banking sector entry for foreign banks fully liberalised.
The base for determining benefits depends on the total length of contributing service and the actual amount of contributions paid.
The eligibility for early retirement was sharply curtailed at the beginning of 1999.
The scope for early retirement for special groups has been further narrowed. Early retirement is available on a universal basis, provided the sum of contribution years and age - referred to as points - exceed a certain threshold (98 for men and 88 for women in 2000, but both is increased 1 point every year until reaching 100 and 90, respectively).
Pensions will be increased every year, starting July 2001 based on the "Swiss-formula" depending on the previous year's increase in social insurance revenues and the consumer price index, but will be limited to under four times the minimum old-age pension through end-2003.
From the beginning of 2002, those born after January 1, 1960 will be obliged to participate in universal and/or professional pension funds, established and managed by licensed pension insurance companies. (The second pillar was restricted between 2000 and 2002 to certain professions.)
6-month increase every year until retirement age reaches 60 for women and 63 for men (from 55 and 60, respectively).
Determining the ratio of contributions between employers and employees: from 80:20 in 2000 to 50:50 in 2007 and the following years.
International capital flows are fully liberalised.
Designed to simplify and accelerate bankruptcy procedures.
Bulbank, the largest bank of the country, was sold to a strategic investor in July.
Increase the efficiency and transparency of the privatisation process, and eliminates preferential treatment for management and employees.
Central corporate income tax rates are reduced by 5 percentage points.
Personal income tax burden is reduced by 2 percentage points.
Social contribution rates are reduced by 3 percentage points.
Employers must justify mass layoffs and begin consultations with trade unions at least 45 days before such events.
Permanent contracts cannot be turned into temporary contracts without explicit agreement by the workers.
Credit controls and reserve requirements are fully liberalised.
Creation of legislative provisions related to branch and sector collective bargaining. A new procedure provides for the extension of agreements' provisions to all enterprises in the branch/sector concerned.
A stipulation that, if not otherwise specified, collective agreements have a duration of at least one year but not more than two years.
Introduction of a clear definition of the levels of collective bargaining: enterprise, branch, sector and municipality.
The role of the Economic and Social Council (ESC) is to express the views of the social partners and other representatives of civil society on Bulgaria's main economic and social problems, drawing up statements on the initiative of the President of Bulgaria, the chair of parliament, the government or the ESC itself. The law stipulates that ESC should have a number of permanent and temporary commissions, and their establishment should start in early 2004.
Introduction of a new option, whereby the parameters for branch/sector bargaining may be determined by a framework agreement between national trade union and employer organisations.
Amendments made to the Labour Code at the end of 2002 have obliged employers to register with the National Social Security Institute all employment contracts concluded, amended or terminated since 2 January 2003.
The number of employers’ and insured individuals’ representatives was reduced.
The minimum and the maximum rates of the unemployment benefit are no longer linked to the minimum wage but are set annually on the basis of the Social Security Budget Act, while maintaining a close relation to the minimum wage.
Employment promotion and incentive measures for unemployed and employers. In general, wages and social securities are subsidized for different programmes and measures, including: 1) a programme called "From Social Assistance to Employment" and providing employment and social integration to unemployed persons who received monthly social benefits through the opening of jobs in public benefit activities and provision of social services; 2) incentives to employers to hire unemployed women over the age of 50 and unemployed men over the age of 55 (Art.55а of the EPA); 3) Encouraging entrepreneurship among disabled people.
The worker or the employee does not fulfil the obligation for notification under Art. 126, item 12 (incompatibility with the fulfilled work); There is incompatibility in the cases of Art. 107a, paragraph 1 (for the persons, working with employment relationship in the state administration).
The share of hospital spending covered by the National Health Insurance Fund was raised to 45 %.
The minimum amount of the unemployment benefit was set at 80 BGN (from previously 70 BGN) while the maximum amount of the unemployment benefit was left stable at 140 BGN. The unemployment benefit amount is fixed at 60 % of the gross earnings during the last 9 months.
The right of the unemployment benefits for persons insured during 9 out of the last 15 months preceding the job lost and do not receive pension for age and length of service.
The strategy defines the concept of poverty as the lack of funds necessary for meeting basic needs, as well as the lack of the conditions and preconditions for a decent and 'full-value' life as a result of lack of choice. Decent living conditions should allow for a lasting and healthy way of life, possibilities for education, and free and unlimited participation in various social activities. The concept of social exclusion links material deprivation with participation in social life and the exercise of social rights, according to the strategy.
Contributions to the second pillar increased from 2 to 3 percentage points.
New, unified Social Insurance Code adopted, which brings together the legislation governing the various pillars of the pensions system. It makes significant changes aimed at stabilising the social security system and improving the quality of the protection it provides, notably in the area of pensions where a 'three-pillar' system (i.e. the state pension, supplementary occupational pensions and individual pensions) is now regulated.
Reduction in corporate income tax rate from 23.5 to 19.5 %.
Increase in non-taxable income for individuals to the level of the national minimum wage and cut in the lowest income tax rate from 15 to 12 %.
The changes oblige employers to pay the social insurance contributions for their employees calculated on the latters' gross wages received. At the same time, these contributions should not be less than a new minimum monthly social insurance income (higher than the national minimum wage), established by the cabinet for particular occupations and sectors.
The changes lay down a number of new obligations for the employer in the event of collective redundancies. When an employer plans such redundancies, it will be obliged to start consultations with workers’ representatives at least 45 days before the planned date of the redundancies. The employer must provide information in writing about: the reasons for the planned redundancies; the number of employees to be made redundant; the total number of employees in the enterprise, broken down by their functions and occupations; the planned criteria for the selection of employees for redundancy; and the date when the redundancies are planned to occur.
The amended Labour Code provides all parents (including adoptive parents) working on the basis of an employment contract a new right to unpaid parental leave of up to six months in the period up until the child's eighth birthday.
The amendments formulate in a new way the obligatory minimum contents of the individual employment contract. The contract must in future determine: the place of work; the title of the position and the nature of work; the date of signature of the contract and the date it enters into force; the duration of the contract; the basic and additional paid annual leave; the notice of termination of the employment contract that must be given by either party (the term of the notice must be the same for both parties); the basic remuneration, as well as additional remuneration of a permanent nature, and its frequency; and the duration of the working day or working week.
Initiates the development of national medical standards for different medical specialties. Substituted the 1972 Public Health Act.
In cases when an employer orders overtime work during the two-day weekly rest period, it should not only pay the relevant wage premium, but also grant the workers an additional uninterrupted rest of at least 24 hours during the following week.
In order to provide equal working conditions for women and men, the amendments remove the current absolute prohibition on night and overtime work for mothers with children up to six years of age and mothers who take care of children with disabilities, regardless of their age. These workers can now declare in writing their agreement to be assigned to night and overtime work.
The amendments also strengthen controls over the medical assessments that evaluate whether there are health grounds for granting a disability pension. To this end, medical commissions are to be established at the regional units of the National Social Security Institute, whose approval must be obtained when a disability pension is to be granted. If the new commission decides that a medical assessment was incorrect, the party concerned is entitled to appeal before the competent body, seeking revision of the decision.
It is no longer possible for people who already receive a 'length-of-service' or old age pension also to obtain a disability pension 'for general disease' (rather than for work-related reasons). Previously, people who became disabled after having been granted a length-of-service or old age pension could apply for a disability pension. The new restrictions do not concern cases when a disability pension is claimed on the grounds of workplace accident or occupational disease.
These boards will comprise representatives of insured persons and pensioners, representatives of the insurers that make the contributions to the mandatory supplementary pension insurance funds and an expert from the pension insurance fund.
Introduction of calculating personal pension accounts in units and the daily announcement of the unit value. This presentation in units has made it possible to introduce a uniform methodology for announcing the yield from investments and the results have become fully comparable, with the yield being distributed and capitalised on a daily basis to the personal account. Thus every insured person has the possibility to follow the balance of their personal account without having to wait for the annual statement or go to a company office. It is also possible for people to compare the different funds and make an independent decision based on the unit value as to whether to continue their membership of the selected pension fund or change it.
These councils will be made up of equal numbers of members of representative organisations of employees and of employers, as well as an expert from the pension insurance fund.
Increase in non-taxable income; cuts in the lowest income tax rate from 12 to 10 %, for the middle income tax rates from 22 to 20 % and from 26 to 22 %, and cut in biggest income tax rate from 29 to 24 %.
Changing the ratio of contributions between the employer and the employee, moving from a 75:25 ratio in 2004 to a 70:30 ratio in 2005, and to a 65:35 ratio in 2006. Social security contributions will be part of Public Social Security Budget Law for relative year.
Introduction of certain benefits in favour of employers who have hired disabled persons. Similar benefits are also given to specialised enterprises, centres for the disabled and cooperatives of disabled persons which are members of nationally represented organisations of disabled persons. Provides that employers who have hired disabled persons will benefit 30 % reimbursement of the paid social security taxes for disabled persons. The benefits are given on the basis of the law on integration of disabled persons and are to be used for investments.
The main change is that companies where the rate of work-related injuries exceeds the national average must insure their workers additionally against work-related accidents.
The Bulgarian government increased the statutory national minimum wage by 25 % from January 2005. The government imposed this increase despite the opposition of employers' organisations during tripartite talks on the issue (to gross 150 BGN per month).
Not more than 40 working hours per week for employees and workers less than 18 years old.
For other categories, the working week can be more than 40 hours only by agreement of the worker/employee if it does not interfere with the minimum daily and weekly break set for by the Labour Code.
Setting the minimum amount of the unemployment benefit at 90 BGN and the maximum amount at 160 BGN.
Fixation of a new higher amount (55 levs) of the monthly guaranteed minimum income.
Corporate income tax is reduced from 19.5 to 15 %.
Increasing the tax-free allowance to BGN 180 (from BGN 156 in 2005).
Introducing an option to deduct from the taxable income an amount of BGN 360 for one child, BGN 780 for two children and BGN 1'140 for three or more children.
Persons who start work without intermediation of Employment Agency get employment subsidies for 12 months.
Setting the minimum amount of the unemployment benefit at 90 BGN (no change) and the maximum amount at 180 BGN (from 160 in 2006).
Unemployed people at working age can receive monthly social benefit only for 18 months, after that for 1 year they are out of social assistance scheme.
Introducing a pecuniary indemnity for long-term unemployed who are registered as such with the local PES and meet the following conditions: have been unemployed for at least 12 months; are 60.5 years old for men and 57.5 for women and have an insurance career up to 60 months less than required by Art. 68; have not been granted a pension; do not practice any labour activity. The indemnity can last for maximum 30 months.
Fixing the minimum social security thresholds for the main economic activities and occupational group, covering 50 economic activities. These thresholds represent the minimum monthly income for social insurance purposes, on the basis of which social contributions are calculated. The growth rates of the agreed minimum social security thresholds vary by sector and economic activity. The social partners have agreed on an average increase of 15 % or more for 20 economic activities. For 12 further economic activities, the average agreed growth is within the range of 10 to 14 %. Due to the failure of negotiations for the remaining 18 economic activities with agreements, the increases of minimum social security thresholds in these sectors were determined by parliament. Most of the sectorial agreements stipulate the agreed minimum social security thresholds as minimum wages for the different occupational groups. According to the 2007 Social Insurance Budget Law the thresholds cover 73 main economic activities and 9 occupational groups.
Setting the minimal level of disability and survival pensions as a % of minimal pension for length of service instead of % of old-age social pension.
Corporate income tax reduced from 15 to 10 %.
Increasing the deductible income from the taxable income by BGN 60 for one child (up to BGN 420), BGN 60 for two children (up to BGN 840) and BGN 120 (up to BGN 1260) for three or more children.
Increasing the tax-free allowance to BGN 200 (from BGN 180 in 2006).
Persons occupied with agriculture have to pay only a rate of 25 % of required level of insurance contribution.
Changing the distribution of social security contributions to 60 % for the employer and 40 % for the employee. The level of contributions for employers will thus be of 20.65 and 13 % for the employee.
privatisation does not allow aid to investors according to the Law for promoting investments.
The budget introduces a flat tax rate of 10 %, abolishing the current progressive tax scale, which rises from 20 to 22 % and 24 %. At the same time, the new flat tax rate will apply to all income and the non-taxable allowance has been abolished, meaning that even those on the lowest incomes will pay income tax.
More stringent controls and increased penalties for employers who violate the law.
Reduction in employers' social security contributions of 3 % which took effect in October 2007, along with the 6 % reduction already introduced in 2006.
Allocating funds under the National Employment Plan for 2009 for some 20 programmes seeking to encourage employers to create jobs. About BGN 15 million (€ 7.7) are earmarked for the integration of people with disabilities. Special attention to be paid to the programme ‘New employment opportunities’, under which 5'000 persons would be hired.
Setting up main lines of policy for protection of competition; setting up independent Commission for protection of competition
Recognition of marginal work – of up to five days a month – as an employment relationship.
Expanding the scope of cases where dismissal compensation is due, to include dismissals when the employee refuses to follow the company in case of its relocation.
Maternity leave has increased from 315 to 410 calendar days. Furthermore, working fathers are entitled to 15 days of paid paternity leave to take care of a new born child; this leave provision aims to encourage parents to share their caring responsibilities. Fathers are also provided with an opportunity to share the maternity leave with the mother, with the option of taking the remainder of the 410 days when the child reaches six months of age.
Recognising up to 160 days of unpaid leave a year as seniority and insuring the length of service, as a means to protect employment during the crisis.
Employers are obliged to draw up detailed internal work place rules. On the request of the employees employers are obliged to issue job description, documents related to the employment relationship, a recommendation or notice of dismissal. Employers and employees are also obliged for a joint effort to maintain and improve qualification of employees. Control over compliance has been increased.
Allowing employers to use working time reduction for a period of three months twice a year (three months prior to the economic crisis).
Entry of the state as a third insurer along with the employers and the employees. The previous 22 % rate for pension insurance, distributed 60/40 between employers and employees respectively, is reduced to 8 % for employees and 10 % for companies and the state was obliged to pay the rest as social insurance contribution. In addition, as of 2009 the healthcare contribution is increased to 8 % (from 6 % in 2008). The net effect of the implementation of the measure is 2.4 percentage points reduction in the social security contribution (including healthcare contributions) paid on part of the employers and no change for the employees.
In agreement with the social partners, the Ministry Decree concerning the compensations for workers in case of reduction of working time was renewed, providing for the state to pay directly the workers half of the minimum national wage (about € 60) with the employer paying the other half.
Introduction of a training system based on vouchers for training either full or part-time.
Equal treatment rights for temporary agency workers with permanent workers in the user enterprise, concerning: pay, paid leave, training, health and safety, and social security. Among other matters, the new regulatory framework provides for the right to information and consultation and representation of temporary agency workers. These workers have the right to join trade unions, to participate in collective bargaining and to get involved in the settlement of collective labour disputes.
Changes in 2009 included the abolishment of the Assembly of Representatives and the Control Council as well as a second reduction of the number of citizen and other nongovernment representatives in the NHIF managing body. Consequently, the NHIF was turned almost into a subordinate structure of the Ministry of Health.
Amendments to the Health Law in 2009 installed a civil council on patient rights at the Ministry of Health.
For 2009 the unemployment benefits are differentially paid: 130 % is paid during the first half of the unemployment spell and 70 % is paid during the second half.
Unemployment benefits increased for 2009: The minimum benefit is equal to 60 euro (increased by 20 % compared to the minimum benefits for 2008). The maximum benefit is equal to 120 euro per month. The daily benefits are introduced from the beginning of 2009 in the amount of minimum 3 euro and maximum 6 euro per day.
Since the beginning of 2009, family contributions for children till the accomplishment of their secondary education are increased by 2.50 euro (17.5 euro). More than 920'000 children are going to receive 40 % higher amount of social assistance. The social assistance for children with disabilities will double to 35 euro. Every child with disability is entitled also for additional payment equal to 70 % of the minimum wage (84 euro). In addition, the access threshold for family social assistance payments is increased with 16.7 % to 175 euro.
Increasing the guaranteed minimum income from BGN 55 to BGN 65 as of January 1, 2009. The guaranteed minimum income is the basis for determining the amount of the different types of social payments, such as: the social benefits defined by the Law for social assistance, the integration supplements in accordance with Law for integration of people with disabilities and the financial aid for prevention and reintegration, for the raising of children by relatives or friends or in foster families. As a result of this measure there will be a broadening of the scope of the assisted persons (it is expected that it will affect 500'000 beneficiaries) and an increase in the amount of benefits.
The weight of each year of contribution in the pension formula was raised from 1 to 1.1 %.
The maximum pension was raised by approximately 40 %.
Cut of social security contributions by 2 percentage points, which should decrease further the employers' social insurance burden and could have job retention effects.
The compulsory contribution rate was lowered from 22 to 18 %.
Amendments to stimulate the job search behaviour of registered unemployed persons: payment start date is tied to specific conditions of registration; time for declaration of changed circumstances is changed.
Possibility for joint financing and implementation of job creation projects by non-government organisations and social partners.
Subsidies for employers for a period up to 12 months for green jobs to be offered to unemployed people.
I Can More: provide opportunities to employed on a labour contract and to self-employed to obtain professional qualification, or training on foreign language or digital competence in order to improve their positions in employment and for career development. The deadline for applying was 21.05 2011 and the end date of the procedure is 31.10.2012.
Extension of the traineeship period (from 6 to 9 months) for young people who have completed their professional training during the last 24 months without work experience.
Introduction of a new reason for terminating the employment relationship with an employee by the employer. According to the new paragraph 10a of Article 328 (1) of the Labour Code the employer may terminate the employment relationship, with prior notice, if the employee receives a retirement pension.
From 1 January 2012, workers in case of redundancy will receive compensation only for unused paid leave for the relevant year and also for any days postponed until the next year.
Bulgarian workers have until the end of 2011 to take any paid leave they may have accumulated in previous years, under amendments to the Labour Code.
Until December 2010, if employers are faced with reduced orders, they can require workers and employees to take unpaid leave without their consent for up to 60 workdays.
Introducing a set of measures, funded under the Operational Programme for Human Resources Development and the state budget, aimed at preserving employment in companies experiencing difficulties, including the introduction of flexible working hours and specific unpaid leave for economic reasons.
Employers have no right to refuse scheduled leave. Exceptions are made only for important production reasons, in which case the employer can postpone leave for employees for the next year but not for more than 10 working days.
The amendments to the Social Insurance Code now mean that, until 31 December 2010, employers have to pay the first three days of employees’ sick leave at 70 % of normal gross wages, averaged out over that month. NSSI then pays 80 % of the sick leave allowance from the fourth day on.
The 1996 ILO Convention on Home Work was ratified and came into force in July 2010.
Since 2010, individuals lose their coverage after not having paid three monthly contributions in the last 36 months instead of in the last 12 months.
The accreditation of health care providers is no longer obligatory and has become voluntary. Instead, a Medical Audit agency was established in 2010, as part of the Ministry of Health. The agency’s main functions are monitoring health service quality and patient safety.
All incomes comprising wages, pensions and social benefits were frozen in 2010 and 2011.
The amendments to the Social Insurance Code remove the upper limit of unemployment compensation. The level of benefit is thus fixed at 60 % of earnings for all insured workers. (The level of unemployment compensation was 60 % of a person’s average earnings during the previous nine months. It was set at not less than € 3.07 (BGN 6) and not more than € 6.14 (BGN 12) a day.)
The amendments to the Social Insurance Code now mean that, until 31 December 2010, employers have to pay the first three days of employees’ sick leave at 70% of normal gross wages, averaged out over that month. NSSI then pays 80% of the sick leave allowance from the fourth day on.
The pension contribution rate is further reduced with two percentage points from 18 to 16 %.
On 24 September 2010, the social partners agreed specific base rates for the calculation of social security contributions in 30 sectors. However they failed to agree on rates for 44 sectors, where the Bulgarian government will impose a base-rate increase of 5.6 %, equal to the average rate agreed in other sectors. The government has done this since 2003, but it suspended the practice in 2009 because of the financial crisis. Even though the average increase negotiated in 2009 was 4.85 %, the administrative increase only corrected the rates in other branches for expected inflation (2.2 %). In industries that have been particularly hard-hit by the crisis, either no increase or a minimal increase of thresholds was introduced, because of fears that rising labour costs may force employers to cut jobs. The deal is expected to result in an overall increase in revenue for the National Social Insurance Institute of around € 56 million (BGN 110 million).
Giving Supreme Administrative Court power in some cases concerning competition.
Eliminating the possibility for employers to terminate the employment relationship of workers or officials because they have become eligible for old age pension.
In February 2011, the Cabinet approved a new National Health Map, which aims to set minimum and maximum numbers of health care providers by type and district, based on the actual needs of the population. The map also defines a list of hospitals that the NHIF is obliged to contract. These hospitals are 100 % or 51 % state property. The National Health Insurance Fund is free to contract municipal and private hospitals up to the maximum number of providers defined in the National Health Map for each district based on specific selection criteria.
The relative weight of each year of length of service, acquired after 1 January 2012, will increase from 3 % to 4 % for each additional working year if the individual continues to work after reaching retirement age.
The ‘Swiss rule’ for the annual indexation of pensions will be partially repealed. Article 100 of the SSC sets out the Swiss rule, which states that any pensions granted before December 31 of any given year should be increased annually from July 1 of the following year; the rise should be a percentage equal to the total of half the percentage increase in contributory income and half the percentage rise in the consumer price index for the preceding calendar year. After 2013, increase in pensions will be based only on the growth in inflation.
Pension eligibility conditions for both females and males, eligible for pension at the age of 65 and with at least 15 years length of service as of 31 December 2011, also changed. As of 1 January 2012 the statutory requirement age for these individuals also started increasing each calendar year by 4 months per year until 67 is reached in 2017.
Higher required retirement age comes into force as of 2012 instead of 2021, with 4 months increase per year, for both men and women and for all categories of workers, until 65 years is reached for men in 2017 and 63 years is reached for women in 2020. (in 2011 it was 60 and 63, respectively)
Contribution rate is raised by 1.8 percentage points.
Granting subsidies to university graduates up to 29 years of age that have not been hired after graduation and to young people in disadvantage groups being in the same position. The subsidy is for 9 month internships in the Ministry of Labour and Social Policy (MLSP), Ministry of Health (MH), or in their administrative structures as secondary executors of budgetary credits. Temporary measure for the period: 2012 – 2014.
New Jobs: Incentives for employers to hire young unemployed aged up to 29 by covering part of the investment needed for the creation of new jobs; subsidising remunerations of employed, their vocational training and/or training on key competences. The measure is temporary and should the implemented until 31.10.2014. The total budget is BGN 18 million (EUR 9 million) from which BGN 2.7 million co-financed by the state budget.
First Job: encouraging employers to hire young unemployed aged up to 29 years by covering part of the expenses for labour remuneration, for vocational training and/or training on key competences through vouchers. The measure is temporary and should be implemented until 31.10.2014. The total budget of the grant for this procedure is BGN 20 million (EUR 10 million) from which 15 % are co-financed by the state budget.
Designation of working places suitable for occupational rehabilitation of persons with reduced working capacity, by determining a minimum number of such places in accordance with the percentage of all employees in the enterprise, depending on the employer’s economic activity. According to Article 315 of the Labour Code, an employer with more than 50 employees is obligated to annually designate jobs that are suitable for occupational rehabilitation, between 4 and 10 % of the total number of factory and office workers depending on the employer’s economic activity.
Due to the high interest in the already completed initiative "I can more" implemented 2011, the measure will continue in 2013. Although the duration of the measure has been extended, it is still considered as temporary and there are no announcements for changing this status. The purpose of the measure is to provide opportunities to employed on a labour contract and to self-employed to obtain professional qualification, or training on foreign language or digital competence in order to improve their positions in employment and for career development. The budget of the measure is BGN 50 million for 2013 with 15 % national co-financing.
Limiting the power of the Commission for the protection of competition when the issue discussed includes classified information.
In cases where the controlling authorities establish that the performance of work is being conducted outside of the agreed working time without the existence of conditions for overtime work, the employment contract shall be deemed a full-time employment contract.
To be representative, a trade union must: have at least 75'000 members (up from 50'000); have organisations in more than a quarter of NACE code-defined economic activities, with at least five members in each, or at least 50 member organisations that have at least five members from different NACE code economic activities; represent staff in local authorities in more than a quarter of Bulgaria’s municipalities; and have both a national managing body and the status of a legal entity, obtained by registration as a non-profit association at least three years before the census.
Represent employers in more than a quarter of the NACE code-defined economic activities with no less than 5 % of employees in each economic activity, or a minimum of 10 employers in each activity; represent public employers in more than a quarter of Bulgaria’s municipalities, plus a national managing body.
The new remuneration model for the officials in the state administration will comprise two parts – a permanent one, which depends only on the hours worked, and a variable, not guaranteed one, which is related to the achieved results, the specific features of the work processes and organisation.
The measure provides subsidies to compensate employers who hire unemployed and ensure on-the-job training on key competences according to the European Qualification Framework . Most often, these persons are long term unemployed who don’t have, or have lost professional qualification and need such training; poor (or extremely poor). The combination of paid employment with on-the-job training corresponds to their needs.
Receives an additional BGN 12.4 million (€ 6.2 million) of funding, which will create subsidised employment for 7'500 newly unemployed workers. Micro-enterprise employers will receive subsidies for the first five new jobs they create. (Part of a larger package strengthening other already existing subsidised employment programmes)
The amount of the compensation for maternity leave for raising a child between the ages 1 and 2 was increased with 29 %.
The amount of the targeted allowance for schoolchildren was increased by 66 %. The amount of the monthly allowance for permanently disabled children below 18 years of age was increased by 14.8 %.
Linking the monthly family allowance for children with regular school attendance (including in compulsory pre-school education).
Emergency measures to help alleviate the financial difficulties being faced by the poorest groups in society: 1) a one-off payment of BGN 65.72 (€ 32.90) for individuals and families denied government heating assistance because they exceeded the differentiated minimum income by up to BGN 10 (€5); 2) a one-off payment of BGN 50 (€ 25) for children with disabilities; 3) the state will also fund soup kitchens between May and December 2013, when they are usually closed.
The control over the expert decisions of the medical committees for evaluation of the disability levels have been increased as a means aimed at limitation of disability pension abuses. New Integrated Information System of Medical Expert Report has been implemented that shall collect and integrate data from various institutions (National Social Insurance Institute, Ministry of Labour and Social Policy, Ministry of Health) that shall be used as regards the granting of disability pensions, social benefits, tax rebates, etc.
A home price scheme for wheat was introduced to insulate Canadian consumers from overseas price rises. Subsides were placed on bread, wheat and durum for domestic human consumption. A consumption subsidy on milk was also introduced.
A freeze on domestic oil prices plus an export tax were introduced. An export tax of $0.40 was placed on crude oil. This was raised to $1.90 in December, $2.20 for January 1974.
Increases in old age and other pensions and allowances
Old age pensions and the guaranteed income supplement were indexed to quarterly increases in the CPI.
A reduction from 49 to 40 % as from the 1st January 1973 of the top rate of corporate tax
Main exemptions and deductions, as well as the income tax brackets are indexed in order to prevent taxable income increasing faster than total income as a result of inflation. The system is designed to be operative only for increases in the price level. If prices fall, the previous year's tax schedule is to remain unchanged.
A 5 % cut in personal income tax with a minimum cut of $100 and a maximum of $500 with retroactive effect as from 1st January 1973 was made
A reduction in tax free reserves for banks and other financial institutions.
An increase in the profit limit from $50,000 to $100,000 for small businesses eligible for the 25 % profit tax.
Provincial royalties are disallowed as taxable income deductions against Federal taxes.
A basic 50 % national tax rate was introduced that all abatements applied to. With abatements, the tax rate on mining profits became 25 % and petroleum profits became 30 % in 1974 with proposed reduction to 28 % for 1975 and 25 % for 1976 and after.
A 10 % surtax was placed on profits earned from 1st May 1974 to 30th April 1975. The surtax does not apply to manufacturing or processing profits, petroleum or mining profits, small businesses or to investment or mortgage corporations.
The deduction of up to $1000 of interest income was extended to include dividend income in 1975.
A registered home ownership saving plan (RHOSP) was introduced whereby contributions were tax deductible up to $10,000 (at $1000 per year) if finally put towards house purchase.
For 1975, the basic tax cut was increased to 8 %, the minimum raised to $200 and the maximum raised to $750.
The first $1000 of pension income was made tax deductible and certain age exemptions became transferable.
The minimum tax cut for 1974 was raised to $150.
Reducing the tax rate on the first $500 of taxable income from 12 % to 9 %.
The income tax schedules were lowered by the 1974 indexing factor of 6.6 %.
A deduction of up to $1000 of interest income from taxable income was introduced from 1974.
Cancellation of indexation on allowances under Canada Manpower training programme.
Basic professional fee schedules must not be increased such as to allow the average professional working the same amount as in the base year to increase his income by more than the income guidelines permit.
As a general principle price rises should be limited to compensating for net increases in costs. (a) For firms which are able to allocate costs to individual products, the increase in price should not exceed the sum of the increases in raw materials and labour costs per unit of output. The latter element implies that productivity gains are not reflected in higher unit profits. (b) For firms which are unable to allocate costs to individual products, the latter should be priced – such as to leave the firm's percentage pre-tax net profit margin no higher than 95 % of the average figure for the last five completed years (see details in source).
Increases in maximum lending limits for mortgages guaranteed under the National Housing Act announced.
Increases announced in maximum house prices qualifying for mortgage loans under the Assisted Home Ownership Programme (AHOP). The interest rate on AHOP loans made by The CMHC remains at 10 %.
Expansion of the Assisted Home Ownership Programme (AHOP) whereby eligibility was ensured to two-person households, and the maximum annual subsidy available to bring the subsidised 8 % mortgage repayments down to less than 25 % of the borrowers income was increased from $600 to $750. After January 1st 1976 the subsidy was to take the form of a recoverable loan rather than a grant.
Coverage. The guidelines cover the prices received and the wages paid by: i) All firms employing over 500 persons (in the construction industry over 20 persons). ii) Any firm some of whose employees bargain in association with employees of other firms. iii) The Federal government and participating provincial governments. iv) All persons in receipt of professional fees.
The guidelines set wage increases as a factor of inflation, productivity and gives room for adjustment for past wage and salary experience, but ultimately defines a range of 600 and 2400 dollars per year. These are, however averages for members of a group, that is, individuals may receive more than the average. The regulation also grants in some cases exemptions from the guidelines, that is, increase above the guidelines may be granted.
The following bodies are concerned with administration of the guidelines: The Anti-Inflation Board (monitoring and negotiating contraventions); the Administrator (imposes fines, refers to Courts, which has the power to enforce its decisions); the Anti-Inflation Appeal Tribunal (decisions by the Administrator can be appealed to the Tribunal)
Suspension of the indexation of family allowance payments for one year
Family allowances increased 10.4 % for the year.
Old age security, guaranteed incomes supplement for pensioners and veterans allowance increased as a result of indexing in every quarter
Government pensions increased 10.1 % for the year
The new indexing factor of 10.1 % came into effect.
The indexing factor of 11.3 % for personal income taxes in 1976 announced.
A surtax of 10 % on the tax payable on taxable income in excess of $30 000 was introduced as of 1st January 1976.
Canada and Quebec Pension Plan premiums rise by 13.6 %, based on an increase in the level of "pensionable" earnings by 12 %
Unemployment insurance premiums rise by up to 8.8 % for those paying the maximum.
All firms given limited choice of base period; either average of 5 fiscal years preceding October 14, 1975 or most recent fiscal year ended prior to May 1, 1976.
Maximum pre-tax profit rates as percentage of base period rates reduced: (i) from 95 to 85 % for non-distributors. However, investment credit of up to one-half of specified new investment allowable up to 10 % of permissible profit (thus raising maximum effective profit rate to 93.5 % of base period figure); (ii) from 100 to 95 % for distributors who, however, are not eligible for above-mentioned investment credit. Above profit limitations are, however, subject to minimum 8 % return being allowed on equity regardless of base-period experience.
Changes proposed in unemployment insurance programme, involving principally increase in required number of weeks of insured employment from 8 to 12 to qualify for benefits.
Government pensions increased 11.3 % for the year
Old age security, guaranteed income supplement for pensioners and veterans allowance increased as a result of indexing every quarter.
Exemptions for child care and retirement savings plans increased
Canada and Quebec Pension Plan premiums rise 11.9 %, based on an increase in the level of pensionable earnings of 12.5 %
Unemployment insurance premiums rise by up to 27.4 % for those paying the maximum.
Increase of $150 million for job-creation programmes
An employment credit scheme to be introduced in early 1978.
Increase in minimum personal income tax credit of up to $100 concentrated to the first two months of 1978
Indexing factor of 8.5 % applied to federal personal income tax scales.
Phasing out of mandatory prices and incomes controls begins.
Changes to be made to Unemployment Insurance system announced estimated to eliminate 10 % of recipients from rolls.
Increases in pensions for needy elderly persons
Introduction of new refundable child tax credit
Indexing factor of 7.2 % applied to federal personal income tax scales.
Indexing factor of 9.0 % applied to personal income tax scales and allowances.
The revision of the Bank Act partially liberalised the bank sector for foreign actors. It allowed more direct competition by foreign firms, which were authorised to operate wholly-owned subsidiaries (as Schedule B banks). Besides reciprocity requirements, however, the law sets an overall limitation on the size of business (16 % of total domestic banking assets for all foreign banking subsidiaries), and maintains control of the bank size as Canadian domestic assets are limited to 20 times the deemed authorised capital.
Surcharge of 5 % on federal corporate taxes (effective beginning 1980).
Indexing factor of 8.9 % applied to personal income tax brackets, tax exemptions and to refundable child tax credit.
Indexing factor of 9.8 % applied to personal income tax brackets, tax exemptions and to refundable child tax credit.
$41 million Special Response programme provides work for persons who have exhausted unemployment insurance entitlements in order to secure requalification for benefits.
Finance Minister delivers Economic and Fiscal Statement, providing for $ 1.1 billion expenditure reallocation in favour of employment promotion [New Employment Expansion and Development (NEED) programme to provide 60 thousand jobs over next 18 months].
Work sharing agreements covered some 200 thousand workers in 1982 and are estimated to have prevented up to 87 thousand layoffs.
The Act suspended the right for collective bargaining for public sector employees covered by it, and cancelled existing collective agreements.
The Act suspended the right to strike for public sector employees covered by it.
Compensation increases for federal employees to be limited to 6 and 5 % during the 12 months to mid-1983 and mid-1984 respectively. (A series of similar provincial acts followed the federal one in 1982, see in sources).
Indexation of family allowances capped at 6 and 5 % for calendar 1983 and 1984 respectively
Indexation of Old Age Security pensions capped at 6 and 5 % for calendar 1983 and 1984 respectively
Indexation of public sector pensions capped at 6 and 5 % for calendar 1983 and 1984 respectively
Indexation of personal income tax scales capped at 6 and 5 % for calendar 1983 and 1984 respectively
Indexing factor of 12.2 % applied to personal income tax brackets, tax exemptions and the refundable child tax credit
New expenditure initiatives amounting to $1 .7 billion announced (including measures to directly bolster employment).
The overall size constraint imposed by the Bank Act was increased in 1984
Codifies the five criteria that make up the principles of the national healthcare system: public administration: the province’s insurance system must be operated on a non-profit basis and be accountable to the provincial government; comprehensiveness: all medically necessary hospital and physician services must be covered; universality: 100 % of the insured population must be covered; accessibility: access must be provided without barriers, including no supplementary charges and no discrimination; and finally portability: residents of Canada are entitled to services no matter where they move or travel.
Economic and Fiscal Statement updates federal fiscal projections and introduces policy package cutting budget deficit by net $2.2 billion in fiscal 1985/86. Deficit reduction measures cover programme cutbacks ($2.2 billion).
Removed oil and gas price controls, in principle, as well as taxes and restrictions on imports and exports
Temporary surtaxes on high-income individuals and on corporations
Extension of corporate income tax surtax from 12 to 18 months
Indexation of personal income tax brackets and exemptions limited to CPI increases above 3 %
Elimination of federal tax reduction (at present $50) and of Registered Home Ownership Savings Plan (RHOSP) deductions
Personal income tax brackets, exemptions and refundable child tax credit increased by 4.6 % for 1985 in accordance with indexation of personal tax system.
Phased-in $500 000 lifetime exemption from capital gains tax
Child tax credit increased and income threshold for maximum credit raised
Unemployment insurance premium rate raised by 2 % and ceiling on insurable earnings raised by 8 % to $460 per week; rate raised from $2.30 to $2.35 per $100 of insurable earnings for employees.
a) elimination of 3 % inventory allowance; b) phasing-out of general investment tax credit; c) reductions in corporate income tax rates.
3 % surtax on corporate income taxes from 1st January, 1987 (replacing existing surtax)
3 % surtax on federal personal income taxes from 1st July, 1986
The 1987 National Transportation Act relaxed entry controls, ended licence restrictions on flight frequency and aircraft type and permitted discounting.
Consolidation of federal supervisory agencies (a consolidation of the present divided responsibility for supervising federal bank and non-bank financial institutions, and measures to strengthen the effectiveness of federal supervision)
Strengthening of the Canada Deposit Insurance Act
Reduction of general federal corporate income tax rate to 28 %. At the same time, tax base broadened so that tax revenue expected to increase by $5 billion over next five years.
Reduction of federal personal income tax rates to 17, 26 and 29 % on taxable income and conversion of most exemptions and deductions to tax credits. (Prior to the tax reform there were 10 personal income tax brackets in Canada ranging from 6 to 34 %). These measures reduce personal income taxes by an estimated $2 billion in 1988 and more than $11 billion over the next five years.
Parliament passes legislation to bring the Canada-United States Free Trade Agreement into force.
The duration of benefits has been shortened (from 46 to 41 weeks)
Penalties will be imposed on those who quit their jobs without a valid reason (they will be excluded from the scheme for between 7 and 12 weeks, and will be paid a lower rate of benefit).
The eligibility criteria have been tightened up (the period of employment prior to unemployment required to qualify for benefits has been lengthened)
The safety net consists of an insurance (Gross Revenue Insurance Programme) and a stabilisation account (Net Income Stabilisation Account), both financed through joint contributions from farmers and the federal and provincial governments.
One time tax credit of up to $1 000 for small business (instead of announced payments of up to $600 a year) for compensation of goods and services collection costs
Income surtax to be raised from 3 to 5 % for those earning $62 000 or above per year
Cancellation of announced one point cut in middle income tax rate
The federal government lowers the minimum down payment for first-time home buyers for the next two years.
The UI benefit rate was reduced from 60 to 57 % of insurable earnings
Persons who voluntarily quit their jobs without just cause, or lose their jobs because of their own misconduct, no longer receive benefits
In the December 1992 Economic and Fiscal Statement, the Government announced a 10 % reduction in most subsidy programmes – excluding the safety-net ones – in each of the next two fiscal years; these cuts were extended and deepened in the April 1993 Budget to 15 % in the third year and 20 % thereafter.
The universal family allowance system and child tax credits and refunds will be replaced by a single tax-free monthly benefit.
A total of 46 government entities are affected by streamlining measures announced in the 1992 Budget. Twenty-one agencies or other government organisations will be wound up and others merged or consolidated. Two corporate holdings are being privatised and three other privatisations are under consideration, including that of the Royal Canadian Mint.
The personal income surtax will be lowered in July 1992 and again in January 1992.
The training and adjustment uses of UI funds were increased to C$ 2.2 billion in 1993, more than four times the amount budgeted in 1990. Altogether, this fiscal year the Government intends to spend C$ 3.8 billion on active labour-market market policies, benefiting more than one million people.
The 1993 Budget announced the elimination or restructuring of an additional 12 organisations ranging from large departments to small agencies and advisory bodies.
The benefit rate further lowered to 55 % (except for low-income beneficiaries with dependents)
The maximum duration of benefits reduced
The minimum period of work required to qualify for UI benefits was increased
Canada’s provinces adopted an Agreement on Internal Trade to reduce internal barriers to trade, investment and labour mobility. The general principles articulated in the Agreement oblige the parties to: – treat products and services from other parties no less favourably than each party’s own; – permit unfettered movement of goods, services, persons and investments across borders; – assure that regulatory measures have a legitimate purpose and restrict internal trade no more than necessary; – reconcile differing standards among parties; and – maintain regulatory transparency and notify other parties of proposed actions that could materially affect operation of the Agreement.
Funding of ALMPs from the EI fund will be consolidated into five categories of ALMPs. (Wage subsidies, employee earning supplements, self-employed assistance, job-creation partnerships, skills loans and grants.) The EI Act stipulates that ALMPs are to be developed and implemented in concert with provinces, while existing federal spending on labour market training programmes (purchase of training, project-based training and apprenticeship training) will be phased out over three years.
A wholesale spot market was created in 1996
The maximum insurable earnings on which premiums are calculated is set at C$ 39 000 over the period 1996-2000, down 9 % from C$ 42 380 previously (this compares with the average industrial wage of about C$ 30 000).
The basic replacement rate for the calculation of benefit will be kept at 55 %. However, a new "intensity rule" has been introduced whereby the replacement rate is cut by 1 percentage point for every 20 weeks of benefits collected in previous years, up to a maximum reduction of 5 percentage points.
UI benefits are now based on earnings over the 26-week period preceding layoff; these earnings are divided by a minimum of 14 to 22 weeks (depending on the regional unemployment rate) or the actual number of weeks at work in this period, whichever is higher.
The maximum falls to C$ 413 per week (from C$ 448)
The threshold income at which the "clawback" of benefits is operated is reduced to a level of C$ 39 000 (equal to the new maximum insurable earnings) for claimants with more than 20 weeks of claims in the last five years, at which point benefits will be repaid at the rate of 30 %, up to a maximum proportion of benefits (50 to 100 %) which will increase with the amount of benefits collected in the previous five years. It is estimated that about 6 % of claimants will be affected by the clawback compared with 1 % previously.
The minimum benefit period would remain at 14 weeks (in low-unemployment regions), but the maximum period is reduced to 45 weeks (from 50 weeks previously) in higher-unemployment regions (i.e. above 10 %).
Employees will now qualify for unemployment insurance on the basis of the number of hours worked (420-700 hours depending on the regional unemployment rate) rather than on the number of weeks worked (previously 12-20 weeks). In addition, coverage is now extended to include an estimated 500 000 part-time workers working less than 15 hours per week.
An enriched child tax benefit (C$ 1 625 for the first child and C$ 1 425 for each additional child) delivered by the federal tax system and extended to low and modest income families with children.
Premiums are reduced to C$ 2.95 per C$ 1 00 of insurable earnings (from C$ 3) and employers pay to C$ 4.13 (down from C$ 4.20).
In 1996, the annual RRSP contribution limit was frozen at C$ 13 500 until the year 2003, after which it will rise to C$ 14 500 in 2004 and C$ 15 500 in 2005. For the RPP, the current maximum pension limit will be kept at the current levels until 2004.
The contribution rate increased to 6.0 from 5.6 % in 1996. This rate will rise quickly to 9.9 % in 2003, after which it will be capped at that level.
The strengthening of work attachment rules for disability benefits and revised guidelines for the determination of disabilities to put the emphasis back on their medical basis and to de-emphasise the use of socio-economic factors in allowing benefits.
A new CPP Investment board will be created to invest the CPP in a diversified investment portfolio at arm’s length from governments. The real return on the CPP Account is expected to rise from the current rate of 2.5 to 3.8 %. This together with the accelerated contribution rates is projected to reduce by 1.5 percentage point the stable contribution rate.
Canada has had open market entry in all telecommunications services since the end of 1998. A license is required for wireless operators and international service providers (others need only register).
C$ 2.5 billion multi-year Canada Millennium Scholarship Foundation which is to provide 100 000 scholarships a year to low and middle-income students
Payments for disability benefits reduced
The maximum death benefit was frozen at C$2 500
Benefits were modestly reduced: a five-year average of the year’s maximum pensionable earnings is used to calculate retirement pensions rather than a three-year average
Tax payers earning between C$ 50 000 and about C$ 65 000 will see the 3 % general surtax (on basic federal taxes) reduced, and those earning up to about C$ 50 000 will see it eliminated altogether. This measure will lead to tax relief for 14 million people, or 90 % of all tax filers. (The general surtax was first introduced in 1986 as a temporary initiative to help reduce the budget deficit).
The 3 % general surtax will be removed on taxable incomes up to C$ 50 000
Income that can be earned tax-free rises C$ 500 for individuals and C$ 1 000 for families
Increased limits on child-care expense deductions
An increase in the amount of income which can be earned tax free by low-income single Canadians by C$ 500, and by C$ 1 000 for a family. This measure is expected to remove 400 000 people from the tax rolls completely, and to reduce federal taxes for an additional 4.6 million tax filers.
The premium rate was increased from a combined (employer and employee) rate of 5.6 % of pensionable earnings in 1996 to 9.9 % by 2003, after which the rate is projected to remain at this “steady-state” level.
The Year’s Basic Exemption – the earnings level below which premiums are not levied – was frozen at C$3 500 and thus will decline in real terms over time.
The elimination of employment insurance premiums for employers on new jobs created for youth aged 18-24
In addition, two not for-profit corporations have been established: an Independent Electricity Market Operator, which monitors the wholesale electricity market and ensures fair access to the transmission system; and an Electrical Safety Authority to install and inspect electrical equipment. A fifth body, the reconstituted Ontario Energy Board, is responsible for approving all rates for transmission and distribution and ensuring a level playing field with private operators once competition begins.
Ontario Hydro was split into two new companies: Ontario Power Generation (OPG) and the Ontario Hydro Services Company (OHSC). The former owns and operates the generation facilities and sells electricity to industries and municipal utilities, while OHSC runs the transmission, distribution and retail business.
Legislation was passed in June 1999 allowing foreign banks to offer a full range of services via branches rather than as separate, fully regulated banking subsidiaries
The government introduced a new supervisory framework for federally regulated financial institutions to address increasingly complex activities, enhanced structural flexibility, innovative products and globalisation.
Elimination of the 3 % taxpayer surtax on high-income earners effective 1 July
To encourage work attachment over this extended leave period, parents will be able to earn the greater of C$ 50 or 25 % of their weekly benefit rate without any penalty (currently, any additional income is deducted dollar-for-dollar from benefits)
Competition in generation was increased in 2000 by auctioning operating leases on government-owned power plants
Due to increasing market concentration the Canadian Transportation Agency was given additional powers to limit price gouging behaviour (even jail term or/and a C$ 10 million fine).
At the end of this year, the current maternity/parental-leave benefits will also be doubled to 50 weeks and the qualification period reduced to the same as for sickness benefits.
As of 1 January 2001, for business with revenues between C$ 200 000 and C$ 300 000, reduced basic tax rate from 28 to 21 %.
As of 1 January 2001, basic rate is reduced from 28 to 27 % for firms not already receiving special treatment.
Increase of the tax benefit C$ 70 per child on 1 July. Increases the maximum tax benefit from C$ 1 805 to C$ 2 056.
On 1 July 2001 lowering from 5 to 4 % on incomes above C$ 85 000 with the goal to eliminate by 2004.
As of 1 July, the 5 % surtax for high-income earners applies to incomes above C$ 85 000 (previously, C$ 65 000).
Capital gains tax arising from stock options will have to be paid only when the stock is sold (with a C$ 100 000 annual limit), bringing Canada in line with practice in the United States
National Child Benefit is fully phased out by second tax bracket.
Middle income tax bracket reduced from 26 to 24 (currently there are three brackets 17, 24 and 29)
1 July 2001 increase of the tax benefit by C$ 200 per child with a goal to raising it to a maximum of C$ 2 400 for the first child by 2004.
Full indexation of the tax system to inflation.
Allows, as of 27 February, tax-free rollover of capital gains on qualified investments from one small business to another.
The share of income subject to capital gains tax (the inclusion rate) was lowered from 75 to 66 %
Contribution rates continued to rise, as envisaged by the Canada Pension Plan reform in 1997. Contribution rate rise from 6.4 % in 1998 to 7.8 % in 2000.
Protects the personal information of individuals when used in the course of commercial activity (e-commerce)
A reduction in minimum capital requirements
A relaxation of the “widely-held” rule for banks and demutualised insurance companies from the 10 % ownership limit to 20 % for voting shares and 30 % for non-voting shares
The "intensity rule" introduced in 1996 was eliminated (whereby the replacement rate was cut by 1 percentage point for every 20 weeks of benefits collected in previous years, up to a maximum reduction of 5 percentage points).
Special benefit and first-time claimants are exempted from the benefit repayment (claw-back) provision
(vi) providing measures to protect competition in the Canadian airline industry.
Ontario’s wholesale and the retail electricity markets were liberalised.
The Ontario government ended the liberalisation of the retail electricity market, setting a fixed price of 4.3 cents a kilowatt hour for residential and small commercial customers and rebating electricity costs in excess of the new fixed price since the market was liberalised in May.
(ii) providing a framework to allow for mutual legal assistance in non-criminal competition matters;  (iii) allowing the Competition Tribunal to issue interim orders in civil reviewable matters, except mergers, in cases where: injury to competition that cannot adequately be remedied by the Tribunal is likely to occur; a person is likely to be eliminated as a competitor; or a person is likely to suffer a significant loss of market share, a significant loss of revenue, or other harm that cannot be adequately remedied by the Tribunal;  (iv) giving the Competition Tribunal the authority to hear references, award costs and make summary dispositions;  (v) allowing private parties to apply directly to the Competition Tribunal to address matters regarding refusal to deal, tied selling, exclusive dealing and market restrictions (sections 75 and 77 of the Competition Act).
(i) prohibiting companies from sending out deceptive notices of winning a price
New investments in a Health Reform Fund were announced in the 2003 Renewal Accord on Health to support primary health care, home care and catastrophic drug coverage. Agreement between Premiers to the goal of ensuring that at least 50 % of their residents have access to an appropriate health care provider, 24 hours a day, 7 days a week, as soon as possible and that this target be fully met within eight years. A first dollar coverage will be provided for a basket of services for short-term acute home care by 2006.
Provision in the 2003 federal budget of an increase in federal support for health care of C$34.8 billion over five years
Establishment of a new long-term Canada Health Transfer (CHT) in the 2003 Renewal Accord on Health by 1 April 2004. It includes the portion of the current CHST (both cash and tax points) corresponding to the current proportion of health expenditures in provincial social spending supported by this federal transfer.
In February 2003, the New Child Disability benefit was introduced to help low- and modest-income families to cope with the onerous financial burden of raising children who have a severe and prolonged physical or mental disability.
Canada Health and Social Transfer (CHST) to be split into separate health and social transfers from 1 April 2004.
Phased reduction in the tax rate applying to resource income from 28 % to 21 %, the same rate that applies to other sectors, along with phased elimination of the resource allowance in favour of a deduction for actual royalties and mining taxes paid, to ensure more consistent treatment of costs across resource projects and between sectors.
Eliminating the federal capital tax effective in 2004 for medium-sized companies and by 2008 for all companies. This tax was levied on firms with more than C$10 million of capital and was deeply unpopular as it had to be paid regardless of profitability. The similar capital tax levied on large financial institutions has not been eliminated.
The cash portion was adjusted according to provincial tax capacity such that lower-income provinces with less tax capacity received a larger cash portion relative to higher-income provinces with greater tax capacity.
C$2 billion of federal funds was also provided to the provinces and territories in the 2004 Federal Budget
The federal government committed itself to increase the cash portion of the CHT by 6% annually from 2006–07 to 2013–14. An element of equalisation was built into the CHT, a carryover from the predecessor block transfers.
The federal government agreed, subject to parliament approval, to provide new funding of C$41 billion over 10 years in support of the action plan on health. This will include: C$3 billion over two years to as a short-term supplement to the Canada Health Transfer; C$500 million in 2005-06 for home care services and catastrophic drug coverage; A new Canada Health Transfer base at C$19 billion in 2005-06 and an escalator of 6 % as of 2006-07; C$5.5 billion over ten years for the Wait Times Reduction Fund; A one-off C$500 million for new medical equipment.
The First Ministers committed to achieve meaningful reductions in wait times in priority areas such as cancer, heart disease, diagnostic imaging, joint replacements and sight restoration by 31 March 2007. Quebec will apply its own wait time reduction plan. The Wait Times Reduction Fund will augment existing provincial and territorial investments and assist jurisdictions in their diverse initiatives to reduce wait times.
Introduction in the EI system of a six-week compassionate family-care benefit to allow employees to care for a gravely ill or dying child, parent or spouse. Job protection is provided for employees taking such leave.
Criteria for seasonal workers in rural and remote areas to receive Employment Insurance benefits were softened in May 2004.
In September 2006, the federal government, all provinces and two territories agreed to achieve, by April 2009, compliance with the labour mobility provisions of the Agreement on Internal Trade for all existing regulated occupations. (It was implemented in January 2009, see note).
Federal capital taxes have been abolished from 1 January 2006
Local phone service was deregulated in 2007
The parliament also passed a bill, in April 2007, which relaxed the residency requirements for directors of Canadian financial institutions from two-thirds to a majority.
Annual gradual reductions in the basic federal corporate income tax rate (from 22% in 2007 to 15% in 2012)
Budget 2007 introduced the Working Income Tax Benefit (WITB) to lower the welfare wall. Work with provinces and territories is ongoing to ensure that the WITB works well with provincial and territorial income support programmes.
A cut in the lowest personal income tax rate (from 15.5 to 15% retroactive to tax year 2007)
An agreement to provide airlines unlimited freedom to operate direct services between any point in Canada and the 27 European Union countries was signed in December 2009.
The Air Pact signed with the European Union in May 2009 provides for a future relaxation of foreign ownership restrictions on Canadian airlines.
Legislation was approved in 2009 to raise the maximum foreign ownership limit on airlines from 25% to 49%
Amendments to the Investment Canada Act that came into force in February 2009 limit net benefit reviews to larger transactions and aim to improve transparency.
In May 2009, joint stewards of the CPP unanimously agreed to the gradual restoration of actuarial neutrality to adjustments made to the CPP retirement benefit when taken early (ages 60-64) or late (ages 66-70). Other changes include: removing the work cessation test; expanding coverage to those otherwise eligible to receive retirement benefits who continue to work or return to work; and raising the number of low earnings years that can be dropped from the calculation of the retirement-benefit amount.
In 2010 the existing restrictions on foreign ownership of Canadian satellites were removed.
The federal government linked increases in the CHT to a three-year moving average of nominal GDP growth rate, with a floor of 3% per year.
Replacement of the previously “equalized” CHT formula with a pure per capita formula.
GIS increased by up to $600 for single seniors and $840 for couples.
PRPPs are voluntary but employees are automatically enrolled, unless they opt out. Contributions are pooled. Employers are not obligated to contribute, and the funds are managed by third party financial institutions.
The 2012 federal budget introduced significant tightening of Employment Insurance (EI) rules based on a worker’s history of use of EI benefits: the longer and more frequently workers have previously claimed employment insurance, the broader their job search will have to be and the lower the wages they must be willing to accept.
In the 2012 budget, the government announced that it would lift foreign investment restrictions for telecommunications companies that hold less than a 10% share of the telecommunications market.
Age of eligibility for oas and gis benefits to gradually increase from 65 to 67 starting in 2023, affecting anyone who is 54 years of age or older as of March 31, 2012
The age at which the Allowance and the Allowance for the Survivor is to gradually increase from 60– 64 to 62–66, starting in 2023 affecting anyone who is 49 years or older as of March 31, 2012
Individuals allowed to voluntarily defer OAS pension beyond age 65, for up to five years, resulting in a higher annual pension
Increase in benefit level to guarantee subsistence level.
Constitutional mandate for unemployment insurance to be made compulsory for all workers (transitional measures establish compulsory affiliation from 1977).
Introduction of indexation of pension benefits to inflation.
Accident insurance was separated from health insurance and declared mandatory for all employees.
At the introduction of mandatory unemployment insurance scheme (after an interim arrangement had been in place since 1977), the replacement rate was set higher, at 70 % for singles and 80 % for married persons and for carers.
At the introduction of mandatory unemployment insurance scheme (after an interim arrangement had been in place since 1977), new "active" measures for enhanced mobility and employability (such as intermediary gain, i.e. the possibility of combining income from work with benefits) were introduced.
Introduction of a mandatory unemployment insurance scheme, after an interim arrangement had been in place since 1977.
At the introduction of mandatory unemployment insurance scheme (after an interim arrangement had been in place since 1977), a new compensation benefit in case of employers' insolvency was added.
Second pillar becomes compulsory for all employees earning at least twice the minimum AHV/AVS pension. Eligibility for full benefits from the scheme: 37 years for women, and 40 years for men, respectively; Coordination of basic and occupational pension: Earnings insured by the basic pension are exempt from occupational coverage; Notional contribution rates of 12,5%. Pension funds had to set aside 1% of contributions to finance benefit improvements for older workers.
Light strengthening of rules against cartels abuse.
Further liberalisation of the Swiss capital market: the Swiss National Bank abolishes the CHF 200 million ceiling on public sector loans to foreign borrowers.
Following a series of proposals from the Banking association, three measures were approved in early September, including abolition of the withholding tax on interest on interbank loans.
Following a series of proposals from the Banking association, three measures were approved in early September, including abolition of the Stamp duty on participation by Swiss banks in Eurobond issues.
Following a series of proposals from the Banking association, three measures were approved in early September, including abolition of the turnover tax on gold.
Parliament adopts tax reliefs for families, which amounts to direct tax cuts in the order of 30 % for middle-income families (this implies a loss in Confederation's revenues of about CHF 365 million).
Dismissed employees have a right to be informed on causes of dismissal.
Better protection of minority shareholders.
It becomes no longer possible to refuse new shareholder or deny them voting rights.
Partial liberalisation of the telecommunication market. This totally liberalised the market for end-user equipment, subject only to the certification of devices by the Federal Office of Communication. Monopoly restrictions on service provision were also eliminated with the exception of voice telephony and infrastructure, where market access continues to be prohibited. Télécom PTT retains its monopoly on the cable and hertzian infrastructure as well as on mobile communications.
Consultation of work council at company level in the case of dismissals.
Adoption of annualised working time agreements, allowing more flexibility for companies.
Decentralization of many collective bargaining items to the company level.
Inflation adjustment clauses disappear from all major collective labour agreements; share of workers covered by CLAs with such clauses drops to 0.3%.
Contribution rates raised from 0.4 to 2 %.
The replacement rate of unemployment benefits is reduced from 80 to 70% for people without family charge.
The duration of unemployment benefits is increased from 300 to 400 days.
Law on Public Procurement to enhance competition by increased transparency in public tendering.
A catalogue of reimbursed services is established.
Mandatory insurance forbids associations and groups providing services and insurance to claim an exclusive right to conclude fee agreements, thereby seeking to enhance competition.
Affiliation to health insurance is made compulsory for all citizens.
Establishment of sanctions for jobseekers not actively seeking work.
Important accentuation of active labour market measures.
New law on competition strengthens competition authority.
Law on Trade Restrictions to lower technical barriers to trade.
Law on Domestic Markets to create a homogenous domestic market.
Provides for equal treatment of men and women in dismissals.
The Federal Banking Law, which complies with relevant EU directives, comes into effect. As a consequence of the revision, the National Bank drops the authorisation requirement for foreign borrowers in the Swiss market; bank reporting is now compulsory only for Swiss-franc-denominated bond issues.
A "solidarity contribution" of 1% is introduced on high wages above the threshold insured.
Contribution rates raised from 2 to 3 %.
Increase in contribution rate of disability insurance to cover increasing expenditure and deficits.
Addition of a new 5-day waiting period (with some exceptions) for the receipt of insurance benefits.
Granting of pension credits to women who stop work to care for children or elderly relatives.
Pension benefits are now split between spouses.
Means-tested supplementary benefits for low-income recipients of public pensions (and disability insurance).
Time spent educating children is taken into account in contribution period.
Early retirement three years before standard retirement
VAT increase for additional financing of basic pension.
Law on freedom of movement thought to prevent the insured from suffering financial loss when changing jobs and should thus encourage occupational and geographical mobility.
The retirement age for women is increased from 63 to 64.
Abolition of widows’ pension (with exceptions)
Post and telecommunications monopoly broken down: telecommunications market further opened to competition. The public monopoly on telephone networks ended and opened the telecommunications market up to competition, as the telecommunications business has been separated from the former PTT (postal and telecommunications services) and operates as an independent enterprise. It is organised as a joint-stock company under a special telecommunications law, which allows partial privatisation but stipulates that the majority stake in the capital and the majority of the voting rights have to remain with the federal government. Profits from the telecommunications business are no longer accruing to the Confederation. Rather, Swisscom distributes dividends to its shareholders and is also liable to taxation. During the first five years of its existence, Swisscom is required to cover the whole country with a basic supply of telephone and data services. Thereafter, this public service will be put up for tender as a regional or nation-wide licence.
Post and telecommunications monopoly broken down.
Liberalisation of postal services considered non essential (packages), while letters and packages under 2 kg remain state monopoly.
Partial privatisation of public telecommunications company, federal state remains majority shareholder.
Regulation of financial transactions to increase transparency, forbidding anonymous bank accounts and covering all financial intermediaries, as well as being strict on documentation requirements and transparency.
Flat federal Corporate Income Tax (CIT): The new federal law on business taxation comes into force, replacing the progressive federal taxation of profits by a flat rate (8,5%) and easing the tax burden on holding companies and on small and medium-sized enterprises. (No federal tax on net worth.)
Based on the new law on agriculture, producer prices and processing margins for dairy products cease to be guaranteed by the federal government. The subsequent income losses of farmers are to be partly offset by direct payments.
A new banking law comes into force, which removes the obligation for cantonal banks to be guaranteed by their respective cantonal governments.
The law gives foreign bank supervisors the right to inspect Swiss subsidiaries of their domestic banks and check Swiss banks, exchanges and security traders operating in their home markets.
Rules for applicability of collective labour agreements to posted workers.
Setting of interconnection charges to cover full historic cost, on the basis of the so-called long-run incremental cost (LRIC) model as from the beginning of 2000. This is in line with EU legislation. It has entailed a substantial fall in interconnection fees (down 16 to 19 % from their levels of 1999), which induced a cut in retail prices for fixed net services by about 30 % in early 2000. Although prices for calls from the fixed net to mobile phones have come down as well, they still remain some six times higher than prices for fixed net telephony.
Parliament authorizes the government to temporarily restrict access for medical service providers (physicians and other non-medical health-care providers) in outpatient care.
Creation of cantonal tripartite commissions to monitor labour market.
Labour market opened to EU workers (agreement between Switzerland and the European Union on the free mobility of workers, coming into force in June 2002, taking full effect in June 2007, although transitional quotas continue to apply to Central and Eastern European EU member countries).
Minimum wages can be introduced by tripartite commissions in case of an observed abuse in wage standards.
privatisation in telecommunications as Swisscom sells ist share in Cablecom.
Reinforcement of surveillance powers over LAMal insurers.
Standardisation of three areas in each canton where insurers can apply different premia (reflecting variations in health costs across regions within any canton). Previously, these areas where defined by, and therefore varied across, insurers.
Right to substitute a branded product with a generic bioequivalent by pharmacists.
Introduction of a new method of remuneration of pharmacists and prescribing doctors, based on fee-for-service rather than retail-price margins on dispensed drugs.
Improvements in the system of premium subsidies for low-income individuals and families.
Introduction of measures to facilitate switching between LAMal insurers.
The "solidarity contribution" on high wages is abolished, while allowing the government to levy it under certain circumstances when the unemployment insurance fund is facing a debt of more than 5 billion francs.
Duration of benefits cut from a maximum of 520 days to 400 days (except for those older than 55, and for workers in cantons where the unemployment rate rises above 5 % if the canton decides to extend the scheme).
The minimum duration of contribution for eligibility for unemployment benefits is increased from 6 to 12 months.
Strengthening of sanctions for anticompetitive practices.
Disestablishment of existing parastatal protectionist organizations such as the "cheese union".
Abolition of all public price and purchase guarantees.
Reduction of the conversion rate from 7.2 % to 6.8 %.
The threshold for compulsory occupational pensions was lowered to CHF 18'990, and the amount of non-insured earnings to about CHF 22'155 per year.
Minimum interest rate for occupational pension funds was lowered from 4 to 3.25 %.
State-paid maternity leave is introduced.
Reimbursement rates for outpatient medical care to rest on a uniform single product catalogue (Tarmed).
Minimum interest rate for occupational pension funds was lowered from 3.25 to 2.25 %.
Modification of premium reductions: According to the new model, cantons have to reduce premiums for those on low incomes and for families.
The 10 % contribution of patients towards the cost of medicines was increased to 20 % for brand name drugs for which less expensive and interchangeable generics were available (which applies up to an annual cap of CHF 933).
On market entry in Switzerland, generics must be priced below the reference price of the original drug. In the past, the price of a generic was set 40% below the originator’s price. Since 2008, in order to encourage generic entry in the Swiss market, generic price discounts have been defined in relation to originators’ market shares: the larger the market share, the higher the discount.
Creation of and staffing of cantonal labour inspectorates.
Increase of the minimum early retirement age in occupational benefits from 55 to 58 over a period of 5 years.
Minimum interest rate for occupational pension funds was raised from 2.25 to 2.5 %.
Since the end of 2006, manufacturers of originator products were provided with the opportunity to “buy” an entitlement to lower (10%) cost-sharing by patients if they reduce their prices in line with generics (and many of them did).
Market for letters above 100 g open to competition.
Opening of the electricity market: large consumers/businesses now allowed to choose electricity provider.
Means-tested supplementary benefits for pensioners on low incomes: yearly maximum benefit level abolished in order to reduce the burden of health insurance in financing long-term care to some degree.
New repartition of financing between cantons and the Confederation which made supplementary benefits first and foremost a federal responsibility and, as a result, increased the federal share in their financing.
Eligibility for invalidity benefit is tightened, increased incentives to seek work.
The revision of the invalidity insurance system requires regular testing ofthe working capacities of the insurance beneficiaries.
Parliament decided to introduce the “Cassis de Dijon” principle and thus eliminating remaining technical barriers for over 80% of the imports from the EU through a revision of the law on technical barriers to trade.
New independent regulator for the electricity sector.
Reduction of 30 % in budgetary expenditures for market price support (direct payments instead).
New law to combat illicit work. The law obliges cantons to set up control organs and implement tougher penalties.
A tax reform adopted in 2008 reduces or eliminates the double taxation for investors owning at least 10% of the capital of a company.
The HarmoS-Concordat came into effect in August 2009. 15 cantons (representing 76% of the entire population) have ratified the Concordat. Beyond the introduction of compulsory education from the age of 4 and common educational objectives, it includes the obligation to offer day-schools.
Tax allowances for parents utilizing external childcare: A new tax law foresees that parents utilizing external childcare shall be granted further tax allowances.
Postal services: Differences in personnel and administrative rules and regulations have been eliminated, except for universal services obligations.
The contribution rate is raised from 2 to 2.2%.
The duration of entitlement is aligned on the time of contribution. Benefits cannot be received for longer than the time contributed.
Young people under 25 will have to wait 120 days before receiving benefits.
Clarifying the responsibilities and obligations of the various parties involved such as fund trustees, auditors and actuaries, thus strengthening the supervisory system by establishing an overarching independent federal commission which has the power to issue binding standards for the local supervisory authorities.
Incentives have been raised in the second pillar for prolonging work after the standard retirement age.
Additional legal provisions stipulating further governance and transparency requirements to avoid conflicts of interest for managers of pension funds.
The new legislation foresees tighter capital requirements, which are expected to require capital to amount to about 19 % of risk-weighted assets in the Big-2 UBS and CS Group, and a leverage ratio requirement which is currently estimated to reach around 5 %. However, these measures, once approved, will be implemented over a transition period of several years, in line with the Basel III process. (Implementation of Basel-III rules will result in the introduction of a counter-cyclical buffer starting in 2016).
The requirement on banks to hold liquid assets in Switzerland to be able to fund deposit withdrawals has become permanent.
The temporary increase of the ceiling on depositor protection from CHF 30 000 to CHF 100 000 per account has become permanent.
Authorities have abolished the preferential lower reserve requirement for cantonal banks compared to the other commercial banks. However the continued guarantee on their liabilities by the cantonal governments along with their mandates to lend to local customers tends to blunt their incentives and their ability to operate as effective commercial institutions. The combination can also encourage excessive risk taking.
Co-payment for equivalent products with the same active substance is increased from 10 to 20 % if prices exceed the average price of drugs in the lowest third of the price range of products containing the same active substance by more than 20 %, irrespective if originator or generic drug.
Differences in rules and regulations have been eliminated (universal services obligations).
Customs duties on processed cereals for human consumption reduced.
Ordinance to simplify procedures (Procurement statistics have been improved and prices are being benchmarked.).
Government plan to make the electricity market regulator independent from the Federal Office of Energy.
Postal regulator (PostCom) to become independent from the Federal Council and endowed it with the power to impose fines.
Payments for the dairy sector abolished.
Expenditures for market support have been further reduced and shifted towards direct payments.
Along with DRG reforms, a hospital “list” will be established, specifying those hospitals which will be able to receive the canton’s funding of 55% of each service delivered. Furthermore, investment costs will be included in the case-based payment system, removing the uneven playing field that formerly existed where hospitals receiving subsidies for investment costs had a lower marginal cost per service compared to those hospitals that did not receive subsidies. The combination of discontinuing subsidies and paying hospitals for the cost of each in-patient case on the basis of a uniform tariff structure, should, in principle, drive activity towards the most efficient hospitals, whether public or private.
A new organisation, Swiss DRG SA, has been established to develop and maintain a national schedule of Swiss Diagnostic Related Groups, initially based on a German DRG model (Swiss DRG, 2005). Once fully implemented throughout Switzerland by 2012, this national schedule will govern payments for compulsory social insurance schemes (health, accident, military and disability) to all hospitals (including private hospitals). Scales will be computed based on 42 hospitals that delivered data to Swiss DRG. The split of funding will see insurers provide a maximum 45% of the price of a service and cantons providing 55% of the price of a service.
Revision of labour law to allow shops to open at night: gas stations are now allowed to sell things at night.
The new Basel III framework provides for a countercyclical capital buffer, ranging from 0 to 2.5% of risk-weighted assets that can be adjusted over time. If lending growth relative to GDP growth is above trend, the buffer should be increased. To be phased in between 2013 and 2016.
The population accepted a people's initiative including a cap on managers' salaries.
The Swiss post turned into a stock company with the state as its proprietor.
Creation of a General Social insurance Scheme: a universal, compulsory pension scheme funded with tripartite contributions at 16.6% of earned income, capped at a certain point. It comprises supplementary benefits as well as an earnings-related portion determined by the ratio of wages earned to basic earnings. In each year, the first point year accrues to the basic pension and additional points count for the supplementary pension. Up to that moment, the system only included the basic part. An important difference between the basic and supplementary benefits is that the former is computed each year based on the corresponding basic earnings, while the latter is computed once, given the basic earnings at the time of retirement, and subsequently adjusted by inflation. In other words, the basic pension is indexed to wages as basic earnings are, and the supplementary benefit is indexed to prices.
Corporation tax is set at 4.25% for international companies, 20% for revenue below 100000 pounds, and 25% over there.
The amount exempted of income tax is brought up to 2000 pounds. There are three brackets: 20% for 2001-4000 pounds, 30% for 4001-8000, and 40% for 4000 and over.
Monthly payment of the social pension amounts to 70 % of the basic pension for old age without dependants. In December an increase of 1/12 of the total amount for the completed year is paid up to the beneficiary.
The increase paid up to a dependant on the basis of old age, incapacity, widowing, invalidity or benefit of oblivion terminates on the date when the dependant is entitled to a social pension. Under given conditions, the above-mentioned persons is also entitled to maternity, sickness, unemployment or injure benefit.
Requirements allowing to a social pension: age of 68 years completed; legal residence in Cyprus (20 years completed after applicant's 40th birthday or 35 years after 18th birthday); no right for any other pension or any other similar revenue from any source.
Retirement age is increased from 63 to 65 years.
Amends Trade Union Laws 1965-1991 with regard to annulment of a trade union's certificate of registration, and notification of annulment. Section 16 sets forth reasons for which a trade union's certificate shall be withdrawn or annulled.
CIT for revenue between 40000 and 100000 pounds is brought up to 25% from 20%.
The amount exempted of income tax is brought up to 5000 pounds. First bracket (20%) goes from 2001-4000 pounds to 5001-8000. Second bracket (30%) from 4001-8000 to 8001-11000, and 40% is now applied above 11000.
Reduction of working time from 40 hours per week to 38.
Provides for the establishment of the Human Resource Development Authority (HRDA- AnAD) (Αρχή Ανάπτυξης Ανθρώπινου Δυναμικού, ΑνΑΔ) as the only authority with competence and power in the field of training, including continuous vocational training, although no explicit reference is made to it.  The HRDA’s mission is to create the necessary prerequisites for the planned and systematic training and development of Cyprus’s human resources, at all levels and in all sectors, for meeting the economy’s needs, within the overall socio-economic policies. Article 10 of Law 125(I)/1999 stipulates that HRDA - AnAD shall be managed by an Administrative Board consisting of 13 members, five from the government side (the chairman, one member each from the Ministry of Commerce, Industry and Tourism, the Ministry of Education and Culture, and the Ministry of Employment and Social Insurance, and one member from the Planning Bureau), and eight members from the most representative employers’ and workers’ organisations, specifically, one member from the Cyprus Chamber of Commerce and Industry KEVE (Κυπριακό Εμπορικό και Βιομηχανικό Επιμελητήριο, ΚΕΒΕ), one member from the Federation of the Building Contractors Associations of Cyprus OSEOK (Ομοσπονδία Συνδέσμων Εργολάβων Οικοδομών Κύπρου, ΟΣΕΟΚ), two members from the Employers and Industrialists Federation OEV (Ομοσπονδία Εργοδοτών και Βιομηχάνων, OEB), two members from the Pan-cyprian Federation of Labour PEO (Παγκύπρια Εργατική Ομοσπονδία, ΠΕΟ) and two members from the Cyprus Workers' Confederation SEK (Συνομοσπονδία Εργαζομένων Κύπρου, ΣΕΚ).
For the accomplishment of its mission and in order to be able to exercise its competences and powers, the HRDA is funded by the Human Resource Development Fund. Every employer is obliged to pay to the Fund a levy not exceeding 1% of the emoluments of each of his/her employees as may be specified from time to time. The government is exempted from this obligation.
CYTA, the sole telecommunication provider and regulator, begins liberalisation by restructuring prices towards cost-oriented options.
Defines dispositions concerning the rights of disabled persons to work, just working conditions, and equal treatment in the working environment. Creates the Council for disabled persons and the Fund for persons with disabilities, and provides for their administration and management. Also provides for codes of practice and for the associated regulations.
The amount exempted of income tax is brought up to 6000 pounds. First bracket (20%) goes from 5001-8000 pounds to 6001-9000. Second bracket (30%) from 8001-11000 to 9001-12000, and 40% is now applied above 12000.
Discount of subsidies for local and international calls.
The consultation with the employee representatives should consider ways of avoiding collective redundancies (within 30 days, at least 10 dismissals in companies with 21-99 employees, at least 10% in companies with 100-299 employees or at least 30 dismissals in larger firms), reducing the number of employees to be made redundant, mitigating the negative consequences of redundancies and integrating redundant employees back to work.
If the employer resorts to a mock up bankruptcy to deprive the employees from their rights or violates the obligation to inform and consult with the employees about the planned collective redundancies, they are to pay a fine as well.
If the collective redundancies (within 30 days, at least 10 dismissals in companies with 21-99 employees, at least 10% in companies with 100-299 employees or at least 30 dismissals in larger firms) are put into effect before the authorised period (e.g. collective redundancies that take effect earlier than 30 days from the date of the notification to the Ministry of Labour and Social Insurance), the employer is to pay a fine.
Employees or their representatives are entitled to take action in the courts against employers who do not comply with the legislation.
The cause of the dismissal shall not be tied to the person of the dismissed. The present act cannot be applied to mass contracts concluded for a determined period of time or for a specified work project, to the employees of the public service, to organisations which are partially under state control, to personnel of the Regional Administration, or to the ships' crews.
The legislation specifies various low-level fines upon employers for failing to comply with the dismissal related legislation.
As part of this obligation the employer is also obliged to inform the minister: of the reasons for the proposed redundancies, the number of the employees that will be dismissed and generally employed, their employment positions, their names, family status and obligations, the period during which redundancies should take effect, whether consultations took place between the employer and the employee representatives and their context and outcome.
The minimum period of notice for terminating employment depends on the length of service as detailed below and it should be given in writing: one week’s notice for 26 to 51 weeks of service; two weeks’ notice for 52 to 103 weeks of service; four weeks’ notice for 104 to 155 weeks of service; five weeks’ notice for 156 to 207 weeks of service; six weeks’ notice for 208 to 259 weeks of service; seven weeks’ notice for 260 to 311 weeks of service; eight weeks’ notice for more than 312 weeks of service.
Financial penalties cannot exceed a certain amount, which is changed year per year.
Employees who have been previously made redundant and who have been employed for not less than 104 weeks have to be prioritized if an employer wishes to expand its workforce with employees of the same type and skills. In addition, the employer must give priority to people who were made redundant as to the operational needs of the enterprise.
Consolidation of a National Health Insurance Scheme.
On the basis of CYTA’s designation as an operator having significant market power (SMP), the NRA has imposed a series of interrelated remedies on the incumbent—mainly in the areas of prices and network access—focusing on the facilitation of competition development.
With respect to access regulation, CYTA is mandated to publish the Reference for Unbundling Offer (RUO) and the Reference for Interconnection Offer (RIO).
With regard to price regulation, the incumbent’s retail prices for fixed and mobile telephony were liberalised but are still subject to caps and floors, whilst broadband bit stream access is based on the ‘‘retail minus’’ method
Setting up of an independent National Regulatory Authority in 2002 that would enforce and implement the transition to liberalisation in telecom. The NRA is responsible for issuing regulations, orders, and decisions, subject to approval by the Council of Ministers. Its budget requires approval by the Ministry of Communications and Works, which is also responsible for spectrum management. The Ministry subsidises the NRA’s budget, which mainly consists of funds obtained from licences issued to service providers.
Private placement agencies are regulated and legalized.
Prohibition of discrimination of part-time employees.
Any employed parent shall be entitled to take unpaid parental leave of a duration of up to thirteen weeks in total, by reason of the birth or adoption of a child, in order for the parent to take care of and participate in the raising of the child.
Provides for equal treatment between men and women with regard to employment and vocational training
Introduces minimum periods of daily rest, weekly rest and annual leave and the maximum permissible duration of weekly working time, including that of night work.
The amount exempted of income tax is brought up to 9000 pounds. Hence, only two brackets (30% for 9001-12000 and 40% above 12000) exist.
Prohibition of discrimination of fixed-term employees.
Reform of the payment of unemployment benefits (UB) to hotel employees whose employment is suspended for the winter season, as follows: 1) the employer will notify the employees the period during which their services will not be required; 2) in order for UB to be paid, all employees in a state of suspended employment must register as unemployed at the District Labour Office; 3) the employer will pay a basic 2.8% of the basic wage and price indexation as well as the corresponding contributions to social insurance fund, so that the period of suspended employment can be counted as actual service for redundancy purposes; 4) all benefits specified in accordance with collective agreements will be secured by the employers. Before the agreement, customary practice was that the employer in the tourism and catering sector paid employees whose services had been suspended a sum equal to a quarter of their basic pay plus a price-indexation allowance, on top of 75% of full UB.
Extends the grant of public assistance to disabled persons residing temporarily outside the Republic of Cyprus for educational or medical treatment purposes.
The rate for benefits below 100000 pounds is taken down to 10%. Above this quantity, the rate is now 15%.
The rate for income between 9001 and 12000 pounds is brought down to 20% from 30%. A new bracket of 25% is created for income between 12001 and 15000. Income above 15000 is taxed now at 30%.
Modernisation of PES, involving the introduction of a self-service internet system for employers, the expansion of the local labour offices network, the provision of individualised services for active support.
New Scheme for the promotion of training and employability of the inactive female labour force
The amount exempted of income tax is brought up to 10000 pounds. First bracket (20%) goes from 9001-12000 pounds to 10001-15000. Second bracket (25%) from 12001-15000 to 15001-20000, and 30% is now applied above 20000.
New Scheme for the promotion of training and employability of new Secondary Education Graduates
Vocational training and promotion of the employment of recipients of public assistance
Vocational training and promotion of the employment of disabled persons.
Regulation of private universities: maximum fees are established, as well as increases, which cannot go further than 1.5x the inflation rate of that year.
Employers have a statutory duty to inform the employees (where there is no employee representative in place) or the employees’ representatives within reasonable time and notify in writing the reasons for the intended redundancies.
Introduction of part-time employment in the banking sector, on a voluntary basis and on the basis of the provisions of the relevant legislation.
Consultations shall, as a minimum, cover: possible measures to prevent any collective redundancies (within 30 days, at least 10 dismissals in companies with 21-99 employees, 10% in companies with 100-299 employees or at least 30 dismissals in larger firms) or to reduce the number of the employees who would be affected; and possible ways and means for easing the adverse consequences arising from such collective redundancies, through social measures, for example, or the re-employment or retraining of dismissed employees.
Employers must consult with trade unions or employee representatives. Information and consultation in relation to decisions that fall within the framework of the following directives and laws must take place at such time and manner as to allow the workers’ representatives to undertake a comprehensive analysis and, where necessary, prepare consultation: the Collective Redundancies Law 28(I)/2001 (Directive 98/59/EC); the 2000–2003 Laws 104(I)/2000 and 39(I)/2003 on the Safeguarding and Protection of Employees Rights in the Event of Transfer of Undertakings businesses or Parts thereof (Directive 2001/23/EC); the Law 68(I)/2002 on the Provision for the Establishment of a European Works Council for the Purpose of Safeguarding the Employees’ Rights for Information and Consultation in Community-Scale Undertakings and Community-Scale Groups of Undertakings.
Provides for the protection of workers' representatives against acts of discrimination on account of trade union activity and requires the employer to provide workers' representatives with the necessary facilities for discharging their duty.
Corporate tax is set at 10% for every firm and benefit level, also for international firms.
Payment of social security insurance benefits to employers employing persons with disabilities
Developing a system of personalised action plans for unemployed people and making the District Labour Office handle an increased number of vacancies.
Regulating shop opening hours and retail employees' terms and conditions of employment (working hours, overtime, daily rest periods, meal and rest breaks; recuperation). Drawing a clear distinction between shop opening hours and employees' working hours (shops may remain open for longer than the law stipulates for employees).
Provision of financial incentives for employers to construct facilities and to adapt the working environment and machinery to people with disabilities. A scheme to provide incentives for the employment in the private sector of persons with serious disabilities. This scheme also provides pay subsidies to encourage the employment of people with serious disabilities
Legislation for the Protection of Employees' Rights in Case of Employer Insolvency covers workers against bankruptcies. In particular, all outstanding payments by employers to employees are safeguarded thanks to a special fund established for this particular purpose. The fund is financed exclusively by employer contributions (0.2% of gross salaries). The employee is entitled to the following payments from the fund: all unclaimed wages due from the employer for the last 13 weeks of employment, occurring within a period of the last 78 weeks up until the date the employer's insolvency commenced; the equivalent of all unclaimed paid leave for the above-mentioned 13 weeks (in the event that the employer possesses a certificate of exemption from payment of contributions to the Central Holidays Fund); the equivalent of the thirteenth and fourteenth salary or the wages of the 53rd–54th weeks for the same period. Excluded are workers that:  have special links and common interests with their employer, amounting to collusion between employee and employer; employees who are shareholders and members of the board of directors, employees of the naval, military and air forces of the UK government; employees who not habitually reside in Cyprus; employees who alone or with first generation relatives own a substantial part of the business; officers working for the government.
Provision of two grants, one to cover disabled employees’ contributions to the social insurance fund and the other to cover employers’ contributions to the social insurance fund, the holiday fund and the redundancy fund.
The amount exempted of income tax is brought up to 10750 pounds. First bracket (20%) goes from 10001-15000 pounds to 10751-15000.
Prohibition to the employer of termination of employment while being on leave.
Introduction of a modern apprenticeship scheme and the setting up of vocational training courses in secondary schools
Retirement age of public servants increases from 60 to 63.
The amount exempted of income tax is brought up to 19000 pounds. First bracket (20%) goes from 10750-15000 pounds to 19501-28000. Second bracket (25%) from 15001-20000 to 28001-36300, and 30% is now applied above 36300.
Aims to help employers to retain their employees, instead of laying them off, by participating in trainings. In particular, the HRDA helps employers to design and implement training programmes that meet their specialised needs and subsidises their eligible costs, including wages of the participants for the duration of the training. The promotion of these in-house training programmes focuses on the sectors of the economy which are mostly affected by the economic recession and where the possibility of employee lay-offs is imminent. Such sectors are Hotel and Catering, Retail Trade and Construction. The proportion of the costs covered depends on the size of the firm. In general, for enterprises with more than 250 employees, the subsidisation by the HRDA covers 60% of the eligible total cost of the proposed training programmes, for enterprises that employ 50-249 persons the subsidisation is 70% and for enterprises that employ 1-49 persons the subsidisation is 80%.
Implementation of training schemes for employees in the hotel industry whose employment has been suspended temporarily. During the training (3 weeks per employee) wages will be covered by the government
Aims to meet significant labour shortages through theoretical and practical training (of 21 to 25 weeks duration) in occupations which are currently in demand. The Human Resource Development Authority (HRDA) covers all costs for the institutional training. In addition, trainees receive a weekly allowance of €200 as well as travelling costs. Participants who successfully complete the programme are granted a Training Certificate, which specifies the subject of specialisation and the duration and content of the training.
Companies are encouraged to hire unemployed people for a period of six months through receipt of a subsidy, and for a further two months without a subsidy. The subsidy amounts to 30% of total wage costs for each employee, with a maximum expenditure amount of €3,600 per person on a six-month basis. All enterprises are entitled to receive the subsidy, except for those operating in the primary production of agricultural products, in fishing, aquaculture and coal, as well as in ‘ailing companies’ as defined by European Community guidelines
Covers 75% of annual wage cost (max €15,000 ppy for the first 2 years of employment). Covers up to 25% of cost of adapting premises equipment and software for use by disabled. 120 disabled persons. Runs until 2014.
New emergency scheme for supporting employment through individualised training and employment of unemployed persons to fill vacancies reported and/or replacement of foreigners from third countries.
Adaptation of stricter insurance conditions in order to be entitled to an old-age pension as well as a lump-sum of old-age pension
As of April 2009 and until January 1, 2039 employees and employers contributions will gradually increase by 1.3% every five years. The contribution to the increase is 0.5% on employees, 0.5% on employers and 0.3% on the state.
Accelerated initial training programmes for newcomers and other unemployed persons in occupations which are in demand with a duration of 16-24 weeks, offered free of charge for the following occupations: plumbers, refrigeration and air-conditioning technicians, electricians, aluminium technicians and cooks.
Promotion of training programmes for upgrading the skills of unemployed persons in order to increase their employability in accordance with the identified needs in the labour market. Participants are entitled to a training allowance in addition to the unemployment benefit.
To stimulate the availability, popularity and acceptance of flexible forms of employment. 1,200 economically inactive who, for family reasons, need flexible forms of employment. Subsidy scheme, promotion of self-employment. Runs to 2014
Provides incentives for hiring disadvantaged individuals in the private sector and local authorities: A 65% subsidy towards annual wage costs (max €13,000) for first year of employment. Allowance for transportation costs to employees. Runs to 2014
Helps job placement and job creation by improving the matching process. Strengthens the administrative and technical facilities, improves monitoring, improves individualised counselling, and helps private placement agencies to improve their service. Runs to 2015
Private university fees are fully liberalised.
New provision for employees applying for parental leave, whereby the employee must provide express warning to his/her employer (in writing) three weeks in advance of the date in which parental leave will commence. In cases of serious illness or conditions in the cases specified in the table appended to the law, the advance warning is reduced to one week. The duration of the benefits, in the case of natural mothers lasts from the termination of the maternity leave (4 months) until the child attains the age of 8; in the case of natural fathers it lasts from the birth of the child until the child attains the age of 8; in the case of adoption it lasts for 8 years from the date of adoption of the child and after the termination of the maternity leave (four months), but limited to up until the child attains the age of 12. The adoptive father may be granted parental leave straight after the adoption of the child. In case of a child with disability, the duration of the time within which parental leave may be granted is extended up until the child attains the age of 18, as provided in Law on Persons with Disabilities 127(I)/2000 as amended.
In particular, according to the most recent Order (No. 156/2010) that is effective retroactively from 1 April 2010, the minimum monthly salary for new job entrants in eight of the nine occupational categories - excepting that of cleaners - is set at €835 from €791 in 2009, while for employees who have worked for the same employer for six consecutive months, the minimum wage is set at €887 from €840 in 2009. With regard to the field of application of the existing legislation, beginning in April 2010 the decree also covers the occupation of cleaners, for which the minimum is set at €791 and €840 accordingly. Minimum wages are gross earnings and are readjusted on an annual basis, following consultation with the social partners
simplifies the provisions referred to the insurance conditions and the calculation of the benefits for old age pensions
As regards information and consultation deriving from an agreement, according to Article 6 section (1) the social partners may, at the appropriate level (including the enterprise level), define freely and at any time, through negotiated agreement, the practical arrangements for informing and consulting employees.
Reduction of salary scales for new employees of the broader public sector by 10%.
The reform aimed at reducing the cost of the system to the government and improving equity with private sector employees. The main measures were an increase in the permanent contribution rate for public employees from 0.8 % to 5.1 % of the wage bill, the abolition of access to public sector schemes for new public sector workers, and the indexation of pensions in payment for inflation only. Moreover, an additional temporary contribution on public employees and pensioners in the public sector was also imposed, based on their income.
A new bracket is introduced: income above 60000 pounds will pay a tax rate of 35%.
Student grant reform. The amount of the grant was reduced by: 7.5% for families with income between €30,000 and €40,000, 15% for income between €40,000-€50,000, 22.5% for income between €50,000-€60,000, 30% for income between €60,000-€70,000, 40% for income between €70,000- €80,000, 50% for income between €80,000-€90,000. PhD students are not eligible for the benefit, while Master students are, if their family income stands below €30,000.
Scale reduction in emoluments of public and broader public sector pensioners and employees from 1 December 2012 until 31 December 2013: 6.5% for €1,001-€1,500; 8.5% for €1,501-€2,000; 9.5% for €2,001-€3,000; 11.5% for €3,001-€4,000; and 12.5% for above €4,001 per month.
Freeze of increments and general wage increase in public and broader public sector until 31 December 2016.
Suspension of COLA for public and broader public sector until the end of the first quarter of 2016.
A permanent contribution of 3% on pensionable earnings of state employees to the Public Employees‘ Pension Plan; 6.8% on pensionable earnings by state officials who are not covered by the government pension scheme or any other similar plan but are entitled to a pension and gratuity.
Introduces a compulsory health care contribution for public servants and public servant pensioners of 1.5% of gross salaries and pensions.
Implements a further reduction in emoluments of public and broader public sector employees and pensioners by a flat rate reduction of 3% on all wages.
Implements a scaled reduction in emoluments of public and broader public sector pensioners and employees as follows: 0.8% for 0–€2,000; 1.0% for €2,001-€3,000; 1.5% for €3,001-€4,000; and 2.0% for above €4,001.
Pension entitlements that will accrue after 1 January 2013 are considered as personal income, thus becoming fully taxable.
Increase the tax rate on interest income to 30%.
Increases the contributions, as of 1 January 2014, of salaried employees and employers to the GSIS by an additional 1 p.p. on pensionable earnings, i.e. 0.5 p.p. from employees, 0.5 p.p. from employers and 1 p.p. from self- employed persons.
Extends the temporary contributions in the public, broader public and private sector on gross earnings and pensions until 31 December 2016 (2.5% for €1,501-€2,500; 3.0%, for €2,501-€3,501; and 3.5%, for income above €3,501).
The Law of External Economic Relations (July 1988) increased the possibilities of companies to engage in foreign trade and abolished the monopoly of the 50 to 60 foreign trade organisations that had controlled trade before
The state enterprise act of 1988 laid the basis for breaking up enterprises into smaller units
Established the legal basis for a universal banking system. Established the legal framework for the creation of new domestic and joint venture banks, subject to licensing issued by the State Bank following consultation with the Ministry of Finance during the review of registration applications. Foreign banks are permitted to establish joint venture banks or wholly-owned subsidiaries in Czechoslovakia, and such banks are accorded full national treatment. Foreign banks are, however, not permitted to establish branches in Czechoslovakia.
Act laid the basis for establishing a two-tier banking system by a separation of central bank and commercial banking functions, and provided the central bank with the means to conduct monetary policy and with regulatory authority over the banks
This law establishes employment offices as the basic unit of active employment policy
Re-qualification and training programmes were introduced. The financial incentive for those taking part is an increase of unemployment benefits by five percentage points of former salary
Introduction of special training programmes for school leavers that should prepare them better for the labour market
First amendment of competition protection after communist era, allows private enterprises, companies and competition rules.
The foreign trade law was amended to allow all economic units, including private entrepreneurs, to export their own products and to import inputs for their own production
This Act brought deregulation of all prices.
The elimination in July 1990 of the negative turnover tax, which provided subsidies on consumer goods, mainly food, was compensated by the introduction of universal income support to all persons in form of a monthly payment of 140 koruny. This operation was more or less budget-neutral.
The law on private business activities gave all citizens the right to establish their own business, subject only to registration, in almost any sector of the economy. No limitations on the number of employees and the amount of property of the enterprise are contained in this law
A constitutional amendment granted equal status to the owners of private, cooperative, and state property
To reduce labour supply, the government extended primary education by one year in 1990
Severance payment was set up to 5 monthly wages
The law on joint stock companies re-established joint stock companies as a legal form in Czechoslovakia
Regulates relations arising from the business activities of corporation and individuals after communist era. The planned management of the economy moves to a market economy, permits the creation of self-employment and companies.
This law allows foreign equity participation of Czech companies.
Provision for bargaining with multiple trade unions in the company, the biggest trading union in the company represents also non-union members
This Act enabled the establishment of trade unions
This law established the unified system of ownership, equal status and equal protection for all on the labour market, allowed to employ persons from private entities.
After one year, unemployed continue to receive a flat social allowance of 1 580 koruny; the same amount is paid to those who have never held a job before.
The scheme provides compensation of 65 % of the last net salary for 6 months, and 60 % for another 6 months, subject to a ceiling that is about 75 % of the average wage.
The first regulation governing social support of motherhood, parental leave was set up on 3 years.
Exceptions are made for school leavers up to two years after they leave school as well as for women returning from the maternity leave.
Eligible to receive benefits are persons who worked for at least 12 months during the previous three years.
Transferred control over management from the founding ministry to a supervisory board. This board is made up equally of ministry representatives and elected workers' representatives. The right to appoint and recall the director has, however, remained with the ministry. Plan targets and restrictions on the use of enterprise funds have been abolished. Under the new rules, enterprises are supposed to take their own decisions on investment, production, and marketing.
Participants in these auctions are required to pay a non-refundable fee corresponding about a quarter of the average monthly wage, to participate in the auction. In addition, they have to deposit 10 % of the starting price which is determined by independent appraisal, mostly on the basis of book values. In the first round of the auction, only physical or legal persons composed entirely of physical persons that are or were Czechoslovak citizens after 1948 and are over age 18 are allowed to participate. In the second round foreigners were also allowed to participate.
Small restitution relates to nationalisations which occurred from 1955 onwards, and concerns mostly small property claims, including small businesses which were confiscated against then prevailing law. In total, the government expects to return 70000 properties under this law. Property is returned in kind and in present condition, except for special conditions, e.g. when the property was significantly altered or a new building was constructed on the land, in which case financial compensation is paid. The deadline for filing claims was 1 April 1990. Restitution for most real estate will be in physical form, with about the same exceptions as in the small restitution law.
The law on cooperatives was amended to establish the right of a member of an agricultural cooperative to get back the land originally contributed, subject to the condition that the land continues to be used for agricultural purposes
A law regulating the taxation of small enterprises was adopted.
Measures to increase the demand for labour are mainly different schemes for subsidising salaries for those formerly unemployed, the most prominent of which is subsidies for employing school leavers in 1991
Another measure is the programme of the Federal Ministry of Labour and Social Affairs for the promotion of small businesses. Unemployed workers who want to become self-employed can receive a lump sum payment of up to one year's unemployment compensation, and twice that amount if an additional job is created.
Companies were obliged to report vacancies to public employment services.
This law creates a network of offices, providing active employment policy at the regional level.
This Act introduces quotas for a share of employees with impaired capabilities for health reasons and other duties as report to the labour office vacancies and occupation, preferentially occupy the places indicated in the list of vacancies reserved for citizens with reduced capacity to work these citizens.
State undertakes that, through bodies actively helping people to succeed in the labour market, provide retraining and also encourage those who are unemployed.
This Act allows the creation of private employment agencies.
The Act assigns Czech citizens the right to work, and repeals the previous duty to work. Likewise, people have the right to work mediation and suitable jobs, to retrain, to material security before entering employment and in case of job loss.
The law lists seven elements of cartel contracts which are against the law. It establishes merger controls. It obliges enterprises to report dominant market position. During privatisation the monopolistic position of privatised firms have to eliminated.
The new commercial code and the establishment of commercial courts will provide the civil law infrastructure for business based on the freedom to contract. It promoted FDI by providing national treatment to foreign investors.
Heating subsidies were phased out in May 1991, and replaced by cash payments to pensioners and families with children; other groups were not compensated.
It established (or recognised) three competition offices: the Federal Office for Economic Competition; the Office of the Czech Republic for Economic Competition; and the Slovak Antimonopoly Office.
If employee turns out to be unable to perform assigned task, his employment contract can be terminated even if there are jobs in the organisation suitable to his qualifications
Employment contract can be terminated at once only if the employee's conduct is severely undisciplined.
This Act introduced temporary working agreements
The notice period is increased from two months to three months
Severance payment decreased to 2 monthly wages.
Leave entitlement in enterprises may be extended by one week through collective agreements. If the employee is granted leave in several parts, at least one part must be at least two weeks.
This law provides for certain additional preconditions for the exercise of the functions filled by election, appointment in the public sector for the first time after the fall of communism.
This law regulates Czech insurance system, the capital of insurance companies was set at 10 mil. CZK.
Specified that the central bank could extend only short-term credit to the Federal, Czech or Slovak governments by purchasing treasury bills.
Two procedures are envisaged in this law. The first applies to enterprises which are insolvent; these are, as a rule, to be liquidated, and control over assets is taken away from management. The second applies to enterprises which are illiquid because of delayed payments by customers. In general, these enterprises will be restructured and maintained as going concerns. During a transitional phase, the law is to be applied "selectively".
This regulation creates legal framework for corporate enterprises in all kinds
The General Health Insurance Company, founded at the end of 1991, was the first health insurance fund to be allowed to operate (payers and purchasers of care, financed through mandatory, wage-based contributions). It also has the most influence due to its market share and its function as a safety net for members of health insurance funds that close or go bankrupt.
The government created the Council for Economic and Social Agreement in 1991 in order to allow the social partners to express their views and to find a consensus. Government, employers, and unions have equal representation in this tripartite body.
The Council set the minimum wage at 2000 koruny per month.
This Act creates minimum wage per hour at 11,4 CZK in the case of 40 working hours/week in Czechoslovakia
Strikes are permitted as a weapon of last resort.
Over the medium term, the government plans to replace current wage regulations by collective agreements between employers and employees, with negotiations on branch and enterprise level. The role of the government will be limited to determining minimum tariff wages by category of work, in addition to the general minimum wage.
The guidelines allowed the average wage level in the enterprise sector to increase during January and February of 1991 by a cumulative 5 % above the level of December 1990, and by 6 % in the government sector. In case of a price increase in the first two months of 1991 of more than 25 %, the ceiling would be adjusted so that the average real wage in March would not be more than 12 % below the December wage. For the remainder of the year, an indexation formula was designed to assure that the real wage by December 1991 did not decline by more than 10 % against December 1990.
The benefit was reduced to 60 % of the previous net wage income for the first three months and 50 % for the remaining period
This Act introduced the concept of subsistence level of income as a socially recognised minimum income level at the level of minimal material needs which was 1200 CZK.
Maximum duration of benefit was reduced to six months (from one year).
This law defines procedures for the social security of job loss or other life situations where the person cannot increase his income.
Entitled to unemployment benefits are jobseekers who meet the condition of having been employed for at least 12 months in the last three years before applying for a job placement.
Fully indexed minimum pensions to the cost-of living index. Higher pensions are only partially indexed.
This law regulates the structural organisation of social security in the Czech Republic first time after fall of Communism.
The large-scale privatisation will be carried out in several waves, each involving several rounds. The first wave is expected to be completed by May 1992. Vouchers for the first wave have been on sale for a nominal fee since October 1991, and had to be registered with local post offices by end-October 1991. One thousand voucher points, issued by the federal ministry of finance, can be registered by Czechoslovak citizens residing in Czechoslovakia for the price of 1000 koruny (1/4 of the average wage). They are not transferable, though shares acquired with these vouchers are. The voucher points can be distributed by the citizens on companies of their choice in the list, up to a maximum of ten companies. The value of shares can then be expressed in terms of investment points, and can be determined through comparison of the total number of shares available for voucher privatisation against the total number of investment points offered. In each round, citizens will get shares in companies for which they bid, provided there was no oversubscription. Any shares that remain after the first round go into the next round of bidding. In the case of over-subscription, the enterprise may be withdrawn from this round and the price of its shares raised in a subsequent round.
The act is aimed at mitigating the consequences of certain property injustices that occurred to the owners of agricultural and forest property.
Large restitution relates to nationalisations carried out between 1948 and 1989 according to prevailing law, but against the civil rights as expressed e.g. in the Charter of the Organisation of the United Nations. Up to 6 % of total state property may fall under this law. The deadline for filing claims was 1 October 1991.
This Act creates National Property Fund, which is to provide technical realisation of the privatisation decisions by temporary administration of state shares intended for gradual privatisation.
Wage increases (including bonuses paid out of costs) in excess of between 3 and 5 % of the ceiling are taxed at a rate of 200 %, and at 750 % for increases in excess of 5 %. Bonuses paid out of profits in regulated enterprises with more than 25 employees are limited to less than 20 % of the wage bill; any excess beyond this limit is taxed at the penalty rate of 750 %.
Along with the 1991 Act on the General Health Insurance Fund and the 1992 Act on Departmental, Professional, Corporate, and Other Health Insurance Funds establishes a statutory health insurance model (SHI). SHI contributions legally set at 13.5% of pre-tax monthly wages; the state contributes for economically inactive persons.
This Act defines help for disabled people to gain working places. This Act establishes the possibility of the existence of so-called sheltered workshops, in which the proportion of people with disabilities is a minimum of 75%. These institutions receive a special state support of 50% of salary for each job.
Aggregate credit ceilings fully liberalised
In January 1992, a new banking law paved the way for the privatisation of banks and for the establishment of new private banks and of branches of foreign banks.
Setting up of regulation of securities market by Czech National Bank. Securities market is fully liberalised.
This law sets up the Czech national Central Bank as the main and only actor of monetary policy, regulation and surveillance of financial and banking market in the Czech Republic.
This Act allows to create first privatisation investment companies and investment funds as a part of Czech financial system.
Allows a number of quasi public, self-governing health insurance funds to operate acting as payers and purchasers of care, financed through mandatory, wage-based contributions.
Privatisation of hospitals progressed much slower. As of end 1995, only 30 small hospitals were effectively privatised so that most of the privatisation was still to be implemented.
Privatisation of health care facilities began in 1992. By the end of 1993, most of the primary health care privatisation had been completed (about 90 % of general practitioners and about 70 % of paediatricians had been operating in private offices).
The right to strike in the Czech Republic guarantees the fundamental rights and freedoms for all except judges, prosecutors, members of the armed forces and security
This law regulates the social security insurance which includes pension insurance and sickness insurance, and contributions to the state employment policy first time after fall of Communism. Whole system was totally different during the Communist era.
Corporate income tax is levied on accounting profits at a flat rate of 45 %, with allowances for depreciation and some other expenses. There is no provision for inflation adjustments in calculating taxable profit.
A personal income tax was also introduced, with a basic rate of 15 %, rising to a maximum of 47 % (there were six brackets). A single person pays income tax on income in excess of 22 800 koruny per annum – around one-third of the average wage. The 15 % basic rate applies to taxable income up to about twice average wages.
Introduced pension insurance as social security contribution. Rates have been given to the employer at 27%, 9% and self-employers 36%.
Law defining a list of taxes collected in Czechoslovakia. The previous tax system, which included five types of income taxes, was, among others, replaced by an income tax system distinguishing between two types of income (personal and corporate).
Stricter conditions of eligibility were introduced in 1993. These exclude people who do not co-operate with the labour offices (by refusing a job offer).
Extending the subjects included in the Law on Protection of Competition (associations of entrepreneurs, chambers, trade communities and other forms), the introduction of block exemptions and de minimis aid.
A new accounting law will make accounting practices meet international standards, in conformity with EC legislation; it will be effective 1 January 1993.
The Czech parliament decided to fully implement an amended version of the 1991 Bankruptcy Act at the end of April 1993. A comprehensive debt clean-up operation was organised with the participation of the FNP which contributed CZK 1 billion. The purpose of the operation was to reduce significantly the volume of inter-enterprise debt. A second clean-up operation was conducted in the late autumn of 1993; it reduced the volume of inter-enterprise arrears in the Czech Republic by some CZK 4 billion.
Allowances were increased at the same time.
Raising the minimum premium basis from 50% to 77% of the minimum wage.
The option for people to subscribe to additional pension insurance schemes was created in February 1993. The state pays a contribution, calculated according to a formula which is progressive in absolute terms (with an upper ceiling) and regressive in relative terms. Employers are allowed, if they wish, to pay the contribution for their employees, but they cannot be a contracting party for the additional pension insurance and their payments are not tax deductible.
The legal code amendments adopted by the Czech parliament in August 1993 helped to streamline the selection of submitted privatisation projects while strengthening the position of the Ministry of Privatisation, which now has the authority to modify such projects as well.
The tax rate on profits was reduced from 45 % to 42 % in 1994; and the possibility of a new deduction from the tax base as reinvestment or gifts for school, sports or medical facilities up to max. 2% of the tax base.
Another economically sound measure consisted of a legislative amendment enabling companies to write off non-recoverable foreign claims against tax just like domestic ones. The amendment was approved by the parliament in the summer of 1993 and implemented in the second half of the year.
Total contributions to three sets of funds – for unemployment benefit, health insurance, and sickness benefit – are levied as a fixed percentage of employees' earnings; in the initial period employees were to pay 9 % of their gross earnings and employers to contribute a further 27 %.
Private rail operators were permitted access to track from 1994.
First law regulating public procurement.
Entry barriers from fully to partially liberalised.
This law governs pension schemes with state contribution for pension funds, pension funds and activities of state supervision over pension schemes
Extending the powers of banking supervision and introducing a general system of insurance of household deposits which replaced the existing state guarantee for deposits with the originally state-owned banks.
This law eliminates the differences in legislation between different forms of employers, employer companies and individuals.
Minimum rest period of 8 hours was established, before there was no regulation.
In late 1994, the government passed legislation providing for fully-funded voluntary pension insurance funds with a goal of increasing individual savings for retirement and relieving stress on the PAYG system. Individuals are allowed to participate in only one of the 25 funds in operation (down from the initial 44 licensed as a result of mergers and liquidations), while their contributions are matched up to a threshold by the state (and, on a voluntary basis, by the employer).
It regulates some relationships related to the creation, entrepreneurship and the disappearance of credit unions and regulates the supervision of credit unions, which performs the Czech National Bank, and insurance claims from deposits in credit unions.
Abolition of capital controls (from fully repressed to partially liberalised).
Increases the amount of all kinds of benefits.
Eligibility is generally withdrawn as household income rises above a certain multiple (which may vary according to the benefit) of the subsistence minimum. The subsistence minimum is also used as a base for calculating the level of certain benefits.
This Act specifies the length of the payment of the contribution to employment policy min. for 12 consecutive months, to allow job seekers to run unemployment (before it was 12 months in the past three years).
It consists mainly of targeted and differentiated aid. The main type of state social support is the child allowance (others exist such as housing, parental allowances, benefit for foster parent care, birth grants, funeral contribution, and a social allowance for people with permanent financial problems).
Pensions will be composed of two components, the first being a fixed amount and the second earnings-related. Under the previous system, the base for calculating the pension was the 10 highest-earning years of working life. This period will now gradually be extended to thirty years so that most of the income earned during one's active life will be gradually taken into account; contributions during that period will be adjusted by average wage increases between then and retirement.
The law mandates an increase in pensions each time the CPI increases by 5 percentage points; the increase should "take into account" both price and wage inflation, and should be at least equal to price inflation.
According to this new law, the retirement age should gradually rise from the current 60 years for men and 53-57 years for women (according to the number of children) reaching 62 for men and 57-61 for women by 2006.
This Act regulates merger, consolidation, division or transformation of a company, the functioning of the General Assembly of the joint stock company and relations between shareholders. Only those companies which have the same legal status may merge. It must be the decision of the general meeting or shareholders.
This law creates an independent competition authority as the main overseer of the functioning of competition on Czech market.
Entry barriers from partially to fully liberalised.
Introduced a first range of tools to prevent legalisation of funds from criminal activities. The basic value when financial institutions must identify the parties to the transaction has been set at 500,000 CZK.
An amendment of the Act on Health Insurance Companies has recently become effective that imposes more stringent prudential standards on insurance companies. These standards consist of increased basic capital requirements, a minimum number of insured and restrictions on investments (so that, for instance, they can no longer purchase medical facilities).
This law allows patients to change their health insurance company every year.
The maximum benefit was set at 1.5 times the minimum wage, changed to 1.5 times subsistence minimum for an individual as from January 1996.
The Ministry for National Property Administration and Privatisation ceases its activities. The remaining privatisations are to be conducted by the Ministry of Finance.
The tax rate on profits was reduced from 41 % to 39 % in 1996.
The number of tax brackets was reduced to five and the top income tax rate was reduced from 47% to 40%.
This law regulates public health insurance, extent and conditions, reimbursement of health services, method of pricing and reimbursement of medicines, etc.
In 1997, a pilot Diagnosis Related Group (DRG) experiment was launched in 19 voluntary hospitals, with a view to generalise it to the entire hospital sector by 2004.
A freeze in the nominal wage bill of the state sector in 1998, coupled with an appeal for wage moderation in the private sector and among firms with a significant state ownership participation.
A freeze in the government sector real-wage bill achieved principally by the abolition of the ‘‘14th monthly wage’’ at the end of the year
Social contributions for low-income households are also introduced.
Elimination of the possibility to retire up to four, respectively five years earlier before reaching retirement age. Introduces a new calculation for increasing the retirement age. Assigns a period of study and unemployment among the contributory period. Retirees who want to work can do this only with the agreement of limited duration.
The government begins to prepare the privatisation of its residual stakes in the remaining three big banks, by opening a tender for strategic advisors.
The SEC is a central state administrative authority with no rule-making authority, funded through the state budget with a chairman and board appointed (and recalled) by the President of the Republic (following the suggestions of the government). Its main powers are: – To enforce remedies and charge fines of up to Kc 100 million (about $3 million) in cases of proven failure to comply with regulations. – To prevent the trading and movement of securities and freeze financial means of firms or individuals suspected of failing to comply with SEC regulations. – To provide public information on the activities of capital market participants and concerning Commission decisions. – To oversee issuers’, investors’ and brokers’ fulfilment of information requirements. – To collect data on trades done on public markets, as well as those done outside these markets.
Replacement rates have been lowered from 50 to 40 %.
CIT rate has been reduced from 39 to 35 %
As of 1 January 1998 interest income earned by legal entities and self-employed individuals on debentures issued in and after 1998 is taxed as part of the corporate income tax base. The 25 % withholding tax is treated as a prepayment, which is deducted from the final corporate tax liability. Previously, interest paid from Czech sources to legal entities and self-employed individuals was subject to a final withholding tax of 25 %.
The government raised spending on ALMPs by Kc 500 million that year (the share of ALMP in expenditures dropped because of an increase in passive benefit payments well below OECD average, see table in source).
In 1999, the Czech Electricity Transmission System (CEPS a.s.) was separated from CEZ a.s. and set up as a 100% subsidiary of CEZ a.s.. CEPS a.s. decides on access to the transmission grid.
The plan has four main objectives: i) improving employability; ii) promoting the demand side of the labour market; iii) enhancing labour market adaptability and flexibility; and iv) strengthening equal opportunities for men and women.
Creates higher fee for insurance companies establishment from 10 mil. CZK to (depending on the type of provided services) min. 34 million CZK and max. 1 billion CZK.
The government has decided to increase the minimum wage to a level higher than that of the minimum living standard (MLS) for a single adult (the MLS serves as a reference for almost all social security benefits). This meant a more than 50 % raise.
All new entrants to the scheme will fall under different rules: a minimum contribution period of five years was introduced.
All new entrants to the scheme will fall under different rules: supplementary pension benefits can not be drawn before the age of 60.
All new entrants to the scheme will fall under different rules: early retirement will still be possible before the age of 60 once fifteen years’ contributions have been reached.
Privatisation of Cesko slovenska obshodni banka (CSOB) is completed with Bankassurance Holding (KBC) of Belgium taking a controlling interest through the purchase of the state’s 66 % stake. The call for tenders for the last remaining state-owned bank, Komercni Banka, is published.
Effective from 1 January 2000, the withholding tax on dividends and capital gains earned on holdings of less than six months will be lowered to 15 % from a previous 25 %.
CIT rate has been reduced from 35 to 31 %.
Effective from 1 January 2000, the top personal income tax rate of 40 % will be abolished and the marginal personal income tax rate will drop to 32 %. This concerns individuals earning Kc 1.1 million (i.e. roughly more than $31 000) a year or more.
Subsidies for job creation and partial reimbursement of retraining costs, aiming inter alia at helping employers create new jobs in high-unemployment districts.
This law for the first time establishes a system of investment incentives to employers in the form of contributions for retraining and new jobs.
The telecom sector is already subject to considerable competition, with several mobile operators and a legislative basis for introducing fixed-line competition having been established in 2000. As of 1 January 2001 the monopoly of the state controlled Cesky Telecom (CT) was abolished and alternative carriers have since entered the fixed-line voice telephony market.
Restriction of monopoly of the state enterprise Czech Post postal services and any postal license holder can offer a full range of postal services.
Right of non-discriminatory interconnection to the transmission grid at regulated access tariffs to all generators
The new Energy Act provides a right of non-discriminatory interconnection to the transmission grid at regulated access tariffs to generators with an installed capacity over 10 MW.
The new Energy Act foresees the share of the electricity market subject to competition increasing from zero currently to 30 % in 2002, 50 % in 2005 and 100 % in 2006. The gas market is to be liberalised more slowly, starting with a minimum of 28 % of the total in 2005 and progressing to the minimum of 33 % in 2008.
It creates the same rules of procurement for the sector monopolies (water management, energy, transport, telecommunications) same as for public institutions, increases the limit for direct public procurement without competition from 100 to 500 thousand CZK.
The Energy Regulatory Office (ERU) began operations on 1 January 2001 as the independent regulator of both the gas and the electricity sectors. As well as taking over regulatory functions from the Ministry of Industry and Trade, the ERU also assumed responsibility for determining connection charges in addition to end-user and other prices, functions previously performed by the Ministry of Finance. Moreover, the ERU is responsible for granting licensing to all operators and has the authority to reject applications for competitors to join the Czech power grid.
The sector is regulated by the Czech Telecommunication Office (CTU) which began independent operations in July 2000; previously it was subordinated to the Minister of Transport and Telecommunications. It has sole authority to take decisions on pricing, licensing and regulatory standards and its decisions are final and cannot be appealed except through the courts.
Incorporates a completely new regulation framework for public subsidies in connection with EU accession and possibility using EU Funds. It sets up the rights and obligations of providers and recipients of public subsidies.
Aligning collective dismissals and related obligations for employers with EU legislation.
Setting that contracts for unlimited period of time are the norm but fixed-term contracts are possible.
Compulsory severance pay limited to two months as before; additional severance pay can be provided by collective agreement.
Introduction of the obligation for employers with at least 20 employees to employ at least 5% of its workforce among people with disabilities. Seriously disabled persons shall count as three workers with diminished capacities.
This Act transposes the relevant European Community and provides for the protection of employees in the employer's insolvency. The salaries are provided by the state, for which the cost is eventually enforced upon the employer in insolvency proceedings.
It adapted the relevant directives of Community law, in particular by increasing legal protection for workers against discriminatory treatment, equal opportunities, working conditions, social dialogue, occupational safety and health.
The central bank tightened the supervision rules in 2000, imposing capital adequacy requirements on consolidated financial groups including commercial banks.
Establishes general rules for broader distribution, change of legal status or protection of creditors in the transformation of a company. Distinguished mergers (merger or fusion), transfer of assets to a partner, division (formation of new companies, merging and combining these two forms) and the change of legal form. The novelty was the admission of the possibility of a merger or transfer of assets to a shareholder of a company that is bankrupt or whose property was declared bankrupt and any transformation of the company that had been put into liquidation.
Provides for stronger protection of minority shareholders and the threshold was lowered to 40 %.
A new Act on Territorial Government mandated the transfer of hospital ownership, along with other publicly-run facilities such as secondary schools, to regional governments. The territorial administration reform law foresees a five-year “grace period” (2000-04) before fully enforcing these principles in 2005, to temper the adjustment shocks for hospitals.
Since 2000 government decrees have introduced indirect coverage through administrative extensions of wage agreements.
This Act creates harmonisation with the EU law. It is to strengthen the position of employees in labour relations. Among other it enhances the employees' right to information and consultation, thus creating a space for the representation of employees trade unions and works councils or representatives for the safety and occupational health and puts it increased to substantial emphasis on occupational safety and health and guarantee the employee rest periods.
It introduces a concept of net working hours, not including breaks for meals and rest.
The government announced in October and November 2000 that the further privatisation of the dominant electricity (CEZ a.s.) and gas (Transgas) companies would involve the simultaneous sale of the state’s interests in the various regional electricity and gas companies to a single foreign investor for each of the gas and electricity sector.
The government announced in October and November 2000 that the further privatisation of the dominant electricity (CEZ a.s.) and gas (Transgas) companies would involve the simultaneous sale of the state’s interests in the various regional electricity and gas companies to a single foreign investor for each of the gas and electricity sector. An exception to vertical integration will be that the electricity transmission system operator (CEPS a.s.) will be different and strictly separate from the new owner of CEZ a.s. within one year of the privatisation of CEZ a.s.
Defines horizontal and vertical agreements, relevant market and establishes rules for the functioning of the EU Leniency programme (amendment of 63/1991).
The government has frozen the nominal level of the basic cash-welfare benefit (known as the minimum-living standard or MLS) since October 2001, reducing its attractiveness in real terms.
New pension-benefit rules introduced in July 2001 made early retirement less attractive by imposing stricter actuarial adjustments. Whereas early-retirement benefits (the main reason for growth in the non-active population) accounted for 58 % of new retirement pensions in 2001, their share declined significantly to 32 % in the first half of 2002.
This Act attaches to EU citizens the same rights and obligations in the labour market of the Czech Republic as residents, while also subject to active employment policy.
Limitation for establishing bank increased on 500 million CZK.
The privatisation agency receives € 4.1 billion for the state’s 97 % stake in the natural gas company Transgas.
The state decides to sell its controlling stake in the heavy-engineering conglomerate SkodaPlzen to a closely held Appian group of the United States.
The government decides to sell the largest domestic steel producer (Nova Hut) to a subsidiary of the LNM multinational group.
Authorities have decided to overhaul the Telecommunications Act in 2003, with the intent to force the partly foreign-owned Český Telecom to rent the local loop to any competitor on reasonable terms.
A new law was passed on public tenders in October 2003, the main motivation being to bring legislation into line with EU directives. The new law contains a number of elements that should increase the scope, efficiency and transparency of the tender system. The reform includes setting up a central registry of suppliers (though registration will be optional) and each public contract will be made publicly transparent through publication in the EU’s on-line database for public tenders. Increased transparency and non-discrimination is also anticipated by only allowing very limited avenues for exceptions.
A collective dismissal clause that fully reflects EU directives.
The competitive clause with a maximum of one year restriction on post contract competitive activities of employees in exchange for pecuniary compensation.
The maximum cumulative duration of temporary contracts via temporary work agencies will remain unrestricted.
A limit of two years on the maximum total duration of temporary contracts (exceptions will apply to working pensioners, substitutes for long term absent employees and operational or technological reasons on the side of the employer).
Explicit principles of equal opportunities and treatment.
In June 2003, the Constitutional Court declared void the Act on Collective Bargaining which included provision for the Minister of Labour to unilaterally decree administrative extensions – the court ruling was made effective in March 2004.
Lowering the level of sickness benefits for the first three calendar days of sick leave from 50 to 25 % of the daily assessment basis.
Reduction of the assessment basis from 100 to 90 % for the first 14 days of sick leave.
Extension of the decisive period for the assessment basis from 3 to 12 months.
Freezing of the current reduction caps for defining the assessment basis.
Restriction in the study years spent over the age of 18 that are recognised as contributory periods and acquired before 1 January 1996.
Abolition of early retirement schemes with only temporarily reduced pension benefits.
Indexation of pension benefits will be kept to the statutory minimum (i.e. an index comprising a two-thirds weight on consumer price inflation and a one-third weight on real growth in average wages).
The statutory retirement age will continue to rise beyond 2007 at the same pace as present, until the target age of 63 years for men and childless women is reached. The original reform plans envisaged removal of special treatment for women who have had children but this was not implemented.
Cancellation of the restriction on drawing pension benefits simultaneously with earnings exceeding double the minimum subsistence level in the first 2 years following retirement.
Separation in January 2003 of CD into a state-owned corporation providing passenger and freight services and an infrastructure state agency.
The rate of CIT was reduced from 31 to 28 % in 2004.
The employer’s contribution rate for public pensions has been raised from 26 to 28 % in January 2004.
Stricter registration and reporting requirements with labour offices and conditions for provision of unemployment benefits.
A person who refuses to take up a suitable job, retraining or who does not participate properly including tests, will be disqualified from the register of job seekers (e.g. unemployment benefits expires).
This Regulation establishes a framework to support job creation by employers in a range between 100 000 and 300 000 CZK.
The employer gets CZK 100 000 per new job created in a municipality with an unemployment rate at least 25% higher than the average unemployment rate in the Czech Republic, and another 25 000 CZK per person with disabilities who were registered as a job-seker for more than 3 months (in order to get the extra subsidy for employees with disabilities, the person with disability has to be hired for at least more than 1 year).
Introducing some new active employment policy instruments such as employee commuting in areas with poor transport infrastructure, bridging allowance for people who have decided to withdraw from the jobseekers register and become self-employed, contributions towards recruitment for candidates with poorer chances on application.
The Law on Protection of Competition is regulated henceforth under European law. The Czech authority of competition gained new power according to Articles 81 and 82 of the Treaty establishing the European Community.
Restrictions on the applicability of competition law to the agricultural sector.
This law regulates the conditions for the management and administration of investment funds and foreign investment funds, brings to investors higher protection through more accessible and more detailed information obligations, strengthened investment limits.
This law enable establishing of new form of company: European company.
The amount of unemployment benefit is to remain the same for the first three months of unemployment (at 50 % of previous net earnings) but has been increased from 40 to 45 % thereafter, with the maximum amount remaining 2.5 times the personal minimum subsistence amount.
The six-month standard duration of unemployment benefits has been prolonged to nine months for those older than 50 years and to twelve months for those above 55 years of age, conditional on 25 years of participation in pension insurance (30 years for the twelve-month extension).
“Partial unemployment” has been introduced, in which the unemployed can earn up to a half of minimum wage (working maximum of a half of legislated fixed working time) and still get unemployment benefit (3,350 CZK).
This Act regulates the procedure and conditions for the transfer of selected assets, which is owned by the Czech Republic and is authorised to manage the Czech Airport Authority and state enterprise Czech Airlines.
This law increases tax benefits for families with children provided in the form of tax relief, in the form of a tax bonus, or a combination of both forms, as well as a deduction for the spouse.
Restrictions on the applicability of competition law to the telecommunications
Cancels the block exemption Czech Republic and setting the block exemption of the European Union
New regulation on financial companies and their acting of financial markets. Integration of supervision of banks and other financial institutions falls fully under the Czech National Bank. State supervision over the capital market with state supervision in insurance and pension funds including the Securities and Exchange Commission.
It regulates procedural collective bargaining in favour of the unions and the possibility of their agreement to include the Collection of Laws.
This law abolishes the National Property Fund of the Czech Republic, whereby all assets of the Fund transferred to the state.
In 2006 the last of a scheduled series of corporate tax-rate cuts reduced the rate from 26 to 24%.
This Act changes the whole system of deductible items from the tax base the tax credit. There was also change in tax rates. The first two bands were reduced from 2006, at 12% from 15% in the first bracket (which was also somewhat widened), and 19% from 20% in the second bracket (the third bracket stayed at 32%).
As of January 2006 the two lowest income-tax brackets were cut from 15% to 12% and from 20% to 19% and the brackets were widened.
Introduction of a second, less generous floor to the minimum-living standards system. The subsistence minimum was introduced as a sanction for those not co-operating with labour offices and for those not fulfilling other commitments for eligibility for the standard welfare benefit.
This law abolishes the previous obligation to offer the employee another suitable place at the employer's place of residence or place of work.
Widened the notion of those personal obstacles at work, during which the employee is entitled to paid leave.
A switch from a “Napoleonic” to an “Anglo-Saxon” approach in legislation should bring wider contractual freedom (that is, from now on what is not forbidden is allowed).
The possibility of employment by "appointment" is limited to public authorities. The private sector will use only employment contract.
This law extends the scope and powers of the Czech National Bank in the capital market supervision.
The act brought a different position for creditors and debtors in bankruptcy proceedings, as well as for the bankruptcy trustee, who replaces former bankruptcy trustee. Insolvency administrator can only candidate with higher education master's degree programme that passed before the examination commission assembled the Ministry of Justice insolvency trustee exam.
The new Code allows for greater flexibility in working hours, establishing a "working time accounts".
This Act regulates the provision of assistance to meet the basic living conditions of individuals who are in material need, through benefits in material distress. The reason is the higher resolution of the aid applicants who are motivated to work from those who do not have it or cannot work. Living wage fulfils a crucial role in assessing poverty, as well as socially protective measure.
It cancels the exemption for the communications sector which was established by 127/2005 because it was in breach of EU law.
It introduces the institution of employee care, which requires the employer to adopt various measures concerning working conditions, professional development, etc.
Small nominal user fees (CZK 30-90) for doctor consultations, emergency-room visits, prescriptions and hospital stays, which were introduced in January 2008. Annual out-of-pocket expenditures were capped on healthcare at CZK 5 000 per individual.
Greater flexibility in the organisation and bonus payments for weekend and shift work was introduced.
Overtime restrictions for junior managerial positions have been removed.
There is now more scope for employers to alter working hours without consulting employees.
Removal of a rule preventing parents with children less than one year old from working overtime.
Removal of a limit of 30 working hours per week for those aged 16 to 18 (the general limit of average 40 hours per week will apply).
In addition, the pay-out has been lowered for illnesses lasting less than a month but increased for long-term illness.
The package decoupled many benefits from the minimum-living standard (MLS), expressing them in cash amounts, rather than multiples of the MLS.
A “waiting period” has been introduced; the insurance benefit is not to be paid for the first three days of illness and employers’ can decide on whether to pay individuals during this time.
Reduction in the rate of CIT from 21 to 20%.
Reduction in the rate of CIT from 20 to 19%.
Reduction in the rate of CIT from 24 to 21%.
All withholding taxes on capital returns unified at a 15% rate.
Introduction of a flat rate system with a rate of 15% in 2008 with a base of “super-gross” earnings for employees.
After 6 months, unemployed people are entitled to 'subsistence minimum' instead of a more generous 'living minimum', unless they participate in public works for 20-30 hours per month. In the latter case, they retain the right to the 'living minimum'. If they work for more than 30 hours they receive a bonus to complement the minimum living, amounting to half the difference between the subsistence and the living minimum. (That is, 3126 CZK instead of 2020 CZK).
The Labour Office shall establish a mandatory individual action plan to all job seekers who are in register more than 5 months. A job seeker who, without serious reasons does not fulfil his obligation to cooperate on an individual plan with the labour office, will be removed from the register. University graduates are no more considered as disadvantaged groups in the labour market.
Support for new jobs increased from 20 000 CZK to 50 000 CZK in the regions where the unemployment rate is higher by 50% than the overall unemployment rate. It should help with the high regional disparities.
Eliminating trade union organisations' right to carry out inspections of companies’ observance of the Labour Code, the Employment Act, other industrial regulations, internal regulations and obligations ensuing from collective agreements. The unions retain the right to carry out inspections of the health and safety situation in a company, but will not be authorised to impose ‘sanctions’ in the form of issuing a binding instruction to remove defects that are discovered, or banning work or overtime work and night work.
Better incentives for taking up jobs – the unemployment benefit duration is shortened by 1 month, while the benefit amount is increased for the first period of unemployment: from 50% of average wage for 3 months and 45% for the rest of the social protection period to 65% during the first 2 months, 50% the following 2 months and 45% in the rest (with the total amount paid during the whole period of benefit payment remaining the same). (The duration of unemployment benefit was also shortened by one month).
A reform was adopted shortening the maximum entitlement period by one month in general from 6 to 5 months.
Tightening of eligibility conditions for unemployment benefits. One cannot count specific non-working spells, such as participation in education for up to six months, towards the required 12-month contribution period.
In addition to extending the increase in the retirement age, the legislation will increase the minimum contribution period (MCP) from the current 25 years to an eventual 35 over a ten-year period. There will also be a reduction in the credits allowed for certain non-contributory periods, such as time spent in higher education, which will be excluded entirely from calculation of the MCP.
Under legislation adopted in 2008, this process has been extended: retirement ages will continue to rise by 2 months per year until they reach 65 for men and childless women in the early 2030s. The retirement age for women will vary between 62 and 65, depending on the number of children raised.
This law regulates the method of assessing and preventing abuses of significant market power in the sale of agricultural and food products and supervision over compliance with this Act.
Simplified procedure for the approval of the company merger if their common share is lower than 15% on horizontal market and lower than 25% on vertical market.
Full liberalisation of rents effective as of 2010 except in the largest cities, where it will take place only in 2012.
Antidiscrimination Act is the first comprehensive legislation of its kind in the Czech Republic. Discrimination is prohibited by the Act, including access to employment and entrepreneurship, in matters of membership in professional associations and trade unions, social security, access to health care and education. Expressly refers to situations that are not prohibited by discrimination as a condition of a minimum age, education and experience to the job. Also, unequal retirement age between men and women is legitimate.
Robust regulation (increased protection of entities operating in the capital market), higher transparency of information about issuers, precise definition of assets in which standard collective investment funds can invest, deepening the rules for the approval of acquisitions and increases of qualifying holdings in some subjects of the capital market.
A decision on the transfer of assets to a partner requires the consent of at least 90% of the votes of all shareholders of the dissolved company. Everyone had to agree before.
User fees (CZK 30-90) for doctor consultations, emergency-room visits, prescriptions and hospital stays adjusted. The maximum amount of out-of-pocket expenditure (CZK 5000) was halved for those under 18 or over 65.
The introduction of fees proved a major issue in the regional elections held in the autumn of 2008, and a number of newly elected regional authorities began “reimbursing” various fees in early 2009.
The conditions of employment agreements, which the employer may offer to a worker for a maximum of 150 hours per year, and which require no health or social insurance payments have been tightened. This type of contract must now be put in writing where, previously, a verbal contract was sufficient.
Stricter conditions for employment agencies. They must take out insurance in case the agency or one of its customers goes bankrupt to cover claims from employees affected by former employers going out of business. Employment agencies also now need a permit to operate from the Ministry of the Interior of the Czech Republic.
The possibility of earning money up one half of the minimum wage and still being eligible for unemployment benefits was terminated.
Unemployment benefit has been decreased for employees who choose to terminate their employment without a compelling reason.
When an employee qualifies for severance payment, he/she will not receive unemployment benefit for the period corresponding to the value of the severance payment.
Cancellation or reduction of some state social support allowances. The social allowance that was given to the lowest income families with children has been cancelled, although it continues to be paid to those with physical disabilities. The ‘birth grant’, a one-off benefit for each new born child, has been significantly reduced. From 2011, the birth grant applies only to a first child and is means-tested against the family’s income.
Employers will now pay sick pay for a period of 21 calendar days instead of 14 days, as they were formerly obliged to do. This measure will be in force for a period of three years, until 2013, when the compensation period will revert to 14 days.
The bonus for later retirement is to be increased.
Prior to 2010, those taking early retirement suffered a reduction in benefits of 3.6% per year. This will rise to 6% per year when it becomes possible to retire five years early. Moreover, the provisions allowing ordinary pensioners to combine pension benefits and labour income do not apply to early retirees.
As the retirement age is increased, the period in which early retirement is permitted will also be increased, so that the age at which early retirement may be taken will not change. When the statutory retirement age reaches 65, early retirement will be available five years prior to that.
The provision restricting pensioners to one year contracts if they continue in work has been abolished. In general, it has become easier for ordinary pensioners to combine pension receipt with some labour income. The rules for drawing a pension while continuing to work have been altered.
If the job seeker refuses to perform the public service (in the range of up to 20 hours per week) continuously for more than two months without good reason, he/she will be excluded from the register and thus loses state financial support.
Labour offices are now solely responsible for distributing unemployment and other social welfare benefits, while employment opportunities for job seekers will be mediated by private employment agencies.
Higher limit for hours worked under the contract for work – 300 hours permitted to be worked under the contract for work (up from 150).
It is possible to negotiate fixed-term employment contracts to a maximum extent of three years. It can be repeated twice, which extends the maximum duration of a fixed-term employment relationship to 9 years. A new fixed-term contract can be concluded between the same parts only after a three year period (previously it was six months).
Gross breach of the regulations regarding temporary absences based on incapacity to work is a reason for a fair dismissal (e.g. breach of the medical regime). The notice period in these cases is just one month (the general two months notice period remains unchanged).
New severance pay rules: 30 days if tenure below 1 year; 60 days if tenure between two and three years; 90 days if tenure equal or above three years (previously – 90 days, non-tenure related).
Lower severance pay paid by law at the termination of employment due to organisational reasons.
Trial position for managerial positions increased from 3 to 6 months. For non-managerial position the trial period remains at 3 months maximum duration.
In 2011 the prescription fee was altered to CZK 30 (€1.1) per prescription (not per item on the prescription) and the fee per inpatient day was increased from CZK 60 (€2.20) to CZK 100 (€3.65).
The new law regulates patient-provider relationships and clearly defines the basic rights and obligations of each party. In particular, the Act aims to define patients’ rights, specify providers’ status and responsibilities, and define registration requirements. Additionally, the Act sets adjusted monitoring and (quality) control requirements targeted at improvements in patient safety and the quality of care. On the other hand, the Health Services Act requires patients to adhere to agreed treatment plans and to truthfully disclose their state of health. Sanctions, however, are only outlined for providers not abiding by the new rules and not for patients.
Higher contractual freedom for employees and employers in labour-law relations
A trade union is entitled to represent employees if at least three employees of the respective employer are among its members.
Maximum length of shift cannot exceed 12 hours. The amendment makes it possible to arrange a different minimum amount and method of calculating bonuses for work on Saturdays and Sundays, and for night work than stipulated by the Labour Code. Special arrangements of overtime work relates to employees in the public sphere.
Raising the amount of subsistence and existence minimum, respectively. Existential wage from 2020 CZK to 2200 CZK, living wage for adult from 3140 CZK to 3410 CZK.
The vesting period for applicants for unemployment benefits was reduced from 3 to 2 years.
Change in the benefit formula introduced two thresholds for the calculation for the earnings-related component. Up to 44% of the average wage, 100% of earnings are replaced; above that, earnings up to a ceiling of four times the average wage are replaced at 26%. This should result in the same replacement rate for the lowest income decile, a 25% increase for the top income decile and 3% decrease on average for the remainder. Furthermore, as opposed to the past practice of annual adjustment by the Ministry of Social and Labour Affairs, the thresholds are now set as a percentage of the average wage.
Pensions were indexed yearly by inflation plus one-third of real wage growth, but the actual increases had been frequently higher. As of September 2011 indexation will be automatically carried out by a ministerial decree, based on the above specified minimum, and will not require government approval.
This law regulates supplementary pension savings with pension companies, rights and obligations of supplementary pension savings, claims arising from supplementary pension savings, providing state contribution, activity pension companies, activities related to the activities of pension companies, the transformation of the pension fund, the performance of supervision and state supervision in the area of supplementary pension savings.
Once the statutory retirement age reaches 65 in 2030 it will continue to increase by two months per year.. Moreover, the differentiated and lower statutory pensionable age for women will be phased out by accelerating the ongoing increases in the pensionable age for women will be accelerated. This will result in the age being unified for men and women by 2041 at over 66 years (66 years and 8 months).
This law regulates pension savings with pension companies, rights and obligations of retirement savings, pension rights savings, retirement insurance with an insurance company and the oversight functions.
Super-gross wages will be cancelled (the super gross wage is the sum of an employee’s gross wage plus social and health insurance), tax rate amounting to 15% of the income; income tax amounting to 19% of the income of physical persons will be introduced, which will be calculated from the gross wage.
Allowance rates for social security and health insurance will be unified to 6.5% for employees. This way, the employees’ insurance rate will be increased by 2%. Implementation postponed by government decision (amendment to the Act 458/2011).
Allowances by employers to employees’ social and health insurance will be replaced by a tax on wages amounting to 32.5%, which means reduction by 1.5% for employers, compared to the present rate. The 32.5% rate will be unified, i.e. the health and social insurance paid by the employer for the employee will not be separated Implementation postponed by governments decision (amendment to the Act 458/2011).
Public Service Jobs: The Constitutional Court has shut down the programme, where unemployed were asked to provide their services for free in order to remain in the registry. Over 60 thousand mainly long-term unemployed have participated in the programme last year. Public Service Jobs programme will be kept as optional only for interested unemployed.
Amendment of Commercial Law no. 513/1990 Coll., detail is dedicated to the performance of functions, remuneration issues, process control decisions of managers and their liability. For a limited liability company reduces lowest possible capital CZK 1 from the current CZK 200 000. Another important change is the ability to create more types of shares. At a joint stock company allows you to choose between a dualistic and a monistic system internal structures. The joint stock company has the obligation to take up a website etc.
Eliminating as of January 2013 the lower statutory minimum wage levels applicable to those aged 18 to 21 and to those with handicaps. Since January 2013, the statutory minimum wage is thus the same irrespective of the worker age or job type.
The new Civil Code gives trade unions the status of a legal person with all the Rights and obligations that derive from this status.
Minimum living and subsistence benefit harmonised.
To fight undeclared work while drawing unemployment benefits, the labour office will be able to ask selected unemployed to report in post offices near to their home up to twice a week during normal working hours. Missing such appointment from other reasons than allowed in the law will lead to loss of unemployment benefits.
The eligibility to unemployment benefits for those who will give notice or will be fired for serious misconduct within 6 months of work intermediated by the labour office are strengthened. Unemployment benefits start again after 6 months from start of the job to prevent misuse of the system.
Students with a work record will be eligible for UB.
Unemployment benefits are paid only to those with at least a 12-month work record during the past 2 years (previously 3 years).
Ten benefits for the disabled merged into two new benefits
New policy of pre-pensions for those who lose their jobs much before reaching the statutory retirement age. The policy is motivated by providing early retirement plans for workers employed in hazardous or extremely physically strenuous occupations. These pre-pensions would be available to those who have sufficient savings in the private third pension pillar that will support at least 30% of the average wage at earliest 5 years prior to reaching the statutory retirement age. These early pensions may be co-funded by additional employer contributions and will not affect the statutory pension level.
After the reform, people will have the option to divert 3 percentage points of the current 28% pension contribution rate into a funded pension plan that will be managed by a pension fund manager (i.e. pension company) of their own choosing. The diversion will be conditional upon adding 2 percentage points on top of the existing contribution, bringing the contributions rate to the second tier to 5% and the overall contribution rate to 30%. Current employees over the age of 35 will have to decide during the first half of 2013. Employees below that age and new labour market entrants can decide on their participation before reaching the age of 35 or within 6 months of making their first social contribution. For those participating in the second tier, the pension from the first DB tier will be lowered accordingly: the earnings-related component of the pension benefit will be calculated from a reduced contribution rate of 25%.
Introduction of a PIT surcharge of 7% for income over the threshold for social security contributions. Effective between 2013-2015.
Introduction, development and active support for flexible employment. Support (including financial) for development of available childcare service (e.g. kindergartens, licenced trades in childcare, children´s groups, etc.) and creation of conditions for the establishment, operation and development of social services (e.g. care services, drop-in centres, personal assistance and so on, as care facilities for other dependents), evaluate developments in the given area and assess the existing network of individual types of these facilities from the perspective of quantity, density and accessibility.
New rules for fixed-term employment relationships: the employer does not have to adhere to 2 rules (a. The length of the employment law relationship may not exceed 3 years; and b. The employment law relationship for a definite term may be repeated/ extended only twice.) If : 1) There are serious operational reasons; 2) Due to such reasons (operational or relating to the nature of the work), it is not justified to require the employer to hire the employee in an indefinite term employment relationship; 3) The terms of a fixed-term employment relationship offered by the employer are adequate (proportionate) to the employer’s reasons (operational or relating to the nature of the work); 4) An agreement with the trade union (or an internal regulation issued by the employer at which no trade union is present) regulates the following: - Closer specification of the employer’s reasons, Rules for different procedures of negotiation and repetition/ extension of the fixed-term employment relationship; Scope of employees to which this different procedure applies; Term for which the agreement is concluded (or internal regulation is issued).
New rules for continuous rest between two shifts: Currently, according to Section 90 of the Labour Code, the employer is obliged to distribute the working hours so that the employee can rest without interruption for at least 12 hours within 24 consecutive hours between the end of one shift and the beginning of the next shift. The new Act reduces this obligatory rest period to 11 hours. For employees who are under 18 years, the mandatory rest period remains at 12 hours.
This law creates new division of funds, makes it possible to establish three new kinds of financial market actors, public limited company with variable capital, limited partnership investment certificates, Trust Fund. For qualified investor funds increased minimum investment 125 000 CZK. Required size of the basic capital was reduced from 50 mil. CZK to 1.25 mil. EUR (i.e. about 35 mil. CZK according to the current exchange rate).
In July 2013 the Constitutional Court ruled that the 2011 increase in fee per prescription and per inpatient day was unfair to vulnerable groups and the fee was abolished completely.
The monthly minimum wage in the Czech Republic will increase to CZK 8,500 (about €330 as at 23 August 2013) from 1 August 2013. The minimum wage has been CZK 8,000 (about €310) since the last increase in January 2007.
Introducing stipends and mobility to attract students into apprenticeship programmes.
Extension of the 10 % income tax surcharge (see 17th February) to tax payers in medium income brackets.
Levying of a 10 % surcharge on corporate tax with effect from 1st July, 1973.
DM 600 million programme to alleviate employment situation, involving temporary wage cost subsidies for hiring unemployed labour and nonrecurring mobility supplements for chronically unemployed.
Stopping of a 10 % surcharge on corporate tax with effect from 30th June, 1974, with proceeds to be frozen.
Unemployment insurance raised from 2 to 3 % effective from January 1976.
DM 430 - labour market programme: to subsidise handicapped unemployed
DM 430 - labour market programme: to promote regional labour mobility
DM 430 - labour market programme: to subsidise young unemployed
Corporate tax reform, eliminating double taxation of corporate profits, effective 1st January, 1977.
DM 430 - labour market programme: to subsidise vocational training
Introduction of co-payment for the use of ambulance services
Limitation of refund for dental care decreased to maximal 80 %.
Introduction of a more performance oriented servicing
Reduction of refund for all health insured people
Comprise an increase in family allowances.
The Pension Fund consolidation package becomes effective, comprising the following measure: payment of Pension Fund premiums for unemployed by the Federal Labour Office starting 1st January, 1979.
The Pension Fund consolidation package becomes effective, comprising the following measure: reduction in Pension Fund payments to public health insurance scheme.
Children's allowance raised to DM 100 monthly for second child (effective 1st July, 1979) and to DM 200 monthly for third and subsequent children (effective 1st January, 1979).
The tax rate on dividends of foreign companies was raised from 25 to 36 %.
The tax concessions amounted to DM 5 to 6 billion and included the abolition of the payroll tax and an increase in the basic tax-free allowance of the business tax, thus benefiting especially the enterprise sector.
Wage and income taxes were relieved through the increase in prior deduction of expenses incurred in provision for the future and the introduction of an allowance for child-minding expenses.
Removal of the step increase in the marginal income tax schedule which previously featured a jump from 22 and 30.8 % at DM 16'000 taxable annual income. The scale now rises smoothly in this area. Basic tax-free allowances are raised by DM 390/780 to DM 3690/7380 for single/married employees.
Increase in basic tax-free income allowance by 10 % and introduction of general tax-free income allowance of DM 510 (1020) for single (married) persons became effective.
Retirement assistance for farmers raised by 4.5 %.
In 1979 personal income tax rules cut effective since 1st January. The annual average growth of income taxes (4 %) will be less than the increase in the gross wages and salary sum (6 %) in 1979 due to the tax reform measures implemented on 1st January.
The Bundestag adopted a Fourth Amendment to the Act against restraints of competition (improvement of merger control and of supervision designed to prevent misuse by enterprises of their dominant market position).
The Bundestag adopted the Conciliation Committee's compromise on the 1981 Tax Relief Act, raising the upper limit at the constant rate zone (proportional zone) and a levelling-out progression of the income tax scheme as from 1981.
With the need to ward off capital inflows disappearing, the few remaining restrictions on non-residents' purchase of domestic bonds and short-term papers were removed in 1981.
Unemployment insurance contribution was raised to 4 %.
The following measure of the Tax Relief Act came into force: adjustment of the basic scale of income tax rates (raising of the ceiling of the constant rate and levelling out of progression).
Measures to improve young persons' opportunities of finding vocational training places and jobs (DM 1/2 billion).
Phased introduction of health insurance contributions by pensioners, starting in 1983 at 1 % of pensions paid and gradually rising to 4 % in 1986.
Calculation of the contributions by the unemployed to the health insurance funds on the basis of 70 % instead of 100 % of their last gross wages or salary.
Elimination of tax relief for child-minding expenses and reduction in child benefits.
Reduction of the additional demand in social assistance from 30 % to 20 % (aged over 65, disabled, pregnant or single woman with two or three children under 16) or from 50 % to 40 % (single man or woman with four or more children).
Contributions to the pension insurance fund were reduced from 18.5 to 18 %.
Contributions to the unemployment insurance fund were raised from 3 to 4 %.
Increase in contributions to the unemployment insurance fund from 4.0 to 4.5 % for three years.
Pension Adjustment law providing for a 5.6 % rise in pension.
Calculation of the contributions by the unemployed to the pension insurance funds on the basis of 70 % instead of 100 % of their last gross wages or salary.
Stricter differentiation of duration of entitlement (ALG) in accordance with contribution record (ratio of former to latter changed from 1:2 to 1:3).
Additional payment for drugs is raised from 1.50 DM to 2.00 DM. Introduction of co-payment per hospital stay: 5 DM per day/max 14 days per year. Co-payment for health cure: 10 DM per year. Minor drugs are cut out of the GKV benefits catalogue.
75 cent per drug, as well as payment for massages and baths (2 Euros), 4 (Euros) per glasses (in German: nun 75 Cent pro Medikament, für Brillen und bei Heilmitteln wie Massagen, Bädern 2 Euro pro Verordnung. Auch für Brillen wurden vier Mark fällig.).
Cap on social assistance increase (2 % instead of 3 %) from July 1983 to June 1984.
For employees older than 49: increase in ALG entitlement (max. 18 months; dependent on contribution record).
All employees over 58, who are no more employed, receive until the end of 1988 a early retirement subvention.
Reduction of annual adjustment of unemployment benefits.
The federal government approved a special programme for applicants for vocational training who were registered as not having a training place on 30th September 1983. The programme aimed to create 7'000 to 8'000 additional training places.
The Federal Government adopted an employment promotion bill expanding the possibility of concluding fixed-term employment contracts
The maximum period of unemployment pay was extended from twelve to eighteen months for jobless aged 49 years or more (limited to the period 1985 to 1989).
The parliament passed the Act to facilitate the transition from working life to retirement (Pre-Retirement Act). It allows retirement at the age of 58 years, if an appropriate collective agreement has been reached.
Privatisations have been proceeding, mainly on the Federal government level, where the number of participations has been reduced from more than 800 to about 132 and revenues from the 1984 to 1989 sales of federal assets amounted to DM 9.7 billion. A number of large companies were fully privatised, among them the two largest utility conglomerates, VIAG AG and Vega AG (realising DM 5.1 billion) and the steel company Salzgitter AG (DM 2.5 billion). The Federal government sold its remaining share in the Volkswagen AG (DM 1.1 billion) and reduced its participation in the Deutsche Lufthansa AG, though retaining a majority holding.
The Government has reduced its participation in VEBA, a large conglomerate company (from 43.8 % to 30 %; in the meanwhile the rate has dropped further as a result of an increase in the company's capital). In 1985 it was decided to go ahead with the sale of part of its holdings in only five cases. In June, VIAG, a chemicals, energy and aluminium group, offered 40 % of its shares to private shareholders. From September onwards, IVG, a transport and property conglomerate, will follow, with the Government also retaining its majority position. The sale of assets is expected to reduce the budget deficit by DM 0.5 billion this year. Moreover, it is envisaged that later this year the Bundesbahn will reduce its stake in two companies which it now controls. A reduction of public holdings in VW and Lufthansa is not envisaged in the foreseeable future. Progress is more important if the reduction of indirect Government participations (subsidiaries of publicly-owned enterprises) is taken into account. While the Federal Government is now set to make a further step towards privatisation, State Governments have tended to rather increase their participation in industrial corporations.
The Federal Government adopted a bill to introduce a "child-care vacation", including protection against dismissal, for a period of twelve months after the birth of a child.
Subsidiaries of foreign banks in Germany were allowed, on a reciprocity basis, to be a lead manager in underwriting foreign DM bonds. Branches of foreign banks are still not permitted to be lead managers.
Several financial instruments, which had already been widely used in international financial markets, were allowed in May 1985. These included: zero-coupon bonds, floating rate bonds, dual currency bonds and bonds linked to interest and currency swaps.
The Federal Government adopted a bill on capital investment companies. It was to establish the legal framework for capital investment companies to provide enterprises, which are not listed on the stock exchange, above all small and medium-sized businesses, with risk capital in various forms.
Labour conflicts in the metal-working industry began with the goal of shortening the working week to 35 hours. The conflicts ended at the beginning of July resulting in a reduction of average working time to 38 1/2 hours, including flexible implementation at the plant level.
Payment of unemployment benefits or aid to jobless at least 59 years of age even if they are no longer available for placement by the labour exchanges.
Reduction of the rate of contributions to the unemployment insurance fund in 1986 from 4.1 to 4.0 %.
The first stage of the 1986/88 tax cut became effective on 1st January 1986. The basic tax-free amount were raised and the progressive tax scale lowered, leading to a reduction of the wage and income tax burden by about DM 10 billion in 1986.
The amendment of the "Borsenzulassungsgesetz" (Law Regulating the admission of securities to the stock exchange) creating a newly regulated market sector with less strict conditions for access and disclosure requirements.
The Federal Government passed 45 % of the Industrieverwaltungsgesellschaft (IVG) to private ownership.
The introduction in 1989 of a 10 % withholding tax on most interest incomes, estimated to yield about DM 4.5 billion. The abolition of a wide range of employer and employee tax deductions.
The first stage of the 1986/88 tax cut became effective on 1st January 1986. Tax allowances for dependent children as well as the basic tax-free amount were raised and the progressive tax scale lowered, leading to a reduction of the wage and income tax burden by about DM 10 billion in 1986.
The coalition parties agree on the basic features of the tax reform which is to come into force in 1990. The tax relief will amount to DM 44 billion. The amendments include: basic tax allowance to be raised; the bottom and top marginal rates of income tax to be lowered to 19 % and 53 %, respectively, with a linear progressive tax scale between these two rates.
Introduction of a "Part-time old age rule" (Altersteilzeit-Regelung) for those over 58, who were full-time employees before.
The Federal Government announces measures to cut health expenditure by DM 14 billion a year.
The contribution rate to the pension insurance funds is lowered from 19.2 to 18.7 % of eligible income.
The Federal Government and the Reconstruction and Loan Corporation sell the remaining 60 % of their shares in the "Vereinigte Industrieanlagengesellschaft" (VIAG), the net proceeds of which amount to DM 1.2 billion.
The Federal Government sells its shares in Volkswagen AG.
For corporations the uniform rate on retained profits is to be lowered from 56 to 50 %, while the tax rate on distributed profits remains unchanged at 36 %.
The second instalment of the three-stage tax reduction programme becomes effective on 1st January, 1988, with DM 11.5 billion, out of a total of tax cuts worth DM 13.7 billion, coming from the flattening of progressive income tax rates.
Statutory marginal personal tax rates are reduced over the whole range of the income scale, with the introduction of a linear progressive tax scale for income taxation and the top marginal tax rate coming down from 56 to 53 % for annual incomes of DM 120'000 and above. The entry rate will be reduced from 22 to 19 %, with progressivity starting at a lower income level than before. For married couples the tax assessment remains on the basis of income-splitting.
Switch from gross to net wage indexation
An increase of the federal subsidy (Bundeszuschuss) to a constant share of 20% of total expenditures.
The curtailment of non-contributory benefits (exception: improved credits for child rearing)
The Federal Post Office was split into three public enterprises responsible for mail services, postal banking services and telecommunications. While broadly maintaining the monopoly of network transmission and telephone services, except for marginal competition from private satellite and mobile radio communication, all other parts of telecommunications services (e.g. data transmission) will be open to private competition, as will the market for telecommunication equipment.
The Federal Government sells the whole of Salzgitter AG, the net proceeeds of which amount to DM 2.5 billion.
Competitive conditions are improved in the trade sector by rendering more efficient the existent instruments for merger and conduct control with regard to the demand side and by buying agreements among small and restrict competition. Conforming with general guidelines of the EC and in order to enhance competition, the Cartel Law has been extended to cover previously exempted sectors - banking, insurance, transportation and utilities. The Federal Cartel Office has the possibility to control mergers and acquisitions when participation is below the 25 % mark, provided that considerable restrictive influence on the enterprise concerned can be proven.
In retail trade some liberalisation of the strict shop-closing hours has finally been conceded for Thursday evenings, with however a compensating cut on those Saturdays when they were previously allowed to stay open.
The spectrum of activities of the stock market has been broadened, with in particular the establishment of a Futures and Options Exchange (Deutsche Terminbörse) in Frankfurt in January 1990, trading at present 14 German stock options.
Following a 1990 agreement, working hours in the metal industry are reduced to 35 hours per week.
The Bundestag adopts the Act Removing Impediments to the Privatisation of Companies and Promoting Investment (Gesetz zur Beseitigung von Hemmnissen bei der Privatisierung von Unternehmen und zur Förderung von Investoreri). The Act primarily aims at creating the legal framework conditions for selling property to investors rather than giving it back to former owners and at more rapidly settling ownership claims in the new Länder.
The age limit for receiving Transitory Benefit (Altersübergangsgeld) is reduced from 57 to 55 years. Duration of eligibility is increased correspondingly from 3 to 5 years.
Social security contributions are increased by 2.5 percentage points.
The government announces that social security contributions will be increased by two and a half percentage points as from 1st April 1991, as part of measures to save DM 35 billion in the 1991 budget.
Increase of the contribution rate to UI from 4.3 to 6.8 %.
The one year 7.5 % solidarity surcharge on corporation tax expires.
A surcharge on corporate income tax (solidarity contribution) amounting to 7.5 % of the tax due as of 1 July 1991 and limited to one year.
Funds allocated to the German Unity Fund by the federal government are raised by DM 5.9 billion in 1992. Improvement of general tax regulations for enterprises as of 1993 is made by lowering net worth tax and trade tax. Temporary exemption from trade capital tax and net worth tax in the new Länder is extended until the end of 1994.
7.5 % solidarity surcharge on income tax is to be reintroduced as from 1995.
The one year 7.5 % solidarity surcharge on income tax expires.
A surcharge on personal income tax (solidarity contribution) amounting to 7.5 % of the tax due as of 1 July 1991 and limited to one year.
The government announces the "Upswing-East" programme for the new Lander. DM 12 billion of additional expenditure is foreseen in each year of 1991 and 1992. A temporary surcharge on personal and corporate income taxes of 7.5% is announced, to run from 1 July 1991 to 30 June 1992. Energy taxes and taxes on insurance and tobacco are also increased. Additional revenue is to amount to DM 17 billion in 1991 and DM 27 billion in 1992.
Sanctions (benefits suspended) due to intended/grossly negligent causation of unemployment reduce the period of UB eligibility at least about 25 %; severance payments reduce the period of UB eligibility even more; apart from failure to report, the claim for benefits are suspended if a jobcentre’s request to participate in a measure for work counselling is ignored; specific ALMP schemes for former GDR region.
The Bundestag adopts the Healthcare Restructuring Act, involving relief measures for the statutory health insurance system worth DM 10.7 billion in 1993, of which the suppliers of services account for DM 8.2 billion and the insured parties for the remainder. Enormous reform package: additional co-payments are introduced for the patient/consumer.
Family tax relief and benefits are raised: benefits for the first child are raised from DM 50 to DM 70 and the children's allowance by an annual DM 1 080 to DM 4 104.
The time limit for short-time work benefits is extended to up to 15 months in the case of work stoppage for cyclical reasons, and 24 months for structural reasons, for work stoppages occurring between April and September 1992.
In the new Länder old-age pensions are raised by 11.65 %. Furthermore, the Pensions Conversion Act (Rentenüberleitungsgesetz) brings western German legislation into force for pensions in the new Länder.
Old-age pensions are raised by 15 % in the new and by 4.7 % in the old Länder.
The federal government decides to privatise the federal railways (Deutsche Bundesbahn and Deutsche Reichsbahn) in three stages over a period of about 8 years. It also adopts a privatisation programme for the current parliamentary term concentrating on the services sector and public real estate, after the government's withdrawal from industrial holdings.
On income tax, the top rate on business profits is to be lowered through a reduction of the marginal rate from 53 to 44 %.
More intense assessment of recipients by PES.
Short-Term Work Benefits (SWB) are only granted for more than 6 months, if the recipient of SWB is available for work and the employer agrees to another occupation.
Rejection of a job without important reasons leads to benefit suspension when becoming unemployed.
Participants of direct job creation schemes (JCS) can even be placed into temporary jobs.
It concerns social assistance in general and the relationship between the different social assistance bodies, and contains special provisions dealing with disabled persons. PES is to co-operate closer with Municipalities’ Social Assistance Agencies. Previous claims for Maintenance Allowance (MA) during participation in training schemes are now at PES discretion. Rate of MA is reduced from 73 %/65 % to 67 %/60 % of net earnings.
BA can grant permission to run profit-oriented job agencies. From 1 April 1994 to 31 March 1996, BA grants temporary permission for placement services in model regions. For executive employees, FEA is must grant permission for placement services for higher positions.
The notice period for blue-collar workers is extended and aligned with those of white-collar workers. Under the law all employees have a minimum statutory notice period of four weeks either to the fiftieth or to the end of a calendar month, provided it is the new statute which is applicable, and not a preceding collective agreement or an individual contract.
Genuine Unemployment Assistance (UA) is limited to one year.
Reduction of UB (Arbeitslosengeld) from 68 %/63 % to 67 %/60 % of net earnings. Reduction of Unemployment Assistance (UA) from 58 %/56 % to 57 %/53 %. "Genuine" UA is limited to one year.
ALMP subsidies for employers' costs for pension contributions to short-time workers are abolished.
Old age benefits are increased by 3.86 % in western Germany and by 14.24 % in eastern Germany.
The Bundesrat approves the "Standortsicherungsgesetz", which includes the second stage of a corporation tax reform (coming into effect at the beginning of 1994). Rates of income and corporation tax on business profits are reduced, while some tax concessions as well as possibilities of abuse are to be eliminated.
Second stage of a corporation tax reform coming into effect in January 1994 is approved by the Bundesrat in July. Reduction in the rate of corporate tax on distributed and retained profits from 36 to 30 % and from 50 to 44 % respectively.
A first instalment of the corporate tax reform implemented this year involves a reduction in the corporate tax on wealth and business capital (Vermögens- und Gewerbekapitalsteuer) as of 1 January.
The tax-free threshold for interest earnings is raised to DM 6'000 for single persons and DM 12'000 for married couples.
As a part of corporate reform a cut in personal income taxes on proceeds from business activities is also introduced, lowering the upper tax rate from 53 to 44 % and bringing it on a par with the corporate rate.
Duration of sanctions that occur before end of 1995 are extended. Obligation to report is strengthened.
Rule according to which unemployed persons above 58 do not have to be available for job placement under certain circumstances is extended by 5 years.
Until the end of 2000 unemployed persons can take part in short-term training programmes without losing UB/UA claim.
General permission to run private, profit-oriented job agencies
Maximum duration of contracts through temporary work agencies is increased (6 to 9 months).
Extension of act on temporary employment.
Unemployment and related benefits are cut.
Recipients of UA performing voluntary community work, do not lose eligibility for UA.
The contribution rate to the pension insurance funds is raised from 17.5 to 19.2 %.
The reform of the railways comes into force with the establishment of the "Deutsche Bahn AG". A new subsidiary budget, the Federal Railways Fund, assumes the debts incurred by the railways of about DM 66 billion.
In the postal and telecommunications field, the so-called "Postreform II" was introduced from the beginning of 1995, entailing the organisation as joint-stock companies of the three main units: Telekom, Post and Postbank. So far, all shares are owned by the "Bundesanstalt für Post und Telekommunikation", an agency under the Ministry of Post and Telecommunications, the supervisory boards of the three companies consisting, to a large extent, of politicians and the regulatory council being comprised of MPs and Länder representatives. However, a first tranche of Telekom shares will be floated in 1996.
The corporation tax is reformed (Standortsicherungsgesetz). Rates of income and corporation tax on business profits are reduced, while some tax concessions as well as possibilities of abuse are to be eliminated.
It extends from three to six consecutive months the permitted period for which agencies can hire out a temporary worker to the same third party in the context of the hiring-out of labour. The relaxed provisions for hiring out temporary workers, which were originally intended to last only until 1990, have since been extended to December 31, 1995.
The duration of UI in case of unjustified dismissals is limited to 24 months.
In the new Länder old age benefits are increased by a nominal 2.78 %. Due to the introduction of the care insurance the effective rise is 2.23 %.
Amendment of the Solidarity surcharge (Solidaritätszuschlag): The legal basis for imposing and determining the solidarity surcharge is the Act on measures to deal with inherited financial liabilities resulting from the unification of Germany, to provide a lasting foundation for reconstruction in the new Länder, to reorganise the system of federal revenue equalisation and to afford relief to public authority budgets (Act implementing the Federal Consolidation Programme of 23 June 1993, Federal Law Gazette 1993 I p. 944). The solidarity surcharge is levied in the form of a surtax as provided in Article 106 (1) No. 6 of the Basic Law. The solidarity surcharge is imposed on the basis of the Solidarity Surcharge Act 1995 (SolzG 1995) in the version of 15 October 2002 (Federal Law Gazette 2002 I p. 4130), last amended by Article 6 of the Act Implementing the Recovery Directive of 7 December 2011 (Federal Law Gazette 2011 I p. 2592).
Doubling of the wealth tax from 0.5 to 1 % on many assets and, at the same time, increasing the wealth tax allowance from DM 70'000 to 120'000. Increase in the insurance tax from 12 to 15 %.
Reintroduction of the solidarity income tax surcharge of 7.5 % of personal and company income tax.
Increase in the insurance tax from 12 to 15 %.
Training measures for recipients of UA are introduced, e.g. for assessment of willingness to work. Recipients of UA can be placed into seasonal occupations in low-wage jobs.
Social Assistance Agencies can facilitate employment of assistance recipients by allowances to the corresponding employer or other suitable measures. If a recipient takes up a job on the general labour market, the agencies can grant him or her monthly allowances for a maximum of 6 months. The wage gap principle is further intensified.
Only the long-term unemployed can be placed into JCSs. Claim for "Anschluss-UA" remains valid for 3 years (previously 1 year) if during this time an UA payment has not been executed due to lack of need. Claim for UA is suspended if older unemployed being eligible for old-age pension without reduction do not submit a pension application within a month. Individual market value rating of the long-term unemployed is replaced by a minus-adaptation of 3 %.
A law comes into force, which allows for longer shop opening hours.
Legal conditions covering dismissals are relaxed. The size threshold for dismissal protection is lifted from 5 to 10 employees on a full basis per firm.
A law comes into force liberalising employment conditions specified in the labour code (Arbeitsrechtliches Beschäftigungsförderungsgesetz). Legal conditions covering dismissals are relaxed, the minimum statutory rate for sickness pay is lowered, and the admissible duration of fixed-term contracts is extended.
Stricter social selection criteria (i.e. age, length of service or family situation) must be taken into account by employers in the event of redundancies.
liberalisation of temporary contracts. The renewal period for fixed-term contracts and temporary work agencies and admissible frequency of renewals were increased.
The member state hosting a posted worker must ensure he is protected by the minimum standards in article 3(1). These are, working time (hours, holidays, pay), standards applicable to agency workers, health and safety, pregnancy and maternity protection, discrimination law, in the building and construction trades, collective agreement standards that 'have been declared universally applicable' across a geographical area.
The reasonable load of the patients co-payment (for travel expenses, drugs, dressings and medicines and dentures) have to be a maximum of 2 % of the annual gross income for subsistence (so-called excessive demand clause) from 1997 onwards. The far higher rate of 4 %, for those whose gross income for subsistence above the BBG GKV is, is not necessary. For the chronically ill, the same for more than one disease year in duration and treatment co-payments up to a year had to apply load limit of reasonable personal ontribution decreases after the first year for the duration of this treatment more to 1 % of annual gross receipts for subsistence.
The bill to control hospital budgets comes into force, back-dated to the start of the year.
Parliament passes the social assistance reform law. Main provision: statutory social assistance benefits are set to increase by 1 % in July 1996 and with the growth of net wages in 1997 and 1998.
Reduction of short-term sickness benefits from 100 % of net salary to 80 %.
Employers’ compensation for lower earnings and pension reductions due to employees over 55 working part-time are refunded by BA if an unemployed person or trainee (after completion of vocational training) is hired to replace part-time worker.
The retirement age for women is to be increased from 63 to the standard retirement age of 65 years between 2000 and 2005. In both cases early retirement is still possible at pensions reduced by 0.3 % for each month of early retirement.
The contribution rate for the pension insurance funds is increased from 18.6 to 19.2 %.
A law comes into force (Gesetz zur Förderung eines gleitenden Übergangs in den Ruhestand) promoting part-time employment of formerly full-time employed elderly workers by grants from the federal labour office, provided companies compensate for reduced work hours by employing the unemployed or newly graduated apprentices. The law provides for a phased increase of the minimum age for receiving a full pension on account of unemployment from 60 years to 63 years.
A law was passed in July liberalising the telecommunications market and which will also facilitate a partial privatisation of Telekom by the end of 1996. The market is to be regulated by an authority under the supervision of the Ministry of the Economy, but the sector will be subject to the competition law. The criteria for issuing licenses will not be as liberal as the federal government intended and Telekom will still remain in control of the cable network. In addition, the terms of access to the line network of Telekom have not been clarified and this may limit the contestability of the market.
The 1996 tax law increases the basic tax allowance for untaxed income (Grundfreibetrag) to DM 12'095 and to DM 24'190 for married couples (basic tax allowance according to the 1992 tax schedule: DM 5'616, respectively DM 11'232). The entrance tax rate is increased from 19 to 25.9 %. Child allowances and child benefits are also increased, but can no longer be cumulated.
New training measures for improvement of job market integration prospects and assessment of willingness to work are introduced. Criteria regarding “suitable” jobs are tightened and are directly regulated in the law.
Within the scope of means-testing (UA), BA is allowed to request information on unemployed person's assets from financial institutions.
PES can grant wage subsidies for start-up employers to facilitate employment of previously unemployed persons for unlimited period.
Employment Promotion Law to encourage job-search: abolition of the possibility of refusing job offers, even if they do not correspond to the vocational qualification of the unemployed. Offers must be accepted during the first three months of unemployment.
The government tables an updated competition law, forbidding cartels – subject to some exceptions – and adapting legislation to European practices.
Sections of the revision to the employment promotion law comes into force. A more flexible type of employment contract for hiring long-term unemployed is created: Active labour market measures are more focused on long-term unemployed and unemployed with unfavourable characteristics. Wage subsidies are curbed and job search controls for recipients of unemployment benefits strengthened.
The renewal period for fixed term contracts is extended (9 to 12 months) and the admissible frequency of renewals is increased.
New regulations come into force concerning employment conditions for civil servants (Beamte). Among the provisions, the transferability between posts is enhanced and tenure in management positions restricted.
Increases in contribution rates to health funds are linked to increases in co-payments and clients are allowed to switch funds immediately.
Budget limits on total expenditures by physicians and for pharmaceuticals are lifted with details to be negotiated between health funds and doctors.
Dependent on the size of the package statutory payment amounts increase for drugs and dressings (currently 4 DM 6 DM and 8 DM) on DM 9, DM 11 and DM 13. The co-payment for medicines increases from 10 to 15 % of costs. Which is restricted to a maximum of 14 days per calendar year. Co-payment at hospital treatment rose from DM 12 to DM 17 (new countries: 9 DM 14 DM) per day and the same applies for stationary connection rehab. The increased amounts are also (but with no time limited to 14 days) for maternal health cures and preventative cures for mothers. The internal portion of medically necessary travel expenses increases from 20 DM to 25 DM per trip. The co-payments for drugs and dressings, medical and aids and travel costs are also to be applied in the future, if these benefits under the supplementary benefits for rehabilitation et cetera.
A law comes into force (Beitragsentlastungsgestz) restricting some health care benefits. The public health funds are required to lower contribution rates immediately to pass on these potential savings.
Claim-depreciating effect of sanctions is intensified and "Partial UB" are introduced.
A phased decline in the average replacement rate starting from 1999 is introduced.
Structural SWB is extended to end of 2002.
Reduction in disability benefits of 0.3 % per month of early retirement, limited to a total of 10 % of the benefits.
Also benefit recipients who have only been unemployed for 6 months, can be placed in JCS. Temporary special JCS regulations for a 100 % allowance (East) combined with reduced working hours is extended until end of 2000.
The minimum age for receiving unemployment benefits for more than a year is raised by three years.
Eligibility criteria for disability benefits are tightened. Introduction of a new pension regulation in case of reduced capacity to work. Pensions for reduced capability to work are rescheduled to be assessed solely on health grounds.
Abolition of the possibility of renewal of the right to Unemployment Insurance through participation to training courses.
UB claim can only be gained through contribution periods.
Assessment periods for determination of UB amount is extended to 12 months (previously 6) and includes all those periods in which obligation to insure existed.
The accrual of pension rights, not based on contributions, is restricted.
Contribution rates for pension insurance are increased from 19.2 to 20.3 % of the wage base.
Increased pension claims for contribution free periods of child raising.
The pension level for immigrants is reduced.
liberalisation of power generation and distribution (+ in autumn 1999, the German Federal Cartel Office reinforced a ruling that local distributors had to open their grids to competitors), full opening.
From April 1997, air transport has been liberalised along the lines of the directive by the European Commission. The federal government sold its remaining 35.7 % stake in Lufthansa to a state owned Bank (Kreditanstalt für Wiederaufbau), with the shares to be sold to the public in the second half of 1997. The reason for the delay is the need to establish a mechanism which would ensure a majority of German nationals in the shares of Lufthansa after privatisation. This is considered to be a necessary condition for a further privatisation, since without a domestic majority, some bilateral air traffic agreements with other states would become invalid.
The ‘‘solidarity’’ tax surcharge is reduced by two percentage points to 5.5 %. The business capital tax is abolished. The basic income tax allowance is increased.
The Immediate Action Programme, that plans to reduce youth unemployment, comes into force. This programme includes training offers for young people who have not find a training place, qualifications and employment offers for young unemployed persons.
The new government reintroduces full dismissal protection for all workers who are hired in companies with more than five employees. The former government had limited comprehensive dismissal protection to companies with more than 10 employees.
Dependent on the size of the package co-payments for drugs or bandages are lowered from DM 8 to DM 9 (N1) of DM 11 to 9 DM (N2) or 13 DM 10 DM (N3). Insured persons who are fully exempt from co-payments (so-called hardship cases) receive the supply of dentures without co-payment. For the chronically ill, the duration of treatment for the same disease in and co-payments are one year in the amount of at least made 1 % of annual gross receipts for subsistence have to account for the extra payments necessary travel expenses, to drugs, dressings and medicines after the expiration of the first year for the duration of the further treatment. The co-payment exemption only for the chronically ill themselves, and for the rest of the family in the household, the general rules apply (load limit).
Participation in training programmes ceased to re-establish benefit eligibility.
If a recipient takes up employment covered by Social Security or Self-Employment, social assistance agencies can grant the recipient monthly allowances for a maximum of 12 months (previously 6 months). An experimental clause, which is valid until 31 December 2002, allows to deviate from this regulation.
The previous tightening of eligibility conditions for invalidity pensions is revised.
Continuing the liberalisation in the telecommunications sector, the monopoly of the Deutsche Telecom with respect to wire-bound voice telecommunication is abolished and a new regulatory authority is established.
For incorporated companies the statutory rate for retained profits has been decreased from 45 % in 1998 to 40 % in January 1999.
From 2001: Reduction of the tax rate to 25 % for both retained profits (from 40 %) and distributed profits (from 30 %).
The basic income tax allowance is increased. The basic tax-free allowance (Grundfreibetrag) is being increased in annual steps (except in 2002 and 2004) from DM 12'300 in 1998 to DM 15'000 in 2005. Benefits and tax credits for dependent children are being raised in 2000 and 2002 (the latter increase not yet legislated).
The bottom statutory tax rates are being reduced from 25.9 % in 1998 to 23.9 % (January 1999), 22.9 % (January 2000) and 19.9 % (January 2001). For non-entrepreneurial income (notably wages, dividends and income from certain types of self-employment such as physicians and lawyers) the top statutory tax rate is being decreased from 53 % in 1998 to 51 % (January 2000) and 48.5 % (January 2002). For entrepreneurial income the top statutory tax rate is lowered from 47 % in 1998 to 45 % (January 1999) and 43 % (January 2000).
The ‘‘solidarity’’ tax surcharge is reduced by two percentage points to 5.5 %.
Job creation schemes have been opened to persons who have been unemployed for at least six months rather than twelve months as has been the case hitherto.
Greater emphasis is given to job creation measures carried out within the public sector.
Local labour offices are required to report regularly on the success of their measures.
In the area of product market competition a number of measures come into force. These include abolishing the law restricting rebates and promotional offers, and the creation of an electricity division within the Federal Competition Authority.
Persons after the completion of the 55th year of life insurance are exempted from the insurance when they are in the last. Not insured by law years before entering the insurance obligation were. This also applies to spouses of civil servants, the self-free insurance or ARBN if, after the 55th years by including a more than marginal employment are insurance. Under the rules currently in force, these people could for example by changes in the level of their Pay through the transition from full-time to part-time employment (e.g. also in part-time) or of self-employment in a employment or by reference to a performance of the unemployment insurance even duty member of the GKV, if at any time before its own contribution to the have done "Solidarlasten".
New legislation comes into force, which reverses higher co-payments by patients and restrictions on the provision of health services introduced by the previous government.
Psychotherapeutic services, which are adopted in the common and recorded benefit catalogue of the GKV, have to be paid by aged insured by the second meeting, pay DM 10 per session. The payment is subject to the adjustment (increase) the payment amounts as determined by the NOG was introduced. For hardship cases, the general rule applies the full co-payment exemption. To determine the load is reasonable for the additional payment to psychotherapeutic supply an independent excessive demand clause created by the load limit for disconnected co-payments for travel expenses to calculate drugs, dressings and remedies is that the only reasonable load for co-payments for psychotherapeutic treatment is 2 % of the annual gross receipts for subsistence, and for chronic patients who are in psychotherapeutic treatment duration and to this end a year long co-payments in the amount of load limit have paid 2 % of the limit load decreases reasonable to 1 % of annual gross receipts for subsistence.
The powers of the Minister of Labour to extend wage agreements in construction to non-contracting parties are widened.
Genuine UA is abolished. Only unemployed persons who were eligible for UB are eligible for UA thereafter (Anschluss UA).
The short-term sickness benefits was increased back to 100 %.
The requirement to be entitled for benefits (i.e. to have been working for at least 12 months during the preceding 3 years) has been slackened with respect of those who have children or dependent relatives.
A new provisions allows people to work and earn a small amount (up to 20 % of their monthly UB) without suffering any loss of benefit.
Structural Adjustment Measures for which employers can receive subsidies if they create new jobs have been extended and the subsidies are payable up to a maximum of 5 years in the new Länder and where unemployment is high.
Legislation comes into force, extending the obligation to pay social security contributions to casual employment (jobs entailing a small number of hours per week and with pay not exceeding DM 630 per month in the west or DM 590 in the east), and to the ‘‘apparently self-employed’’, who are considered as dependent employees, if certain criteria are fulfilled. Redundancy payments are no longer credited against unemployment insurance benefits (Arbeitslosengeld).
Employers are obliged to pay pension contributions even if the worker abstains from coverage by the pension system.
Gradual decline in the reference pension replacement rate up to 6 % by 2030.
Introduction of a demographic factor into the pension formula in order to take into account the increase in life expectancy.
The pensions for disabled at the age of 60 is abolished.
The pensions on account of occupational disability are abolished, but, as a transitional arrangement, the link to the person's occupation is maintained for persons born in 1960 or before. The occupational disability pensions and the general invalidity pensions are replaced by a two-tier system of pensions on account of reduced earning capacity. The pension payments on account of the closed labour market are retained and pensions are generally paid on a fixed-term basis. Increase of the pension age for the old-age pension for severely disabled persons. Actuarial reductions are introduced and the added period is prolonged for pensions on account of reduced earning capacity commencing after 31 December 2000 (in steps).
Introduction of a new pension regulation in case of reduced capacity to work. Pensions for reduced capability to work are rescheduled to be assessed solely on health grounds.
The previous increase of early retirement age is revised. Long term insured can retire at the age of 62 instead at the age of 63.
The Tax Relief Law 1999 comes into force. It lowers statutory income tax rates and reduces the tax burden for households.
Measures to improve the employment levels of people with disabilities, aimed at ensuring the employment of about 50'000 unemployed people with disabilities by October 2002. Companies employing 20 or more people (size exempted small businesses, increased from previously 16) are now obliged to fill at least 5 % of their posts with disabled people (from previously 6 %). If this obligation is not met, a monthly compensatory payment must be made. The level of the compensatory payment for companies significantly failing to meet their legal obligation to employ disabled people has been increased substantially. Other new institutional measures, concerning in particular the interplay between corporate interest representatives and the employment offices, include integration agreements for the severely disabled, prevention obligations, integration projects etc.
Unemployed persons who, upon job offer by BA, do not arrange an interview immediately, miss an interview or prevent interview success through their behaviour are sanctioned. "Market value rating" (Marktwerttaxierung) is modified.
This act combines different active labour market measures in order to increase employment, training and equality. Compulsory unemployment insurance also comprises: Periods of receipt of pension due to full reduction in earning capacity as well as periods of receipt of maternity benefits and of care and education of a child below 3, if through one of these cases an insured employment was interrupted.
Fixed-term workers are to be treated equally with permanently employed workers. Employers are obliged to inform employees with fixed-term employment contracts about vacant permanent jobs, allow them to participate in training measures and inform employee representatives about the proportion of fixed-term-employment relationships within the company.
Additional restrictions on renewal of temporary contracts.
More flexibility in fixed-term employment of older workers.
Law for old-age part-time is changed regarding (amongst others) the period of validity (extended) and the maximum period of claim (prolonged). Regulation according to which unemployed persons above 58 have the possibility to receive UB without being "available" is extended by 5 years.
Wage base for benefit calculation extended to extra payments, such as Christmas allowances.
Recipients of UB/UA can take up voluntary community work without losing UB/UA claim.
The pension contribution rate is lowered from 19.5 to 19.3 % and will be financed by higher energy taxes.
Part-time employees get access to old-age part-time. Replacement requirement for BA-subsidised old-age part-time is eased.
Significant reduction of the marginal income tax.
Introduction of an "integration agreement" (Eingliederungsvereinbarung) between unemployed and PES, aimed to guarantee that the PES make offers of jobs and LM measures which are not only suited to the individual interests, skills and background of the unemployed, but also correspond to gender-specific employment opportunities. Each unemployed person is obliged to make efforts to find a job and to participate in employment policy measures. To overcome effects of interruptions (for family reasons) to gain ful employment more easily, the integration agreement may also apply for those individuals who currently have no entitlement to unemployment benefit or assistance and were paying compulsory insurance contributions. Opportunities for receiving maintenance money have been widened.
Modernisation of the PES and strengthening of the system of "suitable placements" (avoid long-term unemployment). PES are to increase the ALMPs regarding female and older unemployed and extend social security cover during unemployment by filling the gaps in the social security system.
Support to young persons entering into the LM : special programme "JUMP" aimed at lowering youth unemployment (to be integrated into the SGB III from 2004 on). In order to combat effectively youth unemployment, a high level of personal contact and support is considered an essential precondition, that is guaranteed in this framework by monthly meetings with the job placement officer to discuss the results of the activities fulfilled and plan the next stage of the job placement strategy.
Disabled workers are entitled to personal assistance funding worth between EUR 250 and EUR 1'000 per month. Higher costs can be covered in exceptional cases only.
Entitlement to the widow's and widower's pension at the low rate is limited to two years. Entitlement to a widow's or widower's pension generally not before one year of marriage.
Adapting the pension formula to the newly introduced state-subsidised collective private pension scheme (Riester-Rente) so as to lower indexation as people begin building up entitlement to a Riester-pension. The reform aims to keep the equally divided joint employer/employee contribution to the state pensions system at a maximum of 22% of pay in 2030 (then 19,3%).
The new pension reform becomes effective, opening up for funded private pensions
Pension splitting among spouses is introduced.
Strengthening vocational and other training measures (promotion of individual employability and life-long learning). Young unemployed people and those with few qualifications will receive special attention so that they consolidate and widen their skills.
The first part of the Job-AQTIV-Act comes into force with a second part becoming effective in April. The act aims at improving the efficiency of job mediation and activation of unemployed.
Employees and other individuals who are liable to pay social insurance contributions to the Federal Office for Employment are now required to report in person at their local PES and give notice that they are looking for work.
Introduction of a placement voucher for people who are unemployed for more than six weeks. The placement voucher has the value of 2000 Euro. A jobseeker can mandate a private placement agency to find him or her a job.
Establishment of Job Centres, i.e. contact centres for the employment offices and the respective social welfare agencies.
Creation of "personnel service agencies" (Personal-Service-Agenturen, PSAs) throughout the country. The PSAs will be established on the basis of public tenders, in which private employment agencies are to be given priority, to employ unemployed people and hire them out on a short-term basis in accordance with existing or coming collective agreements. The regional offices of the Federal Employment Service (Bundesanstalt für Arbeit, BfA) will conclude "free agent" agreements with PSAs to cooperate in the placement of unemployed people. The new law on Temporary Work Agencies applies to PSAs as well.
The right to training support has been simplified, with the introduction of training credits (or training vouchers) for employees for whom the employment office has established a training requirement. Measures: introducing a further condition for participation in a continuing vocational training programme with the fulfilment of the "pre-employment period" (i.e. the applicant has been subject to compulsory insurance at least 12 months within the last 3 years, or fulfils the conditions for entitlement to unemployment benefit/assistance and has claimed this).
The right to training support has been simplified, with the introduction of training credits (or training vouchers) for employees for whom the employment office has established a training requirement. The main changes: 1) the person who is to receive skills training is responsible for choosing a course, i.e. she/he will be free to use training credits among the licensed measures or training bodies.
The right to training support has been simplified, with the introduction of training credits (or training vouchers) for employees for whom the employment office has established a training requirement. Measures: A training voucher is introduced in the SGB III (art 77.3).
The right to training support has been simplified, with the introduction of training credits (or training vouchers) for employees for whom the employment office has established a training requirement. Measures: A procedure for approval of training providers and courses by a competent body/ external experts (i.e. certification agencies) has been introduced. Labour-market conditions are taken into account in identifying the need for continuing vocational training.
The regulatory framework for corporate take-over activities moves from a voluntary code to encoded standard, providing for clear and transparent rules for hostile take-over activities. Moreover, a voluntary code of conduct to improve corporate governance is introduced the following month.
Elimination of the synchronization and re-employment ban.
Increasing flexibility when taking on older employees. The age-limit imposed for fixed-term contracts, beyond which fixed-term contracts of employment can be concluded with employees without any deadline being fixed or without a maximum time limit, is reduced from 58 to 52, limited to 4 years. Measures designed to integrate older employees.
Temporarily contracts were broadly liberalised in 2002.
Exception of the principle of equal treatment if the agency applies a collective agreement.
Maximum total duration of temporary contracts is brought to 24 months.
The Federal Agency for Financial Market Supervision is created, integrating supervision of banking, insurance and securities markets into one body, making the new authority the single regulator, licenser, supervisor and enforcer of financial market regulation.
Several health insurers raise their contribution rates to restore balance between spending and revenues following the deficits that emerged the year before. A reinsurance scheme for health funds is established to compensate cases where health expenditures exceed certain thresholds.
Giving the possibility to banking companies to introduce performance-related variable pay on the basis of and agreement concluded by management and works council. Companies can use up to 4 % of collectively agreed annual basic pay for distribution as variable pay. In addition, the company must provide an extra budget for variable pay. The variable pay can be related to individual and/or company performance. All concrete provisions on variable pay must be laid down in the relevant works agreement. Furthermore, the performance-related component has been introduced into the collectively agreed annual bonus, which in banking takes the form of a so-called 13th month's salary. The management and the works council are now allowed to conclude a works agreement whereby this annual bonus can be reduced to 94 % of one month's pay in difficult economic situations and increased to 112 % in times of good performance.
Start-up grants, funding an "Ich-AG" (Me, Inc.) or "Familien -AG" (Family plc). Person who are unemployed and have so far received benefits from the employment office and now start a Me Inc./Family plc receive a grant.
Subsidies for unemployed who became self-employed.
“Re-entry of the long-term unemployed over 25 into the LM-Work for the long-term unemployed”-Programme, intended to provide a transitional solution to long term unemployment, until the new regulatory system (pooling unemployment assistance and social welfare for employable persons) enters into force in January 2005.
Reform of the Federal Employment Service (reorient the organisational structures towards the provision of job placement service, simplification of benefit entitlement rules) which will be renamed and re-structured as the Federal Employment Agency. The relationship between the federal government and the federal employment agency will be more modern and more effective than in the past.
Agreement on the provision of high-quality training for workers (especially young people willing to be trained in the dual system of vocational training) and thus, prevention of the impeding lack of skilled workers due to medium-term demographic developments. The agreement proposed actions to offer a training place for every young person who is willing and able to work. Additional measures to significantly increase the share of companies that provide training places over the next years. Use of additional training potentials, reorganisation of measures that were initiated to create new and flexible training professions. Proposals for new training professions and those that require modernisation. Improved exchange between vocational training and universities, including recognition of certificates at European level, in order to increase the attractiveness of vocational training. Inclusion of more pro-training aspects in the collective agreements. The Länder are also asked to step up necessary school policy reform to improve the quality of the system.
The threshold number of employees above which dismissal protection legislation is binding has been raised from 5 to 10 employees with regard to new hirings (apprentices are not counted and part-time employees are only counted proportionally). Previously, the statutory protection against dismissal covered employees in all companies with more than 5 employees. Employees in companies with more than five but not more than 10 employees will keep their statutory protection if employed before 1 January 2004.
Simplification and reduction in the number of selection criteria to be considered by the enterprise in case of dismissals for operational reasons (now limited to disability of the employee, job tenure, age and presence of dependants in the household). Employees with special skills and employees necessary to maintain a well-balanced structure of the workforce can be excluded from social criteria for dismissal. Juridical review is restricted to correct formal application of the criteria.
Introduction of the possibility for employees facing dismissal for operational reasons to choose between seeking legal action against the dismissal or accepting a severance payment (equal to half a month's earnings for each year employed).
The admissible duration of fixed term contracts for small enterprises is extended. Recent legislation has increased the threshold number of employees above which dismissal protection legislation becomes binding from 5 to 10 employees with regard to new hires and the time limit for temporary contracts without specific justification has risen from 2 to 4 years for newly founded firms.
Liberalisation of the use of short-term contracts (up to four years without giving reasons, rather than maximum two years) for newly created enterprises during the first four years after start-up;
Broader definition of marginal jobs; lower age threshold (52) for fixed-term employment without reason.
Introduction of a new category of low-paying jobs to supplement welfare, so-called Additional-Jobs, supposed to help the long-term unemployed back into work. Participants do not receive remuneration, but lump-sum reimbursement for their supplementary expenses related to their work. The level of reimbursement regularly amounts to 1 to 2 euro per hour.
Establishment of a bargaining structure for the temporary agency work sector, involving the following: 1) 35 hours agreed weekly standard working time. The actual working time, however, depends on the collective agreements applying to the user company. Hours worked above the standard working time will be accumulated in an individual working time account; 2) All wage rates will be adjusted each year, following the average wage increases in those industries relevant for temporary agency work; 3) Minimum rates for scale 3 can also apply to workers who are considered 'hard-to-place' by the temporary employment agency. This reduced remuneration is limited to the first six months of employment. From 1 January 2005, this period will be reduced to 3 months and from 1 January 2008 to the first .
Old UA is abolished and combined together with MA for employable persons to a single benefit called “Arbeitslosengeld II” (new UA) amounting to Social Assistance level.
Cut in the duration of unemployment benefits.
12 months of unemployment insurance contributions requirement introduced for eligibility to unemployment benefits.
For assurance of subsistence in the age of 65 and above and in case of permanent reduction in earning capacity persons regularly living in Germany can receive means-tested benefits according to new Basic Maintenance Law (Grundsicherung).
Tightening of job acceptance requirements for eligibility to unemployment benefits. Recipients of the new benefits will be obliged to accept any legal job offer, regardless of the level of pay. If a recipient rejects a job, he/she will have to face sanctions on the form of a reduction of unemployment benefits for a limited time (30 % less of the standard transfer payment for a period of 3 months).
National Public Employment Service (PES) defined performance targets for local offices and intends to control their placement performance regularly.
Planned reform of the job agencies, involving more agents to help unemployed people to find a work, passing from 400 unemployed people per worker to fewer than 75 for 25-year-olds and 150 for people over that age. Setting up of a standardised welfare system for job seekers, which will provide them with every assistance aimed at reintegrating them into the workforce and all the benefits to which they are entitled in order to have a single income from a single source.
Investment in fulltime schooling is being co-financed by the federal government.
Introduced option for bachelor and master degrees and first elements of performance-oriented remuneration and university funding introduced. Planned competition-based selection of a small number of additionally-funded high performance universities.
Social partners make use of firm level opening clauses for collective agreements.
Merger of the unemployment assistance scheme and the social assistance scheme into the Unemployment Benefit II Programme, leaving them both at approximately at the lower level of social assistance (up to 345 euro per month in the first 6 months of 2005 for singles or single parents in Western Germany and 331 euro in Eastern Germany, plus cost of "adequate" housing (children in the household of the recipient and partners in need of financial assistance will receive additional payments.).
Abolished re-entitlement to unemployment benefit after ALMP participation.
Increase from 60 to 63 years of the early retirement age on account of unemployment, gradually implemented between 2006 and 2008.
Reform re-regulating the tax treatment of contributions and income of older workers. The new “Alterseinkünftegesetz” has a considerable effect on all kinds of statutory, occupational, and privately funded pension programs. Transition from the taxation of the yield share to an EET-taxation. After a transitional period, the contributions paid to the statutory pension plan can be deducted from taxes completely. In return, pensions will gradually become liable to taxes. In the transitional period, double taxation is not prevented entirely, especially for those self-employed and voluntarily insured.
Programme to create up to 30'000 additional jobs for persons aged 58 and over, in the form of new work opportunities with top-up compensation (1-euro-jobs) available to long-term unemployed person for up to three years. Approval decisions may be issued until 31 December 2006 enabling participation until the end of 2009.
Centralisation of responsibility for the benefits and job placement of the long-term unemployed who were previously assigned either to municipalities or the PES.
The scope of the block exemption will be scaled back by 2005, and it will by then prohibit location clauses, allow multi-brand dealer ships, and increase competition in the after-sales sector. These changes are expected to enhance competitive pressures in the market through the lowering of domestic and foreign non-tariff entry barriers.
Came into effect at the end of April 2005 to implement the EU Directives of the first Railway Package. This involves improvements with regard to non-discriminatory access to railway infrastructure, the structure of the railways (path allocation and infrastructure pricing independent of railway undertakings) and strengthening competition oversight.
Further decentralisation of labour market services and policies. The full responsibility for labour market policies at regional level is passed to the Job Centres, including staff management, financial budget and administration.
The possibility for receipt of unemployment insurance benefit and unemployment assistance under easier conditions for needy persons from 58 years and above is extended until end of 2007.
Introducing rapid offers (unemployed entrants to be offered jobs or training courses immediately in order to test their willingness to accept work) and sanctions (recipients of unemployment benefit will lose 60 % of their benefits if they reject more than two jobs offers in a year. This will also affect rent allowances).
Gradual progress in take-up of degrees in new two-tier structure. Implemented competition-based selection of a small number of additionally-funded high performance universities. Raised autonomy of universities. Introduced student fees, coupled with loans and income-contingent repayment schemes, in several states.
Greater contractual freedom for insurers to enhance price competition in the pharmaceutical market, in particular through improved possibilities to engage in rebate agreements with pharmaceutical companies.
Greater freedom for insurers in their contractual relations with providers to allow them to compete based on the quality of their products and their efficiency (cost-effectiveness). In particular insurers possibilities to contract a limited set of – at least for the German system – rather novel forms of care directly and selectively with providers will be broadened.
Social partners have extended firm-level bargaining.
Raising the contribution rate of public pension insurance from 19.5 % to 19.9 % of gross wages.
Raising the statutory retirement age from 65 to 67 years. This increase will be gradually implemented between 2012 and 2029 (from previously 2035). The age of retirement will increase from 2012 by one month per year and from 2024 by two months a year. People with as many as 45 insurance years will still be allowed to retire without any cuts in their pensions at the age of 65 years. Under certain circumstances, people will be able to retire after 2029 from the age of 63 but will then have to face a permanent cut in the pension of 0.3 % per month of earlier retirement. Long-term unemployed will be obliged to take this early retirement option. The retirement age for disabled people will increase accordingly from the age of 63 to 65 years.
Supporting 79 regions with high long-term unemployment to create additional jobs. Most of the jobs will be offered by municipalities. The jobs must be additional jobs in welfare-oriented activities like supervision of children in kindergarten and schools, support of public libraries and old people homes. Jobs will be paid regular collective wages and supported for the maximum period of three years. Working time should be 30 hours per week.
New programme for the long-term unemployed which is expected to create 100'000 additional jobs. Jobs will be paid regular collective wages and supported for the first step temporary, later permanent. Up to 75 % allowance to employers.
Easier conditions for employers wishing to hire people over the age of 52 on a temporary basis, allowing for temporary contracts of up to five years with the same employer.
Introduction of binding minimum wages in several sectors at different stages. Minimum wage in the cleaning industry was set at 7.87 per hour for workers in western Germany and at 6.36 for workers in eastern Germany. The minimum wage for postal workers was fixed at between 8 and 9.80 depending on the occupational category and region. Different scales of minimum wages were agreed for the construction industry. In the electrical trades the hourly minimum wage as fixed from 2007 to 2010, ranging from 7.70 to 9.60 at the highest level.
Reduction of contribution rate to unemployment insurance from 6.5 % to 4.5 % as of January 2007. New arrangement on Federal government’s BA deficit coverage.
New initiative ("50plus Initiative") to promote the employment of older workers. Introduction of wage subsidies to encourage older people to accept jobs paying less than their previous employment.
Workers who have contributed for at least 35 years can retire as early as age 63, but with a reduction of 0.3 % of the full pension benefit for each month they retire before the normal retirement age. To avoid incentives for early retirement, the deductions (3.6 % for each year) have in fact been adjusted to the increase of the statutory retirement age. Instead of a 7.2 % deduction, a 63-year-old early retiree will incur a deduction of 14.4 % ( [67 - 63] = 4 years x 3.6 % = 14.4 %) on his pension from 2029 on. Remaining exemptions: 1) women borne before 1952 are still eligible to retire at the age of 60 (with deductions); 2) the deduction-free retirement age for severely handicapped people will be increased to 65 years. Early retirement will be possible for severely handicapped people at the age of 62 (with deductions); 3) an insurance record of 45 years from compulsory contribution periods and creditable periods from child rearing or long term care will entitle a beneficiary to claim the full pension as early as the age of 65. As decided in March 2007 the retirement age will gradually be increased to 67 years until 2029 starting in 2012 with persons born in the year 1947 or later. The increase will be applied to all types of pension. There are no exceptions for specific occupational groups.
Strengthening second-pillar capital-based supplementary pension schemes: Lowering minimum age of vesting entitlements to employer-financed occupational pensions from 30 to 25 years (fiscally flanked).
Participants of Working Opportunity Schemes (WOs) do not receive remuneration but a subsidy to cover additional expenses, such as travel costs. These schemes need to be for the public benefit and may only cover additional works. As they may not be used to make a profit employers are not able to cover any expenses. The duration of WOs depends on the individual need for training and support and should therefore not be regulated (e.g. according to the age of participants).
Special programme to support advanced training for low-skilled and older workers (Sonderprogramm fur ältere und gering qualifizierte Arbeitnehmer - WeGeBau). Expanding the groups eligible under law to include: employed workers who completed their vocational training or last attended a government-funded training course four years ago or more. Contract workers who are rehired by their employers (temporary employment agencies).
Promotion of Vocational skills and knowledge through training-related measures aimed to address shortcomings in language skills and education.0
Implementation of the European guidelines ensuring a non-discriminatory network access (electricity and gas and regulatory powers). Control of the conditions for network access by an independent regulator.
Introduced ex ante regulation of network access in electricity and gas and raised regulatory powers. Introduced an incentive regulation of third party access fees in the energy sector. Simplified appeals on regulator’s decisions in telecoms. Required approval of rail network access charges by regulator.
The Federal Office of Consumer Protection and Food Safety has been set up as the competent authority as regards the enforcement of consumer rights in the case of cross-border infringements, while the German system of the enforcement of consumer rights according to civil law is uphold. Concerning an expansion of the Cartel Offices’ resources, new posts have been created in the context of the last legislative amendment to the act against restriction of competition. With regard to the efficiency of fining procedures, an amendment to the act against restriction of competition has been introduced. The Cartel Office has also issued new guidelines on the imposition of fines.
Greater responsibility is accorded to individual schools in the fields of school development, quality assurance and evaluation as well as in hiring teachers. Common standards in teacher education programmes that are mutually recognised have been agreed to facilitate teacher mobility, but they need to be adopted more widely to increase mobility. The Länder support teacher mobility by a special exchange programme as a possibility to move from one Land to another one.
Nationally applicable standards for several subject areas have been put in place and there is a central review of the achievement of education standards in the context of a Länder comparison. Comparative tests linked to the education standards are carried out in order to assess the performance of all schools at the national or Länder level. In the context of increased school autonomy, school leaders are being trained to fulfil school management tasks.
Since 2008, the German authorities have expanded the availability of single contact points, and lowered the administrative burdens for corporations, for instance by introducing a “light” version of a limited liability corporation.
On 18 December 2008, the higher administrative court of the federal states of Berlin and Brandenburg suspended the introduction of minimum wages in the postal services sector. The minimum wages of 8.00 to 9.80 euro per hour are not longer applicable. Technically, the court suspended the extension of the collectively agreed minimum wage to the whole postal services sector. The United Services Union regrets the court’s decision and even called for the introduction of nationwide minimum wages.
Expansion of the Act on the Posting of Workers to additional industries and modernisation of the Act by specifying minimum working conditions (including sectorial minimum wages). Industries that have a collective bargaining coverage of more than 50 % and on the basis of a joint application filed by collective bargaining parties industries can be incorporated into the area of application of the Act on the Posting of Workers. The Act on Minimum Working Conditions (Mindestarbeitsbedingungengesetz) of 1952 is to be amended to ensure that minimum wages can be specified for industries that have a collective bargaining coverage of less than 50 %.
The lowering of the unemployment insurance contribution rate from 3 % to 2.8 % in 2009 (originally envisaged to be phased out in mid-2010) was extended until the end of 2010, costing EUR 0.8 billion, and the health insurance contribution rate was cut by 0.6 percentage points, costing EUR 9.5 billion in 2009 and 2010.
To enable pensioners stronger participation in the economic revival, statutory pensions were raised by 1.1 % on 1 July 2008. This increase higher than foreseen is being achieved by temporarily deferring the stages taking effect in the pension adjustment formula (so-called “Riester steps”) in 2008 and 2009 to take account of the change in the old-age provision contribution levels. Accordingly, indexation will be higher by 0.64 percentage points. in 2008 and by 0.63 percentage points in 2009. However, the Riester steps are not abolished but only deferred, with the result that the pension adjustments will be correspondingly lower in 2012 and 2013. In this way, account is being taken of the need for long-term stability in financing pension insurance. The higher adjustment in this and the coming year can be financed without increasing.
The corporation tax rate was reduced in January 2008 from 25 % to 15 %. The basic rate of the local business tax (Gewerbesteuermesszahl) was cut from 5 % to 3.5 %.
Income tax rates were lowered by increasing the basic tax allowance (from EUR 7'664 in 2008 to EUR 7'834 in 2009 and to EUR 8'004 in 2010), reducing the bottom tax rate (from 15 % to 14 %) and by raising the other tax brackets (by EUR 400 in 2009 and an additional EUR 330 in 2010). Overall, these measures were expected to lead to tax shortfalls of EUR 3.1 billion in 2009 and EUR 5.8 billion from 2010 on.
Short-time working compensation is paid to employers who must transfer it to employees.
Additional funds for training of unemployed workers: 0.7 billion Euro in 2009, 1.3 billion Euro in 2010.
Federal Programme on funding qualification measures for workers on short-time, supplementing the extension of the short-time work allowance.
The price setting for consulting services by architects and engineers has been liberalised somewhat in 2009.
Since January 2008 the exemption from job search obligations for older recipients of unemployment benefits is only applicable if the entitlement to benefits occurred before 1 January 2008 and if the unemployed person had reached the age of 58 years until that date.
The administration of unemployment assistance (Arbeitslosengeld II) in local job centres was reorganised to continue with the integrated provision of active and passive support to the unemployed.
Competition has been strengthened in the chimney sweep industry.
To ensure competition on the railways, the Third Act amending Railway Regulations was passed to implement the EU Directives of the first Railway Package. This involves improvements with regard to non-discriminatory access to railway infrastructure, the structure of the railways (path allocation and infrastructure pricing independent of railway undertakings) and strengthening competition oversight. The government envisages privatising the transport service subsidiaries while retaining state ownership of the infrastructure. In addition, it intends to liberalise intercity bus services.
Several auction offices were founded in the energy market and put into operation, thereby extending exchange capacities with neighbouring countries. Market coupling, which will further optimise market integration with neighbouring countries, is expected on the western borders for the second half of 2010. A specific regulation (Power Station Connection Ordinance) stimulates the construction of new power plants and thus fosters competition on the market for electricity generation. Enlarging generation capacities is accompanied by legislation to strengthen the grid, i.e. by a new Energy Transfer Expansion Act. This regulation also allows for increased exchange capacities as required by the internal market. In accordance with European regulation unbundling has already been implemented to a large extent. The coalition agreement envisages explicitly allowing the option of unbundling to counter uncompetitive markets.
Some Länder gave universities the right to set tuition fees. Universities are allowed to allocate 60% of all study places at their discretion.
Some Länder have introduced performance-based elements in teachers’ compensation packages.
The introduction of various elective tariffs, including new forms of health care provision, offers more choice for the insured and gives leeway for insurers’ competition. The social health insurers are obliged by law to report regularly on the results of elective tariffs, notably on efficiency and savings.
With the Healthcare Financing Act enacted in January 2011 the contribution rate for social health insurance has been fixed, and income-independent surcharges have been further developed to enhance competition in the health insurance market and to prevent rising labour costs due to rising health expenditure. A tax financed mechanism for social adjustment has been introduced. As a result, the sources for financing have been widened. Members of private health insurance contribute to the solidarity mechanism of social health insurance via tax financing of the social adjustment mechanism and further allowances from the federal budget to the central health fund.
Pharmaceutical prices are not fixed by law but set by the pharmaceutical companies or negotiated between companies and health insurers. The instrument of internal reference pricing (Festbeträge) defines the maximum level of reimbursement by the social health insurers. The new government has announced a review of pharmaceutical regulation.
The growth of hospital spending is limited by adjusting the relevant pricing basic wage rate as well as discounts for multiple services. The output increase in the remuneration of contractual medical care is also reduced. The compensation levels in the GP-centered care is limited. It is basically based on the future level of primary care normally supply. Existing contracts are excluded. To contain the most dynamically growing pharmaceutical expenditure, the Federal Government has taken effective measures to reduce costs and to increase competition in addition to the SHI FinG. Thus, the pharmaceutical industry, pharmaceutical wholesalers and pharmacies contribute among other things, the pharmaceutical market Restructuring Act (AMNOG).
On 1 August 2010, new national minimum wages for care workers came into force in Germany. The employees covered will be entitled to an hourly minimum wage of EUR 8.50 in western Germany, including Berlin, and EUR 7.50 in eastern Germany. The minimum wages, set in a collective agreement and declared binding by the Federal Ministry of Labour under the Posted Workers Act, will affect between 520'000 and 560'000 caregivers out of a total of 810'000 care workers and will apply to all employees regardless of the country of origin of their employer. The rates will increase with effect from 1 January 2012 to EUR 8.75 in western Germany and EUR 7.75 in eastern Germany. With effect from 1 January 2013, rates will rise to EUR 9.00 and EUR 8.00 respectively.
The reform of active labour market policies reduces incentives for relying on "one-euro Jobs" [Arbeitsgelegenheiten, "Ein-Euro-Jobs"], which are publicly financed and usually public service-related jobs for long-term-unemployed. Since their creation in 2005 this subsidy scheme was the most often used instrument to reintegrate long-term-unemployed (beneficiaries of UB-II) through practical work in municipal jobs. The aim is that "one-euro-Jobs" do not replace regular jobs and reduce deadweight losses, criticised by the Federal Court of Audit. Instead Integration chances onto the labour market were improved and new instruments for qualification and stabilisation created.
A full payment of the training costs is possible only for low-skilled workers who take part in a further training that leads to the completion of a vocational qualification. For workers above 45 the training costs are reimbursed up to 50 % maximum.
The crisis measures are phased-out: short-time work allowances were paid in 2012 for six months only and without subsidising the social security contributions by employers. Extension of the duration by legal ordinance is possible. Until the end of 2014 short-time allowances can be paid for twelve month.
The activation strategy is decentralised and individualised. This increases the flexibility and the individuality of the utilisation of labour market policy instruments. PES officials especially get more flexibility in deciding about support measures for the young and long-term unemployed, and receive more training.
Foundation allowances (Gründungszuschuss) was adapted to ensure better targeting. From 1 January 2012 the allowance can be provided by public employment agencies. One precondition for support is remaining unemployment duration of 150 days, up from previously 90 days. The allowance combines unemployment benefits with the lump sum of 300 euro for six months and the lump sum for further nine months. The former regulation provided unemployment benefits with the lump sum for nine months first and for six months thereafter.
A voucher system will be introduced for vocational training measures for the unemployed. This is expected to adapt measures to individual needs and improve the quality of training services.
It is only since 2011, and again through the intervention of the regulator, that all competitors have enjoyed proportionate access to operations control centres, the main decision making units for railway track utilisation.
Competition in the pharmaceutical sector has been enhanced by a comprehensive structural reform of the pharmaceutical market (AMNOG, enacted January 2011). Pricing for products with new agents is now utility oriented, and prices are negotiated between producers and health insurers.
A reform in 2011 tightened regulation of temporary agency workers
The German authorities have taken significant steps to improve bank regulation in recent years, including the introduction of macro-produdential regulation resolution legislation in 2011.
Giving authorities more powers to facilitate the reorganisation of weak banks and the resolution of non-viable banks.
The federal government provides in 2011 in addition an amount of 2.0 billion Euros to the health fund.
Minimum wages for all companies will be introduced for (1) Agency work (7.01 EUR in eastern Germany, 7.89 EUR in western Germany), (2) Roofers’ crafts business (11 EUR), (3) Cleaning business (7.33 EUR in eastern Germany, 8.82 EUR in western Germany). Practically, the Labour Ministry declares the social partners' sectorial wage agreement as binding for the whole sector, using the powers of the Posted Workers Act. With this there will be 11 sectors regulated by mandatory minimum wages.
As part of the reform of the social benefits system, basic income benefits (Hartz-IV) are increased for single persons, from EUR 364 to EUR 374. Similar increases for persons living in subsistence-based partnerships, and for youth. Such adjustments are undertaken with the view of rising living costs.
The contribution rate for statutory pension insurance (Rentenbeitragssatz) was reduced from 19.9 to 19.6 %, effective from 1 January 2012. (For employees half of the contribution is traditionally paid by the employer, and half by the employee.)
A reorganisation of the administration of the basic income scheme has been implemented. Labour offices and communities now mostly provide their services in joint facilities.
To facilitate access to lifelong learning, financial support is provided to low skilled unemployed and older workers in SME. A standard telephone number and an educational guidance portal have also been developed to improve transparency. Under the “Local Learning” programme local authorities are cooperating with foundations to develop and establish a coherent education management structure at the local level. In addition, two expert working groups have been established to develop recommendations for incorporating non-formal and informal learning in the Qualifications Framework. The outcomes of financial support are assessed through the “Bildungsprämie” programme and it is planned to evaluate the “Aufstiegsfortbildungsförderungsgesetz” (Advanced Further Training Assistance Act, AFBG).
New training regulations are developed and existing training regulations are updated regularly according to labour market needs.
An amendment to the general railway law, including strengthening the competence of the regulator for market monitoring and an amendment to the federal passenger Act reducing barriers to new entrants in the intercity bus services is being prepared. Privatising the transport service subsidiaries is also considered.
The EU third legislative energy internal market package is being implemented and a body in charge of out-of-court dispute settlement has been created. Market coupling with neighbouring countries has improved and price coupling is considered in the Central Western European region (France, Benelux countries and Germany).
The profession of chimney sweepers was further deregulated in 2012/13.
The monthly tax-free pay threshold for mini-jobs – which had remained unchanged since 2003 – was increased from 400 EUR to 450 EUR, with effect on 1 January 2013. The monthly threshold for midi-jobs was similarly increased, from 800 EUR to 850 EUR.
Improving the framework conditions for venture capital is planned as part of the implementation of the EU Directive on Alternative Investment Fund Managers (AIFM-RL) which must be implemented until mid-2013 in German law.
The wage threshold for high skilled non-EU migrants has been lowered with introducing the Blue Card EU with effect from 1 August 2012.
The supplementary benefit layer between unemployment insurance benefits and unemployment benefit II (UB II) is being phased out.
The length of short-term work benefits (Kurzarbeitergeld) was extended from the legally guaranteed 6 to 12 months for those workers who claim benefits before 31 December 2013.
A common regulatory framework for venture capital and capital investment companies has been created and transparency improved. In May 2013, Germany introduced an investment grant for Business Angels (Investitionszuschuss Wagniskapital).
Extending the possibilities to take up full-time employment for part-time workers.
The bank restructuring law has also set up a restructuring fund with a target size of EUR 70 billion, with annual revenues of up to EUR 1.3 billion. As a contingency funding mechanism, special assessments may be imposed on banks and the government can make higher pay-outs which it then recovers from the fees. Subject to an overall ceiling linked to the banks’ annual profit (over a multi-year period), the levy rises with the amount of bank liabilities (excluding deposits) from 0.02 % if they exceed 300 million to 0.06 % when they exceed 300 billion.
Further legislation, introduced in 2013, requires large banks to develop contingent recovery plans to ensure the bank’s survival in situations of financial stress while avoiding costs to taxpayers. BaFin can order banks to execute actions foreseen in these plans.
Launched in 2004, practice fee of 10 EUR per calendar quarter is abolished.
Public insurers are subject to the obligation to accept every individual fulfilling the criteria for access to the public scheme and wishing to conclude a contract with them and cannot vary the premia according to individual risk. The 2013 coalition agreement stipulates abolishing the lump sum surcharges which can be levied by individual insurers, replacing them by income dependent surcharges to be paid by the employee.
As eleventh sector with a statutory minimum wage, hairdressers are covered from 1 August 2013 by a Germany-wide minimum wage. A gradual way of increasing minimum wage was agreed by the social partners, with further wage increases, leading to a Germany-wide hourly minimum wage of EUR 8.50, from 1 August 2015.
The Act makes a contribution to containing the taxation and contribution burden. With the entry-level tax rate kept constant at 14 %, the basic allowance was increased in two stages. Starting on 1 January 2013 it was increased retroactively by 126 euros to 8'130 euros, and by 224 euros to 8'354 euros with effect from 1 January 2014. The first increase took effect on 1 January 2013 and the second on 1 January 2014
Social security contributions were reduced from 40.35 % in 2011 to 39.45 % in 2013.
Reduction of social security contributions by 0.6 percentage points in 2013.
Since 2013, individuals can opt out of full pension coverage by not paying the employees’ pension contribution rate of 3.9 %, on top of the employer’s mandatory contribution of 15 %.
The 2013 coalition agreement includes several measures to extend pension claims for selected groups. Workers with a contribution record of at least 45 years will be able to retire with a full pension at age 63 initially, rising.
Pension top-ups will also be paid to mothers whose children were born before 1992
Including an increase in the tax rate from 36 to 37 % and abolition of deductions, calculated on the basis of stock value or net worth.
Employment supporting programmes, including an increase of public investment
Total wage and other incomes increases are limited to 6 % per year.
Five % increase in basic exemptions for personal income taxes in addition to the automatic indexation change in tax brackets (Kr. 1.5 billion).
Agreement on temporary employment-supporting measures totalling Kr. 0.8 billion.
The parliament, regarding the proposed settlement in conformity with the August 1976 resolution on income guidelines (which restricted wage and salary increases to 2 % per year apart from increases due to price indexation), enacted the proposal as law. At the same time a bill was passed, limiting indexation increases to two wage portions (or about 4 %) per year during the contract period.
Employment measures, consisting of a large number of grants or subsidies to exporting industries, energy conservation investments, youth employment programmes, and increasing public sector employment, are expected to raise employment.
New programme for retraining of long-term unemployed: Jobs in the private or the public sector for a period of 9 months shall be offered to long-term unemployed. If it is not possible to find private sector employment, local governments are obliged to provide employment. Costs for both private sector jobs and local government jobs are partly reimbursed by the central government.
Parliament enacted an Early Retirement Scheme for persons between 60 and 66 years of age. Employees, having been members of the unemployment insurance system at least 5 years (self-employed at least from April 1978), can if they leave the labour market receive a pension corresponding to unemployment benefits during the first 2 years (including possible unemployment periods). Thereafter the pension is gradually decreased to 60 % of unemployment benefits. The scheme is financed by increasing employers' as well as employees' contributions to unemployment insurance.
Special measures to stimulate employment: energy savings and business development will be stepped up in 1979 and 1980 adding Kr. 0.7 billion to central government expenditure in the two years taken together.
Minimum pay increased by Kr. 1.20 to Kr. 35.75 per hour as from March 1980.
Increase in taxation of corporate profits from 37 to 40 %. Certain associations, previously exempted from taxation, now also taxed at 40 %.
Temporary provisions on tax deductions for certain investments abolished.
Increase in the direct personal taxes. Abolition except for pensioners of special Kr. 500 addition to personal allowances, valid since 1977. Increase in wealth taxes.
Kr. 5.5 billion appropriations in 1981 to promote activity and employment as a prolongation of the employment plan of August 1977. The measures include, inter alia, eased business taxation (depreciation rules, etc.), energy conservation and direct labour market measures.
Credit controls are partially less repressed. Introduction of no restrictions on expansions of bank credit.
Kr. 1 billion direct tax increases in 1981.
Kr. 5.5 billion appropriations in 1981 to promote activity and employment as a prolongation of the employment plan of August 1977. The measures include, inter alia, eased business taxation (depreciation rules, etc.).
New job creation plans, comprising extension of labour market training programmes, increases in number of apprenticeships and extension of compulsory job offer schemes for youth under 25, who will now receive a job offer after an unemployment period of 1 year.
Continuation of employment creation programme in 1982-83 within an annual ceiling of Kr. 5.6 billion.
The job creation scheme: The creation of new jobs for young people (18 to 25 years) is subsidised with 80 % of the maximal daily cash benefit rate.
Additional funds from municipalities to combat youth unemployment.
Increased financial support for re-education of long-term unemployed.
An employer shall not be entitled to dismiss an employee because he is a member of an organisation or of any specified organisation. If an employee is dismissed in contravention of the provisions of this Act, the dismissal shall be set aside and employment relationship continued or restored if a claim to that effect is made.
The interest rate controls are largely liberalised due to the freeing of deposit rates or lending rates or only part of the interest rates are determined at market rates.
The automatic wage indexation is suspended until March 1985.
The semi-automatic regulation of public sector wages is abolished.
Margins and wages are frozen until the expiration of the current wage-agreement in March 1983.
The maximum amount of unemployment and sickness benefits was "frozen" at the existing nominal level to enhance incentives to work and move, but also to reduce public expenditure. Payments of sickness benefits for the first day of sickness was abolished as from 1st April 1983.
The first day of sickness is not covered by the Social security system.
The maximum rate of daily cash benefit payments is frozen.
Social security contributions from employers and employees are increased.
The tax ceiling is increased from 70 to 73 %.
Foreign exchange controls are liberalised (with effect from 1st May). Firms are freely allowed to obtain finance loans abroad (maturity of five years or more), and residents to invest in foreign bonds if the initial maturity is larger than two years.
The security markets are partially repressed. Foreign equity ownership is allowed but there is less than 50 % foreign ownership.
The real interest rate tax, replacing the temporary wealth tax, is adopted by Parliament (effective from 1984).
Standard tax deductions are slightly increased.
The security markets are largely liberalised. Majority equity share of foreign ownership is allowed.
Contribution to sickness fund increase up to 0.15 % age points.
Wage earners contribution to unemployment insurance fund increase up to 16.7 %.
The ceiling on deposit growth is initially fixed at 14 % (end June) and reduced by 1 percentage point per month to 10 % in the fourth quarter 1985. The marginal deposit rate is fixed at 20 %.
Banks with a deposit growth in excess of a fixed ceiling must deposit a certain proportion thereof at the National bank.
A further liberalisation of foreign exchange controls
In the calculation of profit margins it is prohibited to allow for higher wage cost than stipulated above.
Weekly working time for public sector is reduced from 40 to 39 hours.
For the private sector the weekly working time is reduced from 40 to 39 hours.
Personal allowances will be increased and families with children will receive Kr 5'000 per child under the age of 18.
Employers' social security contributions are reduced by the equivalent of 1.5 % of their wage bill (from 1st October 1985).
Capital pension allowance is limited to Kr 50'000.
The business tax base will be broadened to also cover foundations, societies, associations, mortgage institutes and other hitherto untaxed financial institutions.
Corporate tax rate is increased from 40 to 50 %.
For single entrepreneurs, interest income and payments related to the primary business must be included in the statement of income. Income withdrawn from the business will be taxed as personal income. The share of profit corresponding to a "normal" return on the net capital will be taxed as income from capital.
Persons under 67 years of age with a 1984-taxable income above Kr. 150'000 must pay 8 % of the income in excess of that level in the course of the second half of 1985. Children's allowances are increased.
Personal incomes (wages/salaries, other income from work, pensions, etc.) below Kr 200'000 will be taxed at a rate of approximately 50 % and with 62 % above Kr 200'000.
Double taxation of dividends will be abolished as from 1990.
The employer can be exempted from paying all or part of the cash benefit when the employee has broken the contract of employment, has been dismissed under a contract providing for a probation period of less than three months and which dismissal has not been caused by sickness, or when the business has been closed down because of bankruptcy, death of the employer, etc. Repeals the Notification No. 319 of 26 June 1975 on the same topic.
The law of indexation of wages, which was suspended in 1982, is abolished.
The employer has no obligation to pay cash benefit for the first five weeks for a newly employed person who becomes sick during the first 21 days of the employment. This does not apply to occasional employment or employment of a person who during the previous three months has been employed by the same employer.
Persons between 60 and 67 of age may retire on a part-time basis and receive a public pension corresponding to the reduction in working time.
A 20 % tax on personal net interest expenditure, corrected for interest expenses on priority areas like housing and education.
Increased funds for educational aid and grants
Rules diminishing unemployment benefits after a certain period of unemployment are abolished.
Significant increases in unemployment benefits
Employers' social security contributions are either abolished or will be compensated by the public sector. Employers' responsibilities in connection with an employee's sickness are reduced. To compensate public budgets in part for these changes, a levy of 2.5 % on the VAT basis is introduced. Firms not subject to VAT will pay a levy on the wage sum or an approximated value added.
Significant increases in public old age pensions and retirement payments.
Government activities will be privatised in 1989 and 1990 on a larger scale than originally proposed by the government.
Remaining capital controls are lifted in response to the June 1988 EC directive of liberalisation of capital movements by June 1990. The decision implies that private citizens and firms can, as of 1st October, freely make foreign currency denominated deposits in and take such loans from foreign and Danish banks as well as buy foreign bonds. Foreign firms are allowed to borrow freely in Krone at Danish banks.
The Banking Sector entry is largely liberalised. The share of equity ownership of domestic banks by non-residents is allowed, equal treatment is ensured for both foreign banks and domestic banks and an unlimited number of branching is allowed for foreign banks.
The banking account supervision is less repressed. The supervisory agency is clearly defined and an adequate legal framework to resolve banking problems is provided (the revocation and the suspension of authorization of banks, liquidation of banks, and the removal of banks’ executives etc.).
Employers will pay unemployment benefits for the first day of unemployment.
Rules for supplementary unemployment benefits for part-time employed but fulltime insured employees will be tightened as of 1st January 1989.
Employees' contributions to the labour market training fund (AUD) will be doubled to Kr 94 a month.
Employers will pay unemployment benefits for the first day of unemployment as of 1st January 1989.
Wealth taxation will be reduced by lowering the tax rate from the existing 2.2 % to 1.5 % in 1989, 1.2 % in 1990 and 1 % in 1991.
The international capital account transactions are largely liberalised.
Lowering company tax rate from 50 to 40 % as of 1st January 1990.
Abolition of the special tax on interest expenses of consumer credits. The abolition is retroactive, covering interest expenses incurred in 1988.
Tightening of insurance company taxation.
Regulates the application of the Act, which established a Fund to secure workers' wage claims in case of an employer's insolvency, cessation of business or death. Specifies which claims shall be guaranteed. Determines rights to severance pay, paid holidays, etc.
Privatisation of a number of public undertakings, the main items being the sale of two ferries.
Slight reductions of income taxes (by increasing the base deduction for the so called 6-per-cent tax) and excise taxes.
Eligibility conditions and rules on refusing suitable job offers are tightened.
Compensation for the first 25 hours of unemployment is abolished.
Budgetary outlays for unemployment benefits are reduced.
Reduction of state subsidisation of employers' contributions to the work insurance (saving DKr 1 billion).
Reduction of State subsidisation of employers' contributions to the work insurance.
Reduction of company tax and small-enterprise tax to 38 % (from 40 and 50 %, respectively); Elimination of double taxation of dividends and more favourable first-year depreciation allowances for equipment while eliminating the indexation of the depreciation base.
The Government takes measures to stem the rise in unemployment. The measures,of which most were to be in effect only at the end of the year 1993 , included more timely offers of temporary jobs or education to welfare recipients aged 20 to 24.
The banking supervision is largely liberalised.
The Government takes measures to stem the rise in unemployment. The measures, most of which were to be in effect only to year-end 1993, included: more lightly-regulated and taxed business zones in areas particularly hard hit by unemployment.
The Government takes measures to stem the rise in unemployment. The measures, most of which were to be in effect end-1993, included: increased resources to subsidise child-care and care of the elderly by local authorities.
Increasing training and job-creation measures for the unemployed and the creation of more places in the education system
Introduction of paid-leave schemes for child rearing, education and sabbatical purposes.
Limitation of the maximum duration of unemployment insurance benefits to seven years.
The unemployment benefit period is divided into two (four plus three years), full-time activation through job offers, training and education is obligatory in the second period.
A comprehensive Labour Market Reform is approved by the Parliament: The Unemployment Benefits period is split in two (four plus three years) with full-time activation through job offers, training and education compulsory in the second period.
Compulsory activation for the insured unemployed after 6 months (younger than 25) or 4 years (older than 25).
Efforts to activate UI benefit recipients have been extended to cover the uninsured unemployed.
After three months of unemployment an individual action plan is to be formulated.
Decentralisation of work directed towards insured unemployed.
Individualised action plans for insured jobseekers based on intensified job counselling and broking, compulsory activation measures feature individual job training, voluntary activities and education and training.
All unemployed are entitled to one year of education, job training or grant to start own enterprise, to be started not later than after two years of unemployment.
Temporary work agencies (TWA) are deregulated. Danish law now provides free entitlement to establishing and operating TWAs.
Notice period is extended in case of a mass layoffs. A new law (AFLM 1/6/'94, Nr. 414) extends the notice period in very large company plants making half the workforce redundant. Applies where an employer intends to lay off within 30 days at least 10 employees in an enterprise of at least 20 employees but not more than 100 employees, or at least 10 % of employees in an enterprise of at least 100 employees but not more than 300 employees, or at least 30 employees in an enterprise of at least 300 employees. Includes provisions on duty to negotiate with trade union, advance notice and severance pay.
Extended paid leave arrangements, covering education, child rearing and sabbaticals with compensation levels set at 100 % of maximum unemployment benefits for educational leave and at 80 % for the two other schemes, and targeting both persons employed and unemployed.
Benefits during education and job training are not to fall below unemployment benefits.
The possibility of renewing entitlements to unemployment benefits by participation in active programmes is abolished.
The unemployed are authorised to combine an annual income from ordinary work up to DKr 27'500 with 80 % of maximum UI benefit.
A tax reform reducing marginal tax rates on personal income taxes by 8 to 14 percentage points over the period 1994-98.
A tax reform: payroll taxes to finance labour market policy measures were increased together with "green taxes".
Information systems set up so that the Ministry of Labour can monitor communications from the placement service to the union-based insurance funds about refusal of job offers and similar problems, and audit the sanction decisions of the insurance funds.
The scope of temporary work agencies has been increased
Provides for rules in respect of eligibility and other conditions for early retirement. Applicants must, inter alia, be members of an unemployment fund, fulfil the eligibility requirements for daily cash benefits, have received daily cash benefits or holiday pay for 12 out of the 15 preceding months and, until the end of 1998, be within the age bracket 55-59. Until the end of 1996, however, persons between the age of 50-54 are also eligible to apply. Beneficiaries are not required, but are entitled, to accept offers of employment. The benefits amount to 82 of the highest level of daily cash benefit. Income from employment below 27'500 DKR, as well as certain other income, does not affect the benefits.
Compulsory full-time activation is advanced by two years to take effect after two years of unemployment.
Advancement of training (lasting eighteen months) for low-skilled youths to take effect after six months of unemployment.
For youth without vocational qualification compulsory qualifying training with reduced benefits starts after 6 months.
Enhanced training for job-seekers at risk of marginalisation.
Subsidies for improving the working environment.
The parliament adopts a framework for improving competition in the rail transport sector. Maintenance of tracks is split out from the operating service, with easier access for new operators.
The Danish Salaried Employees Act provides a high degree of protection for the employee, e.g. the right to pay during sickness and the right to a notice of termination of at least one month. Termination of the employment contract on the part of the employer shall be made on the basis of at least: one month's notice, for expiry at the end of the month, during the first six months' employment; three months' notice, for expiry at the end of a month, after six months' employment.
Early transitional retirement scheme for the 50-59 year old long-term unemployed closed for the new entrants.
Unemployment benefits can be obtained for a maximum of five years. Paid leave for education can no longer prolong the benefit period.
Unemployment benefits can be accessed from the age of 19, as the minimum age for membership of UI funds is increased by two years.
Access to unemployment benefit requires 52 weeks of non-subsidised work (formerly 26 weeks) over the last three years.
The minimum age for accessing unemployment benefits is raised from 17 to 19 / from 16 to 18.
Another Labour Market Reform is approved: Eligibility criteria for access to unemployment benefits is tightened (compulsory activation of 13 weeks of unemployment for youths below 25 years of age or 52 weeks for all above 25 years).
Parliament adopts amendments to occupational and individual pension savings, inter alia to allow pensions rights to be transferred between jobs.
Tightening of the availability criteria for unemployed who are obliged to seek work outside their previous occupation after six months and to accept daily commuting time of up to four hours.
All recipients of social benefits will receive education and job training offers and they will be expected to accept them in order to get their benefits.
User fees in labour market training (AMU) are abolished.
Paternity leave is extended by two weeks to a total of four weeks.
Wage bargaining in the private sector results in an extension of the period of sickness with full pay and a topping up of public benefits to ordinary wages during parental (maternity) leave in all agreements.
The government agrees with centre-right opposition parties on a fiscal package for 1998 aimed at restricting private consumption. An obligatory pension contribution of 1 % is introduced.
Wage bargaining in the private sector results in an increase of contributions to occupational pension schemes in all agreements.
The privatisation of Danish Telecom is completed with the sale of the government’s remaining 34.4 % share of stocks to an American company, Ameritech, for DKr 21 billion.
Compulsory activation for the insured unemployed after two years for adults is extended to recipients of cash benefits.
Wage negotiations between LO (Danish Confederation of Trade Unions) and DA (Danish Employers’ Confederation) – covering the manufacturing, the construction and some larger service sectors: the granting of an additional vacation day.
Wage negotiations between LO (Danish Confederation of Trade Unions) and DA (Danish Employers’ Confederation) – covering the manufacturing, the construction and some larger service sectors: increase in the minimum pay during maternity leave.
Withdrawal rates for income-dependent child-care subsidies are lowered.
A one % increase in the contribution rate is levied in 1997 on all income from work and social transfers for funding supplementary pensions on a long-term basis.
Agreement on the 1999 Fiscal Bill: The early retirement scheme is modified: the entry age of 60 is maintained, but tax stimuli are introduced to encourage workers to stay in the labour force until the formal retirement age of 65 years (previously 67).
Stricter rules are introduced to reduce the number of people drawing early retirement pensions.
The government and municipalities agreed to create 4'500 "senior" jobs in the public sector specifically for those of 50 years and over who are long-term unemployed.
A reform of the financing of adult education and training is launched, setting an upper limit (in nominal terms) to public expenditures and introducing employer contributions to a new central fund (Arbejdsgivernes Uddannelses Refusion) which is to finance expenditures above the ceiling.
A reform of the electricity sector is adopted by the parliament, thereby implementing the EU-directive on the internal market for electricity. The reform sets ceilings to the electricity suppliers’ emissions of CO2. The direct subsidies to renewable energy are henceforth to be paid by the consumers via the electricity price and the reform aims to establish an efficient market for renewable energy from 1 January 2003 the latest – from that day all consumers are to be allowed to choose their own supplier.
Initiatives to improve competition in pharmaceuticals are put in place. Most important, the principles of a deregulation of the retail sale of pharmaceuticals are agreed.
Following a strike lasting nine working days, the labour market conflict is settled through government intervention, leading to two additional vacation days and three days leave for child sickness (two immediately and an additional one in 1999).
Employees not taking all the vocation days are entitled to an equivalent cash payment. The planned 0.9 percentage point increase in employers’ pension contributions is lowered to 0.5 percentage points while a recently introduced employers’ sickness charge is abolished.
The benefit duration is limited to 4 years.
The amount of pension benefits is slightly reduced. Payments are further reduced if the person has a supplementary pension.
Increase in the years of contribution to an unemployed fund in order to be eligible for early retirement.
Flexi-jobs for candidates for 'anticipatory pension': Before a pension is awarded to a person whose capacity is permanently reduced, it is tested whether they can perform a flexi-job, for which public subsidies are granted. The amount of the public subsidy is fixed by the municipality and depends upon the working capacity of the person in question.
Introduction of a higher degree of flexibility, in the form of the possibility to enter into agreements to transfer one week of annual (five weeks) statutory leave to the following year. Together with the five special holidays per year introduced in the agreements in the private sector bargaining area covered by DA/LO (trade unions), the sixth week of annual leave is thus a reality.
Extension of extra holidays from the previous wage round to cover a full sixth week, and an increase in pension contributions from employers and employees.
Assuming full carry-over from increases in minimum wages to average wages the agreements suggest increases in wage costs in the range from 3.5 to 4 % per year during the period covered.
Pension contributions increase over a four year period, to 9 % of pay for blue collars and 8,1 % of pay for white collars. 5 % will be paid by employers and 3 % by employees.
Total pension contributions will be at approximately nine % by the end of the four-year period, which is close to the end-contributions originally aimed for when the build-up of pension contributions in blue-collar industries started in the early 1990s.
Simplification of the anticipatory pension scheme: The existing early retirement anticipatory pension system (consisting of four different levels with four different pension allowances) is changed into a single rate which corresponds to the maximum level of unemployment benefit on top of which, depending on the level of disability, the pensioner may receive a tax-free monthly subsidy.
Compulsory activation for the insured unemployed after one year for adults.
The modernization of PES (public employment service) and labour market policy instruments is taking place: PES plays a key-role in intensive job seeking activities and special placement measures.
Change of the definition of part-time workers from those working 15 hours per week to those working 8 hours per week.
Credit Controls and Reserve Requirements are largely liberalised.
Establishment of voluntary pension scheme for disability pension recipients with contributions of 2 % of average wage financed 2/3 by the government and 1/3 by the recipient.
Increase of occupational pension contributions to 9.9 % of pay, compared with the 9 % agreed in most of the private sector in 2000. Shortly afterwards, similar agreements were concluded for horticulture and bakeries.
The reform of the voluntary early retirement pay scheme is encouraging the workers to postpone the early retirement. At the same time, the chances of getting a job for workers on early retirement have been extended.
Introduction of ATP (Supplementary Earnings-Related Pension Scheme) contributions for recipients of disability pensions financed 2/3 by the government and 1/3 by the recipient.
All unemployed persons will be covered by an individualised, tailor-made contact programme. The target group comprises both people receiving social assistance and unemployment benefits.
The distinction between the activation activities, undertaken by the municipal authorities in relation to people receiving social assistance, and the PES activities in relation to people receiving unemployment benefits has been abolished.
Unemployed should be offered education or training as part of an action plan, for up to 6 weeks during the first 12 months of unemployment, or the first 6 months in the case of young people.
Present liberalisation opens up competition for 15 large consumers in the natural gas sector.
An adjustment of the Competition Act was made, introducing merger control and modest fines for first-time violations.
The number of pupils’ instruction hours has increased in many municipalities with the emphasis on enhancing reading skills.
Flexible jobs are introduced to get people off social assistance and back into work.
Two additional special holidays per year granted to central government's employees. Public employees are thus catching up the improvements set out in collective agreements concluded in the private sector in 2000 by obtaining the right to a sixth week annual leave.
An employee and an employer shall have the right to conclude an agreement on part time work for the employee. Any direct or indirect obstacle to or restriction in this right, for instance by virtue of collective agreement, custom or practice, shall be void.
New pay system, called "Plus-pay", for the industry sector which will cover both workers paid on an hourly base and salaried employees. The new pay system is based on three basic elements: 1. basic pay, constituting 80 % of the total wage which is to be the same for all employees or vary between broad groups; 2. pay based on qualifications, which is to be individually calculated according to the qualifications or educational/training background of each employee; 3. a task-related bonus, which is a special wage supplement paid for the performance of special functions or tasks.
Reduction of the amount of social assistance for all groups, with the aim that it will become more financially attractive to accept a job. The ceiling is now between 60 % and 80 % of the maximum rate of unemployment benefit.
Compulsory activation for the insured unemployed after one year for adults is extended to 58-59-year-old workers.
Compulsory activation is now based on an individual assessment for each case with a focus on in-job training in private firms.
Introduction of a duty to accept a "reasonable" job from the first day of unemployment (earlier after 3 months).
Targeted job schemes for the long-term unemployed.
Contact with PES every three months and individual action plans are refined with a new database containing the CVs of all unemployed persons.
“More People in Work” contains measures increasing incentives for labour force participation.
Stepping-up activation: unemployed are required to enter activation programme after 6 months out of touch with the labour market.
Cash benefit recipients younger than 25 years should have an offer of education no later than after 6 months of unemployment. The cash benefit rate for young people is reduced to the level of the education benefits, when the educational benefits are offered after 6 months.
Cash benefit recipients younger than 25 years should have an offer of education no later than after 6 months of unemployment. The cash benefit rate for young people is reduced to the level of education benefits, when educational benefits are offered after 6 months.
Stepping-up activation: unemployed are required to enter activation programme after 6 months out of touch with the labour market (before 75 % of the time each year).
Introduction of subsidised periods of employment to upgrade the skills of people facing labour market difficulties.
“More People in Work” package contains measures that improve the efficiency of ALMPs and that increase economic incentives to work for a sub-group of those receiving social assistance.
User charges on adult education have been harmonised by implementing a general floor and ceiling for charges.
Increase in the user fee of adult vocational training
Adult education grants to vocational courses have been abolished.
Measures designed to achieve liberalisation of electricity and gas markets have been introduced. In a bill presented in February 2003, the framework for municipalities’ use of proceeds from sales of their holdings in power utilities is laid down. It involves a smaller reduction of general government grants to municipalities if selling (fully or partly) their shares in power utilities. The incentive for municipalities to sell is thus increased.
The competition legislation has been strengthened, including a rise in the penalty level that brings it closer to the level in other EU countries.
A national Rail Authority was established in 2003 to manage rail tenders.
Maternity leave has been extended from 28 weeks to 52 weeks of which 32 weeks can be freely divided between the parents. The parental paid leave scheme was abolished at the same time.
The parental paid leave scheme was abolished at the same time.
Measures to increase transparency for consumers on the financial markets have been introduced. In two bills presented in March 2003, regulations on these markets are simplified and modernised.
Client choice has been expanded in the health and care sector. Citizens are now entitled to treatment in a private and/or foreign clinic paid by the public sector if the public health care system is unable to provide treatment within two months. Legal barriers to the introduction and extended use of private providers in the public health and care sector have been removed.
Greater scope to receive cash benefits while earning wage income (DKK 28 rather than DKK 11.5 per hour previously).
Those who qualify for disability benefits will receive higher support than under the old system.
The benefit sanctions for unemployment insurance and cash benefit recipients were made stricter and harmonised for all offences.
Disability benefit system is reformed (integrating three different types of pensions dependent on the level of disability into one); the required reduction in working capacity to qualify for benefits to be reduced by two thirds (50 % was the lowest requirement before).
The creation of People's stock exchange (Folkeborsen), provides workers with the option to freely invest their pension funds
The Special Pension scheme has been rearranged so that redistribution within the scheme no longer takes place and savings are purely individual. As a result, the contributions to the scheme are no longer treated as a tax in national accounts but as private savings (from 2002), and payments are likewise no longer a part of public sector expenditures.
Income tax cuts are to be implemented gradually from 2004 to 2007.
New placement units to target social assistance recipients, the disabled and ethnic minorities.
There has been a significant increase in the delivery of placement activities by external providers and the PES has increasingly outsourced the responsibility for the regular contacts with the unemployed. External providers are partly paid according to employment outcomes.
Strengthening of the activities of PES and municipalities, concerning upgrading of skills and competence development for persons with little education and ready to take up a job and creation of new placement units targeting weak groups, including people in need of flexi-jobs and vocational rehabilitation.
Free choice of supplier in the electricity market took effect from 2004 for all consumers. The PSO has been restructured so that a greater share of power will be sold on the market.
From 2004 a so-called bachelor bonus has been implemented, which gives universities a bonus each time one of their students receives a bachelor’s degree.
Increase of the period of fully paid childbirth-related maternity/paternity leave from 14 to 20 weeks - which may now be taken by both women and men - and introduction of further 'pregnancy leave' of four weeks for women. Introduction of a leave up to one week with full pay if an employee's child is hospitalised.
Introduction of a right to two weeks paid training for workers with service of three or more years who are made redundant.
Introduction of the possibility for the parties at local level to conclude agreements which deviate from the central collective agreement, concerning in particular management-employee cooperation, working time and telework, and variable weekly working hours.
The old-age pension (for those aged 65 and over) can be postponed until age 75, with an actuarial adjustment.
The taxation of share holdings has been simplified as of January 2006.
Income taxes were cut in 2004, reducing marginal taxes for middle-income earners.
The government has now proposed to introduce full-time activation for all having received unemployment benefits for 2½ years.
Guarantee of a relevant education offer to all young people. All young recipients of social assistance between 18 and 25 years of age that do not have a qualifying education will be obliged to apply for education, otherwise they will loose their right to social assistance.
New legislation allowing for a gradual relaxation of restrictions on retail opening hours, in particular on Sundays, came into force in July 2005.
Considerable liberalisation of the book market is expected from July 2006. New legislation allowing for a gradual relaxation of restrictions on retail opening hours, in particular on Sundays, came into force in July 2005. No major action has been taken in other areas.
The price system has been restructured as recommended. High-voltage transmission has been separated from other parts of the system, but the low-voltage grid remains vertically integrated.
The government’s globalisation strategy gives universities more flexibility to attract top academics. It also aims to expand tertiary education with new programmes at the bachelor level.
The “New Chance for All” package from June 2005 included early linguistic stimulation for bilingual students as well as better guidance and help with homework etc.
Bankruptcy rules were eased in October 2005. A committee is considering adjustments to allow more informal rescue plans.
The dominant level(s) at which wage bargaining takes place are the sectorial or industry level.
Following the Welfare Commission’s report from December 2005, the government has announced a set of initiatives to raise the effective retirement age.
Several privatisations took place in 2005, including the sale of 25 % of the shares in the postal services incumbent.
Income taxes were cut in 2004, reducing marginal taxes for middle income earners. The government has stated that additional tax cuts will be made, provided that the long-term fiscal position permits.
The gas transmission grid has been transferred to an independent government owned entity. DONG is in the process of merging with a number of Danish electricity companies, with an initial public offering being expected in 2007.
Medical assessments are now to focus on work ability but are no longer required after eight weeks – it is up to the municipality when to require an assessment.
As a key element of the changes introduced in the maximum flex job subsidy is based on a wage of DKK 387'000, but this is still higher than what 80 % of Danes earn. As the two subsidy rates remain at 67 % and 50 %, the maximum subsidy is an amount 50 % higher than the disability pension.
Increase in the eligible age for the voluntary early retirement scheme in 2019-2022 from 60 to 62 years, and eligible age for pensions is to be increased in 2024-2027 from 65 to 67. Starting from 2025, the age limits in the pension system will be indexed to the mean life expectancy of the 60-year-olds, so that the combined period with the early retirement and public pensions will continue to be 62 and 67 years, respectively. The voluntary early retirement scheme is made more flexible and the early retirement contribution will now have to be paid for 30 years as opposed to the current 25 years of payment.
The benefit rules applying to those below 25 years of age have not been extended, but activation requirements have been tightened for the 25 to 29 year olds.
A leniency programme was introduced with an amendment to the competition act: the first company or person to inform the Competition Authority about the cartel can apply for partial or no legal punishment. The size of the Competition Council was reduced marginally to 17 members, but no changes were made concerning the Appeals Tribunal.
The Competition Authority can intervene if prices applied for choice in publicly funded services are not giving a level playing field for public and private providers.
Students will be allowed to earn more from working without deduction in the € 670 monthly grant for living costs (tuition is free-of-charge for all tertiary education).
Contributions to education funds for life-long learning were introduced in collective wage agreements in early 2007. User fees apply for some adult education courses and are usually paid by the employer.
The access to choose a private hospital or clinic on public funding took effect for patients having waited more than one month, down from two months previously.
The use of activity-based funding has increased in health care. A joint e-government strategy for 2007-10 was agreed between the government, and municipal and regional authorities.
The dominant level(s) at which wage bargaining takes place is the sectorial or industry level.
Unemployment benefit duration has been harmonised to the standard 4 years for everyone older than 25, meaning that the special 9-year duration for 55-59 year olds was abolished. To compensate, subsidised senior jobs with collectively agreed pay will be introduced from January 2008.
Disability pensioners: Persons admitted to the disability pension prior to 2002 should have the opportunity to work with the reassurance that they can return to the disability pension later on. More will be done to prevent young people entering the disability pension, for example due to mental health problems.
People in their 60s and 70s: A special in-work tax credit will be introduced for 64-year olds, conditioned on having worked full time from age 60 to 64. The value of the credit can reach up to € 13'400 (28 % of average full-time earnings) during the one year it can be received.
When the unemployed comes to the first meeting a job search plan is made for the next three months.
The right-and-duty to participate in ALMP (principle of mutual obligations) will take place after 3 months rather than 6 months of unemployed for all unemployed under 30 years and will be simplified with respect to what offers various target groups should receive.
Widening the scope of activation measures and changing the enforcement of availability criteria
Three new international recruitment centres opened to help companies and job seekers.
Young people under 25 years of age who have not completed an upper secondary education programme and who are not currently enrolled in such a programme will be offered guidance by municipalities.
Collective agreement for the financial sector: extension of parental leave by two weeks with full pay.
Supplementary unemployment benefits can be received for 30 weeks within 104 weeks
The cash benefit rate for married breadwinners is reduced when benefits have been received for six months.
The 2008 Job Plan Agreement reduces the length of time for which a person can receive part-time unemployment benefits to 30 weeks within a period of 2 years. Previously, part-time employees with terms of notice were eligible for part-time unemployment benefits for 50 weeks within a period of 70 weeks and those without terms of notice were eligible for part-time unemployment benefits for 4 years within a period of 6 years.
Introducing a special lower-limit allowance of DKK 30'000 per year on the work income for pensioners receiving public old-age pension.
The LD pension scheme allows members to move their assets to another fund.
Economic and Business Affairs and the Danish Insurance Association agreed to let pension funds, which hold about 27 % of outstanding mortgage debt, raise the discount rates for calculating future obligations to partially incorporate the development in mortgage bond rates.
Reduction on the employment requirements for postponed pension - to improve pensioners' opportunities to work.
Following the sale of 25 % of the shares in the postal services incumbent in 2005, the government will soon reduce its ownership share in the gas incumbent to 51 %.
A tax credit was introduced to encourage people to work continuously between 60 and 64 and the amount of income that can be earned before pension benefits are withdrawn was increased.
From 2008, the in-work tax credit is enlarged. From 2009, the threshold from where the middle tax is paid will be raised. The nominal tax freeze remains in place except for energy taxes that will grow in line with inflation from 2008 onwards.
Package of measures including mentorship and reading assistance (early action plan) for 15 to 17 year olds school drop-outs.
In May 2009, the parliament passed a law aimed at keeping people who are on sick leave in contact with their workplace and helping them return to work as soon as possible. Employers can receive a medical assessment report to help tailor work for employees on sick leave and speed up the return to work. They are also obliged to offer talks with employees after four weeks of sickness absence. Job centres will promote part-time sick leave and reduced working hours for employed sickness benefit recipients to reduce the risk of labour market detachment. Job centres can also offer activation for sickness benefit recipients.
All unemployed below the age of 30 will be required to take their first job interview within one month of unemployment instead of after three months and compulsory activation starts after 3 months. Formerly, compulsory activation set in after 6 months for those below 30 and who received unemployment benefits.
Action plan for strengthening active labour market policies provided by PES: decentralized survey to collect best practices and measures; support to creation of company-based employment centres; strengthening of the role of counsellors in jobcentres; centralized critical review.
Hospitals using the full amount of the activity fund in 2010 are required to increase productivity by 2 %.
DKK 25 billion have been earmarked for modernising hospitals. The first DKK 15 billion were allocated based on advice from an expert panel.
The dominant level at which wage bargaining takes place is the sectorial or industry level.
Moreover, the possibility that was granted to households to withdraw money from the compulsory private Special Pension savings scheme helps alleviate their liquidity constraints.
A reduction in the bottom state income tax rate of 1.5 percentage points (the bottom tax bracket and the health care contribution have been merged, eliminating a difference in the tax bases applying to these two elements of the tax system).
The tax rate on income from shares is reduced from 28 to 27 % for people in the bottom tax bracket and from 45 to 42% for those in the top bracket. Financing will come from a reduction in tax deductibility of interest (from about 33.5 to 25.5 % above a certain threshold).
An increase in the income threshold for the top marginal tax rate. The combination of reduced bottom state tax rate and the abolition of the middle tax bracket results in a reduction of the top marginal tax rate of 7.5 percentage points. Positive net capital income less than DKK 40'000 per year will no longer be subject to the top tax rate.
Package of measures tailored to long-term unemployed: Specific screening abilities of long-term unemployed in the context of universal assessment of competences; ear-marked funds for training long-term unemployed; specific assistance for employers hiring long-term unemployed; relevant catalogue of vacancies for long-term unemployed.
Danish Competition and Consumer Authority (DCCA) was made more effective as merger control was strengthened by lowering the thresholds of merger notifications, simplifying the procedures for handling unproblematic mergers and extending the time limits for the handling of problematic ones.
A legislation was passed to give more responsibility to educational institutions as regards improving completion rates.
The reimbursement scheme has been reformed in 2011 in order to enhance municipalities’ economic incentives to activate unemployed people through job training or formal education.
liberalisation of the Danish gambling market, breaking up Danske Spil's monopoly. Also opens up for the entry of foreign firms.
With the reform of the early retirement scheme adopted in 2011, the entry age to this programme has increased by four years (up from two years as planned previously) and this increase is brought forward by five years to start in 2014.
The early retirement period is shortened from five to three years between 2018 and 2023 while the ordinary retirement age remains constant, implying an increase in the lowest retirement age, which will rise to 63 in 2020 and 64 in 2023.
The increase in the early retirement age decided in the Welfare Agreement is moved forward by five years to 2014-17.
The price ceiling on the six-week courses in which the unemployed can enrol – and which are paid for by public employment services – is abolished for low-skilled and vocationally educated workers.
Funding is increased and user fees are reduced for some specific treatments and vaccination.
The duration for receiving unemployment benefits, which had been cut from four to two years, is temporarily extended by six months for the unemployed who will have exhausted their unemployment benefits in the second half of 2012.
A new “senior” disability benefit scheme is introduced for those who have health problems linked to their work conditions and are within the five years of the eligibility to the old-age pension. The procedure to enter the scheme would be short (municipalities would have to decide within six months after the application).
Limitation of the maximum period during which unemployed people can receive benefits: Maximum period is 2 out of the last 3 years.
The rule should be re-admittance in the case of unfair dismissal, only substituted with severance payment in case of voluntary agreement or exceptional circumstances considered by the Labour Court which would impede the normal working relation. Severance payment cannot be below six months (or two per year), nor above five years. However, for ‘numerous families’ members, quantities are 1.5x or 2x depending on the size. Same for older workers (above 45 years) and handicapped people.
The reform extended the maximum duration from 12 to 18 months.
The state will finance 50% of social security costs coming from the use of temporary contracts for new entrants in the labour market.
Recognising the possibility of free layoff for no more than 5% of the working force of a firm if the upper limit of wage increase of 22% per year (at the inflation's pace) is not met.
In the process of collective dismissal through Expediente de Regulación de Empleo more autonomy is granted for the parts.
The Ley 16/1976 de Relaciones Laborales is derogated and substituted. Severance payment goes now from two to sixty months.
Separation of objective and subjective causes. And for the former, further separation between individual and collective dismissals. For the former it is not necessary to prove that the company is in bad economic shape. However, it is required to prove that the worker cannot be relocated.
In order to encourage youth employment, within an experimental programme that will be implemented, it is allowed to use temporary contracts for a maximum of two years for the jobs created by the new jobs that are created from November 1, 1977, provided they are covered by new entrants.
The Law establishes a difference between open-ended and temporary contracts which has necessarily to match with the nature of the job.
Recognising the right to collective bargaining to all the actors. This takes out the almost absolute power of government to impose wage settlements or suspend bargaining. The role of the State is now limited to participate in the bargaining process in the form of tripartite agreements.
Introduced the right to strike (under certain conditions)
Establishing wage increase at 22%, equal to inflation, effectively linking both variables. Mandatory for public administration and firms receiving public subsidies, and indicative for the private sector.
Dismantles a very significant part of the public shipbuilding sector, first plan (6000 to 8000 jobs out).
Social security contributions' increase is limited at a 18% ceiling.
Quota restrictions on some categories have been lifted.
Import duties over 10% cut by one-fifth (except for agricultural products).
The National Institute of Health (INSALUD) was created as a semi-independent public agency in charge of centralized management of the health care system.
100% of public expenditures in health are financed from payroll tax contributions
Increase in wages unilaterally limited to a maximum of 11-14% (depending on firms' conditions), and would be revised if prices go over 6.5% increase in the first half of 1979.
Introduction of the basic taxation structure of corporate taxation: at a general rate of 33%.
This reform established a general, personal and progressive income tax. Introduction of the basic taxation structure of direct income taxation: a progressive scheme from 15% to 65.5% with 56 trenches.
Bipartite agreement on setting wage increases for 1980 between 13 and 16% depending on firms' conditions, including a negotiation clause with a trigger level of 6.75% inflation for reconsidering by June 1980. For 1981 the rates will be 11-15%
Establishment of a compulsory retirement age at 69.
A new figure appears: ‘firing due to objective causes’ of 20 days per worked year with a top of 1 year. This is a significant reduction of regular EPL.
The default contract is open-ended “except if its temporary nature is properly accredited”. Art. 15 specifies the temporary nature: for determined service, for seasonal reasons (maximum six months each year, with specific cause), “fijo discontinuo”, substitution. Important: possibility of prorogation is left open in the Workers’ Charter, to be defined by law/decree. However, Art. 17 limits the use of temporary contracts to three years when its goal is to foster employment creation.
Severance payment in case of unjust dismissal is automatic and does not need judicial consideration. Fixed at 45 days per year worked with a top of 4 years.
Permanent establishment of workforce representatives as a way to regulate workers' participation in collective bargaining, consolidating the status of collective agreements.
The Worker's Charter established a national minimum wage; it is done after (non-binding) consultation with social partners.
As a rule, the benefit is paid for 1/4 of the period that the unemployed has contributed. The unemployed receive 80 % of their salary during the initial 6 months falling to 70 and 60% thereafter.
Reconversion of the steel sector marking a new stage in the approach to restructure sectors under a structural crisis: joint participation by the State and the private sector in which the State only provides limited support and sector-focused, not company-focused.
Dismantles a very significant part of the public shipbuilding sector, second plan (around 8000 jobs out).
Activates the use of temporary contracts to foster employment for older workers (above 45 years), handicapped, unemployed of any kind, potentially including the whole active population; between 3 and 36 months; automatic conversion; limits according to size: 5% for +1000 workers, 10% for 500-1000, 15% for 250-500, 20% for 100-250, 25% for 50-100, 30% for 2-50. It is important to remember that “por obra y servicio” is not limited and will remain as such
Regulates internship contracts. Can be used up to two years after graduation, has to last between 3 and 24 months, and has to be of at least 80% of the base used in the correspondent social security category
Tripartite agreement committing wage limits to 9-11% (only 9% for public servants) for 1982, subject to an automatic adjustment clause if consumer prices rise by more than 6.9% before June.
Ceiling of 10% increase in social security pensions, being one point less for public servants.
Final and complete elimination of tariff differences to guarantee the entry in the European Single Market
Internship contract is modified, now including compulsory training and a wage floor equal to minimum wage.
The limits for using temporary contracts in each firm according to size become more generous: 10% for +1000 workers, 15% for 500-1000, 20% for 250-500, 25% for 100-250, 30% for 50-100, 50% for 2-50; even 100%, if it has previously been communicated to the regional public employment office.
Expresses prohibition of covering a vacant produced by the end of a temporary contract with another temporary contract
Part-time employment can be used for unemployed entitled to those under 25 years old.
Part-time employment can be used for unemployed entitled to unemployment benefits or who have exhausted it.
Fostering SMEs through financial facilities and programs for improving management and preferential tax treatment.
It reduces the weekly maximum working time from 43 to 40 hours. It increases the minimum vacations days up to 30 days a year.
Progressive increase in contribution bases for all workers.
The retirement age of certain categories of workers deemed to perform risky jobs is reduced. The categories affected include workers in the mining sector and certain seamen.
Gradual change in contributions rate: from 32.1% in 1982 to 28.8% in 1985. This drop falls mainly in favour of employers, while employees only take 0.16pp. of the advantage.
Training contract sees the age limit increased to 20 years.
New atypical contracts:  - Contract for launching a new activity (contrato de lanzamiento de nueva actividad) can be used every three months for no more than three years.  - Contract for substitution (contrato de relevo)
Temporary contract for fostering employment (contrato temporal de fomento del empleo) can now be used for any unemployed person and with no limits (before there were upper limits, a top portion of a firm could be employed under this scheme). The employee has the right to perceive a payment equivalent to 12 days per year worked at the end of the contract.
Internship contracts (contratos en practicas) can now be up to four years after having obtained the degree.
Temporary contract for "production circumstances" (contrato eventual por circunstancias de la produccion) now needs to include the specific cause for hiring and the duration.
Specification of what part-time work means (before the definition was vague, just "below the usual"): up to 2/3 of the complete working time. More importantly, it becomes a “normal” form of contract instead a “fomento del empleo” one.
The law regulates the insurance market and extends controls on insurance companies.
Legalisation of SICAV (open-ended collective investment scheme)
Replacement of the ceiling (220% of minimum wage) for a variable scale that represents a function of the number of dependent children, between 170% and 220% of minimum wage.
Minimum benefit raised to equal minimum wage.
Including in the contributory base for the calculation of the benefit of those contributions not utilised during any previous unemployment spells.
The reform extended the maximum duration to 24 months. As a rule, the benefit is paid for 1/3 of the period that the unemployed has contributed (instead 1/4).
At the assistance level, the maximum duration of the paying-out period is raised from 9 to 18 months.
Abolishing requirements of involuntary loss and obligated registering.
Extension of coverage to new workers, particularly public servant.
Assistance coverage is now also granted to unemployed over 55 years old to achieve an early retirement at 60.
Assistance coverage used to include only these unemployed people with dependent relatives. Now it also includes individuals with dependent children and income below the minimum wage who cannot qualify for the contributory level.
Ceiling to the maximum value of pensions.
Reducing cumulating of pensions as well as its compatibility with other income.
In order to reduce the attractiveness of permanent invalidity pensions, the base for calculation of their amount is made identical to that of normal retirement pensions (previous advantages: invalidity pensions, unlike retirement pensions, were untaxed and based on the last month's salary rather than on the average of the final two years of employment).
More flexibility in early retirement scheme, introducing the possibility to retire at the age of 55 with a pension that goes from 50% to 100% of the full pension. More specifically, "For those workers over 55 affected by the reconversion and reindustrialisation programme, the law provides for early retirement with 80 % and 75 % of the last salary until 60 and between 61 and 65 years of age respectively. The maximum payment should under no circumstances exceed the value of the full pension to which he would be entitled at 65."
There used to be a condition specifying that the entitlement for a retirement or disability pension was subject to be actively contributing (i.e. paying) to the social security when the moment of receiving it arrived. It is now abolished.
Under certain conditions, the worker can obtain a 50 % reduction of its working day and salary until retirement as long as the employer takes on an unemployed worker for his replacement. In exchange, the worker is entitled until final retirement to a sum equal to 50 % of the full retirement pension that he could have received at the time of application. This sum should in no case be below the minimum pension for those over 65.
First stage of privatisation (1984-1996): Around 80 companies sold by the state (mainly small or middle sized enterprises). The government obtained 13.2 billion euros in this stage.
Increase in contributions rate for the self-employed: from 18.5% to 28.8%
Increase in contributions rate for the agricultural sector: from 3% to 6% for employees, from 8% to 9% for employers, from 9% to 15% (gradual) for self-employed.
This Royal Decree-Law liberalised the opening hours completely. However, almost all regional governments with jurisdiction about internal trade severely limited this freedom.
This programme gives the unemployed people the possibility to receive in a lump-sum payment the contributory unemployment benefits in order to set up a business.
The pension reform extends the pension calculation period from 2 to 10 years. It also increases the minimum period of contribution required from 10 to 15 years.
The Royal Decree relaxes the criteria under which early retirement at the age of 64 with full pension rights is possible. It allows the contract of the worker replacing the person opting for early retirement to be of any kind except part-time (before: the new contract had to be of the same type as that terminated and the new worker had to be young and in his first employment or else recipient of unemployment benefits).
Introduction of a tax deduction for investment in a house.
Reduction of social security contributions under apprenticeship or training contracts.
An additional flat-rate contribution of Ptas. 85 per day per contract from INEM if the firm organises its own teaching course and a subsidy of up to 75 % of the minimum wage if the firm qualifies as a taller "formativo" (essentially handicraft).
Scholarships to attend training course for: unemployed between 20 and 25 who cannot benefit from training contracts because they are not qualified enough.
Scholarships to attend training course for seasonal agriculture workers.
The law recognizes a right to health services for all citizens and for foreigners resident in Spain (except unemployed without benefits and some members of the liberal professions). Public expenditures in health were financed 70% by general taxation and only 30% from payroll tax contributions. All medical care is provided without charge to patients. Prescription medication is free for retired persons; all others persons pay 40 % of the costs.
New types of medical assistance will be included (e.g. psychiatric and prevention) while coverage will be improved in others (e.g. dental care).
For those people under 55 made unemployed within the sectors affected by the reconversion and reindustrialisation programme, the law provides for the maximum duration of unemployment benefit at a rate equal to 80 % of the last salary until early retirement at the age of 60.
The Decree provides for an unemployment benefit equal to 75 % of the minimum wage for 180 days for those agricultural workers in Andalucía and Extremadura who have paid at least 60 days of social contributions in the previous year. With a minimum of 10 days of contributions the duration of the benefit is of 100 days. About 200 000 workers are thereby made eligible for unemployment benefits.
Liberalisation of interest rate. Banks are allowed to pay interest for sight deposits.
The Government retires from the 'table' in wage bargaining, renouncing to achieve big tripartite agreements. The central headquarters of trade unions also stop setting the pattern for the whole economy, leaving the wage coordination process to the industrial level.
First-time job-seekers are entitled to compensation subject to certain conditions.
This reform regulates, for the first time in Spain, the Complementary Private Pension Plans.
The new regulation on competition strengthens the conditions for free markets: "under the old regime, only negative effects arising from agreements between firms gave rise to legal action but not the agreements themselves. In contrast, the new law renders illegal both agreements and practices which might distort competition, notably with respect of pricing, production and investment controls and marketing of products."
Increased powers for the competent courts to ensure competition.
Great transformation of the Spanish Stock Market. Creation of a Spanish Stock Exchange Regulator (CNMV) to promote the proper functioning of the stock markets.
This new regulation makes the privatisation of public enterprises easier (decreasing the number of requirements) in order to speed up the first stage of privatisations.
The law increases the powers of Competition Defence Tribunal (Tribunal de Defensa de la Competencia). The law also includes provisions to limit public aids to enterprises.
The Royal Decree extends the coverage of the health care system of social security for people without financial resources not included in the same
It is extended the coverage of non-contributive unemployment benefits, enhancing the protection of long-term unemployed and unemployed over 45 years.
The withholding tax on personal income from financial investments is raised from 20% to 25%
Liberalisation of petrol prices, although maintaining a ceiling based on international prices.
Liberalisation of petrol market, formerly monopolized by Campsa (state company).
Temporary farm workers in Andalusia and Extremadura have longer entitlement periods for younger and older workers: for unmarried young people under 20 years old it equals to 1.5 days of benefit per day of contribution; for those between 20 and 25, 2 days of benefit per day of contribution; for people above 51 the entitlement is set at 240 days/year, and for people over 60 years it goes up to 300 days/year.
Temporary farm workers in Extremadura and Andalusia may have unemployment subsidy if the household income is below a certain level.
Increase on invalidity pensions by 17% on average.
Liberalisation of capital movements towards EU countries and third countries.
Introduction of flat-rate non-contributory pensions for the elderly and the disabled citizens.
Elimination of minimum fees, suppression of compulsory payments and elimination of the obligation to register for professional associations.
Introduction of new possible causes for fair dismissal: organisation-related and production-related factors. They add to economic, technological and "major" reasons.
It is considered as individual fair dismissal (despido procedente) when, under the cited conditions, it does not reach more than 10% of the working force for more than 90 days. This threshold means an increase in small firms (before it was only possible to fire one worker in companies below 50 workers).
Increase in the use of "contrato temporal de fomento del empleo" from six months to a year
Abolition of the special employment protection scheme for construction workers, equalling their conditions to the rest of the employees (reducing the demarcations and limits, thus increasing flexibility).
Companies assume a part of the sick leave through payments to the social security system, including temporary invalidity. They used to assume payments from the first to the fourth day, and now they also assume payments up to the 16th day.
It regulates the foreign investment in Spain (specific regime for non UE investors investing in the following sectors: defence, radio, television, gambling and air transportation)
Unlinking central state wages from inflation.
Minimum overtime pay rate is brought down to the ordinary pay rate, while the former is now 70% above the latter.
The possibility of taking the whole amount of NEB in one instalment to start a business is removed.
The amount of the benefit was reduced (70 % of the reference salary during the initial 6 months and 60 % for the rest)
Reduction of duration of unemployment benefits: lowering the ratio between payment and contribution period from 1/2 to 1/3 max.
Minimum contribution period for eligibility is raised from 6 to 12 months.
The criteria for the non-contributory NEB is eased in order to cover also unemployed people not being eligible for standard NEB if they have contributed for at least three months (six if not dependent).
INISA (later named Teneo) is planned to be financially unlinked from the state budget, having to operate in a profit-based manner.
Split of INI (Institute owning and managing public sector companies) into two parts: INISA (80% of INI sales, 57% of its employment) for profitable and viable companies; and INISE (for the rest).
From INISE, a part will be sold to the private sector and another part will be restructured under state management and financial aid.
Partial privatisation of Repsol, a petrol company.
Personal income tax rates were raised by an average of a little over 2 percentage points for all but the lowest income categories.
Abolishment of subsidies and grants for participants in training programs.
Obligation to demonstrate active search in order to be eligible for NEB.
The national government imposes minimum shop opening hours (72 hours per week) and minimum Sundays and public holidays opening (8 days per year). The regional governments are allowed to raise the openings hours and the Sundays and public holiday openings but they are not allowed to reduce them.
Reduction of max. duration of training contracts, down to two years.
A selective list of pharmaceuticals was excluded from public funding.
Wage setting may happen through either collective bargaining at a level not inferior to the 60% in the first year of contract (75% in the second), with the minimum wage as a floor. This is valid for permanent workers in similar positions.
Replacement rate of assistance schemes is situated at a lower level, 100% of minimum wage for unemployed people with dependants and 75% for those without dependants.
In order to be eligible for assistance schemes recipients must now demonstrate an income below 75% of minimum wage.
The tax exemption for unemployment benefits is eliminated.
Specific definition of what a dependent is: relatives with income higher than 75% are not considered dependents any more.
Partial privatisation of Argentaria, a state-owned banking corporation.
Recipients are obliged to assume 65% of social security contributions.
Plan for full liberalisation of basic telephone services.
Collective redundancies: firms can start a collective dismissal procedure within 90 days if the dismissal affects 10 workers (firms with 100 employees or less), 10 % of the work force (firms with 100 to 300 employees), or 30 workers (firms with 300 employees or more). The termination of employment contracts of the firm’s entire workforce of five or more workers is also considered a collective dismissal. Layoffs involving a number of workers less than the smaller of 30 people or 10 % of a firm's labour force do not require administrative approval any more. For layoffs above 30 people/10% of firm's labour force, firms must still consult with labour and submit collective dismissals for administrative approval but the total time for the process was reduced from 60 to 45 days by permitting firms to submit proposals to the Government when consultations begin. In addition, whereas under the old rules applications were refused unless explicitly accepted within 30 days following the consultation period, under the new law they are deemed to be accepted unless explicitly refused within 15 days after the end of the consultation period.
Temporary Work Agencies (TWA) are legalised. Severance pay for those employed under a temporary work agency equals to 12-day wage per year.
Increasing the scope of what is defined as part-time: any contract including working time below the usual
Severance payment for fixed-term contracts (obra y servicio, etc): eight days per year worked.
Contrato temporal de fomento del empleo is again just valid for certain people (disabled, older unemployed above 45)
Training contract use is enlarged to 25yo. The time devoted to training is reduced from 25% to 15% of the working time. And now it can last up to 3 years. Finally, wages can be below minimum wage, fixed through collective agreement
Apprenticeship contracts can take up to 2 years with retribution fixed by collective bargaining, but including a floor of 60% of the wages of workers in the same position, increased to 75% in the second year.
Probation period of two months for non-skilled workers (up to three in firms with less than 25 employees), six months for skilled technicians. In this period any of the parts can end the relationship unilaterally.
The abolishment of 'labour ordinances' deregulates working conditions in several sectors that were determined by such laws, coming from decades ago. Now it is up to workers (and, if present, unions) and employers to redefine these conditions, as in all the other sectors of the economy.
The Bank of Spain became independent from the government. The Law 13/1994 defines the role of the Bank of Spain: promoting the proper functioning and stability of the financial system.
The labour reform extends the content of collective bargaining with the goal of promoting its decentralization.
Bipartite agreement on devolving the lost regulatory competences to the collective bargaining processes.
Flexibilisation of working hour distribution along the year keeping a limit of 40 hour week limit as an annual average, allowing employers to schedule unequal distribution of hours along the year following production fluctuations. Up to now the maximum ordinary working day is 9 hours and the maximum ordinary week 40 hours, so that more than 9 hours worked in a single day and more than 40 in a single week are counted as overtime work. Moreover, extraordinary and overtime hours worked could under the draft law be compensated with extra holidays.
First license to a second mobile telephone company, breaking the public monopoly in telecommunications.
Introduction of an independent regulatory body in the electricity sector in order to begin liberalisation.
Reintroduction of inflation-based indexation in public sector wages.
The special scheme for farm workers in Andalucía and Extremadura is widened: minimum days of contribution down from 60 to 40; entitlement periods increased for younger and older workers: for unmarried below 20 years old, raised from 1.5 days to 2.25 days; for unmarried between 20 and 25, from 2 to 3 days.
Restructuring of Iberia, still within the public umbrella, but including the sell of core actives (Aerolineas Argentinas).
Restructuring public enterprises: introduction of the gas and petrol group (INH) into Teneo (now called SEPI) to finance its debt.
The law make the privatisation of public enterprises easier (opening the door for the creation of golden shares).
The 1995 reform lessened the double taxation of dividends for inter-company shareholdings. The participation threshold to benefit from a tax exemption on dividends accruing from a participation in another company was brought down from 25 % to 5 %, if the participation was held for at least two years.
Tax constraints on the internationalisation of Spanish firms were eased. The correction for international double taxation of dividends and capital gains was applied to corporations owning 5 % of the capital of foreign companies – instead of the 25 % limit contained in the 1978 law – during at least two years.
Tax neutrality towards different sources of income was increased and compliance costs were reduced. The 1995 reform abandoned the distinction between three types of incomes over which different tax rules were applying (operating income, net capital gains and net increases in assets). The 1995 law has identified the balance of the profit and loss account as the unique tax base.)
In June 1996, the required holding period to benefit from an exemption of double taxation was reduced from 2 years to 1 year.
Requirements and responsibilities for the provision of universal telecom service, as well as its financing, is defined.
Third-party access to the transportation system of natural gas allowed to large consumers (over 350M cubic meters per year).
The Decree on liberalisation of pharmaceutical services allowed for flexible operating hours and the establishment of new pharmacies.
Adoption of a decree on medicinal drug prices calling for a nearly 4 % decrease in those prices (reduction of the margins of pharmacists and wholesalers, reduction of the tax on drugs).
Agreement between pharmaceutical laboratories and the Ministry of Health under which the laboratories pledge to surrender a portion of their profits to the State if drug consumption increases by more than 2.6 %.
Agreement between trade unions and employers on an out-of-court settlement of labour disputes. The agreement calls for compulsory mediation prior to strikes over proposed collective redundancies, geographical relocation of labour, substantial changes in working conditions or breaches of contract.
Separates the management and the ownership of public enterprises to improve efficiency during the restructuring and privatisation process
Second stage of privatisation (1996-2006): Around 50 companies sold by the state (mainly large-sized enterprises such as: Endesa, Telefónica, Repsol, Gas Natural, Argentaria, Tabacalera...). The government obtained 30 billion euros in this stage.
Forces separate accounts for firms involved at the same time in transport, storage, wholesale and retail distribution of natural gas. If that happens, they are forbidden to be involved in commercialisation.
Generation will gradually be separated from distribution, as firms are required to legally separate these two activities.
Improved conditions for third-party access to the natural gas system.
Interconnection conditions and prices for fixed telephone operators are set
A new numbering framework was approved in November 1997 so as to ensure that Telefonica and new entrants will have access to numbers on an equal footing.
Legislation permitting the placement of pumps at retail outlets is implemented, as well as reducing regulation for minimum distance between gas stations.
A plan for number portability was also approved which will allow customers who want to shift to another operator to keep their existing number.
Final prices are programmed to be gradually reduced by 8 % in nominal terms during the next five years (approximately 20 % in real terms) and controlled for another 5 years before being completely liberalised. Final-price adjustments are conditional on developments in certain identified variables, inter alia, demand for electricity and interest rates.
Competition and efficiency in electricity generation will be enhanced by a new wholesale spot market where orders will be accepted according to the attractiveness of price bids, and the marginal price of the pool will determine the price for electricity generation.
The Act provided for free setting of fees (eliminating minimum fees) and it also permitted the professionals to practice anywhere in Spain (It eliminated geographic constraints).
Competition will gradually be introduced into the supply of electricity, as large consumers are gradually allowed to choose their suppliers; initially, choice will only be permitted for consumers with an annual demand of 15 gigawatts or more, but will be gradually expanded between 1998 and 2001 to cover those with an annual demand of at least 5 gigawatts, and from 1 January 2007, all consumers will be free to choose their suppliers.
Stranded costs (the unamortised costs of prior investments) and coal subsidies requirements (that at least 15 % of total generation must be based on domestic coal for the next 10 years) will be covered by payments which could reach a maximum of Ptas 2 trillion and will be paid by consumers during the period to 2007.
Gradual liberalisation of gas prices starting by large consumers and ending in the domestic consumer.
The Telecommunications Market Commission (Comision del Mercado de Telecomunicaciones, CMT) has the authority to: – arbitrate disputes between network operators and service providers; – advise the Government with respect to tariffs and regulatory proposals; – assign numbering to telephone operators; and – take the necessary measures to promote competition, with particular attention to access conditions to the networks, operators’ prices, and sale practices.
Inclusion of an upper level on the increases allowed by CB to temporary contracts to 13.5 months.
Partial substitution of the training contract for a new model reducing upper age limit to 21 years and increasing wages (to minimum wage) as well as the effort devoted to training.
Limitation of "contrato de fomento del empleo" (temporary), only for disabled people.
Elimination of "contrato de lanzamiento de nueva actividad".
Creation of a new contract for fostering open-ended hiring ("contrato de fomento de la contratación indefinida"): for youngsters between 18 and 29 years, conversion of temporary into open-ended contracts (before 31 Dec 2003). Severance payment for unfair dismissal is limited to 33 days per year worked, max. 24 months.
To reduce drug expenditure (which accounts for around one fifth of total expenditure on health), the Government reduced the sizeable administratively set pharmacists’ retail margin by 2 percentage points (to 27.9 %) and wholesalers’ margin by 1 percentage point (to 11 %)
Encouraging development of generic drugs.
Some "pilot" hospitals begin linking components of staff remuneration to productivity, as well as introducing flexibility in job contracts and working hours.
Two bipartite agreements setting broad guidelines to reform collective bargaining: wage bargaining should preferably be undertaken at the regional or firm level in order to increase the extension of the coverage of collective agreements. "These two agreements encourage universal collective bargaining and the basing of company-level bargaining on nationwide sectoral collective agreements."
The sub-minimum wage for youth (workers under 18 years of age) was abolished.
Reclassification of what invalidity (permanent) means entitling to social assistance benefits.
Further reduction in the required days of contribution for the special farmer scheme: from 40 to 35 days. Increase in entitlement periods to 3.43 days for youngsters below 25 years old.
The reform changes the pension formula (the period used to calculate the pension is extended from 8 to 15 years). Indexation of pension to the IPC (Consumer Price Index).
Introduction of a decreasing accumulation rate of pension rights as years of contribution increase.
Reduction of penalties for early retirement, for instance, retirement due to job loss after being contributing for 40 years.
The government created a Social Security Reserve Fund (Fondo de Reserva de las Pensiones), in order to finance pensions in recessions.
The 1997 budget law lowered the tax rate which applies to workers from 35 to 30 % – up to the first ESP 15 million of taxable income.
Partial liberalisation of postal services.
Firms are forced to pay the same wage for temporary employees contracted by a temporary work agency that the wage paid to in-company employees at the same position.
Limitation to only one prorogation for the "contrato eventual"
Further reduction of the number of pharmaceuticals on the social security system's eligibility list.
Restricting refunds of medicines to the price of the equivalent generic drug if it exists
Tabalacera (tobacco) is privatised through public offer.
Labour and capital income have been put on a more equal footing, as most partial exemptions and credits on financial saving income were curtailed. Capital income, except long-term capital gains, has been integrated into the tax base, with possibilities of cross-compensation between losses and gains. Most partial exemptions on capital gains and income have been removed.
Instead of the hitherto existing extensive set of tax reliefs a tax-exempt living standard minimum – minimo exento – was introduced. It substituted for most existing tax breaks (e.g. health and education expenditure, renting charges, care for the handicapped, child-care expenses).
Marginal rates were lowered, from 56 to 48 % for the top income bracket and from 20 to 18 for the lowest. The number of tax brackets was also reduced, from 10 to 6.
Reduction of employers' social security contributions on part-time permanent contracts.
Lowering the consumption threshold to benefit from the liberalised segment of the gas market from 10 to 5M cubic meters.
Lowering access tariffs to the wholesale electricity market, widening the choice for medium-size consumers.
Compulsory notification of planned mergers so that their impact on competition can be evaluated.
Obligation to advertise gasoline prices on highways and petrol stations
Lowering the transition to full price liberalisation of gas prices from 15 to 10 years, as well as the consumption threshold to benefit from the liberalised segment from 20 to 10M cubic meters.
The competition watch-dog, Tribunal de Defensa de la Competencia, to verify that subsidies to public enterprises do not distort competition.
Maximum number of hours allowed in a part-time contract is reduced from 99 % to 77 % of standard working time, including normal and complementary hours.
Part-time work is again considered any contract with a working day below the usual level.
Incentives at the regional level in different Autonomous Communities (all but Asturias, Baleares, Canarias and Murcia) placed to promote general reductions in hours worked in the private sector. For instance, in Andalucía, Catalunya and Galicia, social security contributions are now subsidised for those firms that apply the 35-hour week.
Rise in social security contributions for employers when hiring a worker through a temporary work agency.
Reduction of the discretionary powers awarded to public employment services to define what is a suitable job offer.
The "Renta Activa" is subject to active search of job.
The capital of Enagás, the wholesale distributor, which is currently owned by Gas Natural, the incumbent operator, will be opened to competitors. The maximum share that can be owned by a single operator will be 35 %. The cost of access to the wholesale network has been reduced by 8 %
The capital of CLH, which operates the network pipeline and storage facilities, will be opened to competitors (it is currently owned by the three large refiners). No single company will be allowed to own more than 25 %. The maximum combined stake or voting rights for all Spanish refining companies will be 45 %.
Any company (in the electricity market) with a share in the generation market larger than 40 % will not be able to expand its capacity in the next five years (which affects Endesa), while if the share is between 20 and 40 % the period will be of three years (Iberdrola). This ban does not apply to the plants already under construction (a total capacity 30 GW for the sector, when the actual capacity is 55 GW).
Oil sector: "any company with a distribution share over 30 % (15 %) will not be able to expand its distribution capacity over the next 5 years (3 years)."
Natural gas: the maximum market share of a single company in distribution will be 70 %
At least one petrol station will be authorised in every hypermarket. The petrol station will not be allowed to sign an exclusivity contract with refiners.
Electricity: access of large consumers to the transmission and distribution networks at lower prices
The local electricity loop opens to competition.
Opening hours: The number of weekly hours was increased to 90. The number of Sundays and public holiday openings was gradually increased (from 8 in 2000 to 12 in 2004). (The regional governments could raise the opening hours and the Sunday and public holiday openings)
Notaries have been allowed to make discounts of up to 10% and free tariffs are established for large operations (above ESP 1 billion). Regulated tariffs for property registrars and real estate development transactions have been established. Also, Banks have been required to inform customers that they may choose their own notary and insurance company when arranging a mortgage.
Establishment of a lump-sum Internet rate and local calls rate.
Electricity: phasing out of tariffs for high voltage consumers
The Government will have to approve every new merger.
Electricity: introduction of futures contracts in the wholesale market
Resolving differences over the interpretation of the legal requirement that temporary agency workers should receive equal wages as the employees of user companies, as the wages laid down in both statutory collective agreements and company agreements will be taken into account.
Improvement of the working conditions of temporary agencies' own direct employees (i.e. those recruited by these companies to provide their services directly to the agency rather than to user companies)
Introduction of a collective accident insurance scheme for all temporary agency workers
Pharmacies are able to make discounts of up to 10 % on certain drugs.
Margins are fixed from a certain price onwards, and they are widened for generics (from 27.9 to 33 %).
Introduction of a new form of worker representation for the administration of the agreement (i.e. creation of the position of "territorial union delegate")
The replacement income set by the "Renta Activa" is at 75% of minimum wage.
The replacement income set by the "Renta Activa" will be awarded for 10 months.
Renta Activa de Inserción Laboral or "active integration income scheme" targeting the long-term (a year or more) unemployed over 45 with dependants who are not entitled any more for insurance or assistance benefits.
Extending to self-employed workers the existing ‘qualified permanent disability’ scheme for employed workers provided they voluntarily added an insurance for labour contingencies and work-related accidents to their social security regime. This scheme is aimed at workers over 55 with permanent disability, with expected special difficulties to find a new job. The amount for ‘qualified’ workers is higher.
Introduction of sanctions for early retirement applying to contribution periods between 31 and 40 years (between 7.5 and 6 % of pension benefits). Previously, a 8% penalty on pension benefits applied independently of the number of years (over 30) the worker had contributed to Social Security. After this law the penalty applies to workers having less than 30 years of contribution.
Suppression of maximum age for workers under training contracts if the worker is a person in risk of social exclusion
Suppression of maximum age for workers under training contracts if the worker is disabled.
Suppression of maximum age for workers under training contracts if the worker is a long-term unemployed person (+3 years).
Maximum duration of "contrato eventual" is reduced to 12 months from 13.5 months.
New form of temporary contract for public administration.
Increase of the scope for the "contrato de fomento de la contratación indefinida": youngsters between 16 and 30 years.
Increase of the scope for the "contrato de fomento de la contratación indefinida": women unemployed in activities with less female employment above 45 years.
Increase of the scope for the "contrato de fomento de la contratación indefinida": long-term unemployed above 6 months of job search.
Setting guidelines and criteria for lower-level collective bargaining. In particular, it sets criteria regarding the negotiation of wages, aimed at promoting wage moderation as well as wage structures (fixed and variable payments) in line with sectoral and business conditions.
Bipartite framework agreement for pay increases. "In order to help control inflation, and thus to maintain and create jobs, the signatories agree that wage bargaining in 2002 will take as a reference the government's inflation forecast for the year - i.e. 2%. Wage increases may be higher than the forecast inflation rate within the limits arising from the increase in productivity, calculated as a national average of 1.1%."
The working hours of part-time workers may be more flexibly distributed along the year, eliminating previous trimestral limitations.
Increase of the minimum pension for the early retired (below 65).
New pension fund for civil servants aimed at supplementing civil servants’ standard pensions.
Tax incentives for contributions made by disabled workers to private pension plans, as well as for corporate contributions to corporate pension plans for low income workers.
Tax incentives for contributions made by older workers to private pension plans, as well as for corporate contributions to corporate pension plans for low income workers.
Development of a modular system of vocational training and academic and career guidance, responsive to changes in occupational skills needs. Training and vocational guidance will be organised using feedback from the authorities and social agents involved and establishing guidelines for the National System of Qualifications.
Widening the obligation of active job search including geographic mobility (up to 25% of working time), training, acceptance of "suitable" job offers. During the first 100 days in unemployment the person has to accept any proposed measure by the administration. A "suitable" job equals to those that are identical to any job previously performed by the applicant for a period from 6 to 12 months. After 12 months any other job should be accepted including the attendance to a training course. Failing to meet these criteria makes the person lose the NEB.
Resources for the Competition Tribunal and Service have been significantly raised, while more budgetary independence has been granted to the Competition Tribunal.
Suppression of "salarios de tramitación", wages paid by the employer during the procedure of deciding on the fairness of a dismissal procedure, if the employer recognizes its unfairness and deposits the severance payment within 48 hours after this.
General bipartite agreement on wage bargaining functioning as a nation-wide framework. Pay rises will function according to three criteria: the forecast inflation rate, wage guarantee clauses (to recover the purchasing power lost when the real inflation is higher than the forecast), and a variable amount linked to productivity. The agreement is expected to be renovated year after year.
Wage coordination is again influenced by nation-wide agreements by the trade unions and the employers setting the general pace for the whole economy, although the bulk of bargaining still happens at the sectorial and provincial level.
Government - unions agreement on public administration. Aiming to payment rises above inflation in exchange for more flexibility in human resources management in order to increase the efficiency of the provision of public services.
Government-unions agreement on public administration. Aiming to reducing working hours (to 35/week).
The decree states that 'periodical' 'fixed-discontinuous' (fijos discontinuos) employment contracts – i.e. contracts that are open-ended but involve work only in particular periods of the year – will not entail entitlement to unemployment benefits. In other words, people who work in certain periods of the year – as an example, in hotels and catering, tourist services, education and certain activities of the public administration – will not be entitled to unemployment benefits because they will be considered as permanent part-time workers. Only those who do not perform activities that are repeated on certain dates will be considered as being on discontinuous contracts with entitlement to benefits.
Unemployed people who received income from assets and investments will not receive unemployment benefit.
The "renta activa" is generalised to returning emigrants and women who have been under domestic violence.
People over the age of 52 may receive unemployment benefit and work at the same time.
Unemployed may receive their whole unemployment benefit entitlement in a lump sum if they join a cooperative or became self-employed.
The "renta activa" is generalised to disabled people.
Abolishment of special schemes for farm workers.
The "renta activa" is generalised to all people over 45 who have been unemployed for more than a month.
Receipt of compensation for dismissal is again compatible with receiving the unemployment benefit.
Permanent disability pension compatible with retirement pension for workers who have suffered a work accident or a work-related ailment.
Promotion of private pension schemes, involving a review of tax base thresholds for pension contributions and reductions. Contributions to a new type of insurance contract that provides pension income at a guaranteed interest rate will also be tax-exempted up to a given ceiling.
The law 35/2002 abolished mandatory retirement at age 65 in the private sector (workers who decided to extend their working life beyond age 65 would obtain a 2% premium on the pension for each additional year). Early retirement was possible from the age of 61 (with a penalty from 6 to 8% per year). Retirement money became compatible with part-time work in several situations (the retirement money was reduced depending on the duration of the working time).
Introducing a right to a leave of absence, without loss of position, to care for a family member who, as a result of disability, cannot look after himself/herself and has no earnings.
Renewal of wage agreement reached in 2002, aiming to wage moderation following criteria of forecasted inflation rate, wage guarantee clauses and a certain variable amount linked to productivity.
Bipartite interconfederal agreement setting the framework for wage bargaining in 2003. "The criteria accepted by both parties for guiding collective bargaining on pay in 2003 are based on four elements: pay bargaining must take as a reference the government’s inflation target; increases in productivity must be taken into account; a wage revision clause must be incorporated; and other elements of flexibility must be taken into account, such as the diversity of situations of companies and sectors."
Dismissed workers have now more room to get the whole unemployment benefit in a lump sum: joining a "cooperative company" with which they had a non contractual relationship for longer than 1 year; becoming self-employed; having a 33% of disability.
Reincorporation of the special scheme for farm workers in Extremadura and Andalusia, equal in benefits to the general scheme and guaranteeing the payment of contributions by the National Institute of Employment.
Extending the non-contributory social security coverage for temporary incapacity of self-employed workers starting on the 4th day of work (instead of the previous 16th).
The decree establishes a new coefficient scheme to be used to calculate a lower retirement age in case of a high degree of disability. The statutory retirement age (65) can be reduced in case of significant disability (65% or more) without penalties on pensions benefits. The years of work of the disabled person are multiplied by a coefficient (0.25 or 0.5 in case of dependency to another person) to calculate the years of reduction to get the full pension benefit.
More possibilities to retire for disability reasons without a loss in the pension amount if it is done earlier (before the 65-year-old official retirement age).
Increase of requirements for the self-employed to opt for a total disability pension.
In order to foster mobility of unemployed workers, the general net labour income allowance will be doubled during two years for those unemployed who accept a job in a different municipality.
The deduction for labour income, income from economic activities and income on capital held for more than two years is raised from 30 to 40 %.
General tax allowance for labour income raised by 16.67 % for those who earn less than EUR 8 200 per year, and by 6.6 % for those who earn more than EUR 13 000.
To encourage participation of older workers, the general income allowance will be doubled for those older than 65 who continue working.
Mothers who work will receive a tax rebate of EUR 100 per month during three years from the moment a new child is born or adopted. This rebate can also be received in advance in monthly payments.
To favour the supply of rental housing, a new tax allowance of 50 % of net rental income for owners who offer residential dwellings for rent is introduced. There will be deductions for all types of expenses (including 3 % for depreciation).
The number of tax brackets is reduced from 6 to 5. The top marginal rate is set now at 45 % (previously 48 %), and the lowest rate at 15 % (previously 18 %).
Family allowances are raised, and extended to new family situations. Deductions for children range from EUR 1 400 per year for the first child to EUR 2 300 for the fourth, while the additional reduction for children younger than 3 is four folded (to EUR 1 200). The deduction for old-age dependants is raised by 33 % if they are older than 65, and a new reduction of EUR 1 000 is introduced for social care, without the need of justifying the expenses. Tax allowances for the disabled are also raised.
Contributions to a new type of insurance contract (Planes de previsión asegurados) that provide pension income at a guaranteed interest rate will also be tax-exempted up to EUR 8 000 per year.
The flat rate for capital gains is reduced from 18 to 15 %, in line with the reduction of the lowest marginal rate.
To foster competition among mutual funds, capital gains from such investments will not be taxed when changing funds.
Reductions in social security contributions for companies which train their employees and give SMEs special treatment (the smaller the company the greater the reductions). Companies will be able to deliver training themselves or through the employers' organisations, trade unions or specialist training bodies.
Elimination of the link between the minimum wage and the amount of a large number of social benefit. Another indicator is created in order to evaluate the eligibility and amount of social benefits; the minimum wage now serves as a reference only in matters pertaining to labour regulations which refer strictly to salary, workers’ remuneration or closely-related areas.
Increase the minimum contribution basis for particular regimes above the General regime.
For self-employed workers aged 50+ it is possible to increase their contribution basis if they have already contributed for at least five years.
Minimum pension introduced for those between 60 and 64 years old benefitting from a qualified disability pension in order to make it more difficult for the beneficiary to receive a job offer in an activity different from what she was doing.
Contemplating capital gains to determine through mean-test who may be beneficiary of a minimum pension.
Introducing an additional four weeks breastfeeding leave for children up to 12 months, which may be added to maternity leave (public sector).
In the public sector, granting a 10 days' paternity leave for the birth, fostering or adoption of a child
In the public sector, extending to three years the maximum period of leave for public employees to take care of a dependent person who is a close relative.
A special plan has been approved to reduce pharmaceutical spending. It includes, among other measures, a reduction of 6% over two years of prices of non-generics, a reduction in distribution margins from 9.6% to 7.6% over two years, a reduction of margins for pharmacies on the sale of generics and information campaigns for the promotion of generics. The authorisation of generics has also been accelerated, and is now automatic when it implies a price fall of 30% to 50% with respect to the corresponding non-generic product.
Agreement on the intersectoral bargaining framework for 2005, providing for: 1) wage moderation following and renewing 2002 agreement, taking as reference the forecast inflation rate (2%) with a minimum wage guarantee clause to provide for any difference between this and the real inflation rate (the formula for minimum pay developments, used since 2002, consists in taking into consideration the forecast inflation rate plus the increase in productivity, thus keeping annual pay rises at between 2 and 3% according to the social partners); 2) job creation and higher 'employment quality' clauses in collective agreements; 3) improved occupational risk prevention and inclusion of measures to control unjustified absence from work; 4) focus on equal opportunities.
Setting up of a new procedure for the extension of collective agreements to cover areas of employment which are not covered by an agreement due to one of the parties not being recognised/ authorised to negotiate.
In the public sector, reducing the period of the fixed working day to 9 a.m. to 3 p.m.. Single parents and workers with disabled children may extend the flexibility to a further two hours of their working day
In the public sector, extending the possibility of working shorter hours to parents with children up to 12 years of age (from previously 6)
Unemployed people can receive up to 40% (before 20%) of benefits to invest in new activity and become self-employed.
Increasing the length of the "Renta activa".
Reduction of the waiting period for "Renta activa" to be obtained from 3 to 1 month.
Lowest contributory pensions coming from the old system (SOVI) are made compatible with widows/widowers pensions.
Establishment of MIBEL, an agreement to create a common electricity market with Portugal.
Regulation of interim wages is modified also for permanent contracts with lower dismissal costs (33 days of salary per year worked instead of 45): in order to avoid paying interim wages, employers are allowed to pay the worker an amount of 33 days of salary per year worked (instead of 45) in advance to court decision in case of litigation over dismissal by employer.
Training contract includes a limit of 24yo.
The possibility of transforming temporary contracts into permanent contracts is extended to all fixed-term contracts signed before 31-07-2007 (before it was limited to those before 31-12-2003).
Elimination of all "contratos de inserción" or special contract forms for new entrants.
Reduction of a ceiling on the number of consecutive fixed-term contracts that can be signed for the same job, so that the worker automatically becomes permanent once the ceiling is reached (two or more contracts in a period of over 24 moths in the last 30 months).
Renewal of the wage agreement reached in 2002. "The agreement establishes pay rises according to three criteria: the forecast inflation rate (2%), wage guarantee clauses (to recover the purchasing power lost when the real inflation is higher than the forecast), and a variable amount linked to productivity."
The "renta activa" is extended beyond a year and made permanent.
The special scheme for farm workers in Andalucía and Extremadura is widened: the existing limit to the number of times for each worker to benefit for the scheme is leived, and the duration of the entitlement is enlarged in relation to contribution periods.
Now, recipients of NEB will receive the complete amount of monthly payment from the beginning, since the first ten days withholding is abolished.
Increasing the duration of the nationwide contributory unemployment benefit for temporary workers in the agricultural sector.
Restoration of the right for NEB to 'fijos discontinuos".
Access to "renta activa" becomes a right and is not subject to budget constraints any more. Hence it is integrated in the social security system.
Unemployment benefits are extended to the following groups: elected local authorities; high-ranking government members (non officials) and high-ranking trade union members.
Extending the non-contributory NEB to unemployed over 45 years old without dependants (and who are not eligible for contributory NEB).
Increase in the effective contributory period to 18 from 15 years.
Minimum eligibility age for pensions rises to 61.
Introduction of an incentive scheme for workers who remain in the job market after 65 years of age, in the form of a 2% increase in their pension for each year of work after that age (3% if they have contributed for more than 40 years).
Agreement at the firm level may outlaw collective agreement on compulsory retirement age.
Corporate tax on large companies was cut from 35% in 2006 to 32.5% in 2007 (and 30% from 2008). In the income tax, the highest marginal tax rate was decreased from 45 to 43% and the lowest marginal tax rate was increased to 24%. Reduction of tax bracket from 5 to 4. Introduction of capital income flat tax (18%).
Active workers will be able to undergo specific training in any sector, whereas previously they could only receive training related to the sector in which they were working or training that would be generally applicable
Creating mechanisms for linking training for employment to the National Professional Qualifications System, in order to provide accreditation for the skills acquired in both formal and informal training. All workers will be entitled to receive a Skills and Qualifications Certificate and individualised monitoring of their professional career
The law attributed new and stronger functions to the Competition Defence Tribunal (Comsión Nacional de la competencia) in the advocacy area.
Introduction of particular rights for 'dependent self-employed workers' (those whose income depend from a single client in at least 75%): compensation for unjustified suspension of contract.
Introduction of compensation for termination of temporary contracts in the construction sector. All temporary contracts, which represent 70% of recruitment in the construction sector, will be subject to 7% compensation for termination of a contract, compared with the current rate of 4.5%. This covers two million workers.
Introducing protection against industrial accidents or occupational illness for dependent self-employed workers.
Adding new rules to guarantee the rights of information and consultation for workers.
Increasing the amount of the non contributory unemployment subsidy for those who had a part-time job up to the level of those that had a full-time job (the amount is no longer reduced in proportion to the working time)
The law also regulates the criteria of eligibility for entitlement to a disability pension.
Extending the widowhood pension to de facto couples subject to certain requirements regarding evidence of cohabitation, the survivors’ economic dependence on the deceased or the existence of common children
Part-time pension is available from age 61 (instead of age 60) and requirements are extended (30 years minimum-contribution-period).
The tax rate is lowered, in 2007, for small- and medium-sized enterprises, from 30 to 25% and progressively over two years for larger firms, from 35 to 30%, with the rate falling 2.5 percentage points in both 2007 and 2008.
All the tax credits available for firms, with the exception of the deduction for research and development expenditures and the reinvestment of profits in productive investment will be phased out by 20% a year until complete elimination in 2011.
Personal and family allowances are now included in the first income bracket, which is taxed at a zero rate. Before the reform, they were deducted from the tax base, which decreased the progressivity of the tax.
Personal and family allowances are increased. Deductions for children range from EUR 1 800 per year for the first child (up from EUR 1 400, a 29% increase) to EUR 4 100 for the fourth (up from € 2 300, a 78% increase), while the additional deduction for children younger than three is increased by € 200 (a 17% increase). The deductions for elderly dependents is raised 12½ % (10%) to EUR 900 (EUR 1 100) if they are older than 65 (75). Finally, deductions for the disabled are increased between 13½ and 38%, based on the degree of disability.
The number of income brackets is reduced from the current five to four. The top marginal rate is reduced to 43% (from 45%).
Savings are taxed at a single rate of 18%.
The maximum annual tax-free contributions to private retirement savings plans is raised to EUR 10 000, EUR 12 500 for people aged 50 and older. Additionally, they cannot be more than 30% of income (50% for those older than 50). Withdrawals from the savings plans can be made only at retirement, either through an annuity or in a lump-sum payment; if the latter is chosen, the previously available exemption (of 40%) from the proceeds is no longer available.
The general tax allowance for net labour income, which is based on a non-linear formula, is increased 14.3% (to EUR 4 000) for those who earn less than € 9 000 and 8.3% (to EUR 2 600) for those earning more than EUR 13 000.
Introduction of a compulsory public contributions system for involuntary termination of work
Small and medium size firms will receive special support by means of a credit scheme to finance training courses for their employees.
Introduction of the programmes of initial vocational qualification (programas de cualificación professional inicial, PCPI) replacing the “social guarantee programmes” (programas de garantía social). As the social guarantee programmes, they provide a combination of basic general and vocational education, aimed at pupils who have failed the compulsory schooling certificate.
Unemployed who decide to become self-employed can draw 60% of their unemployment benefits at once (instead of the current 40%).
Tax brackets and personal and family allowances were indexed to an inflation target of 2%.
A system of public grants will be provided to enable 18–24 year old workers to obtain qualifications while working.
Creation of Fund for Orderly Bank Restructuring (FROB) to reorganize the Spanish Banking Industry (supporting the recapitalization of viable banks and an orderly resolution of non-viable ones)
Long-term unemployed who have exhausted their benefits entitlement may receive an exceptional benefit (approx. 400 euros per month) for a period of six months.
The reform introduces a increase in capital income marginal tax rates from 18% to 19% (for amounts over 6000 euros the income marginal tax rate increases to 21%). Introduction of a deduction of 400 euros in income tax for all workers.
Facilitating fair dismissal due to economic causes. The firm can fire employees when it suffers a "negative economic situation, in cases such as the existence of present or future losses, or the persistent decrease of the income level”.
Limiting the max. duration of temporary workers with “obra y servicio" to 3 years plus twelve months through collective agreement. After that time the contract will automatically become open-ended.
Training contract can be used up to 25 years until 2011.
Increasing severance payment for temporary workers from 8 to 12 days per year worked in a progressive way: 9 days in 2012, 10 in 2013, 11 in 2014, 12 in 2015.
Increasing the scope for the "contrato de fomento del empleo" (open-ended, 33 days per year worked as a severance payment) to: people who have been unemployed for more than 3 months, unemployed between 31 and 44 who have been fired from an open-ended contract, recently unemployed who have been under temporary workers in the last two years.
Since the adoption of the decree, the Saving banks have the capacity to access international markets to raise equity capital. Introduction of new requirements on governance and professionalism of management. Savings Banks and Commercial Banks are under the exclusive supervision of the Bank of Spain, as commercial banks.
Permitting the modification, by means of collective bargaining at company level, of the conditions established in multi-employer agreements. The conditions that can be modified are salary levels, working hours and working time distribution. Changes must be negotiated within a non-extendable period of 15 days. Also providing systems such as arbitration in the case the employer and the employee representatives fail to reach an agreement. Facilities will be provided to suspend the collective agreement where the employer is in economic difficulties. To minimise the possibility that this change may weaken collective bargaining, especially in the case of companies with no workers’ committee, it has been decided that, in the absence of workers’ legal representatives, employees will be able to confer representation on a commission made up of a maximum of three members belonging to the most representative trade unions of each firm
Laying down the guidelines and criteria for lower-level bargaining in the upcoming year, including pay increases linked to inflation and productivity gains and a focus on employment and health and safety. The reference set for wage bargaining is the Government’s inflation forecast (the target level of the European Central Bank); however, allowance is made for rises higher than inflation within the limits imposed by productivity gains. The agreement seeks to exchange wage moderation for commitments to maintain jobs. There are some guidelines aiming at improving the employment situation (job security, health & safety, gender discrimination) and at facilitating the negotiation of collective agreements. It recommends employers to reduce the use of temporary contracts and to recruit young people, women and older workers (eligible for SSC reductions) and includes alternatives to "quantitative" workforce flexibility, such as internal flexibility, functional mobility, suspension of contracts and shorter working hours.
As a guide for pay increases, the following references have been established: 1% for 2010, between 1% and 2% for 2011, and between 1.5% and 2% for 2012. These references are supplemented with a wage review clause and a non-application or opt-out clause. The former contemplates adjusting salary increases taking into account real inflation throughout the period, in addition to what is stipulated in the collective agreement. The latter is a clause included in the minimum content of collective supra-company agreements, allowing the non-application of the specified salary increase for companies whose financial stability would be affected were it to be applied.
Reducing the working time for economic reasons by the company between a 10% and a 70% of total working time. The worker can get a compensation for the lost hours coming from NEB.
Specific unemployment benefit for self-employed workers.
The amount of money subject to the reduced tax rate (25%) is increased to 300.000 euros (from 120.000 euros) for the SMEs.
Suspension up to 2013 of the ‘límite de encadenamiento’ for temporary contracts established in 2006, allowing chaining these up to three years.
Training contract can be used up to 30 years until 2013.
New core capital ratio: 8% of risk-weighted assets (10% for banks and financial institutions with greater risks).
The Public Health Act extends the coverage of the health care system for unemployed without benefits and for workers of the liberal professions
It gave priority to firm-level agreement over sectoral-level agreement for certain issues: wage, compensation for extra working hours, working time, working time distribution, measures to reconcile work, family and personal life…
The age for receiving the unemployment benefits for older workers has been raised from 52 to 55 years.
Introduction of a sustainability factor that will start 2027.
The reform changes the pension formula (the period used to calculate the pension is extended from 15 to 25 years).
The number of years of contributions required to entitlement a full pension (100%) increase from 35 to 37.
The normal retirement will increase gradually from 65 to 67 (15 year transition period ending in 2027).
Household income tax: 1) The royal Decree-Law introduces a temporary progressive increase in marginal tax rates in all brackets, 2) Introduction of a new bracket: for incomes over 300.000 euros, 3) Finally, the reform introduces a temporary increase in capital income marginal tax rates (21% for amounts of up to 6000 euros, 25% for amount between 6000 and 24000 euros, 27% for amounts over 24000 euros) .
The conditionality and the obligation to take on a suitable job is increased for unemployed workers who have used up their first tier unemployment benefit.
Opens the field for intermediary agencies.
The government raised the national minimum on the ceiling regional governments can impose on opening hours from 72 to 90 hours per week and on opening during public holidays from 8 to 10 days. Touristic areas have been defined for which opening hours regime has been fully liberalised.
Abolishing incentives for renewable energy.
Specification for what is considered as "bad economic situation" as a justification for fair individual dismissals: the worsening revenue conditions should be sustained in the firm for more than two consecutive quarters.
‘Just dismissal’ is considered as the one by default, and the worker has to push for a 33-day severance payment if he considers that it has been unjust. The judge will decide.
Firms can now make changes in the working conditions if the signs of economic slowdown are in place with a wider scope than before. It is referred to conditions of employees with a lower time frame to notice them (30 to 15 days) in individual cases and keeping the necessity of bargaining in the case of collective change.
Elimination of tops for training contracts within a firm (a maximum % over the total working force is no longer applied).
Increase in minimum and maximum duration of training contracts: from 6-24 months to 12-36 months. These limits can be brought down to 6 months through CB.
Severance payment for fixed-term contracts (obra y servicio, etc.) is taken back to eight days per year worked.
TWA can now function as collocation/intermediary agencies.
Wages for people hired under training contracts should match the minimum wage in terms of time worked (this is, a 75%-85% of it). Before, the condition was independent of working time.
Part-time workers can now do overtime, but only up to the limit marked by the Workers' charter for part-time work.
Unjust dismissal: 33 days per year worked.
More internal flexibility for firms: easier to move a worker from one function to another or for one geographical location to another. Reduction of the classification level and detail of "professional categories/groups".
Greater protection of retail investors. Introduction of new limits on wages of executives of State-Aided banks. Creation of an Assets Management Company (SAREB). Finally, the decree introduces new regulation of the FROB, which increases its powers.
This reform limits the coverage of the health care system to affiliated workers, pensioners, people receiving regular Social Security benefits, unemployed who have used up their unemployment benefit and their beneficiaries. Retired persons pay 10% of the cost of prescription medication (before was free). All others persons pay according to their income
The reform allows companies to reach a collective agreement with representatives of workers to establish relevant working conditions within the firm, most notably including basic salary, allowances and overtime compensation, or the distribution of working time. These firm-level agreements have priority vis-à-vis higher-level agreements.
If there is no collective agreement on the firm-level, the new law aims to further facilitate opting out from higher level agreements. No further condition applies to opt-out as concerns working hours, wages, work location or functions, if the firm has suffered declining revenues for two consecutive quarters as compared to the same periods of the preceding year. Opting out is also easier to justify for technical, organisational or production-related reasons. In particular, the law introduces obligatory arbitration if workers and employers do not agree on the conditions of the opt-out (...) If a firm suffers declining revenues over two consecutive quarters, it can unilaterally alter or suspend employment contracts beyond what was originally agreed between employers and workers. Changing a contract unilaterally by the employer is possible under economic, technical, organisational or production-related reasons.
Maximum of one year ultra-activity during which a former agreement is valid. No new agreement reached means that labour relations will be governed by the provisions of the agreements at higher levels.
Young people below 30 can now use up to 100% of their accumulated unemployment benefits if they opt to capitalise their benefits to start up an enterprise.
The government reduced the replacement rate from 60 to 50% for unemployment spells longer than 180 days
The system of on-the-job training and training of unemployed workers is being transformed through the introduction of a voucher (cuenta formación), recentralisation of the training priorities and introducing competition in the selection of training providers
Creation of a new, single and independent regulator (National Commission for Markets and Competition), which will take over the functions of a number of existing sectoral regulators. The new regulator will have a hybrid mandate: promoting competition and regulating a variety of economic sectors.
Introduction of a new revaluation index that determines the annual increase in pensions (minimum: 0.25%, maximum: inflation +0.5%). The sustainability factor will be introduced from 2019, linking starting pensions to life expectancy.
Price liberalisation started in 1989 and was mostly completed by 1992 (1998 Regulated prices still account for about 26 % of CPI basket).
Established the definition of the bank, banking operations, the structure of the Estonian banking system at that time, the role of the central bank, and first prudential ratios (liquidity, risk concentration, minimum equity, capital adequacy) as well as requirements for capital calculation (equity fund, reserves, undistributed profits, and uncollateralized debt obligations that do not exceed the equity fund). The Banking Act included also provisions on sanctions, banking secrecy, inter-bank relations, accounting and supervision on a rather general and abstract level.
The Enterprise Act determined the business types, formation and registration procedures of enterprises, their legal status, the bases of activities, commencement of activities and termination policies. Essentially, the notion of entrepreneurship was established. Provisioning of state-owned, municipal, partnership people's, non-government, and private enterprises, including foreign-ownership to a limited extent. However, provisions enabled to restrict the areas of activities for enterprises. The enterprise, with the exception of public company and municipal entity, had no superior body.
Act provides the general rights of and bases for the activities of trade unions, and their relations with state and local government agencies and employers.
The start of creation of the labour market policy (National labour market institution "The Labour Market Board" is formed)
The establishment of the Labour Inspectorate. Tasks of the institution are defined: to control the enactment of labour laws, labour security, labour environment security
Regulation adopted for the privatisation (sale) of small-scale enterprises with the book-value below 5 million roubles in service, retail and catering areas; listing of the exempted items from the sales, including land, forests, natural resources (also, sale of assets, which would have a pre-WWII owner or his/her heirs, was ruled out); organization of the privatisation by the State Property Agency; regulating the sale of assets mostly to residents (people who resided in Estonia less than 10 years were excluded from the purchases); privatisation through the sale of shares or assets; preference given to insiders (employees) of privatised enterprises; conditionality for the continuing operation and purposeful use of assets within a 5-year period after privatisation. As a result, less than 500 facilities were privatised. In 1991-1992 (first months), 7 large enterprises were privatised as pilots.
Introduction of activity license tax for natural persons and legal entities, who undertook economic activities in areas, where revenues and costs are incurred mostly in cash.
Introduction of tax with definition of income; deductions from taxable income (educational expenses, interest rates on loans); basic exemptions (1200 roubles annual income, state pensions, state scholarships, state lottery wins, travel expenses and payment of daily allowances, income from sale of agriculture/horticulture products and berries, etc.); progressive tax rates of 16%, 24% and 33% (tax rate of 25% for one-time income); taxation of income from entrepreneurship and deductible costs from taxable income; income from capital and taxation (rent, interests); tax incentives provided from local governments
Social tax introduced: 20 % on wages and other remuneration paid to employees. Listed a number of exemptions and deductions to be made from taxable base.
In working age, unemployed, without income, registered as seeking work, ready to upgrade training and retraining.
Introduced the grounds for foreign investments in Estonia, legal rights and obligations, operation of branches and representatives, possibility to purchase real estate, acquire local businesses, grounds for obtaining licenses for business activity in specific areas (e.g. energy sector, mining, railway and aviation), and protection of foreign owned companies against nationalization, requisition, or confiscation.
Introduced the grounds for foreign investments in Estonia, legal rights and obligations, operation of branches and representatives, possibility to purchase real estate, acquire local businesses, grounds for obtaining licenses for business activity in specific areas (e.g. energy sector, mining, railway and aviation), grounds for exemption from customs duty, no restrictions on outflow of foregin currency, exporting and importing without licenses, and protection of foreign owned companies against nationalization, requisition, or confiscation.
Social Health Insurance (SHI) model introduced. The Act set out differentiated health insurance tax contribution rates: earmarked payroll tax equal to 13% of wages collected from employers; a rate of 1.6% for farmers; and 5.7% for the self-employed, according to their income from production. In addition, the local governments had a right to increase the tax rate by up to 3% if the working conditions were considered to be posing a threat to health. During 1992–1993 there were 22 independent local sickness funds in Estonia, including 15 in the counties, 6 in cities and a special fund for seamen (the Seamen Sickness Fund). The funds were strictly locally organized, had an independent financial administration and were responsible for the collection of differentiated health insurance taxes. The populations covered by the different regional sickness funds were uneven in size, ranging from 10 000 to 400 000 inhabitants, with most covering 30 000 to 40 000 people.
Unemployment benefit amounts is 80% of the minimum wage.
Waiting days 1-7 day after registration as unemployed (no benefit in these period). Maximum duration 180 days.
Introduction of principles on land reform, including terms and conditions for return of, substitution, and compensation for land, privatisation of land (method of privatisation - privatisation vouchers, public capital bonds, and cash); defining the municipal and state land. Restriction in privatisation to Estonian citizens only. Restitution and privatisation to be organised by local governments.
Introduction of legal person income tax – subjects, object (gross profit), deductibles (tranches into fixed assets' fund up to 25% of gross profit, donations up to 5% of gross profit) from taxable gross and additions (outlays for covering travel, accommodation costs, gifts) to taxable gross profit; progressive tax rates of 15%, 25% and 30%; special provisions on businesses who yield unreasonably little profit; provisions on covering the previous losses with profit and its calculation for taxation purposes; tax incentives (for companies within favoured economic activities; for foreign-owned companies – tax relief for 2-3 years + taxable amount reduced 50% for the following 2 years; tax incentive (50% reduction) for agribusinesses).
Rent control principals: the lease contract is for at least three years, the rent increase not more than once a year, the extent of the increase or basis for calculation are precisely determined.
Provides for conclusion of contract, obligations of parties, modification, termination and annulation of contract, and disputes settlement.
The types of holidays are annual holiday (the duration of an annual holiday is twenty-eight to thirty-five calendar days for civil servants, fifty-six calendar days for pedagogical specialists); additional holiday (regulated by collective contract or employment contract), parental leave and layoff
From partially repressed to partially liberalised
Regulating the reorganization of consumer cooperatives, collective farms, and industrial cooperatives established since 1987. Separation of for-profit (consumers and, producers' cooperatives, loans and savings associations) and non-profit (dwelling, residential) cooperatives/associations.
The law classifies the types of benefits. Benefits are interconnected and tied to the minimum wage. New detailed text in 1994 (RT I 1994, 13,232). The most substantial change: the size of the benefit is untied from the minimum wage
Citizens whose housing costs exceed 25% of their income, are entitled to housing benefit
The right to receive retirement pension on favourable conditions: 1) workers who have worked in extremely health damaging and difficult conditions 10 years before retirement pension age, 2) workers who have worked in health damaging and difficult conditions 5 years before retirement pension age
Pension for vocational workers and specialists working on jobs, which cause occupational hazard, loss or decrease in the ability to work (police, rescue, pilots, miners etc.)
Terms and conditions for the sale of state-owned joint stock companies: sale of shares of Type 1 joint stock companies up to 50% of shares, 100% sale of shares regarding type 2 joint stock companies; use of auctions or public offering of shares; no discounts; sale of shares of 51-100% in the first round to a buyer (majority control).
Regulation adopted for the privatisation (sale) of state-owned enterprises with the book-value over 600,000 kroons; privatisation with compensation vouchers, public capital bonds, and cash; extension of the list of privatisation organizers (the Bank of Estonia, local municipalities); possibility to use lease contracts or directly privatise also land; listing of conditionality criteria (guaranteeing employment, investments, environmental protection); possibility to use hire-purchases.
Inclusion of small-scale enterprises to be privatised with the book-value below 6 million roubles in areas other than service, retail and catering. Diminishing insiders' prerogative rights (insiders maintained pre-emptive right to buy the property only in case they agreed to pay the final price offered at public auction). However, the range of bidders eligible to purchase the property to be privatised was widened to foreigners. As a result, the privatisation of the rest of 2000-2500 enterprises in service, retail and catering sectors.
Announcement of privatisation of 38 large enterprises with the first international tender (13 eventually sold).
Establishing conditions and principles for the privatisation of state and municipal housing. State support for privatisation with the price policies, benefits in buying in instalments, providing loans on favourable conditions, etc. Determination of privatisation objects (including housing items under exclusion from privatisation, e.g. dormitories, protected property) and subject (restricted to at least 18-year old natural persons who have lived in Estonia permanently at least for 5 years; also limits on selling privatised housing only to these persons). Privatisation with compensation vouchers, public capital bonds, and cash. Provisions on the principles for the issuing of public capital bonds to Estonian permanent residents, based on the working years and their use (within 4 years of issuance; their inheritance). Regulation of condominiums (apartment cooperatives).
Increase of basic exemption amount from 1400 roubles to 4800 roubles; increase of taxable incomes from 4800 roubles to 10800 roubles (16% tax rate); from 12000 roubles to 18000 roubles (24% tax rate); from over 12000 roubles to over 18000 roubles (33% tax rate). Introduction of tax rate 50% to incomes over 20000 roubles from 1.08.1992.
Relief works organised by local governments for the job seekers and unemployed
Introduction of competition law in 1993 defined the essence of unfair competition (Publication of misleading information, presentation or ordering of misleading information for publication, or disparagement of competitor or goods of competitor; Misuse of confidential information or of employee or representative of another undertaking etc.) and impairment of competition (abuse of dominant position by an undertaking – dumping, reduction of output with unreasonable price-hike, rejection to sell the produce on not justified grounds, dictation of the contractual terms with unreasonable profit gains etc.; agreements, concerted practices and decisions by associations of undertakings which restrict competition). Dominant position established by the undertaking that had a 40% control of the market in terms of turnover. It defined the competition and prohibited the violation of competition freedom. It also set the responsibility of market participants and the state's role in the supervision of competition. Two main liabilities: imposition of an obligation, by precept, to end the violation of the act and overturn publicly misleading/prohibited by the act information. In case of further violations, fine of 10% of gross turnover of last quarter of an undertaking.
FDI Law amended, foreign investment, few restrictions.
Chapter I: General provisions. Defines disciplinary offences and disciplinary punishments. Chapter II: Imposition, expiry and cancellation of disciplinary punishments. Inter alia deals with time limit for imposing punishment, demand for explanation and choice and formalisation of punishment. Chapter III: Fines, suspension of work without pay and termination of employment contract. Chapter IV: Implementing provisions.
The primary purpose of the Act was to create a legal framework, to ensure a level playing field for all investors, and conditions to ensure as much information about issuers of securities as possible and to identify a few straightforward steps to protect investors.
Regulation of the bankruptcy records of enterprises subject to privatisation – deals done with the property by the organiser of privatisation were not subject to reclamation and a 6-month moratorium on bankruptcy after privatisation was prescribed. The competence of the Privatisation Agency and the circle of entities entitled to instalment options were specified and the requirement of a privatisation programme was set.
A reimbursement system for prescription pharmaceuticals was introduced, based on the positive list principle and limited cost sharing. Co-payments were €0.32 (EEK 5) per prescription for medicines on the positive list with a co-insurance rate of 100% (defined by disease groups and pharmaceutical names), which also applied to population groups such as disabled people, children under three years old, and people over 70 years of age. Similar co-payments were introduced for medicines with a co-insurance rate of 90%, and slightly higher co-payments for prescription medicines with a co-insurance rate of 50%
Defines collective labour disputes as disagreements arising between the employer (or employers association) and the workers (or trade unions) on matters such as the conclusion, implementation or modification of collective agreements and the implementation of labour law. Chapter II governs the conciliation procedure. Both parties have the right to refer the dispute for conciliation to the Public conciliator. The dispute can be taken to the court if the conciliation fails. Chapter III deals with the right to strike and to lock-out. The decision to strike shall be taken either by the general meeting of workers, the workers' association or the trade union. The decision to lock-out shall be taken by the employer. Strike is prohibited for civil servants and the Armed Forces. Defines unlawful strike/lock-out. Chapter IV inter alia concerns the payment of wages during a strike/lock-out and the rights and obligations of participants.
Provides, inter alia, for the election and dismissal of representatives, their rights and duties, and their employment relationship.
The Estonian Collective Agreements Act was adopted in 1993. A collective agreement might be bi-partite or tripartite, i.e. concluded between: a) the employer and the trade union; b) the employers organisation and the trade union; c) the national association of employers organisation and the national association of trade unions; and d) the national association of employers organisation, the national association of trade unions and the Government.
Provides for hours of work and rest, including overtime, night work, and rest periods (lunch, breast feeding, holidays, etc.). The general national standard for the working time shall not exceed 8 hours per day and 40 hours per week. Specific provisions dealing with reduced working time. The standard limit on overtime per employee is 200 hours per calendar year. The working time of a person with a second job shall not exceed 20 hours per week at the second job. Evening time is defined as time between 18.00-22.00, and night time as time between 22.00-6.00.
The poverty line (subsistence benefit amount) is established by the government. Consumption scales: first adult in family= 1, all other adults=0,7, children until 14=0,5
All family members in working age are: working, studying, officially unemployed or looking for work, in parental leave, retired persons, persons with disability or in other state social benefit. Non workers are not eligible for benefit.
Due to economical hardships of transition, pensions were tied with minimum wage. The sizes of pensions varied from 65-165% of the minimum wage. The concept of "pension" was replaced with the concept of "state allowance".
Integration of three ministries (Health Care, Social Welfare, Labour). Formation of the Social Insurance Board. The Social Insurance Board is a government authority established on 1 February 1993 and operating within the government area of the Ministry of Social Affairs. The Board's role: - provide individuals with statutory pensions, allowances and benefits; - establish and pay maintenance allowance, and collect maintenance support claims transferred to the state; - partially write off the unpaid part of study loans guaranteed by the state; - establish the degree of disability and the additional expenses arising from the disability; - establish permanent incapacity for work; - ensure and finance the provisions of rehabilitation and special care services; - provide victim support and conciliation services.
More universal and clearer rules on the conditions and procedure for privatisation of assets in state ownership and in the ownership of local governments; principles of the activities and grounds for the establishment of the Estonian Privatisation Agency; regulation on the already established sales practices was adopted; a procedure for including enterprises on the privatisation list was adopted; combination of privatisation for money and compensation vouchers (privatisation securities), excluding public capital bonds; specifying privatisation methods (auctions, tenders with preliminary negotiations, and public offering of shares); actual development of privatisation was made dependent on the decisions of the Privatisation Agency and annual privatisation programmes, approved by the Government; property was also considered as a privatisation object; no preferences for 'insiders' in terms of former property owners, businesses' own staff etc.; however, some preferences were made (co-operatives getting beneficial payment terms, existing shareholders got first refusal on shares and could buy them at par); possibility to pay in instalments. As a rule, Estonian and foreign residents had equal rights in the privatisation process, except that local residents had been given favourable instalment plans for up to 10 years with the initial payment of at least 20% of the sale price.
Same provisions from the previous legislation from 1992, but more detailed coverage of housing privatisation principles. Privatisation of housing enabled also to legal entities. Priority purchases limited until December 1, 1994. Extension of the list of activities to be considered for the calculation of working period in public capital bonds.
Extension of privatisation subjects to include non-residents (natural persons and legal entities).
Announcement of privatisation of 52 enterprises with the 2nd international tender (28 eventually sold); altogether 55 sales contracts were concluded within privatisation via tenders.
In 1994, four sectors of industry were given priority for privatisation: the processing of agricultural products and service, the forestry and wood industry, the construction materials industry and the building industry. Actually, rather badly-performing machine-building, apparatus-making and electronic engineering enterprises were largely sold. Completion of so-called small-scale privatisation with both tender with preliminary negotiations (in case of bigger enterprises), public auctions, including public offering of shares.
214 sales contracts via tenders with preliminary negotiations.
Delegation of the establishment of privatisation procedures of the land to the Government of Estonia.
Abolishment of previous tax incentives for businesses.
Specification of taxation principles of residents and non-residents.
Implementation of flat income tax rate of 26% (15% tax rate for income accruing to non-residents and from royalties, sale of patents and other know-how; 10% rate for income from interests; 5% tax rate for rent income).
Widening the list of persons, exempted from income tax (disabled, non-profit organisations).
Extension of basic exemptions to include inherited assets.
Possibility to deduct outlays for covering travel and accommodation costs up to 2% of income, and taxed amount of paid out dividends.
Social tax increased to 33 % on wages and other remuneration paid to employees.
Defines "unemployed person", "job seeker", "suitable work", "search for work". Provides for procedures to register unemployed persons, defines employment services and unemployment benefit. ment training, employment benefit, relief work), state's. unemployment benefit. New services.
Law regulated support to small and medium-sized enterprises (employ up to 80 persons and net annual turnover less than 15 million kroons) through the Fund for Crediting Small Enterprises and the Fund for Crediting Agriculture and Rural Life. Support was to be given either in the form of a loan or a guarantee for a loan. Provision on the requirement for a collateral. Support was given only to economic units based on private capital, provided that at least 70 % of their equity capital belonged to Estonian residents.
Repeal of the Foreign Currency Act and related regulations – removal of controls on capital account transactions.
The central bank amended the principles in the calculation of the net open foreign currency position ratio by approving an unlimited German Mark position and setting a 5% limit on all single currency positions other than the currencies of the OECD countries (10%).
Repeal of the order of the Bank of Estonia on requiring license for foreign investment in the banking sector.
Law on Credit Institutions established the basis for universal banking and enabled banks to own and finance other financial institutions, which also entailed the introduction of principles for consolidated financial statements.
In 1994 the Central Sickness Fund was established on the basis of the ineffective Estonian Health Insurance Association in order to strengthen central functions such as planning, centralized pooling and allocation of revenues.
Chapter I: General provisions (inter alia, para. 5 on equal remuneration), Chapter II: Establishment of wage rates and wage systems, Chapter III: Remuneration under special conditions (additional work, overtime, work on public holidays, night work, etc.), Chapter IV: Guarantees and compensations (for breast-feeding breaks, for health examinations, etc.), Chapter V: Calculation and payment of wages, Chapter VI: State supervision, Chapter VII: Final provisions
The Central Sickness Fund was governed by the State Health Insurance Council, which consisted of 15 members: 5 representatives of state organizations, 5 members from employers’ organizations and 5 representatives of insured individuals’ groups.
Benefits are untied from the minimum wage.
Usually 180 days (maximum duration 270 days)
Act regulates the registration of persons as unemployed and the payment of state unemployment benefits, single benefits and stipends through employment offices.
In working age, unemployed, registered as seeking for work, last year (12 month) working or engaged with activity equal with work minimum 180 days. Equal activities: entrepreneur, study, in armed forces, caring under 7 years old child, sickness, invalidity, prison etc.
Act provides the definition, types and extent of state pensions, and the conditions and procedure for the grant of state pensions, the organisation of state pension insurance, the bases for maintenance of the state pension insurance register and calculation of funds for state pension insurance.
In 1995, completion of the privatisation of industrial, construction, motor transport, trade and other enterprises; preparation of the privatisation of infrastructural enterprises.
Repeal of the requirement for 5-year period residency to have a right to privatise housing property. Extension of the list of persons (disabled) who get the possibility to privatise housing on more favourable terms (municipalities having a right to sell property with a reduced price).
Exemption of the owner from debts in order to speed up the sale or to at least offer a buyer-friendly timing for the repayment of the debts of privatised enterprises.
Extension of the grounds for the privatisation of land by right of pre-emption.
The social insurance tax rate (13% earmarked payroll tax for health insurance and 20% for pension insurance tax) was implemented.
An entrepreneur is a physical person for whom the sale of goods and services is a permanent activity (sole proprietor), or a commercial undertaking, which could be general partnerships, limited partnerships, joint-stock companies and limited liability companies. The code included requirements about the extent of liability and the amount of minimum required capital (for joint-stock companies and limited liability companies it was significantly increased to 100,000 and 10,000 kroons, respectively (before, the requirement for joint-stock companies was 300 kroons and for limited liabilities no minimum was established)). The law also regulated the formation, management, representation, accounting and allocation of profits, winding up, beginning and ending of membership, as well as mergers, dissolution and transformation into a different kind of business. The definition of a group (concern with parent undertaking and subsidiaries), procuration (authorisation to represent an undertaking). A natural person or legal person may be a partner in a general or limited partnership, while the state or local government was not allowed to be partner. Act stipulated restriction on lending activity of private limited liabilities; mandatory reserve capital requirement; prohibition to acquire or take as security its own shares; the right of shareholder to information, pre-emptive right of shareholder to acquire increased share capital, and bases from exclusion of shareholder. A joint-stock company may issue non-voting shares which grant the preferential right to receive dividends and to participate in the distribution of the remaining assets of the public limited company upon dissolution (preferred shares). Otherwise same principles as with limited liability companies. The Act also addressed the establishment of branches of foreign undertakings. It was stipulated that a municipal enterprise may be transformed into a private limited company, public limited company or local government agency. A state enterprise could be transformed into a private limited company, public limited company, legal person in public law or state agency. State-owned enterprises were to be privatised according to the privatisation Act. Transformation, merger or division of state enterprises, collective enterprises, leased enterprises and state funds shall be effected on the basis of an order of the Government of the Republic and pursuant to the procedure established by the Government of the Republic. The state could in no way interfere with the activities of privately owned companies and had practically no control over their activities.
The Public Health Act of 1995 states that the general responsibility for health protection, promotion and disease prevention policy lies with the Ministry of Social Affairs, but it also notes that county governors and municipalities have a general obligation to secure public health services for their populations.
In 1995, patient co-payments for primary care and specialist visits were introduced, where previously all care was provided without user charges. The co-payments were low (€0.32) and several groups were exempt. Co-payments were introduced mainly to raise revenue for health care and to rationalise health care service utilization by eliminating unnecessary visits.
Regulates all aspects of the pharmaceutical market
Establishes general rules for the settlement of individual labour disputes: definition, bodies dealing with individual labour disputes, international agreements, deadlines, work of the Commission for labour disputes, its decisions and their realization, settlement by the same bodies of cases linked with illegal termination or modification of labour contracts, realisation of decisions of bodies dealing with labour disputes on questions relating to return to work.
The act was enforced to govern the administration of state assets (immovable and movable property). The sale of assets (including shares, units, and other securities) of the governmental entities is decided by the Government. Regarding the reorganisation of state-owned enterprises, it was stated that these had to be reorganised into state-owned or privately held joint-stock companies, limited liability companies or other legal entities. People's and rental enterprises were to be transformed into joint-stock companies or limited liability companies. The purpose of the use of state assets was to earn revenue, exercise public authority, and any public purpose. Conditions were set for the free use of state assets and who could use (other state authorities or local governments). Also, the sale of the state assets was to be conducted through public auction or selective tender; in case of securities, shares and units through public sale.
Extension of privatisation subjects to include foreigners with permanent and temporary residence permit in Estonia. Addition of provisions on the reduction of price of housing under privatisation (e.g. when apartments built to attic or basement and costs proved, which are deducted from the selling price).
Income tax on dividends to be paid was established at the level of 26/74th of dividends' amount.
Gains from the sale of securities and rights were included into the taxable income list.
Possibility to deduct from taxable income educational expenses and interests on loans taken from resident credit institutions.
The basic exemption deductible from the income of a resident natural person during a period of taxation was raised to 6000 kroons.
The regulation provided the grounds and procedures for the establishment of and participation as a member or shareholder in private legal entities (public limited liability company, private limited liability company, a non-profit organization, foundation) by the Republic of Estonia. The purpose was to fulfil the duties of the state and implement economic policies. Only the government, through the ministry, could participate in commercial undertaking as a shareholder. By founding the state-owned company, or acquiring shares or units of an operating company, state ownership could not be less than minority shareholding.
Expansion of provided support to include capital support (in addition to loans and guarantees); inclusion of sole proprietors, eligible for state support, and increase of net annual return to 100 million kroons for defining SMEs.
Regional labour dispute commissions are formed in Labour Inspectorate (in 1995-1997 National Labour Environment Authority ). The commissions shall settle disputes between workers and employers linked to labour relations and the respect of labour contract when the parties cannot reach an agreement. In some cases the disputes are settled in court.
Definition of non-profit association: a voluntary association of persons with the objective or main activity, which shall not be earning income from economic activity. Act regulates the founding, registry-keeping, bases of activity and termination for non-profit associations. In the period of 1996-2000, trade unions acted in the framework non-profit associations act.
Citizens whose housing costs exceed 15-30% of their income, are entitled to housing benefit.
Subsistence allowance and housing allowance are integrated. The new benefit is called subsistence allowance.
In amendment of the Privatisation Act, the limit on the circle of persons (Estonian nationals) was annulled and hence, no restriction on foreigners' access.
Continuous privatisation of enterprises, not in natural monopoly position (Estonian Air, Estonian Insurance, Kalev chocolate factory etc.).
Foreigners were allowed to pay in instalments.
Changes in relation to the right of the official responsible for privatisation to put the property subject to privatisation on the appropriate list. In terms of privatisation methods, a two-stage tender scheme was allowed within the framework of preliminary negotiations. Regulation on issuing and use of privatisation securities was rewritten.
In 1996, preparation of infrastructural enterprises (port, energy, railway, telecom) for privatisation and the privatisation of land necessary for production. Two-stage tender applied. Reduction on additional conditions and the length of time of their validity on the sale of enterprises without natural monopolistic features. Enforcement of public offering of shares in the case of more important enterprises of general interest to the public. Increasing attraction of FDI and reduction of provision of state subsidies. Granting of the writing off of the debts only as an exceptional case and in such a case to deny or reduce the buyer's right to pay with the privatisation securities.
Re-introduction of privatisation principles of land with more detailed provisions – special terms and conditions for different privatisation subjects (e.g. obtaining permission from the governor in case of privatisation of land to legal entities); detailed description of methods of privatisation (introducing the use of closed auctions); the extent of privatisation of land; payment for land to be privatised (e.g. extent of use of privatisation vouchers; the right to pay the selling price in instalments).
The Ministries of Education and Social Affairs create the possibility for the disabled to choose their profession and vocational education, with the cooperation of State employment services and other services in charge of vocational guidance.
Last remaining (insignificant) tariffs abolished.
Increase of minimum amount of share capital for joint-stock companies to 400,000 kroons (from 100,000 kroons) and for limited liability companies to 40,000 kroons (from 10,000 kroons).
In 1997, completion of the sale of all (non-infrastructural) enterprises, in the privatisation of which the Government has not established a later term (in total 24 joint stock companies).
Possibility for credit institutions to create a tax-free reserve fund up to 2% of loan portfolio, compared to previous 5%.
Tax rate of 26% extended to dividends paid to non-residents.
Possibility to deduct donations from taxable income from January 1999.
Extension of the possibility to deduct from taxable income educational expenses and interests on loans taken from resident credit institutions to close relatives (children and parents).
8 centres for long term unemployed, young job seekers etc., operating between 1998-2002
Enforcement of a new and more detailed competition law. The processing of unfair competition was amended; exceptions were regulated in depth with regard to agreements and other concerted practices which have as their object, or effect the restriction of competition; definition of special or exclusive rights, on natural monopolies, on state aid, and merger control (essence and notification of mergers) was given.
To determine dominant position on market the use of both quantitative and qualitative criteria was introduced: in addition to 40% criteria, an undertaking was in a dominant position if its market share enabled it to operate on the market to an appreciable extent independently of competitors, suppliers and buyers.
Supervision from partially repressed to partially liberalised.
Pension Law of 1998 in force from 2000. Work performed in 1999 to give a right to state pensions with both a contribution-defined component and a flat-rate component.
20 pension foundations managed compulsory (II pillar) and 10 voluntary (III pillar) pension accounts
Schemes for the pre-privatisational construction and/or sale of 4 infrastructural (railway, energy, mining, telecom) and 2 other enterprises (liquor).
Public offering of minority shares of the enterprises of greater interest to the public.
In 1998, sale of infrastructural enterprises with one- or two-stage tender with preliminary negotiations.
Extension on the use of privatisation securities until December 1, 2000 (later extended until July 1, 2002). The use privatisation securities for the purchase of real estate until July 1, 2006.
Interest income from resident credit institutions was rendered tax free.
Thresholds for minimum amount of social tax were established.
Definition of insurance, advisory and capital support (interest, investment support)
Specification of state aid in terms of extending the definition from financial support to any kind of support. Also, notification procedures were specified when state aid provided (publication of state aid, notification of minister of finance and the European Commission).
One of the underlying changes in the Credit Institutions Act concerned the risk assessment, management and control of credit institutions to improve the transparency as well as market discipline of the banking sector.
This Act establishes the following social benefits for disabled persons: disabled child allowance; disability allowance for a person of working age; disability allowance for a person of retirement age; disabled parent’s allowance; education allowance; work allowance; rehabilitation allowance; in-service training allowance.
Introduction of provisions on privatisation of free agricultural land and usufruct of this land as well as privatisation of free forest land.
In 1999, privatisation of the remaining state property.
Provisions on the income taxation of shadow companies.
New sources of revenue are income of a legal person in the territories with the low-income tax rate.
Legal entities were exempted from payment of income tax – payment of income tax only on the income distribution, as well as transactions that may be considered as indirect distribution of profits (benefits, gifts and donations, non-business related expenses).
Income from securities' sale by non-residents and dividend income by non-resident legal entity, if its controlling share is greater than 25%, are not subject to taxation.
Natural persons given choice with regard to certain types of income - either to declare income from entrepreneurial activity (in this case, the deductions allowed, but must pay social security contributions), or to pay onetime tax on other income.
Tax free income was set at 9,600 kroon a year.
Tax on income and special cases of payment of income tax have been differentiated; the existing tax exemptions only to residents were extended to non-residents also.
10% tax rate on the payment of insurance benefits and allowances from pension funds.
Regulates the provision of employment services to persons who seek employment and to employers. Deals with types of employment service, right to use employment services, payment for employment services, employment services activity licence, employment training, and subsidies to employers.
The Act established the EHIF as a public independent body managed by a Supervisory Board consisting of state, employer and employee representatives. It is intended to strengthen the purchasing power, organizational efficiency and public accountability of the health insurance system. The EHIF was initially organized in seven regional and one central departments, but after the last restructuring in 2004, only four of the regional departments and the single central department were left. According to the current organization set-up, each regional department covers 200 000-500 000 insured individuals.
The implementing provisions of the Apartment Ownership Act, governing the privatisation, the setting of an apartment of privatised housing, and housing associations (-cooperatives), are attached to the Housing Privatisation Law. Residential housing inventory before the privatisation as an additional condition in the privatisation of dwellings is prohibited. Essentially, the second phase of privatisation of dwellings is setting the apartment ownership, it means the privatisation of land under the privatised dwellings.
In 2000, privatisation of the remaining state property (leased out property and minority shares).
Local taxes could be deducted from business incomes.
Income tax on royalties to a resident natural person increased to 26% from previous 15%.
The basic exemption deductible from the income of a resident natural person during a period of taxation was raised to 12000 kroons annually.
Provisions set on tax credit for persons raising three or more minor children.
Sole proprietors may deduct from business income the tax paid for fringe benefits to employees.
Participation in the second pillar entails an additional individual contribution of 2% of gross wage to be paid by the employee. This is supplemented by the state with 4% of gross wage, being re-directed from the pension insurance part of social tax paid by employers. The total contribution to the second pillar is thus 6% of gross wage.
A municipality has the right to refuse to grant a subsistence benefit to a person in working age with capacity for work who is not working or studying, and who has, more than once and without good reason, turned down suitable work offered to him or her, or has refused to participate in employment services or in social services or study organised by a municipality directed towards independent ability to cope.
Addition of provisions on takeover of shares for monetary compensation. Based on the application of a shareholder whose shares represent at least 9/10 of the share capital of a public limited company (majority shareholder), the general meeting of shareholders may decide in favour of the shares belonging to the remaining shareholders of the public limited company (minority shareholders) being taken over by the majority shareholder in return for fair monetary compensation. The majority shareholder shall determine the amount of compensation payable to minority shareholders.
The Health Services Organisation Act (2001) sets out specific organisational changes including recentralising planning functions at national level; establishing a new licensing system for doctors and institutional providers; defining the legal status of providers as private entities; and explicitly defining the financing responsibilities of different sources of funding. Family practices can be organised as joint-stock companies or private enterprises, owned by family doctor(s) or local municipalities. Hospital providers are allowed to organise themselves as (profit-making) joint-stock companies or foundations (non-profit-making).
The Law of Obligations Act (2001) was prepared by the Ministry of Justice and aims to regulate all contractual relations in the various sectors, including those between insurers and the insured population in terms of private health insurance, and between patient and health care provider in health service provision. The section on health service provision contracts and agreements regulates the relationship between patient and provider, establishing requirements for patient information and informed consent prior to treatment, as well as privacy and provider accountability in terms of malpractice. The Law also establishes that if health services are not paid for by a third party or by compulsory health insurance, the patient must pay the “established, agreed or usual fee or, in the absence of such, a reasonable fee”.
The amount of subsistence benefit is established by the Parliament. Consumption scales: first adult in family= 1, all other family members=0,8.
The amount of benefit per calendar day shall be calculated on the basis of the average remuneration of the person per calendar day during nine months. The amount of unemployment insurance benefit per calendar day shall be the following percentage of the remuneration per calendar day: 1) 50 % for the period of 1 to 100 calendar days; 2) 40 % for the period of 101 to 360 calendar days.
An insured person has the right to receive an unemployment insurance benefit not longer than: 1) 180 calendar days if the insurance period is shorter than 56 months; 2) 270 calendar days if the insurance period is 56-110 months; 3) 360 calendar days if the insurance period is 111 months or longer.
Establishment of Estonian Unemployment Insurance Fund (legal form: legal person in public law)
Persons have the right to receive unemployment insurance benefits if: 1) they are registered as unemployed, and 2) their unemployment insurance period is at least 12 months during the 36 months prior to registration as unemployed.
Definition of subsistence benefit: A person whose monthly net income, after the deduction of the fixed expenses connected with dwelling is below the subsistence level has the right to receive a subsistence benefit. Subsistence level is established based on minimum expenses which satisfy the primary needs.
The compulsory funded Defined Contribution scheme was introduced in 2002 by diverting a portion of contributions from the statutory pay-as-you-go scheme into private funds. Participation in the funded Defined Contribution scheme is mandatory only for persons born in 1983 or later (i.e., new entrants to the labour market). For people born between 1942 and 1982 joining the scheme was voluntary.
Privatisation Programme of 2001 (https://www.riigiteataja.ee/akt/85151).
Amendments related to guaranteeing the avoidance of double-taxation of legal persons' income.
The deducted amount cannot exceed 50% of the taxable income.
Restrictions on the deductions from the taxable income of a resident natural person: deductibles from the taxable income – mortgage interest, training expenses (including interest on student loans), gift donations, pension contributions and pension fund shares acquired – limited to the amount of 50,000 Kroons per year.
Changes related to the pension system reform and transfers of social tax receipts into the state pension insurance funds and the bank account of the registrar of the Estonian Central Register of Securities.
Establishment of unemployment insurance system. Unemployment insurance payment is fixed (0,5-2,8% of the gross income paid by the employee, 0,25-1,4% of the gross income paid by the employer).
Amendments related to the implementation of a mandatory funded pension system – mandatory social security contributions to be deducted from natural persons' taxable income.
Thresholds for minimum amount of social tax were removed.
Pension funds' payments that exceed the three-times amount of income tax basic exemption, to unit-holders are taxed at the standard rate of 26%.
Establishment of unemployment insurance system. Unemployment insurance payment is fixed (0,5-2,8% of the gross income by the employee, 0,25-1,4% of the gross income by the employer).
Replaces the 1991 Health Insurance act and its 1994 and 1998 amendments. The Health Insurance Act (2002) was intended to establish clearer regulation of all aspects of the health insurance system, including validity periods, benefits, reimbursement lists and levels for health services and pharmaceuticals, maximum levels of cost sharing for insured people and contractual relationships between the EHIF and service providers.
Establishing the unemployment insurance premium rate as 1.5% (1% for employees and 0.5% for employers).
Unemployment insurance premiums eliminated for retired persons.
Unemployment insurance benefits are not paid to those persons whose employment relationship was terminated by agreement of the parties.
Binding entitlements to tighter verification of job search and participation in active labour market measures.
The Electricity Market Act stipulates the separation of vertical segments in the electricity sector on a legal or accounting basis and defines the rules for the operation of the new electricity market.
Repeal of the previous act (State Support for Entrepreneurship Act). The new regulation sets out the bases, principles and organisation of the state support of enterprise and the grant of state guarantees for business loans and housing loans. Establishes the organisation of state support of enterprise, types of state support of enterprise (support, guarantees, and loans), and target groups (all businesses) with the preference given to start-up companies or micro undertakings, or undertakings whose activities contribute towards balanced regional development and create jobs in regions where the standard of living is low or where there is serious unemployment, or undertakings which are oriented at contemporary and technology-intensive manufacturing or at offering services or goods with export potential. In general, defines the subjects of state guarantees for business loans and housing loans, state guarantee and guarantee contracts, and general principles for grant of state guarantees.
The Communicable Diseases Prevention and Control Act (2003) was passed in 2003 after five years of preparation. It regulates the organization of the prevention and control of communicable diseases, as well as treatment of people with communicable diseases, setting out the obligations of the State and local governments, legal persons and individuals, including health care providers. The Act covers the full range of routine communicable disease control, from immunization to hospital infection control, from laboratory licensing to compulsory treatment for serious communicable diseases. In the case of the latter, the Act sets out conditions for treatment based on a court ruling if a person will not give consent. The Act defines serious diseases as plague, cholera, yellow fever, viral haemorrhagic diseases and TB. In the case of hospital infections, the Act defines requirements for health care providers to monitor and prevent hospital infections as well as inform the relevant authorities in case of infection.
Releasing the residents' income from income tax in case of income earned from employment abroad under certain conditions (during 12 months worked for 183 days abroad).
Deductions of the mortgage interest, training expenses, gifts and donations and trade union entrance and membership from taxable income limited to the total amount of 100,000 kroons per year per taxpayer.
Benefits received on the basis of the Parental Benefit Act were taxed with income tax.
Interests earned from another EU member state's credit institution exempted from income tax.
Lowering tax rates (24% and 1,400 kroons per month as basic exemption from income tax in 2005).
Basic exemption in event of pension (to extent of 36000 kroons per year) and in event of compensation for accident at work or occupational disease (to extent of 12000 kroons per year) were introduced.
Lowering tax rates (22% and 1700 kroons per month as basic exemption from income tax in 2006).
Tax incentives for resident natural persons were extended to other EU member state residents, who received at least 75% of their taxable income in Estonia.
Lowering tax rates (20% and 2000 kroons per month as basic exemption from income tax in 2007).
Redefinition of goods market by extending the geographic coverage outside Estonia: a goods market is an area covering, inter alia, the whole of the territory of Estonia or a part thereof. Liberalisation of the provision on agreements, practices or decisions that are considered to be of minor importance (increase in combined market share of the total turnover of the undertakings which enter into the agreement, engage in concerted practices or adopt the relevant decision that does not exceed: 1) 15 % (previously 10 %) for each party in the case of a vertical agreement, practice or decision; 2) 10 % (previously 5 %) in total for all parties of a horizontal agreement, practice or decision; and 3) 10 % (previously 5 pre cent) in the case of an agreement, practice or decision which includes concurrently the characteristics of both vertical and horizontal agreements, practices or decisions). In addition, the provisions of the Competition Act have been revised to clarify the administrative procedures (involvement of Competition Authority and cooperation with the EU institutions), business secret definition, and new elements of misdemeanour that were added.
The purpose of this Act is to ensure equal treatment arising from the Constitution of the Republic of Estonia and to promote gender equality of men and women as a fundamental human right and for the public good in all areas of social life.
The changes were related to both liquidation and reorganisation of credit institutions as well as the clarification of procedures for authorisation application and the relationships between market participants and the FSA. 2004 amendments were related to final adjustments of the authorisation procedures in terms of replacing the application requirement with the notification requirement in getting authorisation for commencing undertakings as branches as well as acquiring qualifying holding in other member states. The components of own funds were clarified and supplemented by the instruments, previously not covered, such as subordinated liabilities, securities with an unspecified term. In addition, consolidated own funds were introduced. Also, risk weightings for claims of residents of EU-10 states in calculating capital adequacy ratio were decreased and the 50% risk weighting ratio established for local governments and investment companies was reduced to 20%.
The new Medicinal Products Act came into force at the end of 2004 and regulates manufacturing, marketing and advertising of medical devices. It also provides the framework for market supervision and regulates liability of market actors. Therefore, the State Agency of Medicine does not assess services and introduce regulations, but assures quality control of medical devices rather than engaging in health technology assessment activities.
Act provides for the conditions and procedures for the making of contributions to and payments from funded pensions with the purpose of providing a person additional income, besides state pension insurance, after reaching pensionable age.
Income tax exemption on royalties paid to non-resident legal entities and on dividends as well as interests paid to non-resident natural persons.
Possibilities extended for sole proprietors (self-employed) to make contributions for a mandatory funded pension.
This Act regulates the maintenance of records concerning the unemployed and job-seekers, provision of labour market services, payment of labour market benefits, preparation of employment programmes based on the needs of the labour market, settlement of disputes arising from the implementation of this Act and liability for the violation of this Act.
Amendments concerned the regulation on foreign exchange risks: exclusion of foreign currencies, joined with ERM2 mechanism, from net open position limits.
The risk weighting of housing loans was raised from 50% to 100% in calculating capital adequacy, implying the need to increase the share of own funds in housing loan activities, which in general increased capital buffers of banks.
Rules related to the merger, division, and transformation were relieved to simplify and speed up the relevant processes.
Competences and responsibilities of governing bodies of corporations and their members were significantly specified in relation to regulation on increase and reduction of share capital and remuneration policies.
Regulation on the founding of the joint-stock company via share subscription was removed.
The general principles of the functioning of the board of directors and supervisory board were eased, in particular, the rules of the general meeting and the Board meeting attendance were liberalised.
The aim was to simplify the rules relating to corporate activities, in particular, through the elimination of excessive formality requirements. First, formal restrictions that did not have any effect were reduced, which were foreseen to facilitate the formation of companies as well as their daily operation.
This Act provides for the legal bases for: the establishment of a European Works Council or a procedure for informing and consulting on the level of Community-scale undertakings or Community-scale groups of undertakings; the involvement of employees in the affairs of a European company (Societas Europaea) and a European Cooperative Society (Societas Cooperativa Europaea).
Establishing the unemployment insurance premium rate as 0.9% (0.6% for employees and 0.3% for employers)
Thresholds for minimum amount of social tax were reinstated with some exceptions (e.g. Non-applicable for retired persons).
Repeal of the exemption procedure in connection with the authorization of the anti-competitive agreement, decision or concerted action in certain conditions. This simplifies the situation of undertakings, because no longer there is an obligation to apply for an exemption (and penalty in relation to the failure to apply for the exemption) that gives companies greater freedom to self-assess their activities.
Simplification of merger notification for undertakings – amendments and additions give businesses a clearer picture of a notice filing deadlines, the information required, the additional documents and procedural rules. Also, provisions as a listing are given on what is not considered as concentration. The calculation of concentration is based only on turnover in Estonia, not globally (a concentration shall be subject to control by the Competition Authority if, during the previous financial year, the aggregate turnover in Estonia of the parties to the concentration exceeded 100 million kroons and the aggregate turnover in Estonia of each of at least two parties to the concentration exceeded 30 million kroons).
Increase of the mandatory banking reserve rate from 13% to 15%.
Credit institutions will be required to disclose information on the risk management principles, the principles of calculation of own funds and capital adequacy indicators. The new regulation has significantly increased internal assessments and self-control and decreased the proportion of normative regulation. As an important change, banks were given the possibility to calculate the capital requirement on the basis of internal risk assessment (internal ratings based approach). In addition, the calculation of minimum capital requirement for operational risk was added. Also, amendments included the introduction of credit risk mitigation, cooperation of competent authorities, and disclosure requirements.
Opportunity was provided to establish the company within an expedited procedure. This implied the submission of the required data to the registrar through the internet without a notarial authorization or approval. The license checking by the commercial register was abolished.
Regulates the activities of workers representatives including elections, rights and obligations of representatives and employers, provision of information, consultation, and role of the State. Implements Directive 2002/14/EC establishing a general framework for informing and consulting employees in the EC.
Waiving the termination of insurance period in case of allotting unemployment benefit.
Provisioning the insurance of the protection of workers in the event of insolvency of the employer.
Regulation of the basis for continuing the payment of unemployment insurance benefits in case of EU mobility and working outside Estonia, and their withholding.
Extension of the basis for unemployment insurance period (at least twelve months) from the duration of 24 to 36 months prior to registration as unemployed for the purpose of improving the protection of those persons who experience unemployment on a regular basis.
Provisions on the possibility for compensation of the unused privatisation securities (non-applicability to securities with the face value of less than 250 kroons).
Tax amendments regarding the taxation of cross-border movement.
Additions to the field of taxation of interest on deposits due to the EU Directive.
Changes due to the European Community law requirements in granting tax benefits to non-residents as well as residents.
Expansion of the payment of social tax by the state for unemployed persons.
Raising the minimum threshold amount for social tax to the level of minimum wage.
The chapter on cross-border mergers was introduced: a public limited company or private limited company registered in the Estonian commercial register may merge with another limited liability company founded on the basis of the law of another State which is a Contracting Party to the EEA Agreement, which conforms to the requirements of the Directive 2005/56/EC.
Banks were given the possibility to calculate the capital requirement on the basis of internal risk assessment (internal ratings based approach). In addition, the calculation of minimum capital requirement for operational risk was added.
Amendments included the introduction of credit risk mitigation, cooperation of competent authorities, and disclosure requirements.
Changes were related to cross-border take-over bids, increased protection of minority shareholders – minority shareholders entitled to request the redemption of their shares, which provides a greater opportunity to realize the holding, i.e. shares (sell-out option).
Investment firms and other asset management companies required to disclose information on the risk management principles, the principles of calculation of own funds and capital adequacy indicators. The new regulation has significantly increased internal assessments and self-control and decreased the proportion of normative regulation.
The regulation specified core investment services, securities, introduced multilateral trading facility, provisions on mandatory operation in Estonia (avoiding shelf-companies). Rules for best execution of client orders and overall handling of client orders and an investment agent institution with a separate chapter in the Securities Market Act were incorporated into the act for the first time.
BALTIC Rail Services announced on January 9 that the sale of its 66% holding in Eesti Raudtee had been completed, ending five years of private-sector operation of the Estonian rail network.
Lowering tax rates (19% and 33000 kroons per year as basic exemption from income tax in 2010).
Increased basic exemption upon provision of maintenance to child – one resident parent or guardian of a child or other person maintaining a child on the basis of the Family Law Act, who maintains one minor child may deduct increased basic exemption from his or her income in the period of taxation of up to 17 years of age.
Lowering tax rates (18% and 36000 kroons per year as basic exemption from income tax in 2011).
Lowering tax rates (21% and 27000 kroons per year as basic exemption from income tax in 2008).
Lowering tax rates (20% and 30000 kroons per year as basic exemption from income tax in 2009).
Minimal time for cancellation of an employment contract: 15 calendar days.
The Act reduces the notice period by 30 calendar days. The terms for notice of redundancy will be set to 15-90 working days, depending on the length of the employment relationship.
Redundancy benefits are reduced by one months' pay and of them employers only pay one month's average wage, the rest being covered by the Estonian Unemployment Insurance Fund. Redundancy benefits will be between one and three months average wages, depending on the length of previous employment. In the case of people who have an employment tenure greater than 20 years, a five-year transition time will be implemented, during which they will retain the existing level of redundancy benefits, that is, four months earnings.
The Act also stipulates that laid off workers can collect their severance payments only on a monthly basis (and start receiving unemployment benefits only after severance payments have expired, thus moving back the end day of the unemployment benefit collection).
Compensation for cancellation: one month’s average wages of the employee.
Provides for a set of measures to prevent discrimination based on ethnicity, race, gender, religion and beliefs, physical and mental disability or sexual orientation. Article 2 regulates the application of these principles when signing an employment contract.
In 2008, amendments to the Aliens Act came into force. The annual immigration quota increased from 0.05 to 0.1% of the permanent population of Estonia annually. The possibility to except specific individuals from the immigration quota was abolished.
Increase of the insurance benefit from 50% to 70% (of the average remuneration of the insured person per calendar day during nine months) for the period of 1 to 100 calendar days.
The Act also stipulates that laid off workers can start receiving unemployment benefits only after severance payments have expired, thus moving back the end day of the unemployment benefit collection.
Introduction of right, amount, application for and grant/payment of insurance benefit upon lay-offs.
Extension of unemployment insurance benefit to insured persons who cancelled the contract of employment at the initiative of the employee or by agreement of the parties.
In addition to directive 90/435/EEC, requirements on mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States are taken into account, pursuant to the Council Directive 90/434/EEC.
Harmonisation of the Income Tax Act - corporate income taxation principles - with the European Union directive 90/435/EEC. As a result of changes, taxation of income is renounced at the time of income distribution and hence, conversion into an annualised taxation.
Regulation on avoiding double taxation of income from abroad.
Withholding income tax on royalties and dividends to non-residents has been abandoned. In contrast to the previous regime, gains are taxed at the company level, regardless of how profits are taken out of the company, i.e. all payments to shareholders that reduce company's equity are taxed.
Increasing the unemployment insurance premium rate to 4.2% (2.8% for employees and 1.4% for employers) from 1.08.2009
Establishing the unemployment insurance premium rate as 3.0% (2.0% for employees and 1.0% for employers) from 1.06.2009.
A leniency programme came into force, according to which a cartel member who is the first to inform the authorities will get immunity from punishment.
The Act reduced employment protection on permanent contracts.
The Act also made it easier to use fixed-term contracts (but increased employer’s obligations by requiring them to pay for the loss of income to the end of contract term on early termination (except in the case of bankruptcy)).
The Act increased employer’s obligations by requiring them to pay for the loss of income to the end of contract term on early termination for fixed-term contracts (except in the case of bankruptcy).
Restrictions on investments in securitised positions.
The Act regulates the activities of investemt funds (it specifies into which securities admitted to trading on a regulated market or which other fund units of investment funds might they invest). Similarly, the Act regulates, which particular monetary and financial derivative instruments maybe invested in with the fund's assets. In investing the assets of UCITS and other open public funds in securities, these securities must meet certain conditions (e.g. can freely be acquired or disposed of).
Since 2009, insured persons aged 19-63 years are no longer eligible for the annual dental care benefit of €19.18. Instead, this reimbursement can only be claimed by pregnant women, mothers of children up to 1 year of age, people with a greater need for dental treatment because of a particular condition, those 63 years of age or older, and people with work incapacity.
At the same time, health insurance coverage was extended to officially registered unemployed people who are following an active labour market programme. Before, the coverage lasted up to two months of unemployment.
The benefit was also reduced from 80% to 70% of the sick person’s income.
The first three (previously only the first) days of sickness or injury are without sick leave benefits, employers now cover from the fourth to the eighth day, while the EHIF pays sick leave from the ninth day (previously the second).
Legislation was amended giving the government the right to approve a lower pension indexation rate if the expected real GDP growth in the same year is negative or if the gap between projected revenues and expenditure of state pension insurance funds exceeds 1% of GDP (offsetting payments can be made within five years after the index change). The pension indexation rate for 2009 was thus reduced from 1.14 to 1.05 on 1 April 2009.
A new law addresses the transactions carried out with public property – granting the use and sale of state assets. It determined the procedures for the transfer of public assets through the public auction, selective tender, and discretionary procedure. A separate chapter dealt with the state participation in private legal entities, i.e. businesses, foundations and non-profit organisations. Different from the current law, the new act extended the regulatory scope of the State Assets Act by addressing in addition to the governance of state-owned assets, i.e. acquisition, holding, use and disposition of immovable, also the governance of holdings, i.e. the state's participation as a shareholder, founder or a member in companies, foundations and non-profit organisations. The regulation stipulates the obligation of holding administrators, persons exercising the founder’s rights, and persons exercising membership rights to take the position in annual reports on each specific company, foundation and non-profit organisation on whether the state's participation in these continue to be necessary (whether the original objectives of participation have been met or not, and whether the aim is still topical). The nomination of holdings administrators should be also based on certain principles (e.g. the avoidance of conflicts of interest between the different roles of the state). Ministers by administrating holdings in companies must also bear in mind the productivity (rate of return) and capital structure (involvement of debt capital for leverage purposes). The justification of participation in companies have to be related to revenue optimisation/ earning, a natural monopoly argument, or the company carrying out public functions and / or strategic interests are involved in service provision/ goods production. Finally, criteria were introduced for deciding for the establishment of a specific legal form of private legal entity (consumers of goods/ services both the state and the private sector, standard operations, general objectives).
Most of the provisions and sections of the act repealed; only those related to privatisation securities and contract of purchase and sale were upheld.
Widening the range of the unemployment insurance premium for employees from 0.5-2.0% to 0.5-2.8% and for employers from 0.25-1% to 0.25-1.4%.
Full state contributions to the mandatory funded private pension pillar (4% of payroll) were diverted to the general budget (state pension fund) in the second half of 2009 and in 2010. State contributions have partially resumed in 2011 (2% of payroll will be paid to individual accounts) and are expected to be fully resumed in 2012. The contributions may be increased to 6% of payroll in 2014-17 in order to counterbalance current reductions, but only for those employees who chose to continue their individual payments into the second pillar (2% of the payroll) in 2010-11, or applied for paying 3% instead of 2% starting from 2014. This will amount to diverting part of the contributions from the first to the second pension pillar, as social tax is not expected to rise.
In 2009 social security contribution was raised from 35% to 39.2% for the employer, and from 2% to 4.8% for the employee.
Decrease in the mandatory banking reserve rate from 15% to 2% from January 2011.
Amendments in the regulation on prudential ratios included the introduction of risk position and its calculation related to capital rent, the establishment of an investor, original issuer, and sponsor due diligence obligation in case of securitisation transactions, and the provisions on the transfer of substantial part of credit risk (mezzanine positions). There were also corrections in the percentages and the wording of the regulation, while several provisions were complemented (on guarantees with the advanced internal ratings method, risk positions related to life insurance contracts, requirements on the securitisation transactions). The whole chapter on large exposures was redefined.
Amendments in the Credit Institutions Act regulated the possibilities for expropriation of credit institutions in case of increased vulnerability and banking crisis. For the first time after the early 1990s, division of credit institutions was allowed for the purposes of resolution.
An amendment to the Law of Obligations Act obliges the banks operating in Estonia to inform clients of changes in the terms and conditions 2 months in advance instead of 1 month previously. The new procedure requires banks to inform clients personally.
Enabling individuals in financial difficulty to restructure their debts, thus offering them an alternative to personal bankruptcy. Under the act, a court application could be filed to reduce the applicant’s debt, containing proposed measures for restructuring the debt, which include an extension of the terms for the performance of obligations, partial performance of obligations, and a reduction of obligations. The debtor may use the help of a solicitor to develop a debt restructuring plan. The court will approve the plan if at least 50% of the creditors agree to it and if those who do not agree are not discriminated against. The court may also approve the plan in case less than 50% of the creditors agree and if the court finds the debt restructuring plan to be reasonable and that the creditors are treated equally. The court may also change the method and extent of debt restructuring. After approval, the claims covered by the debt restructuring plan may be executed only in accordance with the plan. In general, the act favours extensive debt restructuring, including a reduction of principal claims.
The introduction of the possibility for the foundation of a private limited liability company without making contributions. If the planned share capital of a private limited company is not larger than 25,000 euros, the memorandum of association may prescribe that the founders are not required to pay for the share upon the foundation of the private limited company. The founder of the private limited company specified in that case may be exclusively a natural person.
The act enacts the raise of pension age (from 62 years to 65) by 2026.
Specification of interest income – taxation of interest income that partially or completely depends on the value of a security, deposit, currency, other instrument or the underlying assets thereof or the change in such value.
Income on financial assets – income tax liability arising from gains or income received on financial assets has been specified and the postponement of this liability (provisions on Investment account introduced for that purpose).
Removing the minimum threshold amount for social tax in case of part-time employment with the purpose of increasing part-time labour and increase the employment rate.
Requirements on the provision of savings and insurance products that entail investment risks and regulation on market manipulation were specified. The requirements for the offer of certain savings and insurance products, which include increased investment risk, were stipulated. As a result of the amendments, the service provider who can be both a bank, insurer, company or investment firm, based on the information provided by the customer had to determine whether the an investment-linked life insurance contract or a deposit containing an investments risk element, offered to a client was suitable for a client or not. Also, the service provider was required to explain to customers the products and the nature of their content.
The disclosure requirements of trading book portfolios and securitisation instruments as well as managers remuneration principles were specified.
Removing the unemployment insurance benefit to insured persons who cancelled the contract of employment at the initiative of the employee or by agreement of the parties.
List of income, where Income tax has been exempted, extended to include insurance premiums of supplementary funded pension paid for an official, an employee or a member of the management or controlling body of a legal person and amounts paid for acquisition of units of voluntary pension funds, which shall exceed neither 15 % of payments made to them during a calendar year and subject to income tax nor 6000 euros.
An amendment to the Health Insurance Act from 2012 seeks to strengthen the gatekeeping function in primary health care by lowering the number of directly accessible specialties.
Previous primary health care management functions were centralised from county governors to the national Health Board by an amendment of the Health Care Organisation Act that came into force in 2013. It is hoped that this will achieve a better performing primary health care system through needs-based planning and optimised resource use, plus a better access to primary health care services in rural areas by introducing incentives.
The Estonian Parliament passed amendments to the Collective Agreement Act, establishing the right of a party to a collective agreement to unilaterally terminate it once it had expired. (Previous regulations had meant that when a collective agreement expired, its terms would automatically remain in place until a new deal was signed.)
Since 1 January 2013 a pension supplement for raising a child is added to the old-age pension, pension for incapacity for work or survivor’s pension.
Annulation of the right of civil servants to receive additional pension (up to 50% of the pension for service over 30 years). The law does not have ex post facto force. All additional pensions which have been appointed before enacting the mentioned law remain.
Decreasing the unemployment insurance premium rate from 4.2% to as 3.0% (2.0% for employees and 1.0% for employers).
Provision on a oral hearing was added – at the request of a party to a concentration or the Competition Authority, a meeting shall be held for the oral hearing of the party to the concentration at the time and place determined by the Competition Authority.
The current law was supplemented with regulations, which allowed the Competition Authority to exercise the powers granted by the Council Regulation 1/2003. These competencies/powers had the right to impose temporary measures on enterprises and the right to approve the voluntary commitments taken by undertakings in order to improve the competition situation on the market.
Provisions were added on the requirement for an undertaking with special or exclusive rights or in control of an essential facility to keep separate accounting of revenue and expenditure related to each product or service on the basis of consistently applied and objectively justified accounting principles which shall be clearly specified in the internal rules of the undertaking.
Introduction of taxation of income of contractual investment funds – gains from transfer of property, income from rent, interest income.
Increase of basic exemption in event of pension – if a resident natural person receives a pension paid by a Contracting State pursuant to an Act, a mandatory funded pension provided for in legislation of such state or a pension arising from a social security agreement, increased basic exemption shall be deducted from the income of the person in the amount of those pensions but not more than 2520 (from previous 2304) euros during a period of taxation.
The government imposes private sector wage settlements, places a ceiling on bargaining outcomes or suspends bargaining.
The government imposes private sector wage settlements, places a ceiling on bargaining outcomes or suspends bargaining. The agreement is negotiated between unions and employers, but implemented through legislation (or prepared for legislation).
Revised personal income tax scales were implemented. The additional personal income tax concessions granted at the time of the central incomes settlement were estimated at Mk. 550 million (annual rate), though for countercyclical reasons their implementation was deferred till the beginning of June.
Personal income taxation was reduced. The lower limit of taxable income raised, tax rates made less progressive in low-income groups, and amounts of certain deductions increased (applicable from mid- 1974). The loss in revenue due to the personal income tax rate concessions was estimated at around Mk. 400 million (annual rate), or at almost 8 % of 1973 personal income and wealth tax collections (and 0.5 % of 1974 GDP).
The progressivity of income taxation was eased to compensate moderate wages policy while making incomes policy agreement in 1974. This was a principally important measure which became a regular part of incomes policy pacts to lower taxation up to 2010.
Duration of benefits in Unemployment Insurance (UI) increased from 150 to 200 days within one calendar year (this corresponds to coverage for nine to ten months per calendar year). The total maximum duration remained unchanged at 450 days.
Income tax cut estimated at Mk. 850 million. Pattern of income taxation changed, number of brackets reduced, rates lowered and system of deductions modified.
Law concerning granting of loans to firms on employment policy grounds enters into force. Condition for the loan is that the firm binds itself to keep in work or under training a worker who would otherwise become unemployed. Loans, for which no guarantee is required, are repayable within three years, with freedom from redemption and interest (7 %) payments during the first year.
Tripartite bargaining is restored (national level, with additional sectoral, local or company bargaining).
Downward adjustment of income tax brackets by an average of 13 %, including extra tax concessions for the lowest paid and reductions in employer contribution rates to child endowment and health insurance as well as in employee social security contribution rates. (partly adjusted for inflation)
Tax scales marginally adjusted in the lowest income brackets.
A central part of government's principal decision was the aim to stop the rise of a tax rate and keep it at the level of 40 % of GDP. This became a central idea in the Finnish tax policy up to the year 2013 because Finland's tax rate (%/GDP) varied between 36 and 45 in 1978-2013 despite of strong cyclical changes.
Before making a decision on the matter of dismissal based on economic and production-related reasons the employer must engage in negotiations, first on the grounds for this measure and its effects and then on possible alternatives. Five days before this co-operation procedure commences, the employer must provide a written negotiation proposal (neuvotteluesitys). The duration of the negotiations depends on the number of employees affected. If fewer than ten employees are to be affected the two-stage negotiations continue for seven days, while otherwise they continue for six weeks. Only after these negotiations have ended can the employer give notice of dismissal.
In small enterprises to which the co-operation procedure is not applicable (i.e. those with fewer than thirty employees), before dismissing the employees concerned the employer is under an obligation to explain to them the economic or production-related grounds on which their dismissal is based. However, no specific penalty is imposed for failure to comply with this obligation.
The compensation constitutes a specific consequence which has the nature of a pecuniary remedy, not a penalty. The recipient of compensation is the manual or white-collar worker concerned. Compensation as a remedy relates to situations subject to an increased duty to negotiate in which an employee is actually transferred to part-time work, laid off or dismissed. It is payable only for particular situations of procedural fault, which is independent of whether the employer had lawful substantive grounds for reducing the contract to a part-time one or carrying out layoff or dismissal. On the other hand, being held liable to pay such compensation does not preclude the imposition of other possible penalties. The amount of compensation is subject to a maximum of 20 months' pay. It is paid by the employer and awarded to the employee concerned. No minimum is set. In practice the amounts awarded range from one month's to six months' pay.
The Act stated that the measures which fundamentally transformed the conditions of workers in the companies (over 30 workers) had to be pre-negotiated between the representatives of employers and employees. However, employees gained equal decision-making rights only on inner-firm social activities.
Minimum wages are set by (sectoral) collective agreement or tripartite wage boards in (some) sectors.
Age limit of unemployment pension reduced to 58 years.
National Unemployment Benefit for those not qualifying for the other programmes (but passing the means-test) or exceeding the maximum duration of Unemployment Insurance Benefits. Recipients must register to the employment offices, seek full time employment and accept any job offer after three months on benefit. No maximum duration.
Liberating forward exchange transaction which endorsed short-term financial market.
The 1979 Occupational Health Care Act requires employers to provide occupational health services mostly for prevention purposes, including workplace inspections, prevention of health hazards at work and periodic health examinations. However, employers may also arrange treatment for their employees, and are free to purchase the necessary services from authorised external providers (usually the local health centre) or organise these services themselves – either independently or jointly with other employers. The national health insurance reimburses 50 % of the running costs.
Wage bargaining takes place at national level, there are no additional sectoral, local or company level bargaining.
Adjusted Unemployment Benefit: small group, workers with reduced days of work.
Employers may qualify for subsidies in conjunction with early retirement arrangements up to end-June 1980.
Income and most important deductions adjusted by 8 % on average from beginning of 1979 (new scales to be applied from beginning of February). Ceiling rule of income and wealth taxation incorporated permanently in legislation, so that maximum of 30 % of State wealth tax may be excused (adjusted for inflation.)
Income tax scales are to be adjusted downwards by average 7.5 % from beginning of 1980 and wealth tax and major deductions are too by at least this amount. (adjusted for inflation)
Minimum wages are set by national (cross-sectoral or inter-occupational) agreement (“autonomous agreement”) between unions and employers.
Under the unemployment pension scheme, which was created in 1971, long-term unemployed aged between 60 and 64 years can apply for early retirement. Benefits, which are equal to those paid under the invalid pension scheme, can equal up to 60 % of earlier earnings. The number of recipients, who are included in both labour force and unemployment statistics, still numbered below 4 thousand in 1978, but have since increased rapidly to some 46 thousand, owing in part to a temporary lowering of the age limit to 55 years in 1980.
Personal income tax scales adjusted downwards by an average of 11 % as from beginning of 1981 (adjusted for inflation). Corporate income and wealth tax rates remain unchanged and most important allowable deductions raised.
Sectoral or industry level bargaining, the first tripartite agreement since 1981
Selling the majority of Televa in a way that private company Nokia gained 51 % of its ownership.
Business taxation simplified and conditions for making operating reserve transfers eased.
Personal income tax brackets and major deductions adjusted upwards for inflation by average 12 %.
Deregulation of the flotation of the certificate of deposits of commercial banks.
The abolishing of base rate - bound central bank credits to private banks which meant that only day-to-day money was available from central bank to private banks.
License for the banks to add grey market costs to interest rates.
License for foreign banks to get day-to-day money from central bank which guaranteed that they were allowed to involve in the Finnish financial market.
Pension levels are raised and made taxable. A special tax threshold is introduced corresponding to the level of the basic NPS pension.
Age limit of unemployment pension raised to 60 years (fully effective from 1991 due to transition period).
Government decided that state companies had to become profitable.
Responsibility to be available to find and accept work is widened, although milder conditions apply to unemployed people with children. Claimants have to accept suitable job offers after three months on benefit. Recipients can refuse an offer during the first three months if the salary is lower than the person's UB. However, after three months on benefit, all claimants (also the recipients of Earnings-related Benefit) are asked to accept work outside their educational and work experience.
More stringent sanctions are introduced. A general six weeks sanction was already used. However a new milder three weeks sanction as well as a stricter unlimited exclusion from benefit for people repeatedly refusing work are introduced.
Existing unemployment protection programmes are brought together under the same law. The former Unemployment Insurance Benefit is renamed Earnings-related Unemployment Benefit, while the means-tested National Unemployment Benefit is re-called now Basic Unemployment Benefit. The full rate of Basic Unemployment Benefits is set at a flat-rate of 70 FIM per day. Child supplements are set at 15 FIM for one child under 18, 22 FIM for 2 children, 28 FIM for three or more children. The Earnings-related UB combines a component equal to the Basic UB rate and an earnings-related component (set at 45 % of the difference between the daily wage and the Basic UB).
Introduction of start-up grant experiment for the unemployed who decided to start their own business. The system was made permanent in 1988.
Restrictions on the expansion of bank credit are abolished.
A family can refuse to move if they have a tenable personal reason for that (for instance, an own house, spouse's work, caring responsibilities, children's schooling, etc.) binding the claimant to a certain living area.
This reform partly meant that municipalities gained a right to use private social and health service providers.
Annual indexation of UB in case wage levels increase significantly (more than 5%). Previously, indexation was dependent on government's choice.
Earnings disregards rose from 3'000 FIM to 3'500 FIM. The means-test of the Basic UB do not count the basic benefit for child home care allowance not the sibling supplements.
The earnings-related UB raised significantly
The earnings-related UB will be  reduced by 20 % after 100 days of benefit receipt.
The maximum duration of Earnings-related Unemployment Benefit is increased from 450 to 500 days in three years.
The minimum age to be eligible for unemployment benefit increases from 16 to 17. Full time students have no rights to benefit. All persons aged 17-65 living in Finland are now eligible for UB, rather than Finnish nationals as previously.
Unemployment benefits were raised, but also made taxable.
UI eligibility criteria are weakened as the reference period for the requirement of six months of employment is extended to include the last two years (previously only last six months included).
This latest step in pension reform provides that entrepreneurial and property income will no longer reduce pension entitlements.
An individual early pension may be granted to a person aged 55 or over if his working capacity has deteriorated so that he cannot reasonably be expected to earn a living.
An earlier-than-normal old age pension may be granted to a person aged 60 (58 for civil servants), the rate of pension being then correspondingly lower.
People aged more than 55 are eligible for a pension in case of a decrease of their working ability.
Early retirement is also allowed to people aged 60 or more.
Making a minor part (2 %) of public university funding dependent on quantitive profitability.
Accepting weekly and daily working time flexibilization in a way that working hours had to be levelled in a four months period.
Liberalising of long term (over 5 years) foreign loans of industrial and shipping companies.
Abolishing the interest rate control of central bank (loan lending).
The earnings disregard of the claimants with families are raised to 3'770 FIM (plus additional 320 FIM for every child and 430 FIM in case of additional work or part-time income).
It increases Basin Unemployment Benefits to 75 FIM per day. Child supplements are raised at 16 FIM for one child under 18, 24 FIM for 2 children, 30 FIM for three or more children.
Business taxation reform reduced enterprises income tax rate from 43 % to 33 %. The undervaluation rate of stocks reduced from 50 % to 40 % and the maximum amount of operating reserve allowances was raised to 25 % for 1986 and 30 % for 1987.
Inflation adjustment of personal income tax brackets by 8 % and a substantial alleviation of wealth taxation.
The same six-months work or training guarantee also applies to the long-term unemployed (more than one years of unemployment, either continuously or cumulatively through shorter spells of unemployment during the last two years).
Introducing employment guarantee for long-term unemployed (people who had either been unemployed 12 months in a row/12 months during past two years) or young (under 20 years old) unemployed who had been unemployed over three months.
The competition law was overhauled in 1985 and the obligation to register prices under the price control system was abolished in 1986. By early 1987, only about 9 % of industrial products covered by the consumer price index were still under some form of government control. If prices of public utilities are included, altogether perhaps 25-30 % of items important in private consumption are still subject to price controls.
The Higher Education Development Act endorsed the principle that eventually all members of every age group should graduate either in university or in vocational education. A new system of funding is implemented from 1988: The new system of funding intended to establish a partial shift away from "input-based" appropriation (with grants based on student intake, staff size and earmarked funds) to "output-based" appropriation (i.e. referring to degree/teacher ratios), and was to be applied to new funds granted to institutions without affecting existing entitlements.
Deregulation of foreign loans of companies and co-operatives.
Implementation of market-based interest rates (Helsinki Interbank Official Rate, helibor), which replaced day-to-day money markets administrated by central bank.
It increases Basic Unemployment Benefit to 81 FIM per day. Child supplements are raised at 16 FIM for one child under 18, 24 FIM for 2 children, 30 FIM for three or more children.
The earnings disregard of the claimants with families are raised to 4'030 FIM, for singles to 2'690. For every child under 18 the disregard is raised by 460 FIM. Spouse's income is considered if it exceeds 220 FIM per month. In case of additional or part-time work the disregard is raised by 460 FIM.
Older claimants satisfying the work history requirements not covered by an unemployment insurance fund have no longer to demonstrate a need for financial support. The can therefore benefit from the Basic UB irrespective of their means and income.
Duration of UI extended to 500 days, full benefit period increased to 200 days, and the reduction of benefit level is now only 12.5 %.
The means-test was smoothened so that the partner's income is taken into account only after it exceed 200 FIM per month. Family income disregard was raised to 430 FIM for every child under 18. Means-test will ignore several kinds of allowances (annuities under the Military Injuries Act, compensations for special costs under the Employment Accidents Insurance Act, front-veterans pensions, the supplementary part of family pensions and social assistance benefits under the 1982 Social Assistance Act).
The right to UB is denied to those receiving early retirement benefit or individual early retirement pension.
Access conditions to Adjusted UB are tightened.
No new waiting period for those becoming unemployment again within 14 days after ending the previous UB receipt.
Establishing seven public utilities which arranged public railway, post, publishing, computer, food, map and administration developing services.
Selling the minority share of Telenokia to Nokia.
Lowering marginal rates of personal and company taxes, reducing tax reductions and broadening tax base.
Decrease of sickness insurance contribution (0,95% of total wages)
Price surveillance is abandoned and the Price Control Act is repealed.
The 1973 law on promotion of economic competition is replaced by a new Restrictions on Competition Act. The powers of the Competition Board are increased.
From 1989 dismissal for economic reasons will be possible only if work has decreased significantly and permanently and if employees cannot be transferred or trained for new tasks.
Protection of workers is improved. Periods of notice will be extended from 1989.
Daily working time could be lengthened locally into 10 hours (working hours had to be levelled in a 16 weeks period).
The earnings disregard of the claimants with families are raised to 4'310 FIM, for singles to 2'880. For every child under 18 the disregard is raised by 490 FIM. Spouse's income is considered if it exceeds 230 FIM per month. In case of additional or part-time work the disregard is raised by 490 FIM.
It increases Basic Unemployment Benefit to 86 FIM per day. Child supplements are raised at 18 FIM for one child under 18, 27 FIM for 2 children and 33 FIM for three or more children.
Government changes tax on interest income. In 1989, capital income allowance in income tax will be Mk 2'000, increased by 50 % of amount by which income concerned exceeds Mk 2'000, up to a limit of Mk 10'000. This maximum is reached when income on financial assets totals Mk 18'000.
The Act stated that it was possible to establish in companies (over 10-30 workers) personnel funds which were owned by employees and pay to these funds a share of company's profit. The funds were entitled to utilize its members by arranging education, make investments in the company or make other secure and profitable measures.
Improved unemployed protection for long-term unemployed.
Reversal: Ceilings on expansion of bank credit are re-introduced.
Reversal: From full towards partial liberalisation. (Because if re-introduction of credit ceilings.)
liberalisation of foreign direct investments for financial companies (in practise) and private persons (in principle - implemented in July 1990).
National level, with additional sectoral, local or company bargaining
Accepting working 24 hours on the weekend (Saturday and Sunday) in a way that workers earned a salary equivalent to regular 40 hours working week.
The reduction of earnings-related UB after a certain time on benefit (established in 1985 and 1987) is abolished.
It improves the reconciliation of UB and sickness benefit: UB receipt does not end due to the sickness until the sickness benefit is being paid.
The corporate tax rate is reduced from 33 to 25 %.
Stricter conditions are set when a person can refuse a job or quit.
Opening telecommunication services into competition.
The government dissociating itself from private-sector wage negotiations, so as to encourage more decentralised and flexible wage determination. In effect, the 1993 and 1994 wage rounds essentially involved bargaining at the industry level, and this was not preceded, as used to be the case, by a central agreement between the social partners and the government. Such a move towards a decentralised wage formation process should assist in adapting relative wages to the highly divergent labour market conditions across the different sectors of the economy.
Basic Unemployment Benefit raised to 97 FIM per day.
It increases Basic Unemployment Benefit to 108 FIM per day. Child supplements are raised at 22 FIM for one child under 18, 32 FIM for 2 children, 41 FIM for three or more children.
The "extra days" system is introduced for unemployed older than 55, providing benefits until the month than they turn 60 of age. The system (together with the unemployment pensions) created the basis for an arrangement called "pension tube" where unemployed persons older than 55 could remain on earnings-related benefits until pensionable age (65 at that time).
Spouse's income exceeding 280 FIM per month is taken into account in the means-test. The part-time work disregard is raised to 700 FIM.
The corporate income tax rate is reduced from 25 to 23 %.
The delay before notice can start was shortened from 2 months (as set in the Act on the Dismissal Procedure) to 1-2 weeks (as set in the Act of Employment Contracts).
Full liberalisation. (Credit ceilings are abolished.)
The deductibility of medical expenses is abolished.
Sectoral or industry level bargaining, tripartite agreement: Pact is negotiated between unions and employers, but with heavy involvement of the government in negotiations (”shadow of hierarchy”, threats, side-payments).
The earnings-related component of UB is reduced from 45 to 42 % starting from 01/07/1992.
Reconciliation of salary and benefits for a person whose working hours have been reduced (to part-time): 750 FIM (reconciliation percentage set at 75 %).
The short unemployment periods cannot be cumulated in order to be eligible for long-term unemployment training and work programs.
Individuals' pension insurance contributions are raised by 1,5 percentage points to 2.2 % and to 3.7 % if the annual taxable income exceeds Mk 80'000.
Private sector employers' contribution rates to social security are temporarily reduced by 1 %.
The government launched a large privatisation programme in 1991. However, the implementation of this programme was adversely affected by the weakness of the Finnish stock market until early 1993.
Abandoning the state control in Valmet (May-June 1996) and Enso-Gutzeit (June 1998).
Abandoning the state control in Outokumpu (metal industry). However, together with the National Pensions Institute, the state institutions still had a control in the company until year 2006.
The rate of corporate income tax is lowered from 23 to 19 % by the newly elected government.
The market for training courses was opened to competition in 1991.
Dissolution of state employment guarantee for long-term unemployed and young unemployed.
Abolishing the restrictions of foreign ownership (limited companies, banks, insurance companies and real properties).
Creating legislation on public procurements which especially meant that municipalities (which were the major arrangers of public services in Finland) had to be invited to tender public procurements apart from the services which were arranged by the municipalities themselves.
Possibility of paying young workers (under 25 years old) only 50-90 % of the salary up to eight months compared to the salary which was determined by collective agreement.
Establishing of a municipality's (the main provider of health care services) right to charge healthcare users.
Widening the possibilities of municipalities to endorse a purchaser-provider-model in public services as a part of the reform which replaced state's earmarked funds to municipal public services by framework budgeting which increased municipal autonomy to arrange their services.
Decreasing earnings-related unemployment benefits as much as the income of workers decreased after the increasing of employee's employment pension contribution.
Care Allowances as referred in the National Pensions Act, Disability Allowance are not reduced from the full rate of UB.
Lengthening the period for which labour market newcomers, seeking unemployment benefits, had to wait before being able to receive them.
The waiting period for the first time entrants to the labour market is extended from 6 weeks to 3 months.
A change in the computation of the pensionable wage is introduced in order to take into account reductions in purchasing power of active workers with the introduction of employees' pension contributions (previously only the employers paid such contributions).
The annual accrual factor for public sector workers is reduced from 2.2 to 1.5.
Employers' pension contributions are lowered to 2.4 % in the private sector and to 3.95 % in the public sector.
Several measures are adopted in order to harmonize the pension rules for the public sector with those for the private sector: The standard retirement age for public sector workers is raised from 63 to 65 years, the same age as in the private sector.
Tightening the right for people over 50 to turn down a job offer or training.
Sanction period extended from 6 weeks to 8 weeks.
Implementing unemployment security reform. Its major novelties were the introduction of workfare (work for welfare) principle (work training measure for a selected group of unemployed who weren't entitled to earnings-related unemployment benefits) into Finnish legislation. Former basic unemployment allowance was renamed to "labour marker subsidy" at the same time.
Opening postal services into competition.
With effect from 1 July 1994, two private suppliers of international telecommunication services have been admitted to the market, which so far has been the exclusive domain of the state-owned PTT. With these measures, the liberalisation of the telecom industry in Finland appears to be progressing more than required by the EEA and EU agreements.
In addition to privatisations, the government decided to initiate deregulation in the telecommunication market. As of 1 January 1994, private suppliers of long distance domestic telecom services have been allowed to operate.
The 1939 Restriction Act is repealed and replaced by a new legislation lifting the restrictions on foreign ownership of Finnish companies. This new legislation also liberalises the acquisition of real estate by foreigners.
Provides for a decrease in benefits for unemployed persons: decrease by 2,5% in the earnings related UB
Decreasing earnings-related unemployment benefits as much as the income of workers decreased after the increasing of employee's employment pension contribution and unemployment insurance payment.
Adjusted UB benefits are no longer paid more than 24 months, even though the maximum on 150 days would not be satisfied.
The period for receiving UB at basic flat-rate is shortened: maximum duration of 500 days is implemented for Basic UB. Duration adequate to that of Earnings-related UB.
No means-test during participation to labour market measures for people over 55 satisfying the work conditions and for people who expired the Earnings-related UB (for only the first 180 days).
People living with parents receive 60 % of benefit.
Possibility for claimants older than 55 to receive the benefit until the month during which they turned 60 years of age.
Claimants with dependants can earn 5'540 per month and exceeding income is cut by 75 %. The income limit is raised at 630 FIM per very child under 18. A single person can earn 2/3 of the income of claimants with dependants and also his/her exceeding income is cut by 75 %.
Introduction of the means-tested Labour Market Assistance scheme which tends to lengthen the average benefit duration.
Work conditions (6 months) is introduced for Basic UB.
The target level for public pension lowered from 66 to 60 % of highest pre-retirement earnings (as for private sector employees). The change will be implemented gradually.
Pensioners' contributions introduced for the NPS.
Employers' (occupational) and UI pension contributions introduced.
The minimum age for early retirement rises from 55 to 58 years, but remains 55 for those born prior to 1940.
The general postal monopoly was abolished in 1994 but standard letters remain to some extent regulated. Other services, such as parcels, newspapers, express deliveries and courier services are, however, fully liberalised. A license can also be granted for a standard letter postal service but a fee has to be paid aimed at securing the provision of postal services in sparsely populated areas. This approach is different from that in telecommunication where the incumbent pays the costs of public services.
Ministry of education started results-based management and steering of universities including framework budgeting. The criteria of funding consisted of several quantitive measures from the amount of completed degrees, research activities and evaluations to adult re-education, employability of the students who were completed their degrees, national/international cooperation and earned external funding.
Establishing the network of universities of applied sciences in a way that former vocational schools competed against each others by achieving the new status of the university of applied sciences. This meant that the state evaluated which vocational schools fulfilled best the criteria (the need, quality, international connections and support services of education) of the universities of applied sciences.
The Act covers in more detail the terms and conditions for fixed-term appointment. Basic principle is that the public service relationship is based on a system tied to public offices and a fixed-term appointment to public service relationship is an exception from that rule. A person can be appointed to public office on a fixed-term basis if required by the nature of the office or by a justified reason relating to the government office’s operations. If the fixed-term employment contract has been made without a proper and justified cause, the contract is regarded as a contract for an indefinite term. If this kind of contract has been terminated as a fixed-term contract and if the termination did not have legal basis, the employer can be obliged to pay to the employee a compensation equivalent to the minimum of three months and the maximum of 24 months pay.
Removal of restrictions on temporary work agencies and other private placement services.
Widening local bargaining on working times in a way that local bargaining between the representatives of labour market parties became the primary way to determine working times which could be more flexible than working time legislation allowed.
It increases Basic Unemployment Benefit from 116 to 118 FIM per day. Child supplements are raised at 24 FIM for one child under 18, 35 FIM for 2 children, 45 FIM for three or more children.
Full-time self employment eligible to Basic UB and Training Benefits if satisfying the work condition (at least 2 years of work over the last 4 years).
Eligibility for UA now requires six-month work experience within the last two years and duration is limited to 500 days, and means-testing is removed (basically same system as UI, though with a flat rate benefit).
Working record from other ETA countries can be accepted as part of the work condition only if the person has worked in Finland for at least 4 months.
Since January 1994, first-time job seekers and persons who have exhausted benefit coverage under UA/UI are entitled to the "Labour market support" (LMS), managed (in common with UA) by the Social Insurance Institution. This new scheme supplements the Unemployment Allowance regime, which prior to January 1994 granted benefits on a means-tested basis with indefinite duration. The UA system no longer includes means testing, while the benefit duration is now in line with that of UI benefits. The LMS is a social assistance programme of last resort, with only the basic amount and child supplement granted, subject to means testing, and with indefinite duration. The means test evaluates the claimant's income as well as a portion of spouse income. People who participate in training and rehabilitation programmes also receive this allowance, but are not subject to a means test. The standard waiting period in this scheme is three months. However, no waiting period is applied to those entitled to LMS after the expiration of UA/UI benefits, the allowance being payable without means test for the first 180 days. In this new scheme, the benefit level corresponds to the "old" UA system, Mk 116 pier day which is means tested.
A new method of computing pensionable wage for older workers is introduced: earnings after the age of 55 are disregarded if they would lead to a reduced pension level.
Pensionable wage and post-retirement benefits are not indexed for inflation in 1994.
The required minimum retirement age for part-timers is lowered from 60 to 58 years.
The minimum age for early disability retirement is raised from 55 to 58 years and the accrual factor of workers from 60 to 65 years old is raised from 1.5 to 2.5 % (effectively lifting their pension by 1 % of the pensionable wage for every additional year of work).
The Posts and Telecommunications (PTT) have been transformed into a joint stock company with the government retaining full ownership.
Abandoning the state control in Rautaruukki (steel industry) as a part of the package to sell state companies and their shares to increase public R&D investments and pay state debt in 1997. Parliament had accepted this in principle already in 1994 even if this measure was implemented by a new government (1995-1999).
Persons aged 17 years will not be entitled to labour market support unless they participate in an active labour market policy programme.
In the framework of the 1995 Employment Program a new Working Time Act is implemented, to allow longer store opening hours some days of the week, and the possibility for stores to remain open during a limited number of weekends. Entry into force: 1997 January.
liberalisation of production, selling and foreign trade of electricity.
Adjusting Finnish agriculture to EU agricultural policies which meant diminishing farming subsidies, production quotas and other restrictions.
A full-time employee may stay on rotation leave, with the employer being obliged to employ an unemployed person during the leave.
Bargaining takes place on a sectoral or industry level, but with direct government participation.
Pact or agreement contains, and/or is predicated on, concessions (or promises) regarding unions (representation, recognition) rights, including employee representation, works councils, bargaining rights, etc.
Labour Market Assistance recipients can claim a Daily Allowance and an Accommodation Allowance of 30 FIM per day each.
Child supplement is reduced to 40 % of child supplements of UB.
Rejecting the paying of labour market subsidy for under 20-years-old unemployed who refused to educate themselves or to participate in active labour market policy measures.
18-19-year-olds have no right to subsidies if they refuse offered jobs, resign, drop out education or refuse to apply for vocational training.
Pension benefits are cut by 4.5 % to reflect the fall in earnings of employees caused by the increase in employment pension and unemployment insurance contributions.
A reform of pension rules for the private sector is agreed upon with the social parties. Pension benefits are now to be calculated on the last 10 years of work instead of the last 4. The new rules will be gradually introduced, starting from 1 January 1996.
Abolition of basic universal pension and introduction of procedure of testing NP against other pension income.
A fixed increase of 1.5 % per year of nominal pensions replaces the automatic indexation mechanism.
State Railways have been transformed into a joint stock company with the government retaining full ownership.
The employers' notice period is shortened. For workers with less than one year tenure the notice period is halved (from two months to one month).
Making working times more flexible for both organised and unorganised workers/employers in a way that daily and overtime working time became more flexible even if the maximum overtime hours were restricted at the same time.
The 750 FIM earnings-disregard limit was abolished from the Adjusted UB and the conciliation percentage was lowered from 80 to 50 %. In order to compute the benefit, all work income is considered, of which 50 % reduces it.
Persons over 57 (earlier 55) prior expiration of the 500 days of maximum duration get an extension until the end of the month they are becoming 60 of age. So, the automatic extension of Earnings-related UB is reduced from 5 to 3 years.
Waiting period is extended from 5 days to 7 days.
Claimants with dependants can earn 5'040 FIM per month and any income exceeding this would be cut by 50 %. The additional earnings-disregard for families with children remains 630 FIM per child. A single person's earnings-disregard is lowered to 1'500 FIM.
Lengthening the qualifying period for earnings-related benefits from 26 to 43 weeks, making the qualifying for earnings-related benefits easier for temporary workers, increasing the generosity of partial unemployment benefits for temporary workers, rejecting the paying of labour market subsidy for under 25-years-old unemployed who refused to educate themselves or to participate in active labour market policy measures, letting old unemployed re-educate or rehabilitate themselves without ending the paying of earnings-related benefit which corresponded their earnings related unemployment benefit, and weakening a few rules which regulated the level and paying period of unemployment benefits.
Work condition extended from 6 months (26 weeks) to 10 months (43 weeks). Recipients are required to work for at least 10 months in order to requalify for the benefit and can no longer requalify for "full benefits". One must have worked at least 18 hours per week, the wage must have been consistent with collective agreements or at least the daily wage multiplied by 40. Also the review period was extended from 8 month to 24 months.
Always a new waiting period (5 days) when moving from UB to Labour Market Assistance.
Labour market entrants' waiting period extended from 4 to 5 months.
Persons aged between 17 and 24 lacking any vocational training are no longer entitled to labour market support if, without any acceptable reason, they refuse a suitable job offer, or a slot in a training course. Age limit (19) established in Law 1995/1705 is extended.
The benefit level at which Earnings-related UB claimants requalify for the benefit is referred to the salaries received during the ten months period. In general, several initiatives are undertaken in order to reduce the benefit level in case of renewal of the UB insurance.
The flat-rate component of pension benefits is to be abolished by the end of the decade.
The accrual factors for early-retired and disabled workers are reduced from 1.5 to 1.2 % for those aged between 50 and 60 years and from 1.5 to 0.8 % for the remaining five years until regular retirement.
The annual adjustment of post-retirement benefits of people aged 65 and above is based on 80 and 20 % weights of the CPI and the earnings index respectively. This measure tends to reduce the level of pension benefits relatively to earnings.
Engaging more versatile and riskier investment activities by investing and increasing share of pension insurance companies' assets in shares and foreign investments.
increase in the rate of tax on capital and corporate income from 25 to 28 %
2 % inflation adjustment in all income tax scales
Participants in voluntary vocational training will receive an allowance.
Responsibility for everybody to gain their livelihood by wage working. Reduction of the basic social assistance benefits by 20-40 % for those refusing work and training measures.
Strengthening sanctions for the unemployed who refused to accept job offers.
The length of the period during which unemployment benefits are suspended, in case a person stops looking for work or refuses a suitable job or training offers, is increased. The sanction periods are extended (from 3 weeks to 1 month, from 6 weeks to 2 months and from 8 weeks to 3 months). The work condition is extended from 8 weeks to 3 months.
Full liberalisation: all Finnish households were already able to choose their electricity supplier in January 1997 (ahead of the schedule of EU directives).
A second license for a standard letter postal service was granted in 1997 to Suomen Suoramainonta (Finnish Direct Marketing), but it has not started its operations yet due to the introduction of the fee and the state-owned Finland Post Group kept its monopoly. The charge, which can amount to up to 20 % of the total value of postal services in the area covered by the license, may act as a barrier to entry.
Opening of retail trade on Sundays in June, July, August, December as well as on five separate Sundays.
Atypical work granted equal status to that of permanent employment, fixed-term contracts can be employed in service sector enterprises subject to unstable demand (rules were stricter before).
Making the concluding of fixed-term employment contracts easier if for example the demand of commodities is still unestablished.
Halving of notice periods for employers and employees.
The annual holiday law is revised (as of 1 April 1997), considerably broadening employee rights to annual holiday compensation, including for short-term employment.
The Basic UB and Labour Market Assistance rates are raised by 2 FIM per day.
The index freeze of unemployment benefits will continue in 1997-99.
The period of unemployment benefit for the long-term unemployed over 53 years of age will be shortened by two years.
Unemployed whose benefit receipt has expired (after 500 days) can be paid Daily Allowance during the job experience period. A combined job subsidy is introduced, increasing the subsidy already received by private employers for a maximum period of 12 months who hire a long-term unemployed (for more than 500 workdays).
The Labour Contract Law is to be revised so that the obligation to pay wages during periods of illness is extended in a limited form to include employment lasting less than one month.
Unemployed persons are allowed to make short, occasional trips abroad without losing the right to daily unemployment benefits. The condition is that advance notice is made of the trip, and that the individual can be immediately contacted during the trip and is able to accept work offered during a normal span of time.
Long-term unemployed persons who have been active in the labour market in paid employment or as entrepreneurs for at least 12 years and registered as unemployed job seekers with the employment office for at least 12 of the preceding 24 months have the right to daily unemployment benefits or to Labour Market Support benefits during a period of voluntary training aimed at promoting professional skills for a period not exceeding two years.
New benefit rules are implemented to discourage early retirement: increase of the minimum age for the unemployment pension to 60 years and the lower age limit of the unemployment “pipeline” (whereby the standard unemployment insurance period is automatically extended until an old age pension is drawn) increases from 53 to 55..Increase of the accrual rate for delaying retirement after 60.
The period the recipient is participating to labour market measures does not reduce the 180 days during which the person is entitled to Labour Market Assistance without means-test.
The period of employment entitling to the earnings-related unemployment benefit is extended from six to ten months and the pay forming the basis for earnings-related daily allowances is to be calculated from the date when the employment requirement is fulfilled. New allowances shall be at least 80 % of the previous allowances. The incentive for earning additional income while benefiting from unemployment insurance is improved.
Pensions are more closely linked to work history; the minimum national pension is restricted only to employment-derived pensions below a certain limit.
An additional sickness insurance contribution of 3 % of pension benefits will be collected from pension recipients.
The minimum age of the unemployment pensions is further raised to 60 years.
Selling state company Oy Sisu Ab (car industry) as a part of the package to sell state companies and their shares to increase public R&D investments and pay state debt.
The share of employees' social security contributions is raised starting from 1 January 1999 with a corresponding reduction on the employers' contributions.
The reception of means-tested benefit was made conditional on participation in some form of labour market training for under 25 years old without vocational education.
Enforcement of job search requirements and more frequent contacts between job seekers and public employment services.
A daily allowance is granted to unemployed person for full-time vocational training intended for the promotion of occupational skills, for a period not exceeding 500 days.
Harmonising Finnish competition legislation with EU rules.
Enabling upper secondary schools to outsource its services to other schools or organisations which had gained a right to offer education services.
Basic daily unemployment benefit increased from Mk 118 to 120.
The law limits the access to "last resort" benefit schemes.
Waiting period increased by 2 days to 7 working days.
The merger of the state-owned Enso and the Swedish company Stora, creating the worlds’ second biggest forest industry company, reduced the Finnish public holding in the company from 44 to 18 %.
19.9 % of Fortum (the energy company formed by the merger earlier in 1998 of Imatran Voima [IVO], the biggest electricity supplier, and Neste, the dominant oil and gas supplier) were privatised.
The merger between the partly state-owned company, Valmet, and the privately-owned Rauma, both in engineering and machinery, resulted in a drop in state ownership from 20 to 12 %.
The government sold 22.2 % of its stake in Sonera (the dominant telecommunications company) through the largest ever privatisation by public offering. The privatisation proceeds reach a record high of over FIM 10 billion in 1998.
The income thresholds of the income tax scales are raised by 2 %. The wealth tax scale and the community wealth tax percentage remain unchanged.
Unemployed between 55-59 will now be covered by the Public Employment Service (PES) the same way as younger unemployed, while before the PES treated them as effectively retired. When 55 to 59 year olds become unemployed, there will be an immediate interview by a PES officer, their ability to work will be examined and they may be offered a job search training within three weeks. After an unemployment spell of three months, they can be offered vocational training or a training place in the private or public sector. After an unemployment spell of 11 months, they can be offered a subsidised job.
Implementation of the EU Directive on fixed-term work. The conclusion of a fixed-term contract on the employer's initiative requires a justified reason such as the nature of the work, temporary replacement of a permanent employee, training or other comparable reason. Uncertainty connected with the unstable nature of the enterprise's activity or of demand for the services provided can also constitute grounds for concluding a fixed-term contract. The main motive in restricting the use of these contracts on the employer's initiative has been to prevent evasion of the rules on protection against dismissal. Since a justified reason is required for using a fixed-term contract, in the event of a dispute the employer has to prove the existence of such a reason. On the other hand, these contracts can always be concluded when there is an objective need to do so.
Training counts no longer for 16 weeks of the qualification period for the unemployment insurance scheme.
The means-test in Labour Market Assistance has been eased with respect to the spouse's income. The change has been implemented by raising the deduction on the spouse's income from 300 to 1400 FIM per month (about 15 percentage points), i.e. from EUR 50 to EUR 235 per month prior to the means test.
New pensioners will no longer accumulate pension rights for unemployment pensions from the time they receive an unemployment pension until the general retirement age of 65. This lowers the unemployment pension benefits by 7 %. However, at 65 the unemployment pension ceases and an old-age pension is granted, and the years of receiving an unemployment pension do accumulate pension rights at 0.8 percentage point.
The financial disincentive for large employers to use the unemployment pension scheme has been raised. Large employers have to pre-fund a larger part of the unemployment pension of an older employee who becomes unemployed. Their own risk has been increased to 80 % from 50 %.
Possibility of shelving the disability pension in case of finding work together with receiving an “incentive allowance”.
The financial disincentive for large employers to use the disability pension scheme was aligned with that of the unemployment pension scheme (it was decreased from 100 to 80 %) and has therefore become somewhat smaller.
The temporary reduction of the age limit for part-time pensions from 58 to 56 years was extended to 2002.
The age limit of the individual early retirement pension was increased from 58 to 60 years for those born after 1944. Thus, the measure will only start to bite in 2003.
The government agrees on the merger of state-owned bank Leonia and the private insurance company Sampo. The new financial group will offer bank, insurance and asset management services. The state’s shareholding in the new company will be 43 %. The government intends to lower its stake to 20 %.
In 1999, privatisation proceeds doubled to a record of FIM 20 billion (nearly 3 % of GDP). All proceeds were generated by the public offering of 19.9 % of the shares in Sonera (the dominant telecommunications company).
Abandoning the state control in Sonera (telecommunications) which finally came true in 2002 when Sonera and Swedish Telia (Swedish state was a majority shareholder) merged to one company (TeliaSonera).
Opening of retail trade on all Sundays for the shops which are smaller than 400 m2 as well as extending the right to practise retail trade for all shops on Sundays also in May and November.
The level of bargaining is national or central level, with additional sectoral / local or company bargaining.
Increase in the earnings-related element of unemployment benefit.
The age limit for eligibility to early retirement is raised from 58 to 60 years.
The state lowered its stake in Sonera by an additional 3.5 percentage points to 54.5 % in March 2000, with proceeds of FIM 12 billion.
Abandoning the state control in Leonia (Bank) after merging Leonia with Insurance Company Sampo Oyj.
The tax rate for capital income is raised from 28 to 29 %.
The marginal tax rates in the income tax scales are lowered by 0.5 percentage point in all income brackets. The reduction on tax receipts amounts to FIM 1.55 billion overall. (The government agrees on income tax cuts for 2000 to speed up stalling pay talks.)
People under 25 refusing rehabilitative work get their benefits reduced.
Social assistance on grounds of unemployment requires registration to employment offices as unemployed jobseekers and active job search. Refusal to register may cause a reduction of social assistance benefits by 20-40 %.
The maximum period for paying combined subsidy to the employer (i.e. labour market support plus employment subsidy paid to the employer) was lengthened to two years, for the employment of a jobseeker who has been unemployed for over 500 days.
Although the Act does not specify which particular employees are to be affected when a redundancy situation arises, union representatives may not be selected for dismissal first. In addition, provisions in collective agreements on the order of selection for redundancy are observed and the general principle that those with the shortest length of service with the employer concerned are dismissed first is also followed.
The employer has the right to dismiss an employee with notice if the work in question has decreased substantially and permanently for economic and production-related reasons or reasons arising from a reorganization of the employer's business and the employee cannot reasonably be transferred to alternative work or trained for other tasks. The employer has to justify the necessity of dismissal and the decline in the enterprise's possibilities for offering work. Business economics and management grounds suffice for carrying out restructuring and justify, among other things, the closure of viable units. The grounds stated for dismissal must, however, be genuine and may not be used as a pretext for evading the employee's individual dismissal protection.
Provisions on contract termination are slightly eased (situations where the employer terminates the contract of employment with notice on the grounds of the employee's conduct or a reason connected with the employee personally). The employer may not terminate the contract for a reason attributable to the employee unless that reason is a "proper and weighty" one (asiallinen ja painava). This requirement in the case of dismissal with notice does not constitute quite so stringent a criterion as the "extremely weighty cause" (erittäin painava syy) required for dismissal without notice (see protection against wrongful dismissal). The Act lists a number of reasons which certainly cannot be regarded as constituting such a reason for dismissal.
The Act guarantees part-time employees a preferential right to jobs that fall vacant or new jobs that arise, which means that by undergoing any necessary and feasible training they can obtain a full-time job in the enterprise for themselves. The employer may not apply less favourable employment terms and conditions to part-timers than those applicable to other employees solely because they work part-time.
It can be agreed that the first four months, at most, of the employment relationship should constitute a probationary period in order to allow time for the assessment of suitability on both sides. A probationary period is also possible in the case of fixed-term contracts, but if the term of such a contract is less than eight months the length of the probationary period may not exceed half of that term. A probationary period exists only if it has been explicitly agreed. While it is running, either party can at any time terminate the contract without observing any notice period. The requirements applying to termination during the probationary period are, manifestly, less rigorous than those for termination with notice during the normal course of the employment relationship. However, termination on inappropriate grounds or arbitrary reasons is prohibited.
The new legislation further forbids the application of worse terms to the employment contracts of part-time and fixed-term employees than to other contracts, unless there are special reasons justifying this. This new legislation is transposing the EU directive on part-time and fixed-term work.
It reduces the notice period related to the termination of employment contracts in the case of short-term employment relationships, while it applying a longer notice period of six months once an employment relationship has continued for more than 12 years (from currently 15 years).
If redundancies are carried out on grounds that are deemed inadequate, the employees concerned are entitled to be paid compensation. As laid down in a separate section of the Act the maximum amount specified for this compensation is normally equivalent to twenty four months' pay, but the unlawful dismissal of union representatives can incur liability to pay a maximum equivalent to thirty months' pay.
It Introduces a comprehensive compensation system for cases of groundless termination of the employment relationship by the employer. The amount of such compensation is a minimum of three months' pay up to a maximum of 24 months.
Benefit set at 21.40 € per day; children benefits increase: 4.21 € for one child under 18, 6.18€ for 2 children and 7.97 € for three or more children.
Daily allowance raised from 5.05 € to 7 € per day. An higher daily allowance (14 €) is paid to claimants participating in a training programme outside their job search area.
Increase in the daily unemployment allowance for people who have been dismissed for economic reasons or reasons related to production and who have been in the same employment for at least 20 years, up to on average FIM 130 during the first 130 days of unemployment.
Basic UB raised at 22.22 € a day. Also raised: Labour Market Assistance, Training Allowance, and Earnings-Related UB.
Child supplements under Labour Market Assistance are raised at the level of child supplements under Basic UB.
Temporarily amending the act governing social assistance, so that at least 20 % of earned income but at most EUR 100 a month will not be taken into account when allowances are granted.
People are eligible for UB while they are on rehabilitative work activity.
Abandoning the state control in Kemira (chemical industry).
The right to Labour Market Assistance is widened for those participating to activation measures.
The Market Court was created in March 2002 as a result of the merger of the earlier Market Court and the Competition Council. It is an independent decision-maker, composed of judges and market experts and its resources are provided by the Ministry of Justice, rather than the Ministry of Trade and Industry. As a true court it is expected to follow standard judicial processes more closely than the Council did and it has greater procedural authority than the Council, such as subpoena powers to compel attendance of witnesses.
Extension of the period of increased income-related unemployment benefit from 130 to 150 days for employees with 20 years' employment record.
Increase in the earnings-related part of unemployment benefits from 42 to 45 %.
Extra days rules are altered as of 2009. People born prior to year 1950 (57 years of age) maintain the right. People born after 1950 must be 59 of age before the expiration of the maximum duration of benefits (500 days) and they must have worked at least 5 years during the last 20 years.
If a person lives with his/her parents, the Labour Market Assistance depends on the parents' income (with a maximum level of 50 % of the normal amount).
The Finnish state sells 2 % of its shares in Stora Enso (pulp and paper) to institutional investors for EUR 326 million, reducing its stake to 12.7 % representing 24.1 % of the shareholders’ votes.
The Finnish Competition Authority approves the partnership of the fully state-owned company Vapo (wood-based fuels and peat) and the private company Metsäliitto Osuuskunta, under certain conditions. In November, the Ministry of Trade and Industry made a prior agreement on the sale of a third of the shares in Vapo to Metsäliitto.
The German energy group E.ON Energie AG becomes the majority owner of the City of Espoo electricity utility Espoon Sähkö. It acquires the 27.6 % stake of the partly state-owned electricity company Fortum and half of the 68 % holding of the municipality.
The Finnish and Swedish partly state-owned telecommunication companies Sonera and Telia agree to merge. In June, the European Commission conditionally approves the merger.
More collaboration between labour and social administration, with the aim of creating a one-stop shop for the difficult-to-place jobseekers, is to be implemented by 2005.
Substantial expansion in measures planned with the aim of raising activation rate from 23 to 30 % of unemployed persons.
A new Communications Market Act came into force in July 2003. Under the law, a user of telecommunications services can retain his telephone number if the provider of the mobile communications services is changed.
An amendment to the Electricity Market Act, aiming at making it easier to change electricity supplier, came into force in September 2003.
In 2003, the government introduced a requirement for pharmacists to employ generic substitution (substitution of branded prescription medicines, no longer under patent, by the cheapest generic equivalent) unless the patient or the physician indicated otherwise. The idea was not only to substitute cheaper generic products for branded (patent-expired) drugs but also to encourage price competition among pharmaceutical companies. Either doctor or patient can forbid the substitution and in that case the patient gets the original prescribed product without extra cost. In other words, substitution is an option in Finland – although pharmacists are obliged to suggest it.
Daily allowance raised to 8 € for days participating in a rehabilitative work activity. Increased maintenance benefit from 14 € to 16 € a day.
Increase in the deduction of spouse's income from the calculation of the means test for eligibility to Labour Market Assistance. Only income exceeding 536 € (from 236 €) is considered.
Linking pension adjustment to increased life expectancy. (A life-expectancy coefficient will adjust the pension level of each cohort in proportion to changes in life expectancy after 2009. If life expectancy rises, benefit payments will decline.)
Taking into account study periods of five years and child rearing of three years
Abolishment of target replacement rate of 60 %.
Extension of the reference period from ten years to the whole working career.
Disincentives against early retirement. (Earnings over the entire employment history will affect the amount of pension. Pension accrual rate will rise with advancing age (up to 4,5 %) from the age of 63 up to 68 to encourage longer employment. )
The qualifying age to receive an early old-age pension will rise from 60 to 62.
The normal retirement age, which was 65, becomes flexible, and the retirement age will range from 63 to 68.
The Finnish state decides to sell its stake of 30.2 % in Partek (engineering) to elevator manufacturer Kone.
Through a public offering, the state reduces its stake in the energy company Fortum from 70.7 % to 60.8 %.
The government decides to reduce its stake in the fully state-owned Avena (grain wholesale trade, handling and storage) by ceding shares to Lännen Tehtaat for EUR 47 million. Avena will be split and the State only keeps a 65 % share in Avena Siilot Holding. In July, the Finnish Competition Authority announces its investigation of the competition consequences of the acquisition.
All marginal tax rates in the state income tax scale were cut by half a percentage point from July 2003.
Provision of subsidies for the creation of social enterprises employing at least 30 % of people with disabilities.
Development of employment services for young people, to give them the opportunity to get training, traineeship or working places after an unemployment spell of three months.
Increased financial aid for redundant workers, in the form of "training support" for a maximum of 185 days, financed collectively by employers' contributions. Extension of workers' access to individual "employability programmes".
Every unemployed younger than 25 will be proposed a training, an apprenticeship or an employment after three months of unemployment.
Also the new law gives the opportunity for higher fines. Before, the law set a maximum of EUR 670'000, which is well below the likely gain to a significant, long-standing cartel and in practice no court decision ever reached this statutory benchmark. The new law repealed the maximum and provides now for fines of up to 10 % of annual group world-wide turnover.
Strengthens the position and authority of the Finnish Competition Authority. The leniency programme under the 2004 law is designed to deal with the fact that only the Market Court, and not the FCA, has the power to impose fines. However, the FCA can now promise leniency to the first applicant.
A new Bankruptcy Act will enter into force later in 2004. The general aim of this reform is to make a bankruptcy procedure as quick, efficient and transparent as possible.
Legislation was introduced in 2004 to promote the use of “service vouchers” for the purchase of private home-care services by the elderly as an alternative to direct provision of municipal home-help services. The municipalities could award elderly people vouchers of varying value, depending on their needs and means. The value is supposed to be the cost to the municipality of providing the services (after the client pays the required co-payment). Clients who accept such vouchers (rather than opting for direct care) then choose their supplier from a list approved by the municipality, and pay as a fee the difference between the price of the service and the value of the voucher. In the health sector, the fee paid by the client cannot be greater than the charge if the service were directly provided by the municipality. This constraint does not apply to social services.
Allowing insurance companies to treat their accident-and traffic insured patients also by private health care providers.
Dominant level of bargaining has shifted: sectoral or industry level is still dominant but with additional local or company bargaining.
People aged 65-67 have right to UB if working (new flexible retirement age).
Harmonization of the public sector with the private sector pension system. Pensions for the cohorts born in the of 1960 or later will have the same pension regardless of the sector of employment.
All marginal tax rates in the state income tax scale were cut by one percentage point from January 2004. Moreover, the earned income allowance in municipal taxation was increased from EUR 2'550 to EUR 3'550 by January 2004.
Increase of employers contribution to finance previous reform.
The right of drawing labour market support for at least 500 days is abolished if the recipient refuses to work or resigns from it.
Introduction of a voucher scheme: job seekers (receiving labour market support for 200-499 days) can receive a voucher which entitles any prospective employer to a wage subsidy for their employees.
In March 2005, the Finnish Communications Regulatory Authority was given the powers to set a price ceiling for inter-operator network, lease for an operator with significant market power on a fixed network, and to set a price ceiling in an individual case regarding the cost orientation of a telecomm operator.
Introduction of a new operational model in the 'change security' for employees dismissed for economic reasons, including: 1) A new right for the employee to get full pay leave during the period of notice in order to find a new job or to participate in employment-promoting measure; 2) Right to be informed about an employment plan/employment programme; the employer should also inform the employment office about dismissed workers with a total work history of at least 3 years; 3)The drawing up of an individual employment programme by the PES and the employee covered by the "change security".
Increase (4 € a day) of Basic UB for those satisfying the work condition and who have lost their job due to production reasons and have at least 20 years of work history. Such increase is payable for maximum 150 days if participating in training.
Employment programme supplement (4 € a day) for those who have lost their job due to production reasons and with at least 3 years' work record or who have worked with a temporary contract for the last 3 years or have worked in a temporary work contract for at least one employer in the last 36 months. Payable for a maximum of 185 days.
Rejecting labour market subsidy for the unemployed who have refused to job offers, have been guilty ending their labour contracts or have refused to take part into active labour market or activation measures. The new statutes determined that the regaining of the right to labour market subsidy for the last mentioned unemployed requires working or participating in the measures offered by the employment service authorities for five months. Furthermore, municipalities were obliged to fund half of the labour market support of the unemployed whose unemployment period exceeded 500 days.
The age limit for early retirement scheme is raised from 60 to 62 years.
The “individual early retirement pension” available for persons aged 60-64 years (for which medical requirements were less strict) is being phased out.
Medical criteria for a disability pension for those aged over 60 are relaxed.
The right to Unemployment Pensions is abolished for those born in 1950 or later.
During 2005, privatisation continued at the same pace as in 2004 with the State selling Sampo shares for € 430 million.
The conditionality of labour market support for long-term unemployed was increased. The activation reform for long-term unemployed specify that intensified activation is required after 500 days and at the same time unemployment benefits are made contingent on participation in ALMPs.
A promising innovation, performance-based financing, was introduced in 2006. The system is based on quantitative indicators, with performance targets grouped into the categories of impact (55 %), process efficiency (28 %) and staff (17 %). The impact of education is measured by the labour market entry rate and entries into further studies. Training process results are measured by the student drop-out rate and the duration of studies (completion measure). Staff results are evaluated from the perspective of the formal competence of teaching staff and the resources allocated to staff development. The largest weight (40 %) is given to labour market entry, while further studies and drop-outs both get a weight of 15 %.
Keeping the housing allowance of long-term unemployed persons returning to work during the first three months of employment.
Introduction of a temporary low-paid subsidy scheme to employers for the provision of full-time employment to workers aged 54 and more in full-time jobs paying € 900-2'000 per month. The maximum monthly support is € 220.
Increasing the share of pension insurance companies' assets in shares and increasing their incentive to risk-taking.
An unemployed person can be sent to work in companies providing temporary services, part-time jobs and work outside their own residential area.
Wage support offered to young people under the age of 25 eligible to receive labour market aid can now be provided after three months instead of six months. Wage support is estimated to facilitate employment for about 1'000 more young people than is currently the case. In 2006 a total of 5'500 young people were hired under the support of the wage support scheme.
Selling Kemira's and state's own share of Kemira GrowHow (fertilizer company) to a Norwegian company (Yara).
University law will state that the furthering of life long learning is also the task of universities. Objective of the proposal is to make the additional training in universities more stringent, so that the completion times of degrees can be shortened.
Improving the position of temporary agency workers: obligations of business to exchange information, rights of employee representatives to receive information and clarify the usage of a trial period as the temporary workers shift to the employ of the client company.
Legislative changes were introduced to reduce unjustified fixed term contracts, by improving the right of employees to get information on the length of the fixed term contract, the reasons for the fixed term period and other conditions of the employment relationship.
Increase of national pension allowance by EUR 20.1
The taxation of pensioners is reformed in accordance with the changes made to the taxation of earned income. It will be ensured that pensioners do not need to pay higher taxes than wage earners in any income bracket. The difference in tax levels is eliminated by raising the pension income allowance.
The recruitment threshold for vocationally trained young people will be lowered by recompensing shortcomings in experience and skills with a wage subsidy payable to the employer (for around 2,000 young people). The apprenticeship training wage subsidy will be increased by EUR 3.35 million.
Providing vocational start and expanding on-the-job training in basic vocational training and apprenticeship training to prevent the social exclusion and to improve the employment of young people.
Increasing the number of student openings for basic and supplementary vocational education by over 4000 (plus the creation of 1000 places extra in the greater Helsinki area by the end of the year). These places will be allocated according to regional labour market requirements and growth centres. The aim is to ensure student places for all young people completing their basic education.
The potential working area within which unemployed jobseeker cannot refuse to take a work without a weighty reason is now 80 km around jobseeker’s domicile.
PES: enhanced activation policies. The employment possibilities of the job seeker will be assessed during the first two weeks of the unemployment period. The need of active programmes will be assessed immediately after six months of unemployment. The job search plan on must be re-assessed regularly if the unemployment continues. The follow up of the job search plan will be reinforced.
Increased funding for active labour market programmes and education and training measures. A further 7 million euros for employment and training measures, 1.2 million euros for conducting the increasing tasks of a temporary nature related to change security model ensuing from this extension to the Employment and Economic Development Offices.
Labour market training is granted an additional 10 million euros appropriation corresponding to an increase of 1'250 annual training places.
For small retailers, opening hours are unregulated. Medium-sized and large outlets still face some restrictions, although legislation on opening hours has been liberalised successively, with the latest reform in 2009 allowing retailers of all sizes to be open between 12.00 and 18.00 on Sundays.
The new budget formula for Universities puts more weight on the quality of research. The quality and effectiveness of the research and researcher education will be determined on the basis of specific thematic entities and criteria (35 % of total state university budget).
The New Universities Act 2009 makes it possible to charge tuition fees on a trial basis (2010-14) to students from outside EU/EEA countries who are taking part in separate master’s programmes, provided that the arrangements include a scholarship scheme.
Transforming universities from state institutions to public corporations or foundations, urging universities applying for private funding, increasing universities' liability to a charge, allowing tuition fees for the students outside EU/EEA -area and making easier structural/personnel transformations.
Allowing municipalities to give vouchers to patients which select a (public or private) service provider among the group which have been accepted by the municipality.
A reference price system was introduced in April 2009, generic substitution was extended and electronic tools to support evidence-based medicine were developed.
Abolishment of the maximum period of payment (36 months) of the adjusted unemployment allowance. This allowance can be paid to a person working part-time but seeking full-time employment, whose daily or weekly hours have been reduced on account of a lay-off or an industrial action not related to his terms of employment, who has received a full-time job for a fixed term of a maximum of two weeks or who has income from part-time entrepreneurship.
Members of an employees’ unemployment fund who have been insured for at least the 10 preceding months and meet the employment requirements whilst they were insured are entitled to receive an earnings-related daily allowance. A jobseeker who meets the employment requirement but is not insured in an unemployment fund has the right to a basic daily allowance. From 2010, the employment requirement will be 34 calendar weeks within 28 months for all jobseekers. This reform will make it easier for persons with a short employment history to become eligible for earnings related daily allowance.
The group of jobseekers who qualify for change security is being broadened. Change security consists of paid leave for seeking a new job, an employment program and higher than normal unemployment allowances. Workers who have been laid off for a minimum of 180 days or whose employment contract has been for a fixed-term and have been employed for a minimum of 5 years during the last 7 years will qualify.
National pension contribution is abolished.
Earnings-related employment pension contributions (the TyEL contribution) paid by employees and employers will be raised annually by 0.2 percentage points during the period 2011–2014.
The national pension contribution will be lowered by 0.8 percentage points as of 1 April 2009.
The 2nd and the 4th marginal tax rates are cut by 1 percentage points, the 1st and the 3rd are cut by 1.5 (7, 18, 22, 30.5). All income brackets are significantly increased.
Vocational education: an additional appropriation of 11 million euros is allocated to vocational education and vocational further education and training, amounting to nearly 2'500 additional study places for 2009-2011.
Patients gained the right to choose a municipal health care provider for a non-emergency care inside his/her own municipality or even outside his/her own municipality (the latter right took effect in 2014).
Since 2010 there is a new option for private, tax deductible pension savings in specific long-term retirement savings account, in addition to the existing deductibility of private pension insurance.
The qualifying entry age for unemployment pension ("unemployment pipeline") was increased from 59 to 60 years in 2010.
All marginal tax rates are cut by 0.5 percentage points (6.5, 17.5, 21.5, 30). All income brackets are significantly increased.
From 2014, patients will have the right to choose their health centre and hospital from all such units in the country. The main objectives are to empower patients, ensure equal access to services, improve the quality of care and co-ordination between primary and secondary health care, as well as between social and health services.
A new Health Care Act, which came into effect on 1 May 2011, expands user choice in the municipal sector, in two steps. Since May 2011, patients have access to non-emergency health care outside their municipality under special circumstances (e.g. if they reside in another municipality on a regular or long-term basis). Before the new Health Care Act, virtually no user choice was available within the public health sector, although many patients had a choice between public and occupational and private care.
In January 2011 the age limit for part-time pension was raised from 58 to 60 years and pension is only accrued on wage.
Corporate income tax rate will be reduced from 26 % to 24.5 % in 2012.
Capital income tax rate will be increased from 28% to 30% and, after a threshold of € 50'000, to 32% in 2012. Maximum tax exemption for the dividends of closely held companies will be reduced from € 90'000 to € 60'000.
All income brackets are significantly increased, highest marginal rate is cut by 0.25 percentage points (29.75).
Taxes on earned income have been adjusted to compensate for inflation and higher earnings. The government will apply this rule to labour earnings for its four-year term of office. The maximum of the in-work tax credit is increased from € 740 to € 900 as well as the basic allowance from € 2'250 to € 2'850 in 2012. In addition, linked to the centrally bargained framework agreement the average tax rate of earned income is reduced by 0.2 percentage points in 2012.
patients gained the right to choose a health care provider in the EU-area.
Protection of agricultural workers against accidents happening on the working station and professional diseases.
With effect from 1st February, 1973, the official daily unemployment allowance was increased from Frs. 8.30 to Frs. 8.90 during the first three months and from Frs. 7.55 to Frs. 8.07 after the third month. In addition to these amounts a supplementary unemployment allowance (UNEDIC) was payable, amounting to Frs. 11.20 per day for the first three months and Frs. 9.74 subsequently for low wage earners. The two allowances total 75 % of the monthly SMIC (minimum hourly wage).
First advance payment of company tax brought forward one month and raised from 20 to 33.33 %.
The minimum amount of the special unemployment allowance under the ASSEDIC supplementary scheme was raised to Frs. 16 per day with effect from 1-7-1974. With official unemployment assistance set at Frs. 10 per day, the minimum resources of the unemployed person amount to Frs. 26 per day.
Mothers are henceforth entitled to an old age pension supplement equivalent to two additional years for every child raised.
Any person with old age insurance is henceforth entitled to a pension proportionate to his or her contributions, regardless of the number of years worked.
Any surviving spouse may henceforth combine his or her own pension entitlements with part of the pension entitlements of the deceased spouse (50 %).
The job creation premium also became payable to employers registered as craftsmen without the requirement that the person recruited by them should be registered as a job applicant. The premium was set at Frs. 500 per month where recruitment took place between 5th June and 20th November, 1975 (instead of Frs. 300 per month for recruitment in October and November, as originally intended.)
Law concerning dismissals on economic grounds. Staff representatives need to be consulted.
Compensation for short-time working payable by the firm was increased to Frs. 3.50 per hour.
Introduces dismissal sanctions and compensations. More specifically, employers carrying collective dismissals must notify the government between 30 to 60 days in advance.
Gives rights to work councils to overview the changes in employment within the firm on a yearly basis.
The unemployment allowance for non-established personnel hitherto employed by the central government, local authorities and public undertakings is similar to the supplementary allowance paid under the ASSEDIC scheme. It is equal to 35 % of the wage earned during the reference period and is awarded subject to certain conditions, namely that the prospective recipient should: have worked at least 1 000 hours during the past 12 months; be registered as a job applicant; be aged under 65 and not have exceeded the age limit for the job formerly held. The allowance is payable for one year. This period may be extended by a further 8 months if the unemployed person was aged over 50 at the time of dismissal, but still under the age limit for the job formerly held (or aged not more than 65) if dismissed after the age of 60.
Number of short-time hours that could be compensated by official unemployment assistance was increased from 320 to 470 hours in the year.
Government undertook to finance 90 % of the supplementary assistance paid by firms to workers who had been put on short time rather than being laid off.
Official unemployment assistance was extended to young persons fulfilling certain requirements, namely: 1) unemployed young persons aged over 16 who: either have been registered as job applicants for more than six months after having, at least one year previously, obtained their baccalauréat or completed a full cycle of technological training or an officially approved course of vocational training; or have been registered as job applicants for more than three months after having, at least one year previously, obtained a degree or equivalent diploma or a technological diploma or having graduated from a State vocational school, a recognised private technical school or a vocational training centre; 2) unemployed persons aged 16 to 25 who do not meet the above conditions and who: are registered as job applicants; have practised an occupation or have studied since reaching the age of 16; can justify that they are providing essential support to their families.
The 4th July 1975 Law Generalizing Social Security makes retirement provision mandatory for all the active workforce.
A mother or woman with family responsibilities who is not personally affiliated to a compulsory old age insurance scheme may henceforth apply for old age insurance if she has at least one dependent child (aged under 20) to bring up. Provision was made for affiliation to take effect as from 1st July, 1974, if application was made before 1st January, 1976.
Abolishment of "la patente", the national tax for business, and substitution for a proportional tax.
Vocational training courses introduced for young persons ages 16 to 20 who are registered with the French National Employment Agency (ANPE) and have no job qualifications. Trainees will receive a monthly allowance of Frs. 320 over a period of 8 to 9 months.
The government issued a recommendation to the effect that in 1977 wages should increase by no more than the percentage rise in prices, that salaries in excess of Frs. 18 000 per month should increase by no more than 50 % of the rise in prices and that there should be no increase in salaries of over Frs. 24 000 per month.
The loss-of-employment allowance paid to non-established personnel previously employed in the public service was brought into line with the ASSEDIC (Supplementary unemployment insurance) allowances. It is equal to 35 % of the wage earned during the reference period. Minimum amount was set at Frs. 18.26 per day.
The rates of employers' and employees' contributions to Social Security were raised together with the ceiling on the portion of earnings on which contributions must be paid. This ceiling was raised from Frs. 2 750 to Frs. 3 160 per month. The rates of employers' contributions are 12.95 % for the portion of earnings below the ceiling and 2.5 % for the portion of earnings above. Employees' contributions are 4 % in respect of earnings below the ceiling and 1.5 % for earnings above.
Pensionable age reduced from 65 to 60 years for wage-earning manual workers (or persons whose jobs were physically demanding) with 42 years of old age pension contributions to their credit, and for mothers who have brought up 3 children or more and were wage-earners in manual jobs.
National Employment Pact to stimulate young employment consisting on giving incentives (social security tax exemption) to firms for hiring youngsters (below 25) under apprenticeship schemes.
The July 1977 Economic Concentration, Illegal Agreement and Dominant Position Abuses Repression Law creates the Competition Commission. It was then replaced by the Competition Council (see December 1986 Competition and Liberty Order).
In the industry sector, the Government is assuming control of the two main steel groups which account for about 80 % of steel production. In order to gain control, the Government has converted the special loans it extended to these firms, mainly from 1975 to 1981, into shareholdings. This will give the Government about 95 % of the share capital. In addition, five industrial companies together with the armaments-manufacturing departments of two others have been nationalised. Together these companies have a workforce of about 760 000, or 15 to 16 % of industrial employment.
In the financial sector, 36 banks (with aggregate annual deposits amounting to more than F 1 billion) and two financial companies have been nationalised. The three banks already nationalised attracted 63.3 % of total deposits in 1980 and extended 54.3 % of total credit, whereas the figures for the banks to be nationalised were 26.5 and 30.3 % respectively. After the nationalisation measures, 85 to 90 % of banking activity with a workforce of over 200 000 will be under government control.
A special fund for industrial adaptation was set up to encourage the establishment of new employment-creating activities or to diversify activities in regions affected by the crisis in certain sectors.
The 2nd January 1978 Law creates a special pension plan for minister and religion and religious congregations' members.
The paid training courses hitherto reserved for young persons are now also open to women, who are now also eligible for infirm practical training courses and employment-training contracts.
A premium upon recruitment of workers aged 45 and over who have been unemployed for more than one year.
A premium upon recruitment of a first employee in craft enterprises.
Law generalising the councils called "Conseils des Prud'hommes", a jurisdiction in charge of dealing with employer / employee conflicts.
The additional temporary allowance introduced in October 1974, which was paid for one year after dismissal for economic reasons and amounted to 90 % of the wage, was replaced by a descending-scale system. This reduces the amount of compensation from 65 to 50 % over a period of one year, and to this is added the fixed daily allowance.
Ensuring substantially increased means for the unemployed dismissed for "non-economic" reasons, who had hitherto received the least amount of compensation. From now on they will receive a basic allowance equal to 42 % of their wage, compared with 40 % previously, and a fixed allowance financed out of budgetary resources, an arrangement which did not previously exist.
Increase of the amount of "cotisations" given by both employees and employers to the Unedic, the system in charge of the unemployment insurance
Reduction in compulsory contributions for enterprises employing more than 10 workers.
Governmental programme for public employment creation: 54000 new public employees
Law protecting the employees that suffer from an accident at work from losing their job.
Agreement between employees and employers for the compensation of partial unemployment.
Exemption of 50% of employer contributions for Social Security for one year if hiring young persons aged under 26, single women, and long-term unemployed aged over 45.
Exemption of social security contributions for hiring apprentices aged under 20.
The 27th November 1981 Law completed nationalises (i.e. at 100%) Usinor and Sacilor (which were previously held at 85,70% by the State), which are then merged as Usinor-Sacilor.
Government Order concerning solidarity contracts between central government and enterprises or local government for the recruitment of young or unemployed persons through the following measures: - temporary exemption from all or part of employers' social insurance contributions in respect of newly hired persons; - early retirement, full or partial, for employees aged over 55, subject to their replacement by young persons.
Employment Contracts must be concluded with no fixed-term, except for very specific cases in which the job exhibits no permanent character. A specific list is provided: in case of temporary absences of permanent workers, in case of exceptional and temporary excess of work and in the case of occasional, defined and non-durable task.
Introduction of a premium imposed on firms when a fixed term contract expires and is not transformed into a permanent one.
The 23th November Law Relative to Collective Bargaining and Collective Dispute Settlement makes it mandatory to organise negotiations relative to the wages and work organisation, once a year. These negotiations do not necessarily have to result in further agreements.
Collective bargaining at workplace or company level is developed.
The 28th October 1982 Law About the Development of Staff-Representative Institutions states that Work Councils ("Comités d'Entreprise", "CE") are mandatory in firm of more than 50 workers and that 0,2% of the aggregate payroll are used to finance them. They must be consulted on any question relative to work's organisation.
Establishing an annual obligation to negotiate wages and working time at the firm level.
The 4th August Law Relative to the Workers' Liberty in the Firm makes it illegal for companies not to have internal rules, according to which workers can have "a right to direct and collective expression relatively to their work's content and organisation".
Contractual policy in the private sector designed to discontinue existant indexation.
Abolition of indexation in the public sector.
Annual paid leave extended to five weeks.
Maximum working week reduced from 50 to 48 hours.
Statutory working week reduced from 40 to 39 hours.
Unemployment benefits decrease. Until 1982, they represented up to 90% of the previous gross wage.
Act permitting spouses of artisans and shopkeepers to acquire social or work-related entitlements as co-workers, employees or associates.
Benefits to continue to be paid to unemployed persons having used up their entitlements.
Additional financing for the unemployment insurance scheme through an increase in contributions of 0.48% for employees and 0.72% for employers
Employees are allowed to change, at the age of 55, from full- to part-time employment and they obtain 80% of their previous salary as a compensation for the decrease in salary if the employer signs a solidarity agreement with the State.
Early retirement, full or partial, for employees aged over 55, subject to their replacement by young persons
The 25th Mars 1982 Government Order sets retirement eligibility to 60 years, for people who have worked at least 37,5 years.
The 11th February 1982 Law of Nationalisations completely (i.e. at 100%) nationalises 7 industrial groups, 39 banks and 2 financial societies.
A change was made to the trade tax («taxe professionnelle») to relieve the burden on firms creating jobs.
Taxation brackets were scaled up by 13.5 % to allow for inflation and exemptions were specified for the lowest income groups.
A ceiling was placed on the income tax reduction resulting from the application of family-related rebates and an exceptional surtax of 10 % was applied to high incomes (on income tax payments above Frs. 15 000 for amounts payable above Frs. 25 000).
Measures taken to provide young persons aged between 16 and 18 with a vocational qualification.
Introduction of a series of non-standard employment contracts with the aim of making the entrance of young people in the labour market easier.
According to this law, there can't be a difference in numbers of more than one person between men and women among the employee representatives in a public firm.
Pharmacists to make a refund to the Social Security set at 4 % of their trading income.
The law institutionalises the principle according to which patients should participate financially to their medical care, especially when they need to be treated inside a hospital for one day or more. This measure is called "forfait hospitalier", and amounts to 20F per day in 1983. It will increase every other year from then on.
Public sector democratised: membership of management and supervisory boards to include employee representatives.
Adjustment of unemployment benefits: increase of 4% in the gross replacement rate.
Limits on retirement pension entitlement for persons also in receipt of earnings from employment.
Government Order concerning the lowering of retirement age to 60 years (voluntary). Employees in the general scheme and the agricultural scheme entitled to opt for retirement at the full rate from the age of 60 onwards provided they have worked for 150 quarters. Entry into force, 1st April 1983.
Special tax on personal income for the financing of the Social Security schemes, equal to 1 % of net income in 1982.
Allowing more room for international capital.
Act of 24 January 1984 (referred to as the “Banking Act”): created a common legal framework for all credit institutions and defined the principles aimed at guaranteeing the stability of the banking system. Above all, it determined the terms and conditions for entry into the profession and established the various categories of credit institutions. It defined the concept of banking operations and restricted their practise to credit institutions.
NEB splits between an insurance scheme funded by employee and employer contributions and a solidarity scheme funded by the community. The contrast with the earlier system is that the period of entitlement to benefit is linked to the period of contribution and that the amount of benefit is smaller.
A rise in direct taxation in the shape of higher personal income tax (with the raising of the rate of the progressive temporary surtax and the broadening of the base for the 1 % special "solidarity" tax).
Agreement between the social partners on sandwich courses (débudgétisation of the 0.1 % contributed for the apprenticeship levy and the 0.2 % for continuing training with a view to the direct funding of sandwich courses).
From 1st February 1985 institution of a new scheme based on price deregulation all along the line for gasoline, high octane and diesel fuel as part of counter-inflation commitments.
Easing restrictions on fixed-term contracts, making the list of accepted cases broader.
Measures to promote part-time work including financial incentives for recruitment.
Credit and security markets are partially liberalised, leaving credit controls.
This Act carries out the implementation of the financial market in France. Basically, it doesn't say anything significant, safe for the fact that everyone can exchange any type of financial products on this market…
Instead of being funded on a per diem basis hospitals began to receive a block appropriation.
Increase of 0.38% of the unemployment insurance contributions shared between employees and employers.
Equity funding for nationalised enterprises for 1984 totalling FF 12.9 billion, raising total funding to over FF 30 billion for 1982-84 (of which FF 14 billion for the steel industry).
Personal income tax to be reduced under the 1986 Finance Act (by 3 %) and the rate of tax on undistributed corporate profits from 50 to 45 % (to offset the abolition of the special depreciation system due to expire this month).
The exclusive licence no longer covers value-added services (which since 1986 have had to be notified to or authorised by the Ministry of Postal Services and Telecommunications) nor mobile telephone and radio-paging systems. However, as public service and pricing considerations remain important, telecommunications have only been partially deregulated.
The 1986 Order on the deregulation of prices and competition (Ordonnance de 1986 relative à la liberté des prix et de la concurrencé) rescinded the 1945 Order which gave the government the power to institute price controls at will. In order to comply as fully as possible with EC competition legislation, it established a whole new framework for the functioning of the market. The previous system, based primarily on proscription, was replaced by one encouraging contractual freedom and punishing only abuses. The new principle was that competition should be the sole instrument of market regulation. France has detailed rules about buyer power and unfair competition in its competition statute.
When 10 employees or more are dismissed in a firm with more than 50 employees, a redundancy plan is mandatory
If 1 to 9 employees are to be dismissed, the employees are individually summoned to a meeting and notified of the dismissals.
If 2 to 9 employees are to be dismissed for economic reasons during a period of 30 days: the employer must convene, inform or consult employee representatives or the enterprise committee (in firms with 50 or more employees). The information must include the economic, financial or technical reasons for the planned dismissals, the number of employees who are to be dismissed, the job categories of the employees in the establishment, permanent or not and the planned schedule of dismissals; the administrative authorities must be informed.
If more than 10 employees are to be dismissed during a period of 30 days: the enterprise committee or the workers' representatives must be informed; the employer must provide information on all provisions aiming to avoid dismissals, limit their number and facilitate the outside re-employment of the dismissed employees. In enterprises with less than 50 employees (or more than 50 but when no enterprise committee exists) the provisions aiming to avoid dismissals must include conventions for retraining; if the enterprise employs more than 50 employees, the enterprise committee must be convened two distinct times at predefined intervals depending on the number of employees to be dismissed.
The administrative authorisation for collective dismissals on economic grounds is cancelled completely.
Dismissal for economic reasons will no longer be submitted to any administrative authorisation. The administrative authorities must be notified. The administration has precise time limits by which to examine the information.
The employer must state the reasons for the individual dismissal in written form; he must do so personally in the letter of notification of dismissal when the reasons for dismissal are economic or disciplinary; in other cases he must do it only on written request of the employee. If a single employee is to be dismissed for economic reasons he is to be summoned to a hearing. Then, after 7 days, the employer can notify the dismissal by registered letter with notice of receipt containing the statement of the grounds on which it takes place. Then the administrative authorities must be informed of the dismissal.
Introduction of “intermittent” work contracts (containing provisions for temporary interruptions of the work activity)
Fixed-term contracts can now last longer, up to 2 years.
Substituting the list of accepted cases for fixed-term contracts with a unique condition: firms won't be able to use such contract models if and only if the position to be covered falls under the "normal" indeterminate job positions.
The proportional component of the unemployment benefit is brought to 40% of the Reference Daily Wage (RDW), while the daily fixed component is now 43,87 F. The overall daily unemployment benefit cannot be under 104,55 F.
The 30th September 1986 Law Relative to Communication Liberty privatises TF1, France's first channel in terms of audience.
The July 1986 Law Authorising the Government to Take Several Measures Regarding Economy and Society results in the total privatisation (i.e. at 100%) of 28 public groups, including the 5 industrial groups, 39 banks and 2 financial societies previously nationalised according to the 11th February 1982 Law of Nationalisation, except for Elf Acquitaine which was only partly privatised.
The 45 % company tax rate to apply in 1987 to all earnings (whether retained or distributed).
Tax abatements on income from securities to be standardised and increased for purposes of assessing personal income tax payable in 1987.
The public air-transport monopoly with respect to flights to and from the overseas départements was liberalised in 1987.
Tax employers have to pay to dismiss employees above 50 years old.
Further liberalisation of credit markets, eliminating all controls and several entry barriers for competitors.
Rationalises health insurance by limiting the reimbursement for certain types of care as well as the rights of certain patients to be exempted from making any contribution to medical costs.
The 1988 Stock Exchange Reform states that only European Stock Exchange institutions are responsible for the negotiation of transferable securities prices on a European market. A professional organism, the "Stock Exchange Council", in which a government representative as well as an employee representative are elected, is created to regulate its activity.
Introduction of RMI (minimum insertion income) conditional to activation and inclusion.
The 18th January 1988 Law Relative to the Mutualisation of the Caisse Nationale de Crédit Agricole mutualises, and hence privatises said company.
In the space of two years the rate of corporation tax was cut from 50 to 42 %, and the payroll tax ("taxe professionnelle") has been progressively lowered since 1986. Enterprises can now deduct VAT on telecommunications from their taxes.
An increased number of the lowest-income households were exempted from tax.
The highest marginal rate of personal income tax was lowered from 72.4 % in 1986 to 56.8 % in 1988.
Creation of special institutes to form primary school teachers, the IUFM (Instituts Universitaires de Formation des Maîtres)
Collective redundancies must be accompanied by "social plans" (such as early retirement schemes, retraining contracts, etc.). The drawing up of a social plan is compulsory in all firms or establishments with 50 or more employees, where 10 or more people are to be made redundant over a 30-day period.
The discussion with employees in case of a collective dismissal is reinforced, an employees' conversion is fostered. If there is any doubt on the reasons for a dismissal, the doubt is in favour of the employee.
If the employer fails to follow correct dismissal formalities, then the employer must pay the employee, at most, one month’s wages in compensation; the judge may not propose reinstatement.
The employer must state in all cases, without the request of the employee, the grounds of the dismissal, in the letter notifying dismissal. For dismissal for economic reasons: the employee is requested to attend a hearing during which the employee is offered a retraining contract (“Convention de conversion”). The scheme is jointly managed and financed by the State, the unemployment insurance organisation and companies. If the employee makes no reply to the offer of a retraining contract during these 21 days, it is assumed that the offer is rejected.
Employees dismissed for economic reasons have priority of reinstatement for a period of one year dating from the termination of their contract provided that they make the wish to be reinstated known to the employer within four months.
If an employee with at least two years’ service in a company with at least eleven employees is unjustifiably dismissed, the tribunal may propose, but not enforce, the reinstatement of the employee. However, if either party refuses to accept reinstatement, then the employer is obliged to pay the employee a sum in compensation not lower than the previous six months’ earnings.
Law modifying the 1986 Law concerning privatisations (principal shareholders allowed to sell their stakes, approval needed for any shareholder to acquiring shares leading to a stake greater than 10 % in any privatised enterprise).
The rate of corporate tax on reinvested profits has been cut from 42 to 39 % and the "taxe professionnelle" has been lowered from 5 to 4.5 %.
The flat-rate withholding tax on income from investments in fixed income securities has been lowered by 10 percentage points.
Instituting a system of personalised training (crédit-formation individualisé).
The list of limiting circumstances in which the use of fixed-term contracts and temporary staff is allowed is restored and modified through social partners' agreement to four reasons: (1) The replacement of an employee on leave (2) Temporary increases in activity (3) Seasonal activities (4) Special contracts, aimed at facilitating employment for targeted groups, from the young to the long term unemployed. The list of special contracts has grown in the 1990s, as each government has tried to improve labour market outcomes for one group or another; some of these contracts require the firm to provide training, and many come with subsidies to firms.
The maximum total duration of fixed-term contracts and temporary work is reduced.
A tax credit is to be offered to reduce the work week of labour and increase the utilisation of capital; and weekend shift work will be made easier.
This law gives an extensive definition of Equity in the IFRS standard. Equity should include: Capital, Reserves (i.e. net income group share minus dividends paid to associates), Equity issuance premium, retained earning.
Letting the international capital freely flow into the country.
Statement on the easing of the regulations governing foreign investment in France: a system of "permanent proof of EC origin" to be applied to all established European investors, who are thus exempted from the obligation to give prior notification of planned investments; other Community investors are still required to give prior notification, but the authorities have only 15 days to check the EC origin of the investment. For non-EC enterprises, the time limit is one month. If the authorities do not give a formal decision on the investment, within this time limit, then it can go ahead.
Credit companies with a participation on companies must respect those two ratios: 1°) each participation must not exceed 15% of target company's equity, and 2°) the total amount must not exceed 60% of equity.
Once the maximum of 130 hours per year is passed, compensatory time off will be 100 %, rather than the former 50 %.
The process of removing ceilings on contributions will be carried forward: for family-allowance charges, after a previous below-ceiling rate of 9 % and an interim period in 1989 when a split-rate system existed.
As of 1991, industrial-accident charges will also be uncapped, allowing their rate to be reduced from 3.44 to 2.88 %.
Employers' social-security contributions are to be eliminated permanently for the employment of the long-term unemployed over the age of 50.
Reduction in corporate tax rate from 39 to 37 for reinvested profits.
Reduction from 37 to 34 % of corporation tax on retained profits, equivalent to a reduction of FF 5.4 billion in 1991 and FF 2.7 billion in 1992; payroll tax (taxe professionnelle) ceiling reduced from 4 to 3.5 % of value added, equivalent to a reduction of FF 90 million in 1991 and FF 3.2 billion in 1992.
Personal income tax brackets raised by 3.2 %, reductions in contributions maintained and the ceiling on family-related tax rebates raised, equivalent to a reduction of FF 24.5 billion in 1991
Various traineeship programmes have been simplified and made more generous. Recipients of the guaranteed income (RMI) as well as those unemployed for over three years and the unemployed over 50 will have priority access to these enhanced programmes.
Firms with fewer than 500 employees were exempted in whole or in part from payment of payroll taxes for 18 months when hiring young people without qualifications to indefinite-term contracts paying up to 120 % of the SMIC before the end of May 1992.
The government signs negotiated health spending agreements with the representatives of the four health professions: biologists, ambulance drivers, nurses and officials from private clinics.
Agreement between the government and the Caisse Nationale d'Assurance Maladie to achieve negotiated control over health spending.
Measures announced to promote the employment of young people without skills (exemption from social-insurance contributions)
Employees' contribution rates are cut by 1 point plus a flat amount of FF 42 per month.
The government authorised the partial privatisation of 21 public enterprises (up to 49 % of the capital of banks and industrial enterprises, provided that the operation includes an agreement on industrial, commercial or financial co-operation with the purchaser). (Thus, part (20 %) of the capital of the Crédit Local de France was offered to private investors at the end of 1991); also NEC (in spring 1991) and IBM (in January 1992) acquired stakes of about 5 and 6 % respectively in Bull; and 2.3 % of the capital of Elf-Aquitaine was privatised in March 1992.)
Private participations in public insurance firms to be authorised up to 49 %.
The corporation tax ratio per value added fell from 7.7 % in 1986 to 5.8 % in 1991 (Caubet-Hilloutou et al., 1991); its share of profits fell by 10 percentage points over the same period (from 38.5 to 28.6 %). The various rates of tax (25, 18 and 15 %) on long-term capital gains realised by companies have been merged into a single rate of 18 % in financial years from 1 October 1991. Thus, corporate profits are taxed either at 34 % or at 18 %.
Development of family service jobs (employment tax credit as of 1992), the total cost being FF 1.5 billion.
Introduction of a new tax ("contribution sociale généralisée", CSG) at a flat rate of 1 % on all incomes.
Social partners' agreement: the participation rate in further vocational training for firms with more than 10 employees set to increase from 1.2 to 1.4 % of the wage bill. Firms with fewer than 10 employees, which were not previously liable, required henceforth to contribute 0.15 % of their wage bill.
The reason for an economic dismissal can be a reorganisation of the firm.
All separations (i.e. resignations or the refusal of radical modifications of the employment contract) due to economic reasons are subject to the regulation concerning dismissals for economic reasons.
In order to conform with Community regulations, non-EC companies will no longer be required to request prior authorisation for participations of less than FF 500 million in French companies.
According to this December 1992 Act banks, insurance companies and mutual funds must have at least €5million of liberated capital to be able to run their business.
Companies whose registered office is out of France and that want to open offices in France must, beforehand, meet the French legal requirement relative to solvability ratios, minimal liberated capital thresholds, etc… The Autorité de Contrôle Prudentielle is in charge of those cases, along with the State in which the head office of said company is.
A downward sliding scale for benefit payments (allocation unique dégressive) is agreed upon.
30 % flat-rate reduction in employers’ social security contributions for staff on part-time permanent contracts was introduced.
Instalment payments on corporate income tax have been reduced from 38 to 36 % of reference-period profits for large firms and to 33.3 % for small and medium-sized enterprises (at a cost of FF 8 billion in 1992).
Enterprises which reduce working hours by 15 % and increase employment by at least 10 % will benefit from state aid.
Legislation governing the opening of large retail outlets was tightened.
The new law reinforces the power of administrative authorities through a right to control the quality of the social plan. Statutory requirements are introduced concerning the contents of social plans. If there is no social plan or the measures proposed are inadequate, the redundancies will be considered null and void. In 1995 the Court de Cassation will interpret the 1993 legislation restrictively. Enterprise councils or workers’ representatives must be consulted about the plan before notice of terminations are issued. The plan must also be submitted to the Departmental Labour Inspectorate which may propose changes if it considers the measure taken to be insufficient.
Further elimination of entry barriers to finance markets parallel to stronger supervision.
This law states that the governor of the Banque de France has the ability to determine the monetary policy on its own.
Le contrat d'insertion will allow payments below the minimum wage, with, as a counterpart, the enterprise providing tutoring and, possibly, training.
Benefits duration is reduced, it now varies according to the age and the length of prior affiliation to the unemployment insurance system.
Increasing the required contribution period.
Flat-rate reduction for part-time permanent contracts increased to 50%
The contribution sociale généralisée (CSG) was raised from 1.1 to 2.4 %, to finance a newly-created "Solidarity Fund".
The amount of pension is related more closely to the contribution base (the 25 best-paid years instead of the 10 best-paid years).
According to the 22nd July 1993 Act Relative to Retirement Pensions and Social Protection ("Balladur Reform"), it now takes 40 years of contribution to benefit from a full rate pensions, instead of 37,5.
Non-contributory pension rights are transferred to a solidarity fund financed out of taxes, to reinforce the insurance character of the system.
Pension is indexed to prices instead of wages. However, in case of rapid increase in net wages (high productivity growth) some occasional and discretionary reindexation could be introduced ("clause de rendez-vous").
Retiring at 60 will still be possible but, in order to have a full rate pension, pensioners will have to pay contributions for a minimum number of years, which will become progressively higher: from 37.5 years to 40 for people leaving in 2003.
The 19th July 1993 Law of Privatisation took the 1986 Law of Privatisation further.
Parliament approves the privatisation bill authorising the sale of 21 state-owned companies. The Government announces the first 4 companies to be sold in the autumn (Elf-Aquitaine, Rhône-Poulenc, Banque nationale de Paris and Banque Hervet), expecting to raise FF 40 billion in revenue. A 20 % limit at the time of the sale was placed on non-EC shareholders. (The total revenue was FF 47 billions in 1993).
The 1994 law consolidates the three pillars of employee financial participation in France: „intéressement des salaries“ (voluntary gain-sharing), „participation“ (compulsory deferred profit-sharing) and company savings plans for the purchase of employee shares. It was also the law’s intention to encourage companies to involve employees owning company shares in company decision-making (co-determination).
Flat-rate reduction for part-time permanent contracts decreased to 30%.
A pensioners' solidarity contribution is introduced.
Pensions for farmers are raised by 10 %.
The Madelin Law creates optional occupational social security schemes for independant workers.
The Préfon Law generalises the Madelin Law (which created optional occupational social security schemes for independant workers) to farm operators and public servants.
The privatisation procedure provides for the constitution of a hard core of firms which undertake to hold blocks of shares for a minimum period of time. In order to build up share ownership and involve employees in the success of its privatisation, employees enjoy certain specific advantages, most notably a minimum quota representing 10 % of the securities placed on the market, discounts and payment facilities. The Government also has the right to restrict some buyers' participation in asset sales. Except in the case of sales of Renault shares, the State is either no longer a shareholder or has kept only a very limited part of the capital of privatised firms. (Revenues amounting to FF 61.8 billion in 1994).
Reform of personal income taxation will reduce income tax payments by about FF 20 billion. All households benefit, but tax reductions, are higher for low and middle-income earners and rise more than proportionally with the number of children.
Subsidies for certain firms to hire people that have a lower employability. The training is financed in that case by the public sector.
The subsidies for apprenticeship schemes were raised.
The SNCF was authorised in May 1995 to make its cable network available to private operators, France Télécom no longer has a monopoly on the infrastructure.
The notion of an economic dismissal justified by a reorganisation of the firm is abandoned, replaced by the notion of competitiveness safeguard.
The October 1995 Interprofessional National Agreement sets up mandated workers for a three-years-long experimental period of time. It authorises companies with less than 50 employees and with no union representative to settle agreements with workers representative or with a trade-union representative, provided that this kind of negotiation is made possible by a branch agreement.
The CIE (Contrat initiative emploi) was implemented. For hiring a long-term unemployed person, the employer is exempted from social security payments up to the SMIC level. The CIE replaced an earlier programme targeting the long-term unemployed which was less generous.
Employers' contributions to the pension schemes for local authority employees are raised by 3.8 %.
Old-age and disability pensions are raised by 1.2 %.
In order to bring the deficit back on track (FF 322 billion, excluding net privatisation receipts) and finance the new spending initiatives, lower priority spending will be cut and taxes raised. The tax increases are temporary and taxes will be reduced as soon as it is clear that the Maastricht deficit criterion can be reached.
The July 1996 Galland Law limits the abuse of dominant position between large-scale retailers and their smaller suppliers. More specifically, it redefines dumping strategies as the way their were defined in the 1986 Competition and Liberty Order wasn't sufficient: paying their suppliers after more than two-months (purposely to finance retailers' working capital) is now seen as a dumping strategy. Making them pay (now infamous) "retrocommissions" is also part of a dumping strategy.
The Competition Council Opinion of 1996 regarding La Poste stipulates that a predator strategy occurs when the price is inferior to the average variable cost. When it is inferior to the average total cost yet superior to the average variable cost, it is up to the Competition Council to decide if there is indeed a predator strategy.
The Conseil de la concurrence has expanded powers to address abusively low prices.
The July 1996 Commerce and Craftsmanship Development and Promotion Law ("Raffarin Law") stipulates that building shops over 300 square meters of surface requires an administrative authorisation.
According to this December 1996 Act, companies which business model is based on financial assets management (excluding wealth management and portfolio management companies) must have at least €3,8million of liberated capital in order to run their business.
The 1996 Financial Activity Modernisation Act amends the 1984 Banking Act by placing investment firms under the authority of the Ministère des Finances, de l'Economie et de l'Industrie and of the Commission de Contrôle des Assurance. Asset Management for third parties are placed under the authority of the Commission des Opérations de Bourse.
Act of 2 July 1996 (referred to as the «Financial Activities Modernisation Act»): transposed the Directive of 10 May 1993 on investment services in the securities field into French law. This law completely overhauled the terms and conditions for practising securities-related activities and created a new category of service providers: i.e. “investment firms”.
This law also changed the composition of the boards which are now made up of 3 elected representatives, the presidents of the chambers of commerce and trades and a representative of the consumer associations.
A constitutional amendment gave parliament legislative authority over health spending, via the law on the financing of the social security which is passed every year, like the budget. The social partners continue to be involved in the management of the system but the key decisions are now taken by parliament and implemented by the government. Each year parliament sets a national health spending target (ONDAM) based on revenue estimates and the national health goals defined by the National Health Conference.
Allowance for the elderly jobless is introduced.
New programmes with exemptions from social security contributions are created for the long-term unemployed.
The exemption from family contributions and the degressive reduction of social contributions for low-wage workers were merged into a single degressive rebate.
Old-age and disability pensions are raised by 2.1 %.
State permits early retirement at 58 years old for public workers.
The Council of Ministers adopts a bill changing the status of France Telécom. In 1997, the enterprise will be incorporated and partly privatised.
The government defined the terms of the privatisation of Thomson SA: private sale, the French government keeps veto powers on the sale of relevant defence assets and on the possibility for a simple investor to own more than 10 % of shares or veto rights.
Gross receipts from privatisation rose steeply in 1997, amounting to FF 53.9 billion compared with FF 17.7 billion in 1996. Nearly 72 % of the receipts booked in 1997 came from the opening up of the capital of France Telecom (public offering of FF 19.2 billion, guaranteed placement of FF 22.3 billion with institutional investors, and sell-off of FF 1.3 billion to France Telecom employees), and 17 % from the sell-off of the State’s residual holding in Elf-Aquitaine (which took place in 1996).
Privatisation of industry firms: State sells 6% of its Renault actions becoming a minoritarian shareholder.
Launch of the privatisation of the Companie génerale maritime (CGM).
Launching of the "New Service, New Job" programme to encourage creation of jobs in educational, cultural, sporting, environmental and neighbourhood service activities.
In the rail transport sector, a major move was the separation, in early 1997, of infrastructures from transport services as such. An industrial and commercial government corporation, Réseau Ferré de France (RFF) was set up to take over the ownership and management of French rail infrastructures together with the debt of FF 134 billion representing past borrowing by the Société Nationale des Chemins de Fer (SNCF) to finance the infrastructures.
Full liberalisation of the aviation market.
Telecommunications Regulation Authority (ART), set up in early 1997, enforces compliance with the new rules of the game, manages numbering, assigns frequencies and determines the technical and financial conditions for interconnection.
A financial rationalisation of the management does not justify economic dismissal.
Creation of specific fixed-term contracts for young workers under 26 years old (5 year contracts).
Credit institutions and investment firms require a comprehensive risk management process including Board and senior management oversight, the control system for operations and internal procedures, the organisation of accounting and information processing systems, the risk and result measuring systems, the risk monitoring and risk control systems and the remunerations framework.
The unemployment benefit minimum was raised from FF 2805 per month to FF 3100, but the rate of reduction of the benefits over time is slowed down.
Unemployment benefits are raised by 2,2%.
The 25% benefit deduction for those unemployed having worked 4 months in the past 8 months was abolished.
The period of full-rate entitlement for jobless persons aged at least 49 with a record of 14 months' work during the previous 24 months was extended from 7 to 9 months. The first, degressive rate is now paid for six months instead of four.
The CSG tax was raised by one point and its base broadened (while the rate of employees’ social contributions was reduced by 1.3 points).
The rate of employees’ social contributions was reduced by 1.3 points (while the CSG tax was raised by one point and its base broadened).
Reorganisation of the ASSEDIC s' contingency fund, a scheme set up to provide aid and emergency payments to unemployed people in urgent need (ASSEDIC s are the regional branches of UNEDIC). Financially, the amount allocated to this fund will rise from its present level of FRF 1.2 billion, to FRF 1.4 billion. What is new is the opportunity henceforth available to ASSEDICs to put such services out to tender. ASSEDICs will be able to contract out material aid (housing, water or electricity, for example) to local specialists or institutions. Emergency assistance can also be farmed out to voluntary organisations, which, after signing a binding agreement on service provision, will be able to take over the distribution and management of this aid. It should also be noted that there has been a tightening of regulations concerning eligibility for this kind of payments. Only jobseekers who can prove that they were covered by the unemployment insurance scheme for four of the 12 months prior to their application can claim this benefit. In 1996, just under 300,000 people were given assistance from this fund.
An additional 1.5 million households will no longer pay tax as a result of the abolition of reliefs (d´ecote) and the raising of the zero-rate bracket.
Elimination of tax deductibility of some spending items.
The tax reform aims at simplifying the tax schedule and broadening the tax base. Tax rates will be reduced gradually over five years. The top marginal rate, for instance, will fall from 56.8 % in 1996 to 54 % in 1997 and 47 % in 2001.
Progressive elimination of tax rebates for more than one hundred categories of professionals.
The contrats emplois consolidés (CEC – consolidated job contracts) – which provide five-year jobs with associations and local authorities and are intended to satisfy hitherto unmet community needs, and which are subsidised by the State up to 80 % for those most in need, and also benefit from an exemption from employer social contributions – are now available to the same needy persons without the requirement of their being previous holders of a CES; the number of new CECs is to increase from 30 000 in 1998 to 60 000 in 1999.
The contrats emploi-solidarité (CES – employment-solidarity contracts) – which provide 80 % plus State-subsidised part-time jobs in the public sector (with an exemption from employer social contributions) – are being refocused on the neediest cases, the number of these contracts being set to fall from 450 000 in 1998 to 425 000 in 1999.
New programme entitled TRACE (trajet d’accès à l’emploi – pathway to employment) has been introduced which offers needy young people aged 16 to 25 an 18-month path to a first job, which can be extended in special circumstances and which provides pay or, where necessary, emergency financial assistance. The aim is to cover 40 000 persons in 1999 and 60 000 in 2000. On an experimental basis, the law is extending eligibility for the skills training contracts hitherto reserved for young people under 26, to adults who have been unemployed for more than six months, which might ultimately concern 25 000 persons a year.
Programme of close personal guidance for the least employable youth introduced.
Several existing ALMPs re-focused on weak groups as part of the “Fresh Start” programme that consists of intensified personal counselling, help with job search and training programmes, aiming at offering the young and the long-term unemployed activation before they reach six and twelve months of unemployment respectively.
In the case of an ailing enterprise, the law now allows serving and laid-off employees who take over the business a social contribution exemption, free health insurance coverage for one year and a repayable advance.
The Law of 2 July 1998 authorises the municipalities not served by Gaz de France (GDF) and not scheduled for connection to the GDF network to set up a gas utility under public management or to license gas distribution out, which was hitherto prohibited. However, the law restricts the possibility of becoming a gas supply operator to undertakings in which at least 30 % of the capital is held by the State or by government corporations.
The telecommunications sector was opened up to competition, granting a dozen new licenses.
It is in the power of the judge to assess the seriousness of the reason of the economic layoff.
Financial companies must meet minimum requirements (i.e. at least €1,9million of liberated capital) if they want to carry out credit activities.
The law sets the statutory weekly working time at 35 hours as from the beginning of 2000 for enterprises with more than 20 employees, and two years later for smaller businesses. However, it encourages enterprises to make the adjustment earlier by offering more generous tax incentives for agreements concluded before the cut-off dates. The job creation threshold for aid eligibility is lower, at 6 % for a 10 % reduction in working time (9 % for a 15 % reduction, entitling the firm to a higher level of assistance). More specifically, the law allowed a five-year reduction in employers’ social security contributions for any firm cutting its employees’ working hours by at least 10 %. Under the law’s “offensive” provisions, contribution relief was subject to a 6 % increase in the workforce for firms cutting hours by 10 % and a 9 % increase in the workforce for firms cutting hours by 15 % or more. The new level of employment had to be maintained for at least two years. Under the “defensive” provisions, any firm or establishment which cut working hours in order to avoid layoffs under a redundancy package and undertook to maintain its level of employment for at least 2 years, was entitled to relief. This incentive law holds good until 2002 for firms with fewer than 20 employees.
The 1998 Aubry Law (relative to the reduction of working time) has a few articles relative to Industrial Relations. It resumes the October 1995 Interprofessional National Agreement, with a few differences. This law states that trade-union representatives can be sent to negotiate in companies deprived of such representatives, even though no branch agreement allows it, but only if the negotiation is relative to working time.
An 3% increase in the RMI and ASS with retroactive effects as from 1/1/98.
A person receiving the RMI who takes a low-paid job may now combine these 2 income sources for the first 3 months, the income support is reduced by half the amount of the pay received during the following 9 months.
Possibility of receiving the RMI at the same time as a wage for one year subject to certain conditions.
A 6% rise in the specific solidarity allowance and the possibility of receiving the RMI at the same time as a wage for one year subject.
Unemployment benefit recipients can continue to receive the benefits while earning income from part-time work for up to 136 hours per month.
4.75 of the 5.5 points of the employee contribution were switched to the CSG: The draft law on the financing of the social security system for 1998 is adopted by the Council of Ministers. It projects a deficit on the general social security scheme equal to 0.15 % of GDP. The CSG is raised by 4.1 percentage points to 7.5 %, and the employee health insurance contribution is cut by 4.75 percentage points to 0.75 %. New taxes on savings are introduced, and family allowances are to be means-tested.
The rebate in social contributions is again proportional to the number of hours worked (so as not to unduly favour part-time work) and applicable for up to 1.3 times the SMIC. It can be combined with the 30 % reduction on employers’ social contributions for part-time workers and with the relief allowed by the Robien and Aubry laws (see below). The rebate reduces the cost of labour by 12.6 % at the level of the SMIC and for several years has been the largest of the social contribution exemptions.
Employees of a certain age can opt for reducing their working hours progressively until they reach the retirement age in exchange for reduced pension benefits.
The State sells 67 % of the banking group CIC to the Crédit Mutuel for FF 13.38 billion.
The government halts the privatisation of Thomson-CSF.
The placement staff of the PES is increased over several years.
The burden is on the employer to prove that he met his obligation to find another job for the worker.
The 1999 Saving and Financial Security Act further amends the 1984 Banking Act by strengthening the cooperation between supervisors, by creating the Collège des Autorités de Contrôlé du Secteur Banquier.
Act of 25 June 1999 on savings and financial security: further modernised the banking sector and established the Fonds de Garantie des Dépôts, aimed at compensating clients who lost money, provided that the financial institution they subscribed to was part of said Fonds de Garantie des Dépôts.
The Prime Minister confirms the indexation of subsistence benefits on prices as of 1 January 1999.
Unemployment benefit has been raised by 1,22 %.
Special solidarity allowance (ASS) has been raised by 6 % and unemployed are entitled to receive RMI, a wage and additional assistance at the end of their entitlements.
A new early retirement scheme introduced this year targets employees having worked under difficult conditions (line production work for 15 years, night work) and will rejuvenate the age structure of staff in the companies concerned. The employers' contribution will be at least 50 % (twice as high as the level of contribution to the existing allowances), and the State's aid, conditional on a work-week of 35 hours or under, and the signature of a company-level agreement will vary according to the age at which the employee takes early retirement.
Opening up of the capital of Air France: the State’s holding should fall to less than 55 %.
The merger of Matra and Aérospatiale in June 1999 made the transfer of the majority of capital to the private sector possible, with the State retaining 47.7 %. The net proceeds from the sell-off totalled FF 9.8 billion.
The State’s holding in Thomson-CSF falls from 58 to 43 % following the acquisition by Alcatel, Dassault Industries and Aérospatiale of stakes in the company.
The government announces the privatisation of Eramet; over time, the State’s holding will fall from 54.5 to 30.0 % and will be managed by Cogéma.
The government suspends the privatisation of the Crédit foncier (the situation of the Crédit Foncier stabilised in 1999 with the purchase by the Caisses d’Epargne of 90.5 % of the stake held in this institution by the Caisse des Dépôts, for FF 3.1 billion).
The modalities of the privatisation of the Crédit Lyonnais are announced.
Gradual overhaul of the taxe professionnelle (annual flat-rate tax for very small businesses).
To finance the 35-hour week a complex package has been put together. The relief given to employers will supposedly be offset by the proceeds from an environmental tax (general tax on polluting activities payable by specialised firms), a tax on corporate profits (contribution sociale sur les bénéfices des sociétés) of firms with a turnover of more than FF 50 million, and alcohol and tobacco duties.
Introduction of PARE or "return to work" scheme.
The Electricity Law opened 30 % of the market to competition in 2000, and 35 % by 2003.
The February 2000 Law of Modernisation and Development of Electricity Public Service creates the Commission of Energy Regulation, which is in charge of arbitrating between consumers and electricity providers.
New definition of part-time work as all cases where working time is less than the statutory 35 hours.
In order to ensure greater equity of access to health care, universal health insurance (couverture médicale universelle or CMU) is available since 1 January 2000 to the neediest members of society, a replacement of the former medical allowance dispensed by local authorities (Box 9). The first part of CMU provides basic cover to all those residing lawfully in France, irrespective of their employment situation or insurance contribution record. In practice, people formerly without health insurance, such as those not in stable employment or those facing complex administrative problems, as in the case of foreigners waiting to get official residency papers, are now covered. The second – and most important in quantitative terms – part provides free supplementary cover to people whose income is under FF 3 500 per month per person. The main features of universal health insurance (CMU) are: – The ticket modérateur does not have to be paid by the patient, so that medical goods and care are completely free up to the limits set by the government. Certain types of expenditure (optical and dental care) are capped. – Patients do not have to advance money for payment of fees up front; this is the so-called third-party billing (“tiers payant”) system, whereby the health insurance funds pay health professionals and institutions directly. – One-stop processing of benefits: in contrast with the previous system, under which beneficiaries and entitlements were determined by several offices, the CNAM offices now do it alone; entitlement is immediate once it has been determined. – Automatic entitlement: the government decided that cover cannot be refused because information is missing. Nearly 3 million people who used to receive free medical assistance from the local authorities (départements) are automatically entitled to CMU without having to apply for it, or who receive the guaranteed minimum income (RMI). – Free choice of the supplementary cover provider (health insurance fund, mutuelle, private insurer). The CNAM is still the institution of last resort. In case of an affiliation with a mutuelle or a private insurer, these receive a subsidy of FF 1 500 per year per affiliated person, to meet the costs of supplementary cover.
In the public hospital sector, the government intervenes both directly and via newly-created regional hospitalisation agencies (ARHs) to determine the global budgets allocated to each hospital.
The CNAM has the oversight of general ambulatory care, excluding drugs. It is thus responsible for containing the growth of fees of doctors in independent practice, and of other paramedical professions within the limits of the targets set by parliament, and to report every four months to the government on actual expenditure in relation to targets.
To adjust wage evolution during the transition to the 35-hour week, a, the monthly minimum, i.e. basic wage plus the top-up, will be adjusted on 1 July each year to take account of the rise in the consumer price index and 50 % of the increase in the purchasing power of production workers’ basic monthly pay. By 1 July 2005 at the latest, the hourly SMIC rate for the 35-hour week should have caught up with the guaranteed rate of monthly pay, since the index for the minimum monthly wage is rising less rapidly than the index used for the hourly SMIC, i.e. the basic hourly wage of production workers. Furthermore, the latter could rise even faster than the monthly wage given that full wage compensation in the form of automatic increases in the hourly rate has been written into virtually all the agreements signed. Thus, as the move to the shorter workweek gains momentum, hourly wages will rise faster than monthly wages. Since 1 January 2000, firms implementing the 35-hour week (or the 1 600-hour year) have been entitled to more generous relief on employer’s social security contributions, subject to certain conditions.
3.2% increase of the national hourly minimum wage (SMIC) by two different levels of pay corresponding to two separate SMICs to take account of the entry into force of the law on the 35-hour working week. The definition of two separate SMIC levels was decided to guarantee to minimum wage earners the same level of pay as before the introduction of the 35-hour week.
Definitive introduction of a statutory working time reduction from 39 to 35 hours a week for all companies and provision of detailed regulation for its application.
To adjust overtime coverage and payment during the transition to the 35-hour week, an interim arrangement lasting one year for overtime rates and two years for overtime quotas is to be introduced. From February 2000, overtime is to be paid at time plus 10 % (of gross salary) from the 35th to the 39th hour worked, at time-and-a-quarter up to the 47th hour worked and at time-and-a-half thereafter for firms with more than 20 employees. Where there is no collective agreement, time off will be given in lieu of the 10 % overtime rate. From 2001, the rate will be raised to time-and-a-quarter from the 36th to the 43rd hour worked and time-and-a half thereafter. The overtime quota for firms with more than 20 employees is 130 hours per employee per year for hours worked over and above a 37-hour week in 2000, a 36-hour week in 2001 and a 35-hour week as of 2002. The same arrangements will apply to firms with fewer than 20 employees from 2002 to 2004.
The three main subsistence benefits have been raised by 2 %: 1) RMI (basic income support); 2) ASS (special solidarity allowance for the unemployed at the end of their entitlement)
Reduction of employers' social security contributions in the form of a subsidy per employee per year, to encourage the transition to the 35-hour week through the channel of collective agreements and to limit the expenses incurred by companies reducing statutory working week. This reduction results from the combination of a permanent subsidy with the reform of employers' contributions; these are merged in a single reduction which takes the form of a single scale of exemption. Companies will have to pay a "top-up wage differential" (complément différentiel de salaire) guaranteeing that 35 hours' work by minimum wage recipients will be paid as much as 39 hours previously. State subsidies in the form of a reduction in social security contributions will enable companies to compensate for their extra expenditure.
The Fund to Finance the Reform of Enterprises’ Social Charges (Fonds de financement de la réforme des cotisations patronales de sécurité sociale, FOREC), was created in 2000 as a means to offset the revenue losses incurred by various regimes due to the reductions in social charges associated with the 35 hours legislation.
Gradual phase-out of the exceptional surtax on corporate income tax.
Abolition of the annual flat-rate tax for very small businesses.
For SMEs the rate of this tax will be lowered from 36.67 to 27.5 % in 2001, then to 15.45 % in 2002 and finally to 15 % in 2003. For all companies the 10 % increase introduced in 1995 will be phased out, and the rate of tax for large companies will be lowered from 36.7 to 34.33 % in 2002, then to 33.33 % in 2003. Other company tax measures are: lowering of the threshold for equity holdings of parent companies in their subsidiaries below which dividend payments are not taxed; lowering of the rate of the avoir fiscal tax credit that can be used by companies; reduction of declining balance depreciation coefficients.
Gradual phase-out of the exceptional surtax on corporate income tax. – Phase-out of the contribution representing the real-estate lease tax. – Abolition of the annual flat-rate tax for very small businesses. – Abolition of fifty taxes (duties on ID cards for foreign minors and special cards for foreigners practising certain occupations, registration fees for the baccalauréat and brevet school examinations, and various fiscal taxes, notably on credit cards). – Abolition of the regional quotient of the taxe d’habitation and readjustment of the relevant tax relief arrangements. – Abolition of parafiscal levies. – Abolition of the road tax (vignette) on private cars and certain light commercial vehicles owned by individuals and non-profit bodies.
Taxes on students' wages are deleted. Students must be under 26 years old and not earn more than three times the minimum wage for the year 2009 (i.e. 4013€).
Degressive reduction of personal income tax scales. The reform aims to lower the marginal rates of income tax between 2000 and 2003. The bottom rate of tax was lowered from 10.5 (already reduced in 2000 to 9.5) to 7 % in 2003, and the top rate from 54 to 52.5 %. From 2001 earned income tax credit for low income groups.
Personalised Action Plan For a New Star (PAP-ND) takes effect: it provides individualised treatment to return-to-work for all job seekers. From the moment they sign up PAP-ND, turning down jobs offers can be sanctioned more severely than before.
Reorganisation of the unemployment insurance system around a back-to-work assistance plan (plan d'action pour l'emploi, PARE), under which unemployed people's eligibility for unemployment benefits is linked to their commitment to an individualised PARE.
Creation of 30 000 solidarity employment-contracts (CES).
The New Economical Regulation Law adopted on May of 2001 defines abuse of dominant position relatively to the damages that can be done to competition, and not only relatively to the damages that can be done to the weaker firms.
Strengthened the sanctions against abuse of economic dependence.
The New Economical Regulation Law adopted on May of 2001 stipulates that acquiring firms must inform the Competition Council before an M&A transaction if the merging firms' worldwide turnover exceeds 150bn€ or if the merging firms French turnover exceeds 15bn€. The ministry of Economics can then ask merging firms to amend their contract, after having been advised by the Competition Council.
The New Economical Regulation Law adopted on May of 2001 introduces new arrangements regarding Public Bid Offers and Public Exchange Offers. The Enterprise Committee of the target firm can now summon the bidder to an information meeting. If the bidder declines but the deal succeeds, the acquired shares can be deprived of their right to vote.
Introduction of 11 days of paternity leave for children born after 01/01/2002
The New Economical Regulation Law adopted on May of 2001 stipulates that French public firms' (i.e. French firms on a "regulated market") annual reports must take into account their economical and social impact. The annual report must include informations relative to: the measures taken to increase energy efficiency; details relative to (optional) internal services to face environmental accidents; reserves and guarantees for social and environmental prejudices; allowances and their amount. Said informations are decided by a State Council Decree.
The New Economic Regulation had been conceived to guarantee a better balance of power between the different instances of control, by allowing for the separation of the functions of chairman of the board and CEO, by strengthening the control function of the board, by assuring a higher level of transparency with respect to remuneration, and by increasing the rights of minority shareholders.
More flexible conditions for implementing the transition to the statutory 35-hour working week for companies with fewer than 20 employees. These companies will be able to use more overtime without having to grant time off in lieu, corresponding to 180 extra-hours in 2002 and 170 extra-hours in 2003 (instead of 130).
The principle according to which benefits decrease with time is cancelled.
Creation of the "pension-equivalent benefit" (revenu équivalent retraite) scheme for unemployed people under 60 years of age with over 40 years of contributions, corresponding to minimum € 762 per month and replacing a previous similar provisions.
Employment qualification period necessary for eligibility for benefits has been shortened.
Introduction of a social security contribution from profits.
As of January 2001 the 30 % relief on employers’ social security contributions for new part-time contracts will no longer apply to companies with more than 20 employees or as of January 2003 to other companies.
A 2.2% increase in pensions from 1 January 2002, which is the date that a new dependency benefit, the 'individualised autonomy allowance' (allocation personnalisée autonomie, APA), comes into force.
Enabling all companies in the banking sector to offer either full or progressive early retirement to employees meeting certain conditions. The scheme is open to workers once they reach the age of 58 and remains open for a maximum of 2 years thereafter. Workers must have been employed by the company for at least 15 years. When they leave the scheme, workers must then meet all the required criteria to be eligible for a full pension. The full early retirement allowance varies between 57.5% and 65% of the employee's previous salary. If employees opt for progressive early retirement, they receive pay equivalent to working half-time, supplemented by a state allowance of between 30% an 25% of their basic salary, depending on their salary level. Companies are completely exempt from employers' social security contributions on the allowances paid to workers concerned. New recruitment is planned to offset early retirement.
The share of public support to early retirement pensions has been scaled down.
Increasing the scope and duration of employee saving schemes, by extending them to employees of SMEs and increasing the "lock-in" period for employee savings from 5 to 10 years. Employees of SMEs will now be covered by a new "inter-company saving scheme" (Plan d'épargne interentreprise, PEI), while the creation of a "voluntary partnership employee savings scheme" (Plan partenarial d'épargne salarial volontaire, PPESV) extends the lock-in period for employee savings from 5 to 10 years and turns a short-term savings mechanism into a medium- or long-term scheme.
Reform of private sector compulsory supplementary pension schemes along the four following principles: stabilisation of contribution levels, prioritisation of variable contribution periods, fostering freedom of choice in terms of retirement age from 60 onwards and allowing retirement before 60, with the people concerned receiving their basic pension.
Creation of a working tax credit for workers with low labour income (76000F in 2000 for the 2001 taxes, year of implementation, 16251€ for 2014)
The reform aims to lower the marginal rates of income tax between 2000 and 2003. When this adjustment is completed, the bottom rate of tax will have been lowered from 10.5 to 7 % and the top rate from 54 to 52.5 %. It is also planned to adjust the relief for the poorest households and modify the “family quotient”.
Introduction of an "employment bonus" (prime pour l'emploi), a form of tax credit or "negative taxation" subsidising the pay of workers on low wage applying proportionally to wages of between 30% and 100% of the SMIC national minimum wage.
New employment creation scheme for young people with a low level of education (so-called "Jeunes en Entreprise"/ Youth-in-Business), replacing the youth employment scheme implemented by the previous government.
Firms with more than 1000 employees have to offer a “re-assignment leave” (congé de reclassement) during which the worker can be re-assigned without any interruption in his contract. It lasts between 4 and 10 months during which a unit must be set up in the firm to take charge of the re-assignment of workers. The employee receives an allowance, which is at least 65% of yearly gross wage (and can not be less than 58% of the SMIC). It is paid half by the firm, half by the state (the Fonds national pour l’emploi).
Tighter regulation on collective redundancies. Before being able to table a redundancy plan, employers must have convened negotiations or reached an agreement on introducing the 35-hour working week. In addition, employers contemplating redundancies will have to have reduced "structural overtime". If the company fails to meet these requirements, the courts may be called upon provisionally to block the redundancy plan. The employer will also be required to propose redeployment to alternative jobs requiring equivalent skills within the company or group.
When a collective dismissal leads to a reduction in activity that, in return, impacts a subcontracting firms, those firms should be informed.
When examining the legitimacy of a collective dismissal, the administration can take into account financial position of the group to which the firm belongs.
In case of disagreement in the termination of a firm activity that implies the dismissal of hundred workers, a mediator should intervene and make a proposal to both parties.
A dismissed worker has priority to be hired in the firm for a period of 12 months.
Firms have to inform employees on a temporary contract about permanent jobs offers.
Measures to tackle precarious employment through restrictions on fixed-term contracts. The period which must elapse between the use of fixed-term contracts for the same position is made longer. It will be calculated in terms of working days instead of calendar days. Furthermore, for fixed-term contracts lasting under two weeks, the period between contracts will be set at no less than a week.
An employee can terminate a temporary contract if he has found a permanent one.
The current "precarious employment bonus" paid to fixed-term employees at the end of their contract (if not transformed into a permanent one) is to be increased from 6% to 10% of gross salary.
Increase in severance pay entitlements in case of collective dismissals of redundant workers. The amount of compensation now varies according to whether the redundancy is due to personal or economic reasons. In the latter case, the rate applicable is twice as high as the statutory minimum, i.e. 20% of a month’s pay per year of service up to a 10-year maximum, and 20% of a month’s pay plus 13.33% per year of service in excess of 10 years with the same company. Considerable top-ups to this statutory minimum may be added by company or sector-level collective bargaining or individual negotiations.
This decree forces the firms falling under the NRE Law to include in their annual report informations relative to employment (number of employees, absenteeism causes, hygiene and security conditions, dismissals, formations, ...), relations with NGOs, …
An enhancement of the Universal Health Insurance (Couverture Maladie Universelle, CMU) scheme, through elimination of the spending ceiling for dentistry and the extension of the 'direct settlement' system for former benefit recipients whose income now exceeds the statutory ceiling.
A decree easing the restrictions on legal work time increases the overtime quota from 130 to 180 hours.
Increase in the waiting period for eligibility for benefit from 7 to 8 days; Extension of the waiting period for access to the compensatory scheme (this waiting period is applied to redundancy payments made in excess of the statutory ones).
Reduction in the period of receipt of unemployment benefits: if the entitlement period was initially 15 months, it will be reduced to seven months as of 1 July 2004; if the entitlement period was set at 21 months, it will also be reduced to seven months. In the case of those who had registered with the unemployment insurance scheme prior to 01/01/2003 the new benefit rules will come into effect on 01/01/2004.
Toughening the criteria for benefit entitlement for unemployed people aged over 55: until now, unemployed people aged over 55 received unemployment benefit for up to five years if they had paid 27 months of contributions in the previous 36 months.
Cut in unemployment benefits and increases in contributions, as follows: 1) Increasing unemployment insurance contributions by 0.2%; 2) Raising the employer's contribution to 3.7% of pay and the employee's to 2.1%.
Phasing out of the 'end of career leave' (congé de fin d’activité, CFA) scheme for civil servants. Created in 1996, this scheme enabled civil servants to retire as early as 56 on an income equivalent to their future pension provided they had 40 years of contributions and 15 years of service in the civil service. Those with 37.5 years of contributions and 25 years in the civil service were eligible to retire at 58, while those with 172 quarters of contributions (i.e. 43 years) and at least 15 years' service could retire at any age. Renewed annually since 1996 and used by approximately 10,000 civil servants a year, this programme enabled new recruitment on a replacement basis. The equivalent private sector 'early retirement for jobs' scheme (ARPE), set up by the social partners running the UNEDIC unemployment insurance scheme in 1995, expired at the end of December 2001.
The national rail network is opened up to foreign rail freight companies.
The July 2003 Law Simplification Law authorises the Competition Council to accelerate procedures for transactions that do not exceed a certain amount of money.
The Gas and Electricity Markets and Energy Public Service Law broadens the Commission of Energy Regulation's prerogatives to the public gas market.
Suspension of some articles of 2002 Law that made economic redundancies more difficult. More specifically, firms do not have to implement a working time reduction scheme before the dismissal, mediators do not have to intervene in dismissals over 100 workers.
Introduction of constraints on redundancies of older workers.
The procedure for a dismissal for economic reason can be defined by contractual agreements.
Re-hiring, if asked by the judge when the procedure has not been correctly followed, can not be required if the firm has closed or if there is no job available.
Ease of use of common temporary contract. In case of dispute, the judge only has to check that is common practice not to employ a worker on a permanent contract for that job.
Premium that is paid by the firm on expiry of the contract (if the contract is not converted to a permanent one) increased from 6% of gross wage to 10%. However, if partners agree and if the worker is given access to special training, the premium is 6%.
The August 2003 Financial Security Law extends the May 2001 NER Law's main articles to mergers and acquisitions between banks. This followed a Council of State Decision according to which the Comité des Etablissemens de Crédit et des Entreprises d'Investissement (CECEI) could not examine mergers transactions anymore.
Act of 1 August 2003 on financial security: made substantial amendments to the French Monetary and Financial Code. It merged the financial market supervisory authorities to create a single regulator: the Autorité des Marchés Financiers (AMF). It also created the Comité consultatif de la législation et de la réglementation financières (CCLRF) and the Comité consultatif du secteur financier (CCSF).
The Dutreil Law simplifies the firm's creation (it now takes only 1€ of share capital to create a Limited Liability Company (SARL)), the main residence of the individual entrepreneur is now impossible to seize if said entrepreneur can present a notarial deed stating so, reduces taxation and social contributions for Small and Medium Enterprises (PME), and facilitates its financing.
The agreement provides for an increase in the fixed fee general practitioners are paid for 'paediatric consultations' (compulsory examinations for young children) and for the creation of an 'in-depth' paediatric consultation fee of EUR 26.
The new agreement provides for the implementation of new forms of remuneration designed to promote doctors' participation in public health contracts (contrats de santé publique) or to foster a more effective distribution of healthcare professionals throughout France.
Insurance companies, using the drafting of patients’ rights legislation as a pretext, have opted for a sharp increase in the premia paid by practitioners for third-party insurance. The new agreement provides for two-thirds of insurance premia over EUR 1,000 to be picked up by sickness insurance funds in 2003.
Firms with more than 300 employees have to negotiate every three years on the evolution of employment and skills among the firm.
Making the implementation of the September 2001 agreement on the introduction of the 35-hour working week in French public hospitals more flexible: the 'time savings account' (Compte épargne temps, CET) has been made more attractive for employees, as its use has been made easier and the number of days placed in the CET between 2002 and 2005 afforded a 10% bonus. In terms of training, the agreement provides for the opening of talks on the 'development of pathways to qualifications and the validation of professional experience' as well as 'easier access to studies leading to promotion', especially for staff in smaller hospital.
Cuts the entitlement for the specific solidarity allowance (allocation de solidarité spécifique, ASS) period paid to unemployed people who are no longer eligible for unemployment benefits. The ASS was created in 1984 and is paid by the state to unemployed people.
Law introducing a new "minimum employment income" (revenu minimum d’activité, RMA) scheme and decentralising the existing "minimum integration income" (revenu minimum d’insertion, RMI). The RMI scheme was introduced in 1988 and aims to help reintegration.
Multiple reform of UNEDIC time coverage. People with 6 months’ employment over the last 22 months will receive 7 months of subsidies. 14 months employment over the last 24 months gives right for 23 months of entitlement. 27 months employment over the last 36 months for workers above 50 years old provides 36 months of coverage. Aged 57 years and over with 100 quarters of old age pension scheme membership with the same amount of employment will have up to 42 months of coverage.
The reform improves the situation of surviving spouses by treating men, women and occupational status equally and by simplifying the survivor's benefits arrangements.
The new law enables workers to continue to work while receiving a pension.
The 21st August 2003 Law Relative to Pensions Reform ("Fillon Reform") offers an 85% clearance rate to people who gained the minimum wage ("SMIC") during their entire career and who can justify the required duration in order gate a full-rate pension.
Missing annual pension contributions for the years spent studying for a degree or diploma can be purchased, up to a three-year ceiling. The sum paid is tax deductible.
Introducing a bonus for longer periods of contribution and a penalty for shorter periods of contribution.
Increasing the contribution period by one-quarter every year to take account of the expected increase in life expectancy at the age of 60. Special provisions: 1) Retirement before the age of 60 for employees who began working between the ages of 14 and 16, and having paid 40-42 years of contributions. Scheme also available to people with disabilities according to criteria to be further decided. 2) Missing annual pension contributions (years spent studying for a degree, diploma or certificate-conferring course) can be purchased, up to a three-year ceiling. The sums paid for these purposes will be tax deductible. 3) The age at which an employer can oblige an employee to retire will be raised to 65, instead of the age at which the employee can claim a full pension. It will be possible to pension-off employees under the age of 65 (but over 60) who are eligible to a full pension, if they receive early retirement compensation, or a sectoral collective agreement providing for trade-offs in terms of employment or vocational training has been reached before 1 January 2008.
Convergence of private and public schemes. The law progressively sets the contribution period at 40 years for civil servants, instead of 37.5 years. In practice, it extends the 1993's reform of private schemes on public ones. For both private and public schemes, the pension will be proportional to the number of contributing years.
Increasing the cost of company early retirement schemes, where the employer has now to contribute at a special dissuasive rate (23.85%)
Early retirement for workers who started work at the age of 14 or 15 and having paid 40-42 years of contributions. Scheme also available to people with disabilities according to criteria to be further decided.
Setting out the three criteria which must be simultaneously met in order to retire before the age of 60 for people with long working lives: 1) to have been covered by social insurance for a total of 168 quarters (i.e. 42 years) under any scheme; 2) to have actually paid employee social security contributions for 168 quarters in order to retire at 56 or 57, 164 quarters to retire at 58 or 160 quarters to retire at 59. Periods of parental leave, extension of coverage periods for mothers and most periods of unemployment are excluded from the equation; 3) to have had a minimum period of insurance coverage at the very outset of their working life – i.e. five quarters of coverage before the end of the year on which their 16th birthday fell in order to retire between 56 and 58, or their 17th birthday in order to retire at 59.
Placing restrictions on state-financed early retirement schemes.
Reduction of the early retirement schemes by limiting fiscal incentives to physically demanding jobs and restructuring firms in financial distress. Otherwise, the employer has to contribute at a special dissuasive rate (23.85%).
Introduction of a clear indexation rule of reference pensions to prices.
Foundations of a genuine 'third pillar' of pension funding. Until now, only targeted at special categories of employees and self-employed people. The period during which funds are locked in to the scheme has been extended up to the retirement age of the person concerned. The pay-out from the scheme is a life annuity, but lump-sum payments are also possible.
A State Ownership Agency (Agence des participations de l’État, APE) was established in 2003, which exercises voting rights in general meetings of firms with public participation. However, the government’s shareholder rights are still mostly exercised by the relevant line ministries.
The 31st December 2003 Law Relative to Public Communication Services Obligations and to France Télécom privatises France Télécom.
The final portion of the “professional tax” charged on salaries was suppressed, at an estimated cost of 1.8 billion euros.
Tax deductions for persons hiring domestic employees were increased at a cost of 74 million euros over two years. The “employment premium” (Prime pour l’emploi, PPE), an earned-income tax credit, was doubled in 2002 and reformed in favour of part-time workers at a budgetary cost of 280 million euros. Taken together the measures are expected to cost 1.1 billion euros in 2003.
6 % reduction in marginal tax rates, for an expected overall budgetary cost of about 3.1 billion (in addition to the 5 % reduction in income taxes in 2002).
Provision of one million 'employment starter contracts' (contrats d’activité, CDA), combined with systematic individual support, over a five year period, for people who have been minimum integration income (RMI) and specific solidarity allowance recipients for six months, and to people receiving single parent’s allowance. This contract consists of 26-35 hours’ employment per week, split between work and training, with working time being paid at the minimum wage (salaire minimum interprofessionnel de croissance, SMIC) rate. Working and training actions will be supervised by a guidance counsellor appointed by the mayor. Only local and regional authorities, subsidised companies that help unemployed people enter or re-enter the workforce and non-civil service agencies that provide assistance to the unemployed can offer this type of contract. The employer will receive a flat-rate state subsidy.
New form of social assistance is introduced which can be used as a wage subsidy for some time after recipients return to work.
Setting-up of a clearer and better coordinated range of local services for the most vulnerable. Creation of 300 local employment centres (maisons de l’emploi) by 2009, that will: identify quantitative and qualitative job needs; provide a structure for training.
In electricity since mid-2004 there has been a free choice of suppliers for all business customers and full market opening will be implemented by 2007, when households will become eligible for free supplier choice.
New special scheme for youth employment (Youth-in-Business Contracts – Contrat jeune en entreprise): each of the 800,000 young unqualified unemployed people aged between 16 and 23 will be allocated an individual contact person.
The health insurance system will participate in developing the ONDAM through the Union nationale des caisses d'assurance maladie (UNCAM) that will regroup the three major social insurers: the CNAM, CANAM and the MSA. Each of the three insurers will present a budget proposal by the middle of the preceding year and the measures to ensure that the budget balance of the multi-year budget framework set by Parliament will be met.
A greater consultative role is given to new organisations regrouping health-care professionals (Union nationale des professionals de santé, UNPS) and private insurance and mutuelles providing complementary insurance (Union des organismes de protection sociale complémentaire). These will give their views on the decisions of the UNCAM as regards the reimbursement rates and the care covered by the insurers.
An “Early-Warning” committee (Comité d'alerte) has been established that will follow spending developments and will warn the Parliament, the government and the social insurers when spending exceeds the ONDAM by 0.75%. In this case, the social insurers will be required to propose corrective measures and the Comité will assess whether the measures appear sufficient within the following two weeks.
The frequency of medical check-ups, which employees currently undergo annually, is to be scaled back to once every two years. However, employees under a 'heightened health watch' will continue to have a check-up at least once a year.
Occupational health doctors will be required to devote a third of their working time (150 half-days per year) to activities at the workplace. They will only be allowed to cover a maximum of 450 companies or worksites and 3,300 employees, and to undertake 3,200 medical examinations a year.
To facilitate the conclusion of collective agreements in small and medium-sized enterprises (SMEs) with no trade union delegates, the law allows the social partners to reach agreements on methods in each sector that enable firms to conclude agreements with elected staff representatives or with employees designated by a representative union.
The May 2004 Act makes it easier for company agreements to diverge from industry agreements. The principle of favourability to the employee according to which an agreement can only improve the employees’ rights laid down in an agreement of a superior level is modified. A sector-level agreement may deviate from the provisions of an intersectoral agreement unless such derogation is expressly forbidden by that intersectoral agreement. A company-level agreement may, in turn, deviate from all or part of a sector-level agreement, again unless such derogation is expressly forbidden at the higher level. There are also other restrictions on the right for lower-level agreements to depart from higher ones. The favourability principle is retained for minimum wages, job classifications, supplementary social protection measures, and multi-company and cross-sector vocational training funds.
The legislation introduced a “majority principle” for collective agreements to be regarded as valid. Previously, it was sufficient for an agreement to have been signed by at least one trade union with representative status. The new majority principle will be applied differently depending on the level of negotiations: ● At intersectoral-level, an agreement is valid in the absence of opposition by a numerical majority of trade union organisations with representative status. ● At sector level, two variations of the majority support principle are suggested, and the social partners must choose one of them in a sector-level agreement. The first model that of the intersectoral-level. Under the second model, the agreement must be signed by one or more unions representing the majority of the employees in the relevant sector. If there is no agreement stipulating conditions for the validity of sector-level agreements, the opposition of a majority of unions is applicable to the sector. ● At company level, two different variations of the majority principle are available, and the social partners have to choose between them and enshrine this in a sector-level agreement. In the first model, in order to be valid a company-level agreement must be signed by one or more unions that received at least 50% of the votes cast in the first round of the most recent works council or workforce delegate elections. If no union holds this majority, the agreement must be approved by a majority of employees in a vote. In the second variant, an agreement is valid if not opposed by non-signatory unions that received at least 50% of the votes cast in the first round of the most recent works council or workforce delegate elections.
Increase of SMIC national minimum wage (salaire minimum interprofessionnel de croissance) by between 2.1 and 5.8%. The 5.8% increase (from € 7.19 to € 7.61 gross hourly wage) only applies to a minority of SMIC recipients (those still working a 39-hour week), while most recipients will see a lower rise, of no more than inflation in some cases.
Launch of a large scale programme for the improvement, development and modernisation of apprenticeship, with the objective of raising the number of apprentices to 500,000 by 2009: 1) Apprenticeship will be made more attractive by improving reception; 2) Introduction of a tax incentive for business by means of a tax credit, which will be higher when the apprentice concerned is a young unskilled persons.
Long-term unemployed who receive "minimum social benefits" (minimum income, lone-parent benefits, benefits for adults with disabilities) may receive a €1000 subsidy if they get an activity job between September 2005 and Decembre 2006.
Contrat d'avenir: can be concluded by employers of the public sector, non profit organisations or private organisations in charge of public services, for a max duration of 36 months and 26 hours per week. Financial State support and social security.
Reinforcing the responsibilities of the National Employment Agency (ANPE), in the sense of developing and implementing personalised back-to-work assistance plans (plan d'action pour l'emploi, PARE) with the unemployed.
End of the monopoly of the state-run National Employment Agency (ANPE) over placement services, so bringing legislation in line with the reality (its monopoly was only theoretical).
Creation of job houses ("Maisons de l'emploi"), in which the major actors of the PES are grouped in a single structure.
Possibility for the ANPE to create subsidiaries or to purchase a stake in other entities. Such subsidiaries will be able to charge employers for service provided.
Introduction of a 'personalised back-to-work assistance agreement' (Convention de reclassement personnalisé, CRP) to retrain and find a new job for employees who are made redundant in companies with workforces under 1,000 including those with only one employee. Following estimates from UNEDIC, some 165,300 workers would be concerned by such scheme each year. The CRP scheme provides employees with eight month vocational retraining and personalised back-to-work assistance until they find a new job until six months after the scheme has expired, as well as a compensation equivalent to 80% of their former gross wage for the first 3 months and to 70% of their previous gross wage for the next 5 months. Employees with under two years of service in a particular company and who have earned entitlement to unemployment insurance, benefit from various forms of assistance for the entire eight-month scheme, but their compensation is less generous (it falls under the unemployment benefit scheme). Where employees fail to find new jobs, they receive UB for the normal statutory period minus the 8 months spent on CRP.
Creation of scholarships attributed according to the merit of students
If a teacher is on short-term leave, the law asserts that he should be replaced by other teachers in the same educational institution.
Possibility for temporary employment agencies to offer employment placement services leading to both fixed-term and open-ended employment contracts.
New contracts for the insertion of people with social and professional integration difficulties: 1) Contrats d'accompagnement dans l'emploi: can be concluded by for a fixed-term period of at least 6 and maximum 24 months and a working week of at least 20 hours.
Contrat d'insertion-revenu minimum d'activité (CI-RMA): fixed-term (max. 18 months) or temporary contracts which can be concluded, full-time or part-time, by employers in the private sector with beneficiaries of RMI (revenu minimum d'insertion).
New type of open-ended contract called "Contrat nouvelle embauche" (CNE), for new recruits in firms up to 20 employees, allowing for a longer probation period (two years, against three months) during which the employee may be dismissed orally without having to state any reasons.
New regulation on the use of fixed-term contracts in the civil service, bringing the maximum duration of a fixed-term contract to three years. Contracts can be renewed up to maximum six years in total; after that employment can only be continued in the form of a permanent contract. These provisions aim at regulating the use of fixed-term contracts that were previously allowed to succeed one another endlessly. The new law incorporates the EC directive of June 1999 on fixed-term contracts into French civil service law.
Part of an action plan that aims to keep older workers in employment. New form of fixed-term employment contract for job seekers aged 57 or more who either have been registered as jobseekers for more than three months or have signed a 'personal reclassification' agreement ("Contrat à durée déterminée senior"). The contract has a maximum duration of 18 months and is renewable once (up to a maximum duration of 36 months, including renewal).
No notice period is required during the first month. Two weeks’ notice (from 1 to the first six months of the contract) must be given before ending the contract. This period will increase the longer the employee has been with the employer up to 1 month notice period after the first 6 months of employment.
Standard entitlements to severance payment do not apply; the worker dismissed during the probation period will receive an allowance equal to 8% of perceived gross salaries.
One of both parents with three children may have a parental child-rearing leave during 1 year. They will be paid €750 per month. If they accept, they loose their rights to a three-year leave.
A new principale is implemented, according to which patients need to pay 1€ for every medical act they receive.
Extension in time and scope of derogations to the 35-hours working week. The possibility is introduced for employees, in agreement with their employer and following sectoral collective agreements, to work extra hours beyond the limit of overtime applicable in the enterprise. Also, extension until 31 December 2008 of derogatory regimes already applicable for companies with 20 employees and less. The upper limit for authorised overtime is increased to 220 hours (and can be increased further by collective agreement).
Financial support in favour of employers with maximum 20 employees hiring occasional workers in the hotel and catering sector.
Financial support to employers hiring unemployed people with an open-ended contract or a fixed-term contract of minimum 12 and maximum 18 months. The allowance (aide dégressive à l'employer) is paid by the Assédic and corresponds to 40% of the entry wage during the first year, 30% during the second year and 20% during the third year of open-ended contract (or 40% during the first third, 30% during the second third and 20% during the last third of the fixed-term contract).
Creation of a contract called "Contrat Première Embauche", that refers to a job created for a young worker (from 16 to 25 years old) with low qualifications or living in a deprived area. The first year of contract, the subsidy is of 400 € per month and 200 € per month the second year.
Supplement to wage (aide différentielle de reclassement) for unemployed persons who accept to work for a salary at least 15% lower than the daily salary which had been used as a reference for the unemployment benefit and who are either aged at least 50, or have been receiving the unemployment benefit for at least 12 months. Unemployed people who accept an occasional or reduced job (maximum 110 hours per month with a wage of up to 70% of the previous reference salary) can continue to receive fully or in part the aide au retour à l'emploi during a period of maximum 15 months. This fifteen-month limit does not apply to people aged 50 or more.
Awarding of end-of-training allowances for job seekers who follow a training for bottleneck occupations.
Public support provided by the ASSEDIC for training fees of trainees who are unemployed persons receiving the aide au retour à l'emploi when the training is performed in the framework of a projet personnalisé d'accès à l'emploi and respond to specific labour market needs, up to € 665 per month and € 2,000 for the whole training.
Vertical separation in the gas and electricity sector was enforced in December 2006.
Extension of daily contracts to other categories of workers besides management.
Gradual phasing out of the “Delalande contribution” – a tax which must be paid by companies which dismiss employees aged 50 years and over. This tax is to be phased out completely by 2010. It was set up in 1987 to compensate for the removal of the administrative authorisation of redundancy but in practice obstructed the recruitment of people aged 50 years and older and transferred possible redundancies to employees who were soon to reach 50 years of age.
Increase of yearly overtime work from 180 to 220 hours in the metalworking industry.
Reduced duration of the reformed unemployment benefit (allocation d'aide au retour à l'emploi), which, following the age and the contribution history of the concerned persons, goes from a minimum of 7 months for a person having paid contribution to the unemployment.
Beneficiaries of solidarity minimum allocation (RMI) working more than 78 hours per month are allowed to cumulate wage and allowance during the first three months of work. Then, between the 4th and the 12th month of work, they receive EURO 150 per month.
Tightening of eligibility conditions, especially for the long-term unemployment scheme. The new allocation d'aide au retour à l'emploi is granted to those unemployed persons who had been working for at least 6 months during the last 22 months.
Relaxing the conditions for having access to gradual retirement facility, which until 2008 will be open to at least 60 years old workers who have contributed to the Old Age Fund for 150 quarterly periods (from previously 160), and increase in the level of benefits.
Except in the “special” pension schemes that cover about 520 000 workers, early-retirement schemes have been phased out.
Increasing the special premium (surcote) for retiring later than the age of full pension, according to the amount of extra time in employment (3% for the first worked year after 60 years of age, 4% for the following years and 5% per year for working after he age of 65).
Selling off the property in motorways held by the state.
The 3% surtax will be eliminated in two steps in 2005 and 2006.
The 2006 budget law also introduced a further reform of the taxe professionnelle, a local tax on capital. Its tax base originally comprised the wage bill and the rental value of the fixed capital stock, but to reduce the burden on labour, the wage bill was removed from the tax base. An exemption on new investment was introduced in 2004 to mitigate the tax impact on capital costs. The 2006 budget law made such exemption permanent and established a ceiling so that the tax cannot exceed 3.5 % of the firm value added.
The PPE is paid to people with work incomes above 30% of the monthly SMIC (minimal wage) and up to a threshold which depends on the family situation but can reach 2.1 times the SMIC for a single person or for a one-earner family with two dependent children. It is calculated on the basis of the previous year’s income and, for persons who received it the previous year, it has been paid on a monthly basis since 2006.
A personal income tax reform was introduced with the 2006 budget law and will take effect in 2007. The tax base has been broadened, the number of brackets was reduced from seven to five; headline tax rates were lowered. (e.g. the top tax rate was cut from 48.09 to 40 %; and a 20 % existing exemption was eliminated and integrated into the new progressive structure). The number of tax bands has been reduced from seven to five of which one is zero band; the rates are 5.5, 14, 30 and 40%. A tax cap has been introduced to put a ceiling on personal taxes (income tax, wealth tax and local residence taxes) at 60% of total income.
Private agencies are allowed to provide placement services.
The accounting and legal separation of distribution networks became effective at the beginning of 2008, when the historic operators, EDF and GDF, created distribution subsidiaries.
With gas and electricity, a major step was taken in 2007 with the complete opening of markets to competition for residential customers. In principle then, all domestic customers have been free since July 2007 to choose their electricity and natural gas supplier.
Relaxing of the carte scolaire from school year 2007/8 on.
The administrative board of universities is going to be divided by two (30 members instead of 60) and will welcome more people from outside the university itself, participating in the recruitment of professors mainly. Besides, universities asking for it might have a completely independent ownership of their buildings, and can create private foundations if they wish to do so.
Ordinance of 19 April 2007: transposed the new European solvency rules for credit institutions and investment firms into French law. It sets "economic risk-based solvency requirements" which rely not only on the credit institution's liabilities, but on its "total balance sheet". They hence have to publicly disclose more informations.
Ordinance of 12 April 2007: transposed the Markets in Financial Instruments Directive (MiFID) into French law. It formalises the interactions between financial institutions and their clients (by differentiating three levels of bargaining power for clients) as well as the execution of financial transactions.
Ordinance of 12 April 2007: transposed the Markets in Financial Instruments Directive (MiFID) into French law. It sets competition on financial markets by creating a Multilateral Trading Facilities System which functions like a regulated financial market.
The February 2007 Order implements the third pillar of Basel II. The Autorité de Contrôle Prudentiel verifies that credit and insurance institutions comply with such measures.
The August 2007 Act reinforced the legal mechanisms applied to financial compensations for public firms' retiring executives. It follows and reinforces the "loi Breton" of 2005.
Providing for compulsory consultations, before the government can propose any reforms on individual and collective labour relations, employment, vocational training. All such reforms would come within the remit of national cross-sector collective bargaining. Any proposed reforms in the field of industrial relations, employment and vocational training will first be the subject of consultations with the national-level representative trade unions and employer organisations. The government will provide these bodies with a policy document, which presents diagnoses, objectives and principal options. The social partners will then be able to indicate whether or not they intend to embark on negotiations and how much time they need in order to reach an agreement.
Exempting some overtime pay from taxation, as overtime will be encouraged in companies with fewer than 20 employees. For the workers affected, overtime pay will be exempted from income tax and employee social insurance contributions, while the corresponding employers social insurance contributions will be reduced by a flat-rate amount.
Tax exemption ceiling on earned income for students from two to three months worth of SMIC over the year. This tax benefit has been extended to all those under the age of 25.
Introducing the obligation for enterprises to pay 0.9% of their payroll to the vocational training system, in the framework of a global reform of the funding of vocational training (reorganisation of fund-raising). The Government also wants to implement the vocational training saving account.
The PES (public employment service) will assist them in working out individualised employment plans in light of their personal characteristics (qualifications, working experience, personal situation, etc.) and those of the desired job (expected wage or salary, preferred geographic location, etc.). Those plans will serve to define a “reasonable offer of employment”. The law stipulates that a job seeker may not turn down more than two such offers without having his or her benefits suspended for two months. Moreover, the new rules force job seekers to moderate their expectations as to pay and geographic location as time goes by without finding work.
Establishing the principle that job seekers may be penalised in the case of repeated refusals.
Job seekers may refuse 2 reasonable employment offers before being struck for 2 months from the PES list of job seekers and therefore cut in allowances.
Obliging job seekers to broaden the geographical area of their job search and to limit wage demands in order to raise the chances of finding a job quickly
Encouraging large companies to sign a 'national commitment to employ youth from the quartiers' (low-income neighbourhoods) under which they offer recruitments and/or training.
Merger of ANPE – the national public establishment responsible for placing jobseekers – and UNEDIC – the bipartite body responsible for paying benefits to the unemployed. The new PES will: act as a contact point for jobseekers; provide guidance on employment issues; enable insertion in the labour market; provide unemployment and welfare benefits; collect, process and disseminate data, as well as make these available; help and support jobseekers in cooperation with local authorities. The new institution will have a board composed of: five state representatives; five employer representatives; five employee representatives; two experts; one local authority representative. The board’s role will not be to manage the institution, but to deliberate on the definition of the single operator’s tasks. The new organisation’s financial resources will come from the social contributions paid by the employers and workers. In terms of expenditure, the single operator will have distinct budgets with ceilings for: unemployment benefits; welfare benefits and help given to jobseekers by the State and the National Solidarity Fund; the running costs of its organisation.
Employment promotion programmes for 16 to 25 year-olds include personalised interviews at local employment offices and support through the “social integration contract”.
Increase in government funding for companies that use partial unemployment – offering a special partial unemployment allowance amounting to: €3.84 per hour not worked (an increase of €1.40) for companies employing up to 250 staff; €3.33 per hour not worked (an increase of €1.20) for companies employing over 250 staff.
The August 2008 Economy Modernisation Law suppresses the 300-square-meter limitation of the 1996 "Raffarin Law". In addition, building shops of less than 1000 square meters doesn't require an administrative authorisation anymore.
The January 2008 Competition Development in the Service of Consumers Law regulates the contractual framework between service providers (especially in telecommunication services) and their clients.
Loosening on some conditions for individual dismissals.
Introducing a new way of terminating employment contracts, alongside resignation and dismissal, namely termination by a negotiated agreement or by mutual agreement between an employer and an employee, while at the same time giving employees the right to change their mind up to two weeks after signing the agreement. This procedure must be validated by the public employment service of the Offices at département level of the Ministry of Labour, Employment and Vocational Training (Direction Départementale du travail, de l’emploi et de la formation professionnelle, DDTEFP). The PES has a deadline of 15 calendar days; if it makes no interjection within that period, its silence means validation. The employee is then entitled to a lump sum on contract termination, equivalent to a fifth of a month’s pay for each year of service, as well as unemployment benefit.
New standard work contract for persons furthest removed from the labour market. This contract simplifies the various types of assisted work contracts for groups facing the greatest difficulty in finding a job, while allowing greater flexibility in respect of renewal or changes in the length of the work week.
Extension of the possibilities of temporary short-time working ("chômage partiel"): 800 h/year instead of 600h/year, 1000h/y in some sectors (e.g. automotive and textiles industries).
New employment contract created on an experimental basis for professional and managerial staff, ‘for carrying out a defined assignment’. The length of the contract is limited, but not specifically defined at the time of signing it, as it depends on when the assignment comes to an end. It must last between 18 and 36 months. The use of such a contract is subject to a sectoral or company-level agreement and ‘cannot be used in order to deal with a temporary increase in the workload’. This employment contract can be terminated after a year if there is a real and serious reason. In such an event, the employees concerned receive a lump sum that is equivalent to 10% of their total gross pay and is exempt from social security contributions and tax. They are also entitled to unemployment benefit and support services to find a new job.
New type of contract being tested: 'contrat d'autonomie' for young people with a placement agency, paid according to results. The beneficiary receives individualised training and coaching for a total of one year (six months before and after signing a work contract).
The minimum required experience to be eligible to severance payment is reduced to 1 year, instead of the previously 2 years.
The duration of the trial period is limited. It cannot exceed 2 months for factory workers, 3 months for technical workers and supervisors and 4 months for management positions.
Obliging companies and public establishments that have at least 50 employees to pay a penalty of 1% of their wage bill if they are not covered by a company agreement or an action plan regarding the employment of older employees. The payment will go to the National Old Age Insurance Fund (Caisse nationale d’assurance vieillesse, CNAV). The company-level collective agreement or action plan must include: a quantitative target regarding keeping older people in employment or recruiting them; measures in at least three areas of action chosen from a list set out in a decree; strategies for monitoring these actions. In addition, negotiations at sectoral level should take place every three years on the employment of older people, which must also cover career planning and training.
Lengthening probation periods of permanent employment contracts. The new probation periods are as follows: between one and two months maximum for manual and clerical workers; between two and three months for supervisory staff and technicians; between three and four months for professional and managerial staff. This period can be renewed once by sectoral agreements. A shorter period can be fixed in the recruitment letter or employment contract; young people’s placements count towards the probationary period.
The August 2008 Economy Modernisation Law also creates the juridical notion of "individual entrepreneur".
The August 2008 Economy Modernisation Law also suppresses minimum social capital for Simplified Joint-Stock Companies ("Sociétés par Actions Simplifiées", said "SAS"). Said capital is now set by the company's statutes.
Obliging employers to: establish and keep up-to-date a list of tripartite work placement agreements that have been signed by a company, higher education establishment and a student; remunerate students, whose work placements last longer than three months, on the basis of a monthly minimum gratuity which equals at least 12.5% of the hourly social security ceiling – that is, €398 in 2008. The measures concern the recruitment of students preparing for a higher education diploma.
This August 2008 Act introduces the requirement to have at least a set level of support from employees in workplace elections – either as indicated by the votes for the members of the works council or, in smaller companies for the employee delegates. Additionally, in companies with 10 employers or fewer, where these structures do not exist, workers are able to vote for the unions they favour in regional elections every four years, and there are separate elections for the small number of employees in agriculture. At least 10% of the votes are required for a union to win (i.e. be considered representative) at company level, 8% of the votes at industry level to be considered representative at industry level and 8% of the votes at national level, to be considered representative at national level.
Putting an end to the assumption of irrefutable representativeness which, since a 1966 decree, made it possible for five trade union confederations to be present in companies and negotiate. Trade union representativeness will be based on workplace election results, with different thresholds depending on the level. At company level, representative trade unions would be those that obtain jointly at least 10% of recorded votes in the first round of workplace elections. At sectoral level, representative trade unions would be those that obtain at least 8% of recorded votes in the first round of workplace elections – this is a transitional threshold defined for an indeterminate period. At national level, representative trade unions would be those that: obtain at least 8% of recorded vote in the first round of workplace elections; are also representative throughout the country, as well as in several sectors of industry, construction, commerce and services. Any other trade union which has been legally created and existed for at least two years would be able to present candidates in the first round of workplace elections.
The validity of collective agreements – which to date requires the signature of just one trade union, provided that there is no opposition from other majority unions – would be effective in all instances (company, sector and nation-wide from 2014 onwards) only if one or several trade unions which obtain at least 30% of recorded votes in the workplace elections sign the agreement and without objection from trade unions that have obtained a majority of the votes. In companies with fewer than 200 employees and no trade union representative, employers will be able to negotiate with non-union employee representatives.
The process of fixing the minimum wage (SMIC) is modified: a commission is created to provide a report on the needed evolutions of the minimum wage and from 2010 to provide evolutions in accordance with the global evolutions of the wages negotiated by branches.
Modified timetable for SMIC increases so that they would be known before annual company and sectoral pay bargaining. It is hoped that this will lead to more dynamic pay bargaining.
Municipalities have the obligation of welcoming children enrolled in pre-primary and primary school when more than 25% of the schools' teachers are on strike
Before primary school teachers and workers can go on strike, a collective negotiation is compulsory.
This August 2008 Act extends the May 2004 Act (which had made it easier for company agreements to diverge from industry agreements) to working time negotiations.
Time off at the workplace is no longer mandatory for overtime exceeding the 220-hour annual quota.
In the absence of previous collective agreement, it will be possible for a company-level agreement to redefine working time arrangements, such as seasonal variations in weekly working time, as well as the number of RTT rest days.
The annualisation of working time – which allows varying weekly working time according to workload peaks – will become the norm.
Allowing for a financial payment option instead of having days off work resulting from the law on the reduction of working time (journées acquises en raison de la reduction du temps de travail (journées de RTT)). Up to 31 December 2009, employees can choose to forego all, or part of, their ‘RTT days’; if their employer agrees, employees can work these days instead and be paid at least 10% more than their usual pay. If the RTT days were acquired before 31 December 2007, they will be exempt from social security contributions on condition that they are worked before 30 September 2008. If they were acquired after 1 January 2008, they will not be subject to income tax and employees will benefit from a total exemption of social security contributions, while employers will benefit from a flat-rate reduction in social security tax.
Beyond a fixed number of working days, the system of rest days under the reduction of working time scheme (réduction du temps de travail, RTT) is now applicable to so-called ‘autonomous workers’. However, employers will be able to individually ask these employees to give up rest days and work 235 days a year and even up to 282 days if the collective agreement permits.
New law enables companies to negotiate the amount of overtime which has so far been set at sectoral level. Overtime agreed by individual employees beyond the current quota of 220 hours a year will have an upper limit of 405 hours and no longer require authorisation from labour inspectorate.
Permanent increase in the level of partial unemployment allowance from 50% to 60% of previous wages.
Extending the ‘active solidarity income’ (Revenu de solidarité active, RSA) at national level. This new form of social welfare had been introduced experimentally for a few months in some departments. The main feature of RSA is that it changes the possibilities of combining the minimum income benefit with pay earned by unemployed people who return to work and who depend on these forms of financial help. The RSA replaces certain existing minimum income guarantees, such as the `minimum integration income' (Revenu minimum d'insertion, RMI) and lone parent benefit (Allocation de parent isole, API) and allows for the combination of guaranteed minimum income (RMI or API) and paid work within a time limit. It provides for reducing, during the year following a return to employment, the financial advantages linked to returning to employment for beneficiaries who take up full-time employment and even for those who take up a job that is more than half-time. The increase in the income corresponds to a progressive decrease in the benefits, so that the total disposable income increases EUR 0.62 for each extra EUR 1 of income. In other terms, the Revenu de Solidarité Active "provides social contribution exemptions to employers hiring RMI beneficiaries or long- term unemployed, and guarantees a permanent negative income tax to the new low-wage workers so that they get at least 200 euros more than what the RMI would have provided them with."
New agreement lowers to four months (instead of six) the qualifying period for entitlement to benefits
The social tax relief for companies will from now depend on wage negotiations outcomes. If enterprises do not respect the obligation of annual negotiation, the amount of tax reductions will be decreased.
Companies are exempt from paying employers’ social contributions for students on work placements, since the students are not considered as employees and should not carry out work that replaces missing staff.
All social security contributions are cancelled for SMEs with less than 10 employees that hire workers on minimum wage
Reduction of social security contributions of 15 points for any individual or household employing personnel but exempted from the existing scheme of reduction. The reduction is conditioned on the way of calculating the imposable income. In fact, the employer has the choice to choose the minimum wage (SMIC) or the effective wage as base. If he or she decides to adopt the second possibility, the reduction is granted, otherwise not.
Reduced social security contributions on overtime hours.
Income-tax exemption on the payment for additional days work exceeding the statutory 218 days and additional leave days awarded to an employee in compensation for work time in excess of the 35-hour week converted into pay (10 days maximum per employee).
Unemployment allowance contributions: Rise in the lower limit paid by companies to €6.84 per hour not worked, compared with €4.42 since 1993.
A minimum pension of 85% of the national minimum wage (Salaire minimum interprofessionnel de croissance, SMIC) for a full career on the SMIC is on target for 2012. Moreover, the minimum old-age allowance (Minimum vieillesse) will be increased by 5% a year up to 2012.
Gradual increase in survivors’ pension rates, to 56% of the amount of the deceased’s pension in January 2009, then 58% to reach 60% in January 2011.
Introducing the possibility to combine employment and a retirement pension (cumul emploi-retraite) without any limitations from the age of 60 years for those who have a full pension contributions record and from the age of 65 years for everyone. People who choose to work longer will be entitled to a higher pension (surcôte). From 1 January 2009 onwards, the amount of the pension increases by 1.25% per additional three-monthly contribution, amounting to 5% a year in the private sector. Since January 2004, the increase was 0.75% per additional three-monthly contribution during the first year, rising to 1% per quarter in subsequent years and 1.25% after the age of 65 years. The pension total has also been increased from 0.75% to 1.25% per additional three-monthly contribution in the civil service, up to a maximum of 20 three-monthly contributions.
The number of contribution years required for a full retirement pension (currently 40 years) will increase by three months a year beginning in 2009, in order to reach 41 years in 2012.
The 30th June 2008 Decree harmonises special pension regimes and public function pension regimes. Amongst other, it increases the number of quarters worked from 150 to 165. The implementation of this law is as follows: two additional quarters every year between July 2008 and July 2018.
From 1 January 2010, civil and public servants – who wish so – will be able to continue working beyond previously set limits of 65 years on condition that they are fit to do so. The programme of gradual retirement will continue until December 2009.
Employees can postpone their retirement age if they wish. From 1 January 2010, employers will only be able to oblige employees to retire from the age of 70 years onwards. Between 65 and 70 years, employers will have to ask employees at least three months before their birthday whether they wish to retire. If the answer is no (within a time limit of one month) or if the employer does not respect the prescribed notice, employers will not be able to compel the workers to retire for a year. Pilots (from 2010 onwards) and flight staff (from 2009 onwards) will be able to continue working until 65 years, if they wish so.
Wealth tax: money invested in the capital for SMEs will be deducted from the solidarity tax on wealth (ISF), up to 50 000 € per year. It also includes investments in reinsertion bodies, teaching institutions and research foundations. The relief on the principal residence in the calculation of the ISF will be increased to 30%.
Tax shield: the share of income that can be taken by direct taxes, including CSG and CRDS, will be reduced from 60% to 50%.
Overtime hours will be exempt from income tax and payroll taxes, as well as paid 25% more than normal hours (the measure has applied in the private sector from 1 October 2007).
The ‘individual right to training’ approved by the social partners in December 2003 and included in the law in 2004 has now been extended to civil servants.
Jobseekers benefit from training up to 400 hours with a view to acquiring the skills required for the job on offer.
The decree of 22 September 2009 opens up the capital of professional corporations of bailiffs, auctioneers and notaries to other members of the legal or judicial professions. However, non-professionals are still barred from holding shares in these professional structures.
Maintaining, for a maximum period of nine months, the benefit of complementary health and social protection guarantees that were applied in the company the unemployed person last worked for: Since 1 July 2009, in cases of termination of employment contracts leading to unemployment benefit entitlement, the additional clause to the labour market reform agreement provides for newly unemployed people to maintain the benefit of complementary health and social protection scheme guarantees to which they were entitled in their former company. This right has to exist in unemployed people’s former company in order for such guarantees to apply during unemployment for the same length of time as their last employment contract, up to a maximum period of nine months. Former employees have the option of definitively giving up their right to maintain the guarantees of complementary health and social protection cover. In such cases, they must inform their former employer by letter within 10 days following the termination of their employment contract.
According to the May 2009 Order, the liquidity regime is based on a single management principle which requires all institutions to manage their liquidity effectively and ensure that at all times there will be sufficient liquidity to honour commitments as they fall du and including under stressed assumptions.
Young jobseekers who cannot claim unemployment benefits because they have not made enough social security contributions will be given a one-off payment of €500.
Removal of age restriction on the entitlement to means-tested welfare benefits offering financial support to jobseekers resident in France and on a low income. The previous regime excluded people under 25 years of age (however, to have access to such financial support, a precondition was added that recipients of the benefit aged between 18 and 25 years must have worked for at least two years over the last 3 years prior to being unemployed). To have access to such financial support (with the removal of age restriction on the entitlement to means-tested welfare benefits offer financial support to jobseekers resident in France and on a low income; the previous regime had excluded people under 25 years of age), a precondition was added that recipients of the benefit aged between 18 and 25 years must have worked for at least two years over the last 3 years prior to being unemployed.
Reduction of social security contributions for new jobs created during 2009 in small companies (less than 10 employees).
The quarterly surcote rate was raised to 1.25% past age 60.
The rules on combining employment and pension income were relaxed.
The mandatory retirement age was raised from 65 to 70 years.
Employees with low qualification levels will be able to benefit from vocational training if they have not had any training in the past five years, have frequently alternated periods of employment and unemployment, are in part-time work or work in small or very small enterprises.
Strengthening the individual right to train (DIF), including the possibility for persons dismissed to use hours already acquired, the creation of a right to a progress report on professional experience every 5 years for employees with more than 2 years of seniority, the extension of professional training contracts to job seekers over 26 years. The transferability of the ‘individual right to training’ is guaranteed for all employees in cases where the employment contract has been terminated – except if employee is dismissed due to gross professional misconduct or because end of fixed-term contract. Employees will be able to use remaining DIF time to go on a training course, have a skills assessment or validate work experience in the following cases: during the period of their unemployment benefit; at their new employment place, with their new employer's agreement, within 2 years of being recruited.
The December 2010 New Electricity Market's Organisation Law regulates the access to 100 TWh of nuclear energy to alternative providers.
When the company/group has operations outside France, the employer must ask employees, prior to their dismissal, whether they agree to receive offers of reinstatement abroad, and under what restrictions in terms of location and remuneration. The employees must express their agreement within 6 days from receiving the offers; failure to reply is taken as a decline of the offers of reinstatement to another company location abroad. Such offers (when the employee agree to receive them) must be in writing and clearly defined and must take into account the objections expressed by the employee. Reinstatement must be in the form of a job of ‘the same category’ or an ‘equivalent job’ with ‘equivalent remuneration’. When equivalent offers are not available, the reinstatement can apply to jobs of an ‘inferior category’ with the agreement of the employee. These rules also apply to offers of reinstatement within French territory.
The Banking and Financial Regulation Act of 2010 formalises the relations between the Autorité de Contrôle Prudentiel and the Autorité des Marchés Financiers when it comes to setting sanctions. Moreover, Council of financial regulation and systemic risk (Conseil de Régulation Financière et du Risque Systémique or COREFRIS), chaired by the Minister of the Economy, has been established. It is composed of the Governor of the Bank of France (who is also chairman of the ACP), the Vice-President of the ACP, the President of the of the AMF, the President of the Autorité des normes comptables (ANC) and three other qualified members appointed by the Minister of Economy and is notably vested with the mission to ensure cooperation between the institutions they represent.
The Grenelle II Law extends the application area of the NRE Law of 2001. Now, applicable firms include firms listed on a regulated market (as in the NRE Law) and firm which balance sheet, total turnover and number of employees exceed the thresholds fixed by the State Council. Said informations must be verified by an independant organism.
The 2010 Law of Banking and Financial Regulation aims at developing Remuneration Councils in financial institutions. However, they only have a consultative role, as wages are still the prerogative of the Administration Board.
The amount of the "forfait hospitalier" is increased to 18€ for one day at the hospital and 13€ for psychiatric hospitals.
Modifying the conditions of representation and access to elections of trade unions in the various public functions: union access to workplace elections will no longer be subject to a presumption of representativity. All trade unions established since at least two years and satisfying the conditions of respect for republican values ​​and independence may nominate candidates. The principle of majority agreement is in place: from 2013, an agreement will be valid if signed by unions representing a voter base of more than 50% of voters.
The scope of bargaining in the public service is expanded to all areas, beyond simply wage issues, and the criteria determining the conditions of validity of an agreement (number and level of representativity of the signatory organisations, no opposition from organisations having received a majority of votes in the last election business, etc..).
The principle of majority agreement is in place: from 2013, an agreement will be valid if signed by unions representing a voter base of more than 50% of voters. This device will concern the main consultative bodies of the Public Service: Technical Committees (TC) and joint administrative committees (PAC), National Advisory Committee (NCC), etc.
Alignment of contribution rates (gradual reduction over ten years in the gap between the contribution rates of civil servants and other workers, currently 7.85% and 10.55% of their wages, respectively).
Unlike in the previous provisions, the allowances paid to women while on maternity leave will now count towards years of pension contributions.
Elimination of the early departure provision for mothers with three children.
Harmonisation of the conditions of granting a minimum pension, allotted to people who have not contributed enough to obtain a pension calculated on their pay; extension of the ‘long careers’ scheme to the civil service.
According to the 9th November 2010 Pensions Reform Law, people who have worked until the age of 67 are eligible for full clearance rate ("taux de liquidation plein"), i.e. 50%. (Before this law, the full clearance rate was given to people retiring from age 65 onwards.) This law is implemented by increasing the eligibility age by a quarter every year between 2016 and 2021.
According to the 9th November 2010 Pensions Reform Law the duration of contribution required to be eligible to full clearance rate, for people born from 1955 onwards, is determined every year by a government decree, after the Pensions Orientation Council has been consulted.
Increase from 65 to 67 in the age at which individuals will be entitled to the full state pension (the age of the full rate is maintained at 65 for: people with a disability; those who stopped working in order to support a disabled family member; parents of disabled children; workers who qualify for ‘asbestos pre-retirement’; individuals born between 1 July 1951 and 31 December 1955; parents with at least three children who stopped or reduced their employment to devote time to the education of one or more of their children).
The legal age of retirement increases from 60 years to 62 years in 2018. This increase is gradual: 4 months more a year, starting from 1 July 2011 by year of birth (4 more months in 2011 for persons born in 1951 to 2 more years in 2018 for persons born in 1956). The increase in the legal age of retirement covers all schemes: both the private and public sectors (all public administrations, public enterprises and public social security bodies) and with specific procedures "special regimes".
Increase by two years in the retirement age for civil servants, according to their occupation (from 50 to 52, 53 to 55, 55 to 57, etc.).
The taxe professionnelle was eliminated as of 1 January 2010 and replaced by the Contribution économique territoriale, consisting of a corporate property tax on real estate and a tax on corporate value added, the rate of which is set nation-wide using a progressive scale.
Employees may assemble training rights throughout their employment contract. They can continue to benefit from the funding corresponding to the number of hours assembled in order to benefit from training sessions in cases they have not used these rights before the termination of the contract. This has recently been extended to enable employees to benefit from these rights after the end of their employment contract. Employees must be informed about the number of hours assembled during their employment. Employers must include the following indications in the work certificate: the number of hours the employee is entitled to; the sum corresponding to this number of hours (on the basis of 9.15 EUR per hour); and the relevant OPCA training organisation which will finance the employee's training during periods of unemployment.
New contract for unemployed workers: "used in companies with fewer than 1,000 employees, and for workers who have been receiving unemployment benefits for at least four months out of the last 28 months or, if they are older than 50, in the last 36 months (...) An employer must offer a CSP to each employee being made redundant either during an interview preceding dismissal or during the final meeting with the employee’s representative. Each employee must decide within 21 days of receiving the offer whether they will agree to accept the CSP or choose the traditional path of receiving unemployment benefit (...) The financial advantage of the CSP is that, for 12 months, the employee will receive a payment equal to 80% of their former gross income as long as they had worked for at least one year in the company where they lost their job. (...) When a CSP is agreed, the employee’s skills are evaluated. Then, taking into account the local jobs market and the types of work available, vocational guidance is offered and a professional plan drawn up. Throughout the process, various means of assistance are offered, including periods of training and work, counselling and job-seeking training modules. As long as the CSP is in force, the beneficiary is considered to be a ‘vocational training intern’ under French law. In return, the beneficiary undertakes to actively seek work, respect the measures provided by the contract and respond to job offers. Two unjustified refusals of job offers may lead to the termination of the CSP. If still unemployed at the end of the CSP, a beneficiary can register for the unemployment fund and will be eligible for unemployment benefits as long as they meet all the legal requirements."
This law fixes the minimum ratio of women in administration councils and surveillance councils.
The duration of the benefits cannot exceed that of contribution to the unemployment insurance scheme from the employee.
To be eligible, the unemployed must have worked at least 122 days in the previous 28 months (if he/she is under 50 years old), or 122 days over the previous 26 months if he/she is over 50.
Creation of 150 000 non-work-study wage-subsidised contracts for young people with low or no education.
Internships now "cannot consist of tasks that could be undertaken by a worker in a permanent position within the organisation and must offer training to individuals and be integrated into the intern’s degree or other training".
The new law limits the duration of an internship held by an individual in one company to six months per academic year. However, two exceptions could weaken this measure. An internship can last for more than six months: if the intern interrupts the internship to acquire skills in relation to their degree; when longer internships are part of the framework of a degree that is due to last several years.
If the organisation decides to hire the intern within three months of the end of the internship, the length of the internship must be deducted from the probation period. The period deducted cannot be greater than 50% of the probation period (except in cases where more favourable terms are set by a collective agreement). However, the entire period of the internship must be deducted from the probationary period if the job for which the intern is hired corresponds to the same tasks they undertook as an intern. When the internship exceeds two months, the entire duration of the internship must be included when calculating the individual’s seniority rights.
Organisations are allowed to introduce a new intern in the same role only after a break equivalent to a third of the length of the previous internship.
Interns do not have the right to receive a wage but must be given a bonus by the organisation if their internship lasts more than two months in the same academic year.
Repeal of the reduced social security contributions on overtime hours.
The 12th July 2012 Decree opens up early pensions eligibility to people aged 60, able to justify the number of semesters required for their generation (as defined by the 21st August 2003 Law Relative to Pensions Reform), and who started working before turning 20.
Creation of the CICE "Crédit d'impôt pour la compétitivité et l'emploi", (SMEs and large firms).
Special income tax at the 75% rate for the richest individuals is cancelled
Repeal of the reduced personal income tax on overtime hours.
Creation of the "contribution exceptionnelle sur les hauts revenus" as a temporary tax. It was introduced as a measure to curb the budget deficit. For a single person the rate of the tax is 3% on income between 250,001 euros and 500,000 euros, for an income above 500,000 the rate is 4%.
Gives subsidies to small and medium-sized companies (with less than 300 employees) for signing permanent contracts with people under the age of 26, while maintaining a corresponding older employee aged 57 or over in work or hiring a worker older than 55. (Subsidy amounts to 4000€ a year for a period of three years. Lump-sum which does not depend on earnings).
Creation of 60 000 new jobs in the Education System (not only teachers) over 5 years.
The employer is allowed in some cases to use professional competence as the sorting criterion for dismissal.
Added tax for the employer if they use a non-permanent worker. Not applicable in case the worker is hired on a permanent basis after the temporary contract.
Restrictions to the use of part-time work
The June 2013 Employment Security Act states that employee representation at board level becomes obligatory in larger shared-based companies (Société anonyme (SA)) with 10,000 or more employees worldwide or 5,000 or more in France.
The June 2013 law on employment security states that companies have to provide informations relative to both social (labour) and economic and financial issues. The social issues include: information on the number and type of employees; reasons for using temporary, agency or part-time staff; employment forecasts; the relative position of men and women; changes in collective agreements; and training. The economic and financial information to be provided includes details of: ownership, sales and profits; production levels; investment and state aid; the use of sub-contractors; the structure of the wage bill; plans to change production equipment or methods; and an overview of future prospects. The works council should be given the same information as the shareholders and receive the auditor's report. This informations are to be supplied in the form of a database, covering the two previous years and the current year, as well as the prospects for the three years to come.
The Employment Securisation Act states that at least two employee representatives must be designated in companies with more than twelve people in their Surveillance Board or in their Administration Board, and one if this number of people doesn't exceed twelve.
Under the June 2013 legislation, works councils have the right to ask a financial expert to look at the company’s annual presentation of its strategic direction. Unless otherwise agreed with the company, the works council pays 20% of the cost of this expertise, up to the limit of one third of its total budget.
As a result of the June 2013 legislation, the works councils must be consulted annually on the strategic direction of the company and its consequences for the company’s activities, employment, need for skills and use of sub-contractors and temporary workers. In companies with at least 50 employees, the works council must also be consulted specifically over the company’s use of tax savings provided under a government scheme to aid competitiveness, known as CICE.
According to the June 2013 Act, all companies that subscribed to industry-wide agreements must, by the 1st January 2016, provide industry-wide collective coverage to all employees who do not benefit from such coverage.
Droit rechargeable à l'assurance chômage; in case an unemployed individual finds a job before the end of his/her eligibility to unemployment benefits, they can keep the amount of money left in case they become unemployed again later on.
Creation of a new marginal tax bracket at 45% for workers earning more than 150 000€ per year.
Tax niche are limited to 10 000 € instead of 18 000 € previously.
Work experience made legal in last year of compulsory schooling
Merging of regional UK stock exchanges and Irish Stock Exchange to create International Stock Exchange (aka London Stock Exchange)
Marked introduction of standard uprating of basic state pension; raised in line with earnings or prices (whichever higher); earnings link later broken by Social Security Act of 1980.
Provides a legal framework for employers and trade unions to reach arrangement for health and safety representatives and health and safety committees to operate in the workplace; 'Brown Book' guidance provided by the Health and Safety Executive to supplement statutory framework
Labour government-led legislation (together with Employment Protection Act 1975, was basis of 'Social Contract' employment law programme in UK in 1970s) to replace 1971 Industrial Relations Act; provides immunity to unions who strike and strengthened positive right not to be unfairly dismissed
Established duty on employer to take reasonable care for the safety of their employees, and makes employers liable for acts of employees in course of employment
Pseudo-nationalisation of BP, with UK Government purchasing additional 20% shares (to bring up to total of 75%) in 1974 – though Government could sell without legislation; 1977, UK Government sold 17% to meet IMF loan requirements and sold rest of shares between 1979-1987
Increase in top rate income tax from 75% to 83% following the 1973 reforms
Measures to alleviate unemployment were announced, involving expenditure of £175 million to create a recruitment subsidy for school leavers, the extension of the temporary employment subsidy to cover the whole country, and more public money for training and industrial investment.
Measures to alleviate unemployment were announced, involving expenditure of £175 million to create 100 000 jobs over the next 18 months,
The Government published its proposals on "industrial strategy" and an extra £20 million, in addition to £70 million already allocated, was to be made available for investment projects shelved because of the recession.
State aid of £32 million for the construction industry announced, to be spent on public works projects to alleviate unemployment in the industry.
Prohibits discrimination or harassment on the grounds of sex, marital status, or gender reassignment at all stages (vacancy advertisement to dismissal)
Revised NHS charges for dental treatment and spectacles were announced, to increase revenue by £16 million to pay for increased pensions and social security benefits.
Established Advisory Conciliation Arbitration Service (Acas) as statutory body to provide legal dispute services outside Employment Tribunal and common law courts; Maternity Pay Fund; and expansion of Health and Safety at Work Act 1974
£6 per week pay rise limit became effective.
Established Child Benefit, with phased-in introduction from 1977 to 1979 due to economic crisis, as national benefit paid to mothers; placed family allowance
Provided pension credits to individuals with earnings over a period when not able to financially contribute for 'acceptable' reasons (e.g. self-employment or other; 'acceptable' reasons have been amended over time (Last changed in Social Security (Contributions) Regulations, 2001.
Aimed to provide everyone with inflation-proof earnings-related pension (by offering this additional state scheme or opt-out option for those in occupational schemes); increased replacement rate of state pension and replaced first earnings-related state pension (Graduated Retirement Benefit, in placed since 1961)
The British National Oil Corporation was formally established.
Bill published setting up British National Oil Corporation by the Autumn 1975, which would have powers to borrow up to a limit of £600 million.
Personal tax allowances were increased by £50 to £675 for the single person's allowance and by £90 to £955 for the married allowance.
All rates of income tax, apart from the highest, were increased by 2 %, thus the rate on the first band of taxable income up to £4 500 p.a. increased from 33 % to 35 %
The additional allowance for single parent families was raised by £100 to £280. It was estimated that some 9 million tax payers would pay less income tax than before.
A £215 million programme was announced to save or create 70 000 jobs. It includes (0 £55 million more for modernisation and restructuring of important sectors of industry; (ii) £50 million more for public sector housing; (iii) an additional £1 million to build small factories in rural areas; (iv) £55 million for the Manpower Services Commission to provide up to 35 000 places in industry; (v) £16 million for extending the entitlement period of the Temporary Employment Subsidy from 6 to 12 months.
£24.4 million package of short-term measures designed to give work or training to 60 000 teenagers was announced.
Regulates maintenance of resale prices, making it unlawful for suppliers of goods to impose minimum resale prices on dealers or compel them to charge prices by threatening to withhold supplies.
Overhaul of Restrictive Practices Court (established in 1956), a superior court of record (paralleling High Court) with respect to issue of competition
Required notification of restrictive agreements, which might have led to action before Restrictive Practices Court; exempted Stock Exchange and insurance companies
Affirms the comprehensiveness of the school system, by which there cannot be selectivity based on aptitude or ability. If we assume that the ability of schools to select pupils approximates a market mechanism, then this Act affirming the opposite should be seen as de-liberalising.
Raises compulsory school age to the age of 16, attained between May and September of a given school year (as opposed to between January and September as stated by the previous 1962 Act)
Directs that local educational authorities (LEAs) should not operate selective schools (i.e. schools that select students based on academic ability); but no legal requirement included
Prohibits discrimination on the grounds of colour, race, nationality, or ethnic/national origin (parallels provisions of Sex Discrimination Act, 1975 and expanded similarly in 2003 regulations)
Developed needs-based methods of dividing health services resources between areas rather than by historical patterns of receipt; based on recognition that NHS resource allocation in England in 1970s was unequal
Social Security benefits were increased by £1.4 billion. Increases in short-term unemployment and sickness benefits average 16 %. Sickness and other short-term social security benefits to be increased by 16 % from 15 November. Standard weekly benefit rises to £12.90 for married couples.
Temporary Employment subsidy: doubled to £20 a week and extended to end of year instead of ending in August, with payments to be made until the end of 1977 preserving further 60 000 jobs.
Unemployment benefits to be increased by 16 % from 15 November. Standard weekly benefit rises to £12.90 for married couples.
Government announces £23 a week tax-free payment to men and women who opt to retire a year early thus releasing jobs for younger unemployed people. This scheme, which will cost a net £27 million, will be initiated on an experimental basis for six months as from 3rd January, 1977.
Introduction of Invalid Care Allowance for men and single women of working age who gave up the opportunity of full-time work to care for relatives
Introduction of a 2 % employment tax was imposed on employers through the National Insurance contribution.
A sale of British Petroleum shares should yield £500 million in 1977-1978
Income tax: changes in allowances single up by £60 to £735, married up by £130 to £1’085 and increases of £500 in the higher rate thresholds up to and including the 60 % band conditional on a proposed pay limit of around 3 % being agreed. The cost is estimated at £810 million. Unconditional increases in age allowances and child tax allowances amounting to £300 million.
A £100 million aid to the construction industry is to be spent in addition to the Budget's £100 million expenditure for inner cities.
£70 million will be spent over the next years in certain sectors as part of the Industrial Strategy.
On an experimental basis, a £20 a week subsidy was made available for six months for each additional worker hired by small companies in assisted areas with less than 50 employees.
A £30 a week subsidy paid for up to 6 weeks to employers taking on a disabled person.
The Government approved Youth Opportunities Programme, based on Manpower Services Commission's Holland Report, to assist up to 230 000 young people at a gross cost of£ 160 million, together with a £68 million special Temporary Employment Programme for adults.
Nationalised industries awarded £4 a week pay rise.
The Government introduced the principle of indexation in personal tax allowances from 1978 in line with the cost of living index unless the Chancellor proposes otherwise.
Substantial increases in child benefits as from April 1978 while a further step is taken in phasing out child tax allowances
Personal allowance increased larger than announced in the Budget (by £40 for single people and £70 for married people).
The Temporary Employment Subsidy continued for a further 12 months, with the period of payment extended by 6 months at a half-rate of £ 10 a week.
The Temporary Employment Subsidy continued for other 12 months, with the period of payment extended by 6 months at a half-rate of £ 10 a week.
Granted ability (to working women married before April 1977) to pay reduced National Insurance contribution rate and accrue a pension entitlement based only on husband's contribution record;however, if taken up, they are not eligible for home responsibility protection/care credits
British airoplane company, established as public corporation as UK's main aircraft manufactured in 1988, then converted into public company whose shares held by Secretary State for Industry in 1980; was privatised in 2 stages, 1981 and 1985
As announced on 15th December, 1976, the Government arranged for a sale of £ 560 million of British Petroleum sales in order to help reduce the public sector borrowing requirement in 1977/78. The Government and the Bank of England retain a 51 % majority.
The rate of advance corporation tax lowered to 33/67ths of the amount of the dividend when a satisfactory pay policy is reached.
For small companies, the lower profit limit for corporation tax raised from £30 000 to £40 000 and the limit for marginal relief (tapering between 42 and 52 %) from 50 000 to 65 000.
The level at which higher tax rates becomes payable raised by £1 000 to £6 000.
Personal allowances raised by £70 for single people and married women's earned income and by £ 140 for married people
The limit on the size of annual premiums for retirement annuities on which self-employed can claim tax relief raised by £750 to £3 000.
A £300 million package of job measures was announced to replace Temporary Employment Subsidy (TES) over next two years; the Small Firms Employment Subsidy was extended from 1st July to include companies in assisted areas with less than 200 employees; the Job Release Scheme was extended onto a nation-wide basis as from 1st April; in line with EEC suggestions, TES will not be paid for more than a year and firms will have to submit restructuring plans. A short-time working subsidy will be introduced.
Consolidation and expansion of unfair dismissal law (combining 1963 Contracts of Employment Act and 1965 Redundancy Payments Act); statutes under jurisdiction of Industrial (now Employment) Tribunals
Policy framework for financial control of nationalised industries to avoid policies of early 1970s;- ensures commercial activity and strengthens it, until it can be transferred to private sector until can be transferred to private sector; sets investment appraisals, financial and performance targets, external financial limits and monitoring
Government set a guideline for annual pay rise limit of 5%, with sanctions on public and private government contractors who broke the limit; Trade Union Congress voted to reject limit and called for return to free collective bargaining
Pensions: Married couple's and single person's pensions raised by £3.20 and £2 respectively as from November.
The new earnings-related State pension arrangements mean that all employees can now earn rights to: an earnings-related widows pension
The new earnings-related State pension arrangements mean that all employees can now earn rights to: an earnings-related pension that is inflation-proofed
The new earnings-related State pension arrangements mean that all employees can now earn rights to: A pension worth up to one quarter of their lifetime earnings in addition to the flat-rate State pension payable on reaching normal retirement age of 60 (women), 65 (men)
Allowed individuals to 'contract' out of SERPS if employer sponsored a contracted-out occupational scheme that promised to pay guaranteed minimum pension (GMP); also known as contracted-out salary-related schemes; for participants, allowed employees and employers to pay reduced National Insurance rates
Ability to reduce requisite number of qualifying years for state pension, excluding tax years when caring for child or disabled person
Corporation tax: Profits limit for small companies raised by £ 10 000 to £50 000 and limit for marginal relief increased by £20 000 to £85 000.
Income tax: Rate of tax on first £750 of taxable income reduced to 25 %, single persons and married couples allowances raised by £40 and £80 respectively, and wife's earnings allowance increased by £40. Pensioners' age allowance raised by £50 for single pensioners and £ 100 for married couples and the income limit under the age allowance raised to £4 000. The basic rate of tax was left unchanged at 34 %, but the rate was later amended to 33 %.
The Price Commission abolished aid and the associated legislation repealed.
A new procedure enacted to enable the Secretary of State to ask the Director General to investigate prices of major public concern.
New power given to the Secretary of State to refer nationalised industries and other public bodies to the Monopolies and Mergers Commission to investigate their efficiency, costs, services provided and the possible abuse of monopoly power
International capital account transactions are fully liberalised.
Abolition of all remaining exchange controls restrictions to complete process of abolishing controls on financing of direct investment
Part I sets up a statutory framework for the authorisation and supervision of deposit-taking institutions by the Bank of England. It establishes a two-tier system of authorisation, for "recognised banks" and licensed deposit-taking institutions.
The banking supervision is hardly regulated.
Corporation tax: decrease in the rate of ACT to 30/70 of amount of dividend. Increase in the limits for small firm relief.
Income tax: the basic rate reduced by 3 % to 30 % accompanied by a band increase of £2 000 to £9 250, higher rate threshold raised by £2 000 to £10 000, bands widened and top rates reduced from 83 % to 60 %. Personal allowances were increased.
Cut of top rate income tax from 83% to 60% (eventually down to 40% by 1988); marked beginning of cuts to high income earners throughout the following decades
1980-81 Special employment measures programme announced including expanded Youth Opportunities Programme.
Reform of competition law to focus on competition effects; empowered OFT to address specific practices and deal with conduct of individual firms (not just individuals and monopolies) and authorise inquiries into economic problems in nationalised industries; introduction of competition sector by sector
Introduces a number of changes, the most relevant being giving more influence to parents in the school system; the Law sets out that at least two parents should be part of the school governing body; it also calls for local authorities to guarantee school choice to parents
This Act limits employees' right against unfair dismissal, narrows the immunity for lawful picketing, and considerably reduces the immunity for secondary industrial action. It was the first major enactment in the Conservative Party's "step by step" programme to reform law and promote deregulation.
The credit controls and reserve requirements are largely liberalised.
Series of changes to Bank of England's money market intervention, includes greater emphasis on open market operations and less on discount window lending
Series of shareholder and creditor protections
Removes powers to force employers to recognise trade unions
Introduced more stringent rules to closed shop and limit picketing
It lowers the amount of UB payable to those already receiving occupational pensions. The reform was based on the concern that a substantial number of older people who had retired on an occupational pension before the age of public pensions also received unemployment benefits because there were few vacancies for older persons.
Introduction of tapered earnings disregards for single parents.
National Insurance benefits (UB, short-term benefits, sickness benefits, etc.) increased by 5% less than the increase in prices
Social Security: provision was made for an increase (in November 1980) in child benefit to £ 4, pensions (£ 43.45 married, £ 27.15 single), Family Income Supplement, short-term benefits, invalidity benefits and mobility allowance.
Means-tested supplementary benefits subject to taxation.
Social Security: Earnings-related supplement to be abolished from January 1982. Unemployment and sickness benefit to be uprated in November 1980 by 5 percentage points less than the price-protection would require.
The standard rate of unemployment and sickness benefit raised by 114 % to £ 33.4 per week.
School-leavers cannot claim benefit until the end of the vacation following their last term in full-time education.
Announcement that National Insurance contributions from employees in 1981-82 to be raised from 63 to 70 %
Retirement pensions for a married couple increased by 161 % to £ 43.45 per week; the standard rate of unemployment and sickness benefit raised by 114 % to £ 33.4 per week and child benefit up 75p to £ 4.75 per week for each child.
Changed regular uprating of basic state pension to rise only with prices (no longer earnings or prices, whichever higher)
Conservative government earmarked BA for early privatisation; converted BA into llc, but not fully privatised until 1987; because BA already operating in competitive market, privatisation changed ownership but not airline market
Deregulated UK bus industry outside London, express coaches in 1980 and local buses in 1985 with latter legislation requiring sale of subsidiaries to private sector
Capital taxes: the threshold for capital transfer tax increased to £ 50 000 and a new £ 3 000 allowance for capital gains tax introduced
Income tax: the basic personal allowances raised in line with inflation in 1979 and the lower rate of tax (25 % on the first £ 750 of taxable income) abolished. Higher rate thresholds increased on average by 11 %.
Announcement of a new training scheme for unemployed youth providing to 16 year-old school-leavers a year-long training combining work experience and further education.
It sets out a number of requirements for local education authorities to provide appropriate education to pupils with special needs
Expansive rules on protection of employees' rights on transfer of a business
These Regulations - also called TUPE - were introduced to implement the EC Directive on Transfers (Council Directive 77/184). Employees' rights under contracts of employment and collective agreements may be transferred on a change in the identity of the employer provided that certain conditions are met. The Regulations also impose a duty on employers to disclose information to and consult with recognised trade unions or employee representatives.
Foreign bank entry is allowed, but non-residents must hold less than 50 % equity share.
Companies will be allowed to buy their own shares
Definition of trade disputes to be narrowed
Compensation for victims of closed-shop agreements.
Social Security: most other benefits increased by about 9 % from November 1981
Established Additional Child Benefit, or One-parent Benefit, a non-means-tested benefit for lone parents to complement regular Child Benefit
Means-tested supplementary benefits are extended to unemployed workers aged 60 or over, who have been unemployed for over one year and did no longer register for work
The flat rate contribution of self-employed raised from £3.40 a week to £3.75 a week
Employees contributions to National Insurance increased by 1 percentage point to 8.75 % of relevant earnings starting in April 1982.
Unemployment benefits subject to income taxation
Social Security: pensions are increased by about 9 % from November 1981
Government sold 51.5% of shares in British Ports used to write off public sector debt, after reconstituting British Transport Docks Board under a holding company to prepare for future sale
The "small companies" profits limit (below which special low rates of corporation tax is charged) raised from £ 70 000 to £ 80 000 and the upper limit (above which the full rate is payable) from £ 130 000 to £ 200 000.
Income tax relief for capital losses on shares in unquoted trading companies is to be extended from individual investors to cover investment companies under the Venture Capital Scheme
Young workers scheme came into effect providing a subsidy to employers of young people earning less than £40 per week. The scheme is expected to cover 130 000 young workers in the first year of operation at cost of £60 million.
A job-splitting grant (from 1.1.83 to 31.3.84) to help employers to provide more part-time work to unemployed.
A community programme scheme (from 1.10.82) enabling long-term unemployed to do community work and voluntary activities.
It increased compensation for those dismissed because of the closed or union shops (business or industrial factory where employees are required to join the union or pay the equivalent of union dues within a set period of time following their hire).
Security markets are largely liberalised.
Created individual body to ensure value-for-money spending across government departments, including health; individual auditors regular and inspect local government and health sector work
Outlawed "trade union labour only contracts" (also called union-only or recognition-only clauses). This makes it unlawful to deny to put companies in tendering lists or to award or offer contracts to them for reasons that they do not hire trade union members.
It made easier for employers to fire striking workers and not face unfair dismissal claims.
Social Security benefits will not be fully revalorised in 1983/84.
Social Security benefits will be raised in November 1983 by the projected increase in prices over the preceding twelve months of 5 % but an adjustment will be made to that figure to reflect the fact that the provision in the updating for the rise in prices in November 1982 will have exceeded the actual rise.
Personal allowances and tax thresholds increased by up to 14 %.
Increase from 75p to £2 the amount an unemployed person can earn in a day without losing rights to unemployment benefits
National Insurance surcharge reduced by 1 percentage point to 216 (from August 1982). An extra reduction of 1/2 % will be made between August 1982 and April 1983.
From April next, National Insurance contribution rates will be increased from 8.75 to 9 % for employees and from 10.2 to 10.45 % for employers.
National Insurance contribution rates will be increased from 8.75 to 9 % for employees and from 10.2 to 10.45 % for employers.
Pension rate will be increased by 1 1 % in November 1982 (9 % for expected inflation and 2 % to compensate pensioners for last year's shortfall)
Pension rates are increased by 11 % in November 1982 (9 % for expected inflation and 2 % to compensate pensioners for last year's shortfall).
It allows higher education institutions and further education colleges to charge higher fees for students 'not having the requisite connection with the United Kingdom', i.e. foreign students
Child benefits increased to £6.50 from November 1983.
The 5 % abatement of unemployment benefits to be restored in full in November 1983
The national insurance contribution earnings limit raised to £34 a week (from £32.50) with the upper limit at £250 a week (from £235). The class 1 rates of contribution unchanged (for the first time in four years) at 9 % (employees) and 10.45 % (employers).
Men aged 60 and over registered as unemployed and on supplementary benefit will qualify for higher long-term rate benefits
National Insurance surcharge reduced from 1 1\2 to 1 % from August 1983 at a cost of about £400 million.
Pensions and other social security benefits to be raised in line with the rate of increase of the retail price index in the year to May rather than on the previous basis of Treasury price forecasts for the year to November.
Announcement that the eight Scottish Airports will be sold.
Corporate tax rates for smaller companies cut from 40 to 38 % and various aids and incentives for small businesses and new ventures
Income tax personal allowances and higher rate thresholds raised by 14 %, at an estimated cost of £2 billion in 1983/84 and £2.5 billion in 1984/85.
Established first independent regulator after DGFT, the Director General for Telecommunications, to oversee and control the private monopoly created by privatisation of British Telecom (BT) and support development of competition in the industry
Regulatory framework for new telecommunications market, established Oftel as regulatory authority, ended BT monopoly, and set up BT privatisation
Established competition policy as basis for merger review process; made by Secretary of State for Trade and Industry, with no legal force, but established precedent taken up by successors
It introduced the so-called education support grant, which the central government transfers to the local authorities and the latter need to use to pursue objectives set out by the central government
Introduced ESGs as funding mechanism to LEAs for purposes specified by central government
Trade Union Act 1984 received Royal Assent; provisions on registering names and addresses of trade union members came into force at once with strike ballot provisions to come into force on 26th September 1984 and political fund provisions on 31st March 1985.
Abolition of the child additions in unemployment benefits
The main personal allowances for income tax relief raised by 12 and a half %, some 7 percentage points more than indexation, at an estimated cost of £940 million in 1984/85 and £1 1/2 billion in a full year compared with an indexed base.
National Insurance Surcharge abolished for most employers from 1st October, reducing private sector employers' costs by £350 million in 1984/85 and £850 million in a full year. Local authorities and related bodies will continue to pay the surcharge for the remainder of the 1984/85 tax year.
Abolished Employer National Insurance surcharge, after series of reductions to it from 1982 onwards
Government sold 50.2% of its shares (with further sales in 1991 and 1993)
Main corporation tax rate cut from 52 to 50 % in 1983/84, then to 45 % in 1984/85, 40 % in 1985/86 and 35 % in 1986/87. Small companies rate down from 38 to 30 % from 1983/84.
Instituted series of corporate tax rate reductions (from 52% in 1982/3, down to 35% in 1986/7)
Youth Training Scheme: an extra £125 million in 1986/87 and £300 million in 1987/88 to extend the scheme by one year to two years for 16 year-olds.
Community Programme: an additional 100 000 places to be provided by June 1986 for long-term unemployed (over 6 months for 18-24 year-olds and over a year for other adults) to work on projects which benefit the community.
Legislation to be introduced in the Autumn to abolish all restrictions on shop opening hours, as recommended by the Auld Report.
The qualifying period for unfair dismissal claims to be raised, with employees only able to appeal if they have worked for the same company for two years (previously one year)
Extension of the period of Statutory Sick Pay (SSP) from 8 weeks to 28 weeks (only self-employed and very few workers are entitled to Sickness Benefits after this).
A graduated system for employers' and employees' contribution rates to be introduced for lower-paid workers: 5 % for employees earning £35.50 to £55.00 a week, 7 % for those earning between £55.00 and £90.00 a week, and 9 % for those earning between £90 and £130 (employers) or £265 (employees).
The lower and upper earnings limits for national insurance contributions raised to £35.50 a week and £265 a week respectively from April 1985. A new structure of rates to take effect from 6th October.
Exemption from disqualification provisions in unemployment benefits for those accepting voluntary redundancy
British National Oil Corporation to be abolished and a new Oil and Pipelines Agency to be set up.
The main personal allowances for income tax relief raised by 10 %, some 5 percentage points more than indexation, at an estimated cost of £730 million in 1985/86 and £910 million in a full year compared with an indexed base.
Introduction of 'work-first' approach in UK employment policy; emphasis on strict job-search monitoring.
Introduction of the Restart Programme, the first major activation programme in the UK. It obligated recipients to attend interviews after 6 and 12 months of unemployment, where claimants could get advice on job search. The interview was a way to test the claimants' availability for work.
Job Start Scheme to be expanded from nine pilot areas to nationwide
A New Workers Scheme to help young people during their first year into jobs by providing subsidy of £15 a week to employers recruiting 18-19 year-olds at less than £55 and 20 year-olds at below £65 a week.
Employment measures: Community Programme for long-term unemployed to be increased by 55 000 places, from 200 000, and average wage up from £63 to £67 a week.
Pro-competition reforms in response to Stock Exchange 'big bang' in 1986; required those who carry out investment businesses to belong to a self-regulatory organisation, recognise investment exchange, or recognised professional body; if found to be significantly anti-competitive, can be changed by Chancellor or Exchequer
Integration of trading and sales functions in market structure bringing influx of new firms into gilt market and replacement of minimum commissions and single capacity operations with dual capacity gilt-edged market makers (GEMMS)
Bank of England introduced money operations from own dealing room, ending contracting out of its operations to discount market
Modernisation of UK insolvency law; last resort for enforcement obligations and disciplinary measures on the bankrupt; seen to held long-term interests of creditors
Regulation of wage computation and limited powers of any remaining wage councils (tripartite councils who negotiate minimum wage rates for low paid workers)
Introduction of a lower rate of income support for under 25 (18-25) than for over 25 years
Social Security benefits' increases for old-age pensioners and widows payable in July to be tax-exempt in 1986/87, at a cost of £15 million
Increase in the maximum disqualification period in unemployment benefits from 6 to 13 weeks. It also applies to means-tested supplementary benefits, where there is a 40% reduction.
Reduction of unemployment benefits for those with incomplete contribution records
Removal of the entitlement of full-time students to unemployment benefits and means-tested supplementary benefits during grant-aided period.
Extended Invalid Care to married women and non-relatives to comply with EU equality law; since 1990, carers who receive Income Support and Invalid Care Allowance receive specific premium
Work threshold for income support is lowered from 30 hours to 24 hours per week
Statutory indexation: the Secretary of State has the power to vary the amount of any increase in benefits
Established IS as general, non-contributory cash benefit designed to ensure individual income did not fall below certain limit (some capital asset limits); pensioners granted extra premiums; 100% taper (meaning Income Support= Applicable amount - existing income (including pension))
Made occupational pension scheme voluntary (prior to 1988, law allowed members of employer's pension scheme to be condition of employment); if contracted out, had to join an appropriate personal pension (APP) or contracted-out money purchase (COMP)
New tax regime for personal pensions introduced in 1988. Employees will be able to contract-out of the SERPS by joining a personal pension scheme to which the DHSS will pay a minimum contribution
1st phase out of SERPS entitlement (additional, earnings-related pension introduced in 1975 to complement basic state pension); for those returning after April 1999, reduced amount of working life years available to earn credit and cut accrual rate on earnings
Privatisation is largely liberalised: most banks are privately owned and/or the percentage of public bank assets is from 10 % to 25 %.
Privatisation of British Gas through principal share sale arrangements (similar to BT); public sale of shares and employee share scheme with establishment of regulatory authority (Ofgas)
Income tax : basic rate down 1 % to 29 %; personal allowances indexed: single person's allowance up £130 to £2 335 and married person's allowance up £200 to £3 665; higher-rate thresholds up by £1 000; age allowances up £160 for a single person, £250 for a married couple
New earnings-disregards of £15 for single parents
Replaced Supplementary Benefit; means-tested benefit for those looking for work, but not registered as unemployed; back to work bonus paid if certain conditions met
A Short-time Working Scheme for the textiles, clothing and footwater industries was introduced to supplement the Temporary Employment Subsidy Scheme.
Introduced standardised national curriculum and assessments for students 7-16 to increase standards and ensure all students studying same set of nationally approved subjects
The banking supervision is still hardly regulated.
Privatisation of BAA (Government sold 95.6% of shares); example of Government reducing financial links with a company (all BAA public sector debt repaid by privatisation); restructured into BAA plc holding company with 7 separate airport companies and established Civil Aviation Authority (CAA) to regulate industry
The small companies' rate of corporation tax reduced from 29 % to 27 %. The main rate for corporation tax remains at 35 %.
Income tax relief introduced for employees in profit-related pay schemes (PRP) under certain conditions and up to a maximum amount of £3 000 or 20 % of PAYE pay, whichever is the lower
The basic rate of income tax reduced to 27 %; the main personal allowances for income tax relief raised in line with inflation (3.7 %): single person's earned income allowance raised by £90 to £2425 and married person's allowance up £140 to £3795; higher age thresholds up by £110 for single persons and £170 for a married couple.
The basic rate of income tax reduced to 27 %; the main personal allowances for income tax relief raised in line with inflation (3.7 %): single person's earned income allowance raised by £90 to £2 425 and married person's allowance up £140 to £3 795; higher age thresholds up by £110 for single persons and £170 for a married couple.
New tax regime for personal pensions introduced in 1988. Employees will be able to contract-out of the SERPS by joining a personal pension scheme to which the DHSS will pay a minimum contribution.
Expanded services of Remploy (introduced in 1945 to provide sheltered employment for disabled workers) to help disabled workers find employment outside its factory network.
Requirement to submit local authority services to competitive tender
Education Act becomes law, providing for introduction of national core curriculum and allowing schools to opt out of local authority control
Made school test scores publicly available to increase information to parents regarding effectiveness of schools, to enhance school choice
Major Thatcher-era education reform to establish 'quasi-market' in education; increased parental choice over schools and representation on school boards; linked school funding to enrolment numbers to incentivise schools to attract students; allowed schools, including higher education, to take (grant-maintenance status) financial directives from central government (decreasing power of local authorities)
Bank of England issued first UK Government ECU Treasury Bill, with maturity of 1-6 months, to provide flexibility in management of UK's foreign currency reserves and contribute to use of ECU in international financial markets
Entitlement to benefit is calculated on net rather than gross earnings.
Replaced Supplementary Benefit; means-tested benefit for those looking for work, but not registered as unemployed; back to work bonus paid if certain conditions are met.
Minimum age of entitlement to income support raised from 16 to 18 years
Stricter sanctions for leaving or refusing places on job training schemes
Pensionable age for women is increased from 60 to 65 years. Pension Act: It provides a raising of the State pension age for females from 60 to 65 years, starting in 2010 if women are born in April 1950 and completing the transition in 2020 for women born in April 1955.
First stage of privatisation process, establishing British steel corporation as limited liability company (LLC) with all shares owned by Government; floatation complete in November 1988; following privatisation, profits and tax receipts low; seen as unprofitable example of privatisation
Small companies' rate of corporation tax reduced from 27 to 25 %;
Basic rate of income tax reduced from 27 % to 25 %. Basic rate limit and main allowances increased by twice the rate of inflation of 3.7 %. Five higher tax rates up to 60 % are replaced by a single rate of 40 % for taxable incomes over £19 300.
Basic income tax rate reduced from 27 to 25% and all rates above 40% abolished
Rules on refusing a job offer are tightened. Benefit recipients may restrict their job search only for the first 13 weeks of unemployment.
Updated Fair Trading Act 1973 and financial services legislation to consolidate existing legislation and incorporate EU Directives; required voluntary notification to competition authorities about mergers
Terms announced for electricity privatisation: regional distribution companies will compete only for larger clients, and the two generating companies will compete for only 15 % of regional markets in the first few years.
It removes from small firms the requirement to provide employees with details of disciplinary rules and procedures.
It also relaxes certain employment protection rights, for example by restricting the right of trade union officials to paid time-off rights to carry out their duties.
Further deregulation of the labour market by removing protective legislation restricting the employment of women and young persons.
Increases the minimum basic award, relevant to dismissals which are to be regarded as unfair under the Employment Protection (Consolidation) Act 1978, applicable to calculation of the special award. The increase in the minimum basic award also affects the minimum amount of compensation that shall be awarded by the Employment Appeal Tribunal in respect of a complaint under unjustifiable discipline by a trade union.
Increases the limit on the amount of compensation which can be awarded by an industrial tribunal in claims for unfair dismissal as compensation for failure fully to comply with the terms of an order for reinstatement or re-engagement. The increase also affects the maximum of compensation that shall be awarded by a tribunal in respect of a complaint under unreasonable exclusion or expulsion from a trade union.
Unemployment Insurance replacement rates are reduced, especially for short-term unemployed by lengthening minimum waiting period for eligibility.
Introduction of the "Employment Trial Programme" allowing people previously unemployed for 26 weeks or longer to leave a job after between 4 and 12 weeks without loss of benefit rights
Prior law: if an individual wanted to claim state pension or additional pension (e.g. SERPs), within 5 years of state pension age, s/he had to retire from work; policy change made effective 'date of retirement' for state pension claims to be the date the individual reaches state pension age, whether still in work or not
Employers allowed to set up "top-up" pension schemes for their employees, with no limit on benefits but without special tax relief. A (price-indexed) limit placed on pensions paid from tax-approved schemes, based on earnings of £60 000 a year; annual contribution limit for personal pension schemes increased in line with earnings and subject to an overall cash limit (based on the earnings limit).
Established particular type of personal pension which allows separation of administration and investment for those who want to manage own investments (in contrast to most private pensions, based on package offered by authorised private providers who invest on individual's behalf, e.g. life insurance companies, banks, etc.)
Privatises English and Welsh Regional Water Authorities; establishment of a competition in industry; no provision for introduction of competition in industry (unlike other industries) – instead, designed to raise revenues and rely on capital market to fund future of industry (Scotland and Northern Ireland remained state-owned)
Profits limit for the small companies' corporation tax rate of 25 % raised to £150 000, and limit for marginal relief raised to £750 000.
Tax relief given for payments by companies to qualifying Employee Share Ownership Plan (ESOP) trusts. Limit for individual participation in approved employee share schemes increased to £2 000 (or 10 % of pay up to a maximum of £6 000). Cash ceiling for profit-related pay tax relief increased to £4 000.
Introduction of Employment Services "back to work plans". They made interviews more frequent and introduced individual plans that defined the necessary steps for claimants' labour market reintegration. Compulsory only for long-term unemployed.
The reform introduces maintenance loans for students in higher education. Note that loans are not meant to cover fees (since there were no fees at the time) but to support living costs.
UK entered Exchange Rate Mechanism against ECU and bilateral central rate against Deutsche Mark; designed to reduce exchange rate variation and achieve monetary stability in Europe
Tax relief to purchase private medical insurance (PMI) introduced for 60+
Fifty-seven hospitals and other units become self-governing NHS trusts
The Act also gives job applicants a right of legal redress if their services are refused on grounds of non-membership of a union, thereby banning "pre-entry" closed shops.
Restricting the scope for unofficial industrial action and make it unlawful to induce industrial action by workers of an employer not party to the dispute (except in the case of lawful picketing).
An employee has no right to complain of unfair dismissal if at the time of dismissal he was taking part in an unofficial strike or other unofficial industrial action
Reduction in income support made possible for unemployed claimants failing to attend Restart interviews
The promotion of the privatisation of 12 regional electricity companies in England and Wales begins
Established OFWAT, regulatory body for water prices after 1989 privatisation of water services; OFWAT powers expanded further in 1999
The reforms introduces a body that will be reviewing teachers' employment T&C
Bank issues first UK Government ECU bond, intended to consolidate UK's leading position in ECU financial markets and deeper investment interest in ECU instruments, including among domestic investors
Increase in personal and age-related allowances
Series of increases in CB, first increase in 1991 (after having been frozen since 1987) and indexation with prices from 1992; in 1999, government increased CB value by 20% over and above inflation – connected to lone parent premium abolishment in 1998.
Enables trust ports to become limited companies to encourage voluntary privatisation; element of compulsion in Section 10 to compel trust ports with large turnover to form a limited company and draw up scheme for privatisation
This reform introduces inspection at schools aimed to check the quality of education provided in schools and whether schools' financial management is sound.
Established Ofsted, to employ private contractors to inspect schools and publish findings
Removed higher education from local authority control; created 3 new territorial funding bodies (Higher Education Funding Councils) with status of 'further education corporations'; introduced competition for funding among institutions
UK exits from Exchange Rate Mechanism due to massive rise in official interest rates and interventions on foreign exchange markets (high cost of defending sterling's parity with European system)
Places duty on employer, who recognises an independent trade union, to disclose any information requested by trade union for purposes of collective bargaining; informs Acas Code of Practice on practical guidance
Establishment of Disability Living Allowance (DLA), non-means-tested, non-contributory benefit for those with mental or physical disability; phased out and replaced in 2013
Further tightening in disqualification conditions for unemployment benefits
Expanded access to Family Credit by lowering hours threshold for qualification (24 to 16 hours/week) and in 1994, a child care disregard introduced for the 1st time; replaced by Working Families Tax Credit in 1999/2000.
Full-time work threshold for income support is lowered from 24 hours to 16 hours
Further tightening in disqualification conditions for social assistance
Introduced reduced rate of 20% income tax on first 2000 GBP of taxable income
The 1993 Education Act offered schools extra funding to develop specialisms in particular subject areas, further increasing diversity of provision (Institute for Government, 2012)
The Trial period is extended from 1 to 2 years.
Every employee who becomes pregnant can take a minimum of fourteen weeks maternity leave and is fully protected against dismissal on grounds of maternity.
Employees have the right to a written statement of their main conditions of employment, and the right for disputes with their employer to be settled by an industrial tribunal
Abolished all remaining wage councils and restricted Acas power to intervene in collective bargaining (and instituted fees for its services)
Restricts the circumstances in which unions can legally hold a strike or other industrial action by requiring seven days notice and by giving members of the public the right to seek injunctions to halt unlawful action depriving them of goods or services
Freedom of choice has been enhanced by giving individuals the right to join their preferred trade union
A contributory element of JSA will only be paid for the first 6 months of unemployment (compared with 12 months for the current unemployment benefit). From then on, as with the current Income Support, payment of JSA will be subject to a means test. JSA will be more efficiently delivered and the link between payment and claimant's job-search activities will be strengthened through a tougher sanctions regime.
Privatisation framework for British Coal and establishment of Coal Authority to regulate industry licenses and make attractive to investors; CA took on liabilities of mines and wrote off BC debt
Freezes income tax allowances and restricts further mortgage-interest tax relief and married couple's allowance
Measures to cut government expenditure by increasing local government and national government contracting out of goods and services (increased competitive tendering process) and deregulating series of industries and trade
The lower rate of the Statutory Sick Pay (SSP) is abolished. Only one rate now.
Phasing out or earnings related supplement (ERS), still existing in disability benefits schemes
Short-time sickness benefits extended from 6 months to 1 year.
Invalidity benefit will be replaced by a new incapacity benefit, access to which will depend on more objective medical tests. So as to give employers an incentive to manage sickness absences better, statutory sick pay is no longer to be reimbursed to large employers
Compulsory periodic reviews of invalidity benefits recipients are introduced
Complex breakup and privatisation of British rail, sold off into 100+ new entities; accompanied by creation of Rail Regulator – with purpose to serve as economic regulator of infrastructure monopoly, Railtrack
Nation-wide extension of the "Workwise" and "1-2-1" schemes (which assist with job search for young people unemployed for over a year).
Extension of the "Community Action" scheme (which provides work experience for those unemployed for more than a year).
Targeting "active labour market policies" at the long-term unemployed
Expansion of a number of active labour market programmes (Work Trials, Work start, 1-2-1, Workwise).
Expansion of the "Work Trials" scheme (which allows employers to take on those who have been unemployed for more than six months, on a three week trial period free of charge).
Subsidies to employers for hiring those unemployed for over two years
Offering wage subsidies and hiring incentives for the long-term unemployed
Raising labour market skills of the labour force through better basic education, training and counselling
These Regulations make important amendments to the requirements for consultation in the event of proposed dismissals for redundancy or an impending transfer of the undertaking contained in TULRCA (Trade Union and Labour Relations (Consolidation) Act 1992) and TUPE (1981) respectively. The Regulations were introduced in response to rulings by the European Court of Justice in June 1994 that existing UK law did not comply with the relevant EC Directives because the obligation to consult was confined to recognized trade unions. It requires employers to consult either representatives of a recognized independent trade union or employee representatives in relation to dismissals or transfers taking effect on or after 1 March 1996. However in relation to redundancy dismissals they restrict the requirement to consult to cases where at least 20 redundancies are proposed at one establishment within a period of 90 days (this will will remove the requirement to consult from some 96 % of UK businesses).
Prohibits discrimination again people with disabilities regarding: employment, services, education, and transport; active approach to anti-discrimination law as requires that 'reasonable adjustments' be made to accommodate disabled people
Abolition of the licensing system for employment agencies (established by under the Employment Agencies Act 1973). This requirement is replaced by a system whereby an industrial tribunal, on application of the Secretary of State, may prohibit a person from carrying on or being concerned with any (or a specified kind of) employment agency.
Family Credit and the Disability Working Allowance will offer an extra £10 a week to claimants working for more than 30 hours a week. This change will increase the incentives for recipients of Family Credit to work full-time rather than the 16 hours necessary to qualify for credit. Government projections indicate that some 345 000 people could benefit from this measure.
Nation-wide availability of the "Jobfinder's Grant" (financial assistance averaging £200 a person to cover expenses incurred in taking a job, for those unemployed for more than two years)
Eligibility to disability benefits is made more restrictive
National insurance contribution rates (NICs) are being adjusted to compensate for this change, so that the net effect is to favour firms with low sickness absences.
Measures targeted at reducing unemployment include: reduction in national insurance contributions for low paid persons.
Changed method of calculating the proportion of earnings on which SERPs is paid, with the result that amount of qualifying earnings will fall and the overall pension reduced
Established guaranteed indexation of public sector (defined benefit) sector schemes up to an inflation rate of 5% (not guaranteed in private sector)
Partly centralised regulations in pension industry: established Occupational Pension Regulatory Authority, rules for trustees and independence from employers, and minimum solvency requirements (see next line)
Established market-value-based minimum funding rule for defined benefit scheme; 90% level funding must be returned to 100% in five years and shortfalls below 90% fixed in 12 months; calculations must be made on assuming ongoing scheme (rely on future returns to pay obligations) rather than winding up scheme (with much higher costs associated); some regulations for defined contribution plans – if arrears in scheme, Occupational Pension Regulatory Authority will enforce payment
Introduction of a new private pension scheme.
Increases the state pension age by one month, every month (by individual's date of birth) until state pension age for women up to 65 (originally SPA for women was 60, since 1948); implemented from April 2010 - March 2020
Split British Gas into 2 separate companies (Centrica for trading, BGplc for pipeline transport) after earlier steps (in 1992) to open up market
Basic rate of income tax to be reduced from 25 % to 24 % in FY 1996/97. Band for lower rate of tax (20 %) widened to £3 900, £500 more than needed to index for inflation.
Reintroduction of high quality apprenticeship for 16-19 year olds; modelled on German apprenticeship system
Introduction of requirement to sign a Jobseeker's agreement
Gave voucher to parents/carers to purchase part-time nursery education provision for 4 year olds; intended to bring market economy to sector and increase parental choice
It slightly changes the 1972 legislation on the notice required to be given by an employer to terminate the contract of employment. The advance notice must be: - one week, if continuously employed for less than two years; - one more week for each year of continuous employment (if the period is between two and 12 years); and - 12 weeks if the period of continuous employment is 12 years or more.
It states that the main terms of the contract must be in writing and provided to the employee within eight weeks of the start of their employment. This document is called a "written statement of particulars". It confirms the main express terms of the employment contract.
Replaced Industrial Tribunals as independent panel system to adjudicate employment law disputes; in particular, unfair dismissals and established Employment Tribunals Service to manage system through the Ministry of Justice
Offers health and safety protection, through elected representatives, to small businesses and employers who are not part of, or eligible to be covered by, trade unions
Minimum sanction period increased from 1 day to 1 week
Unemployment Benefits are replaced by the Job-Seekers’ Allowance (JSA). The replacement rate of the Job Seekers' Allowance is lowered. In particular, 20% reduction in allowances for the young (18-24), to bring it in line with the income support. Removal of all remaining additions which existed under the unemployment benefits (for low income or not working partners).
The Income Support scheme is replaced by the means-tested component of the JSA as a safety-net with a marginal withdrawal rate of 100 %.
JSA: The first is a contributory element, which continues the principle of national insurance, with entitlement based on the claimant's previous contributions. But entitlement will be limited to 6 rather than 12 months, as at present.
Reduction of maximum duration of contributory benefits (from 12 to 6 months)
Reduction of unemployment benefits for recipients of occupational pensions of all ages
Full-time work threshold for JSA is back to 24 hours
JSA: The second element is income-related. Persons not qualifying for the first JSA element will be eligible for an income-related payment, subject to a means test. This payment will be aligned with "Income Support", which remains the minimal safety-net benefit.
First two private rail franchises become operational
A small decline in taxation compared with a constant tax policy base. The basic rate of income tax was lowered to 23 %.
New Deal Programme. Design of a job search plan and fortnightly interviews with job counsellors became compulsory for all jobseekers.
Introduction of quasi-market structure in British employment services; includes series of mandatory and voluntary specialised programmes (e.g. New Deal for Young People and New Deal 25 plus, for long-term Jobseeker's Allowance recipients mandatory disabled, lone parents, 50+, etc. = voluntary); implemented through public employment JobCentre Plus system and contracting out to private/voluntary providers
Bank of England given operational responsibility for setting interest rates and banking supervision transferred to new Securities and Investments Board (renamed Financial Services Authority); the Bank of England is responsible for the overall stability of financial system, with own separate pool of foreign exchange reserves for use in monetary policy
Requires all major capital schemes in NHS (starting with hospitals) to consider private financing for projects, using value for money evaluation of PFI options versus public sector capital
Introduction for pensioners to account for higher heating costs in winter months; paid as flat-rate benefits, not related to actual level of fuel costs; made to all individuals over state pension age
Reduces small companies' tax rate from 23 to 21%.
The basic rate of corporate income tax lowered from 33 to 31 % and that for small businesses from 23 to 21 %.
The New Deal for old people (NDYP) mandatory for those aged 25 and over that have been claiming unemployment benefit for more than 18 months. Participants first enter a “Gateway” period lasting up to four months followed by an “Intensive Activity Period” (mandatory for those aged 25-49, voluntary for those over 50) where various options are available including work experience, work placements with employers, occupational training, and help with motivation and soft skills.
The New Deal for young people (NDYP) is mandatory for 18- to 24-year olds who have been claiming unemployment benefit for 6 months. Participants first enter a “Gateway” period lasting up to 4 months during which advisors work with them to improve their employability and to find unsubsidized jobs for as many as possible. Those who do not find a job move on to one of four options (where figures in brackets indicate the proportion on each option as of June 2003): a period of subsidized employment (12 %); a course of fulltime education or training (45 %).
Special New Deal sanctions for 18-24 years old registered unemployed for 6 months who refuse ND options.
Nationwide launch of New Deal for young people in April 1998, and subsequently for other categories
First activation programme for lone parents (part of broader New Deal activation series); voluntary encouragement to improve employment readiness and enter work.
Programmes for long-term unemployed out of work for 2 years, disadvantaged groups, disabled and lone parents, people over 50 who are unemployed, with the aim of encouraging them to work. £750 per person have been allocated towards training costs.
Reform of competition law in UK with emphasis on enforcement to parallel EU; adopts 'prohibition' approach to restrictive practices and abuse of dominance; increases role of OFT and Competition Commission; mandates following of European Court of Justice and EC rulings
Reform of institutional structure of competition policy; eliminated Restrictive Practices Court and changed Monopolies and Mergers Commission into Competition Commission, divided into 'reporting' and Appeals Tribunal; established DGFT as principle decision-maker regarding: competition rules enforcement
The reform transfers student loans from the public to the private sector.
First requirement for Early Years Development and Child Care Partnerships (social partnership regarding: provision with private, voluntary, and non-state organisations and local authorities) to provide free, part-time early education on universal basis for all 4 year olds
Legal basis for schools as institution; increased power of local authorities again; ended grant maintenance status of schools from Education Act, 1988; introduced statutory duty on local authorities to provide preschool education
The reform is wide-ranging: most notably it extends school's right to select pupils based on aptitude and it puts forward stricter performance management system (i.e. if a school's performance is deemed unsatisfactory, the school may be imposed profound changes by the local or national government).
The reform introduces tuition fees of £1,000 per year (Barr, 2012).
Ended free higher education, introduced flat-rate tuition; replaced maintenance grants for low-income students with means-tested loans
Established right of employees to disclose information about alleged wrongdoings ('protected disclosure') without suffering any detriment or dismissal as a result; set of regulations established who can receive disclosed information
Required employers to comply with data protection principles (including employee consent and employee right of access to data) when processing personal data related to their employees, particularly regarding: 'sensitive personal data' and health records
Modernisation effort with implementation of national standards and de-centralisation of services; included National Services Framework regarding: impact on particular areas of care, information strategy 1998-2005 requirements about information made available to providers and patients
Entitles most workers, including home and piece workers, to a minimum gross hourly wage, to be increased annually by recommendations of Low Pay Commission
Part of Labour government 'making work pay' initiative; introduction of first national minimum wage
Stipulates that employers must take all reasonable steps to ensure workers do not work more than average an of 48 hours/week, and minimum 4 week annual paid holiday; opt-out for workers only by written agreement; provision for night workers, youth, and those requiring rest periods
Abolished lone parent premium (1981) into Child Benefit, recognised with raised Child Benefit rates from 1999
1% cut in main corporate tax rate, to 30%
A reduction in the corporate tax rate, the abolition of Advance Corporation Tax and capital gains tax reform.
Married couples allowance relief cut from 15 to 10%
Programmes for young people under 25; "New Deal" for Young People. A period of intensive personal advice, with training to move the youths into employment. In addition, a work subsidy of £60 per week (20% of the weekly earnings) to employers hiring people under 25, unemployed for 6 months or more.
Expansive package of individual, collective, and 'family friendly' employment rights law to promote best practice in employment; phased implementation; improved regulations on discrimination, employment contracts, unfair dismissal, family leave, an employer-employee partnership agreement
The Bill requires the trade and industry secretary to make regulations and codes of practice to ensure that part-time workers are treated no less favourably than full-time workers, to facilitate the development of flexible working-time arrangements and opportunities for part-time work. These regulations will include provisions to implement the EU Directive on part-time work (97/81/EC).
Employees allowed at least 3 months unpaid leave to care for a child; mothers can have up to 18 weeks paid maternity leave
Introduced parental leave of 13 weeks unpaid, as well as time off for emergencies and right to request flexible working; parental leave expanded in 2003
The Employment Relations Act 1999 is widely seen as the most important and wide-ranging piece of employment legislation in the UK for many years. According to government ministers, the aim of the Employment Relations Act is to promote best practice in employment by providing minimum standards for employees. Moreover, the Bill gives the trade and industry secretary the power to make provisions in order to rationalise and update the coverage of existing employment rights.
Bank of England extended range of collateral eligible in sterling OMOs across 3 stages
The qualifying period of employment necessary for claims of unfair dismissal is reduced from two years to one year (a two-year qualifying period had applied since 1985). The law extends statutory protection to an additional 2.8 million employees.
It outlaws the use of waiver clauses in fixed-term contracts under which employees agree to forgo the right to claim unfair dismissal at the end of the term.
Introducing strengthened legal protections against discrimination against employees on the grounds of trade union membership or activities. The Bill amends existing legislation to enable employees dismissed for taking part in lawfully-organised official industrial action to take cases of unfair dismissal to an employment tribunal where the dismissal occurs within eight weeks of the start of the action. Thereafter, dismissal will be fair provided the employer has followed all appropriate procedural steps to resolve the dispute.
Ceiling for unfair dismissal compensation more than quadrupled. The compensation limit for unfair dismissal is raised from GBP 12,000 to GBP 50,000, removing any limit in the case of dismissals for acting on health and safety concerns.
Introduces compulsory trade union recognition rights for collective bargaining, with ability to go to Central Arbitration Committee if needed
National minimum wage introduced in April 1999, at £3.60 (with a lower rate for young people), and to be raised to £3.70 in October 2000 (£3.20 for young people from June 2000, in line with rate for trainees).
It ensures that where there is a "recognised trade union" it must be consulted. Previously, under the 1995 regulations, the definition of "appropriate representatives" was drawn so as to mean either representative of a recognised trade union or employee representatives. The effect of the 1995 regulations was that employers had the option to consult either a recognised trade union or employee representatives. From 1st November 1999 that option is removed.
Regulations prohibiting the "blacklisting" of individuals on grounds of trade union membership or activities. Extension of right of protection for employees taking lawfully organised industrial action.
Introduction of a Minimum Income Guarantee for pensioners.
Introduction of means-tests for incapacity benefits.
Introduced two family tax credits: Working Family Tax Credits (1999) and Child Tax Credit (2001) to assist low-income families in employment
Formalised policy commitment of guaranteed income for pensioners; equal to existing Income Support (IS) allowance plus a pensioner premium – with the pensioner premium increased by 3 times the prior amount
Introduction of a modest flat-rate Basic State Pension (BSP) for all individuals, financed on a pay-as-you go basis.
Until April 2002, employees receiving earnings within a certain band (£67-£535 per week in FY2000/01) build up entitlements to the State Earnings-Related Pension scheme (SERPS), in addition to the BSP, unless they choose to contract out of SERPS. In this case, they must join either their employer’s occupational pension scheme or a personal pension scheme. Then, both employee and employer receive a rebate on their national insurance contributions (NIC).
Introduction of a Stakeholder Pension scheme to encourage people to take out private pensions.
The SERPS will be replaced by a state second pension (SSP) . Initially earnings-related, it is proposed to become flat-rate in time, even though contributions will remain earnings-related, a feature intended to provide an incentive to middle and high-income earners to contract out.
New 10% income tax rate. Basic rate reduced to 22%.
New tax credit for children Increases in working families tax credit (WFTC)
Working families tax credit introduced in October 1999
The New Deal 50 plus, is targeted at those aged between 50 and state pension age and is a voluntary programme which helps both unemployed and economically inactive people and their dependent partners, who have been claiming benefits for six months or more, into paid work.
Established in disadvantaged labour markets; outcomes-focused funding model with contracted-out providers given great flexibility; targeted under long-term unemployed with mandatory participation
Extension of New Deal by sector, to older workers (25 years and more, 50 plus), to Lone Parents, for Partners of Unemployed People, for Disabled People.
Established in disadvantaged labour markets; outcomes-focused funding model with contracted-out providers given great flexibility; targeted under 25 year olds with mandatory participation
Gradually introducing the Jobcentre Plus Programme, bringing together job search services and various benefits under one roof to ensure that all benefits recipients of working age receive work-focused services.
Introduced competition into letter delivery and created regulator Postcomm; privatised later in 2011
Established new Strategic Rail Authority regarding passenger rail franchises, relying on market competition to achieve better consumer outcomes
Competition regulatory framework for financial services; retains DGFT responsibility to review and revise Financial Services Authority rules, investment exchanges, clearing house, and competition scrutiny of rules of 'Competent Authority for listing' and call for investigation of anti-competitive effects
Regulatory regime for electricity and gas designed to protect consumers, and achieve social and environmental goals, thereby expanding regulatory mission beyond economic competition
Sector regulators granted some responsibilities to promote competition
Relaxing the notification requirements for collective dismissals
Part-timers who consider their rights to be infringed have the right, within 21 days of a request to their employer, to receive a written statement of the reasons for their treatment. They have the right, within three months of the less favourable treatment, to take a complaint to an employment tribunal. If infringement is proven, part-timers may receive compensation and employers may be ordered to take remedial action.
The Regulations are based on Council Directive (97/81/EC). Part-time workers will for the first time have the following statutory rights: to be treated no less favourably than comparable full-timers in redundancy situations; less favourable treatment will only be justified if it can be shown that it is necessary to achieve a genuine business objective and that it is an appropriate way to achieve the objective.
The Regulations are based on Council Directive (97/81/EC). Part-time workers will for the first time have the following statutory rights: to receive the same contractual entitlements to sick pay and maternity pay, on a pro rata basis, as comparable full-timers;  to receive the same contractual entitlements to holidays, maternity leave, parental leave and career breaks.
Encouraged NHS commissioners to use private hospital capacity and private care when it would be faster treatment or more value for money than public care
The hourly national minimum wage for those aged 18-21 increases from £3.00 to £3.20.
Rising the adult hourly rate of the national minimum wage from GBP 3.60 to GBP 3.70.
Implementation of Working Time Directive limiting to 48 the number of hours worked per week
The maximum benefit duration for both components of the Jobseeker’s Allowance is cut from 12 to 6 months for recipients with working spouses.
Created S2P to replace SERPS as additional, earnings-based pension; aimed to support those not able to have private pension (e.g. not in paid work due to caring or on low incomes) and help those on moderate incomes to build up better second pension; independent of basic state pension
Existing £15 a week earnings disregards increased to £20 a week for all income related benefits
The married couples allowance is repealed, to be replaced in April 2001 by a Children’s Tax Credit.
Introduced work-focused meetings as condition of lone parents' Income Support receipt; work interviews are mandatory, moving into work also mandatory.
Setting-up a single Learning and Skills Council responsible for funding and planning of all post-16 education and training (except higher education) and supported by 47 local Learning and Skills Councils.
New Deal for Young People is extended to the unemployed over 25 after 18 months.
More teachers hired and new pay scheme for school teachers
Voluntary arbitration scheme designed to provide faster, non-legalistic, and more cost-effective alternative to Employment Tribunals; available for straightforward unfair dismissal complaints and disputes regarding flexible working time
Introducing a package of measures to limit the impact of regulation on businesses, including a new arbitration procedure, providing a voluntary fast-track alternative to an employment tribunal hearing for resolving claims of unfair dismissal.
The Government announces that the national minimum wage for those aged 18-21 is to rise to £3.50 in October 2001, and to £3.60 in October 2002 if economic conditions permit it.
11% increase in the main adult rate of the national minimum wage, to £ 4.10 per hour. This rise concerns almost 1.3 million workers. The hourly national minimum wage for those aged 18-21 was raised to GBP 3.50.
The Government announces that the hourly national minimum wage for adults is to be raised to £4.20 in October 2002 if economic conditions permit it.; The Government announces that the national minimum wage for those aged 18-21 is to rise to £3.60 in October 2002 if economic conditions permit it.
The basic state pension is raised by 7.4 %.
Capped 1975 regulations allowing national insurance contribution credits for 'acceptable' non-paid work activities (e.g. self-employment) to a six-year maximum replacement period
Access to invalidity pension tightened and means-test introduced
Introduction of compulsory job-related interview and interview with personal advisers every six months for lone parents
Amended Competition Act of 1998 to strengthen power of regulators to detect and punish abuse of market dominance and cartel behaviour; narrowed definition of 'public interest' regarding the effect of behaviour on competition
The reform is touching upon a variety of issues. The most significant provisions deal with increased powers to schools in terms of selection of pupils and taught curriculum; it also encourages private public partnerships as far as school financing is concerned.
For England and Wales, teachers' pay is linked to test results and pupils' behaviour; School Teachers' Review Body: mandatory pay review from 2003, from 2013, removed pay links to length of service and linked all pay to performance.
The Act sets out a statutory dismissal and disciplinary procedure and a statutory grievance procedure, each involving three stages. The standard dismissal and disciplinary procedure involves: a meeting between the employer and the employee to discuss the matter
The Act sets out a statutory dismissal and disciplinary procedure and a statutory grievance procedure, each involving three stages. The standard dismissal and disciplinary procedure involves: the employer providing the employee with a written statement of the grounds for action
Maximum duration of fixed-term contracts reduced to 4 years (before it was unlimited).
Right not to be treated by an employer less favourably for fixed-term employees than the employer treats a comparable permanent employee
Established right of fixed term employee equal treatment to permanent employees regarding: pay and pensions, training, and benefits; requires employers to give notice of permanent vacancies and redundancy payments
Made series of amendments to existing UK employment law on 'family-friendly' work issues (increases in statutory leave pay and family leave period to 6 months paid, plus 6 months unpaid), resolution of individual disputes (establishment of statutory dismissal/disciplinary grievances and procedures), equal treatment for fixed term employees, and procedures and costs of employment tribunals
Part of broader effort to introduce more mixed (public and private) provision of services; centres set up to treat NHS patients with basic elective care needs; introduced in two stages (2003 and 2006); funded by central government and Primary Care Trusts encouraged to utilise.
Employment tribunals will be required to vary compensation awards by up to 50% where an employer or applicant has failed to use the statutory procedures.
Supporting legislation to Employment Relations Act, 1999 protecting collective bargaining and introduction of mandatory minimum dismissal procedure for employees
Establishment of union learning representatives with a right to paid time off work.
Paid as addition to means-tested Child Tax Credit as part of replacement to Working Families Tax Credit; eligibility based on lone parents working 16 hours/week and couples working 24 hours/week; bonus payment for 30 hours/week
Replaced Minimum Income Guarantee (MIG) for pensioners; the new scheme includes a guarantee credit (to ensure all pensions have minimum level of income) and savings credit (to reduce disincentives to save created by means-tested benefits)
The Pension Credit is introduced. The PC rewards, within limits and from age 65, those with savings or income from employment and in this respect is an improvement on the Minimum Income Guarantee. (The PC guarantees all pensioners a minimum of £109 for single pensioners and £165 (pensioner couples), increasing in line with earnings through to 2008). Nevertheless, the operation of the system will introduce disincentives for some others to save and work at the margin.
Implemented through JobCentre Plus to assist incapacity benefit claimants into paid work; contracted out to providers with outcome-focused payment model; 6 mandatory interviews, voluntary additional services, Return to Work credit for 1 year; in-work support; Voluntary until 2008, when Incapacity Benefit replaced by Employment Support Allowance
Skills Alliance': piloting a new means-tested grant of up to GBP 30 per week for adults studying full time in further education for a first full level 2 qualification and young adults studying for a first full level 3
Skills Alliance': a stronger regional focus for training
Skills Alliance': offer an entitlement to free tuition for all adults aiming to achieve a first full level 2 qualification as a skills foundation for employability
Setting up Enterprise Advisers to work alongside head teachers in around 1,000 secondary schools in deprived areas, ensuring that pupils in these areas gain a better knowledge of business and enterprise.
Introduction of two weeks' paid paternity leave
Increased length of statutory maternal leave and level of payment (from 18 to 26 paid weeks, regardless of length of employment, and 26 additional unpaid weeks), at 90% earnings (later 80%); introduced 1st statutory paid paternity leave; unemployed have access to Sure Start Maternity Grant (established 2000)
Extension to statutory maternity pay and maternity allowance from 18 to 26 weeks
Prohibits employers from discriminating directly or indirectly against workers based on their sexual orientation and religion/belief; claims can be made to Employment Tribunal
Increasing the National Minimum Wage: the adult rate will be increased from GBP 4.20 to GBP 4.50 per hour; Increasing the National Minimum Wage: and the 'development rate' for 18-21 year olds will rise from GBP 3.60 to GBP 3.80.
Large scale pay agreement between government, unions, and employers covering more than 1 million people; harmonises pay scales and career progression arrangements under an NHS Job Evaluation Scheme and market-rates
Pension Credit introduced from autumn 2003, guaranteeing all pensioners a minimum of £109 for single pensioners and £165 (pensioner couples), increasing in line with earnings through to 2008.
The full basic state pension was increased further to £77.45 a week for single pensioners and to £123.80 a week for pensioner couples. The basic state pension will rise in future years by 2.5% of the increase in the September Retail Prices Index, whichever is higher.
The period over which all pensioners in hospital receive their full state pension is extend to 52 weeks.
The age-related personal allowances in 2003-04 rise to £6,610 for people aged between 65 and 74 and to £6,720 for those aged 75 or over.
New Deal Programme becomes mandatory for recipients of Jobseekers' Allowances under 45 years of age. Pilot scheme for a new mandatory job preparation course, known as "Gateway to Work", in London, Manchester, Dundee and Swansea from April 2003. Currently Gateway to Work is mandatory for people on New Deal 18-24.
Increasing the support available to the low-skilled, by intensive skill advice and guidance co-located with Jobcentre Plus offices.
Increasing the support available to the low-skilled, by extending employers benefits towards those looking for entry into sustainable employment.
Five point plan to personalise the Jobcentre Plus and introduce new local employment plans, including: more power and new local budgets to local managers, to purchase training and support to tackle local problems and individual needs
Five point plan to personalise the Jobcentre Plus and introduce new local employment plans, including: specialist programmes to help to employ people with specific problems
Five point plan to personalise the Jobcentre Plus and introduce new local employment plans, including: review of the intervention and sanction regime, with possibility of tougher and more frequent interviews
Five point plan to personalise the Jobcentre Plus and introduce new local employment plans, including: devolution of flexible skills budgets to enable local advisers to help people gain the skills they need to move into work
Increasing the support available to the low-skilled, by improving mechanisms of financial support for those for whom training provides a route back to work.
Increasing the support available to the low-skilled, by developing skills passports, to help moves into and between jobs by making entitlements more tangible.
Increasing the support available to the low-skilled, by building a record of skills and competencies gained.
Introduction of weekly means-tested payments to low-income students to increase retention; conditional on attendance and results; compulsory evaluation; expanded from pilot in 1999
Allowed English higher education institutions to charge variable tuition rates up to 3000GBP per year (up from flat rate of 1000GBP per year prior) and allowing student loans and means-tested maintenance grants; established Office for Fair Access to regulate underrepresented groups
Series of enhancements of statutory protections for workers participation in trade unions, including protection against dismissal for participation in individual action, enabling government funding of trade unions, prohibition of racist activity in unions, and notably individual workers statutory protection for choice over making use of collective agreements or not without fear of dismissal or penalty
It extends the protection against dismissal for workers taking official, lawfully-organised industrial action from eight to 12 weeks.
Abolished small employer's exemption form 1995 Disability Discrimination Act; expanded access to DDA provisions for those with mental impairments, HIV, cancer, MS, and similar long-term conditions; established Code of Practice to reflect law
Removal of the exemption from employing people with disabilities for employers with fewer than 15 staff and extension of coverage to almost all occupations.
It protects workers against being offered inducements by their employer not to belong to a trade union or not to have their terms and conditions of employment determined by collective agreement
Allowed private insurance companies to provide GP and related services, as well as increased role of voluntary and non-profit sector in health care provision; aka, 'any willing provider' rule
GP practices are able to commission care for their patients using an 'indicative budget'; financial incentives included to encourage take up; managed by Primary Care Trusts.
Updated compulsory trade union recognition rights set out in Employment Relations Act 1999; statutory protection to employees against employer inducements on trade union membership and for representation at discussions on grievance hearings; simplifying legal requirements for individual action
Introduction of statutory right of employees to be informed and consulted on wide range of workplace and employment issues
Increase in the National Minimum Wage for workers aged 22 years and over from £ 4.50 to £ 4.85 per hour.
Increase in the capital limits within means tested benefits. From April 2006 the savings threshold for income support, JSA, HB and CTB will be raised from £3,000 to £6,000.
Enhanced financial incentives to help the transition to work for lone parents, including an improved Job Grant that will pay £ 205 to lone parents moving into work for at least 16 hours per week
Changes in the eligibility criteria Compulsory retirement ages are made unlawful, unless employers can show that they are objectively justified.
Introduction of new retirement options, including on changing scheme rules and the rights of scheme members, to give greater freedom to employers and employees. Introduction of new opportunities for the development of pan-European occupational pension schemes.
Changes in the eligibility criteria: Introduction of the possibility to continue working part-time for the same employer while drawing their occupational pension
Simplification of the pensions schemes tax regime, abolishing the numerous existing sets of complex rules and replacing them with a single regime defining the amount of pension savings that can benefit from tax relief.
The earliest age that a pension may be taken is raised from age 50 to age 55, starting from 2010.
Changes in the eligibility "criteria A": better deal for people who choose to draw their State Pension beyond their State Pension Age (65) is provided, including a new option to take a lump sum
Introduced income tax regulation called 'pre-owned asset tax' to reduce inheritance tax avoidance
New family of Apprenticeship Programmes, including: Young Apprenticeships for 14-16 years old; Pre-Apprenticeship (level 1); Apprenticeships (level 2); Advanced Apprenticeships (level 3); Apprenticeships for Adults over 25.
A National Employer Training Programme for adults with low skills will be introduced across England between 2006 and 2008, following final evaluation of the pilot phase. A decision on public coverage of wage costs for the employees as part of the national programme has not yet been made.
The National Employer Training Programme will offer some matched funding to employers for skilled craft or technician level qualifications.
From April 2005, Jobcentre Plus is piloting a complete package of measures based around an existing core set of policies, including the In Work Credit, Work Search Premium, Extended School Childcare, and Childcare Tasters. This package, called New Deal Plus for lone parents, aims at joining up the various supports and provisions offered to lone parents through the various pilot schemes. The scheme is available in 5 areas of the country: Leicestershire; Dudley and Sandwell; Bradford; South East London; and North London. Pilots funded for one year starting from April 2005, with possibility of extension for a further two years to 2007-8, subject to positive evaluation evidence.
A new National Employer Training Programme (NETP) offering free training to employees to obtain a first Level 2 Vocational qualification and/or basic skills. Employers will be expected to agree on how much paid time off for training will be available to employees.
Legislation concerning the graduate contribution scheme has been passed and from 2006 students will contribute up to £3 000 a year towards the costs of their university courses.
Increase in the development rate paid to 18-21 year-olds from £4.10 to £4.25 per hour; Increase of the adult rate of the national minimum wage from £4.85 to £5.05 per hour.
Introduction of a new duty on employers to consider an employee's request to continue working beyond retirement.
Framework agreement on the reform of pension schemes in the public sector. New pension schemes will be negotiated during 2006 under which normal retirement age will be gradually increased to 65 (instead of currently 60). Retirement at 60 will be possible, but with lower pensions or increased contributions. New schemes remain DB pension and should offer indexation to protect against rises in the cost of living.
New legislation setting a default retirement age of 65. Employers will be free to continue employing people beyond the default age, while retirement ages below 65 will in general be outlawed, unless objectively justified.
Employers ere required to inform employees in writing, and at least 6 months in advance, on their intended retirement date and their right to request to work beyond that date.
The reform is rather similar in its underlying rationale to the 2002 Act. It goes further in the establishment of quasi-markets by stepping up choice and diversity. The Innovative elements compared to the 2002 reform is an attempt to make quasi-markets work for the most disadvantaged, through provisions such as increased free public transportation to allow for more choice also among disadvantaged families (Institute for Government, 2012: 6).
The regulations' main aims are to ensure that: 1) employees are not to be dismissed before or after a transfer (unless there is an 'economic, technical or organisational' reason)  2) employees' most important terms and conditions of contracts are not worsened before or after the transfer (unless there is an 'economic, technical or organisational' reason)  3) affected employees are informed and consulted through representatives
Sets a default retirement age of 65, with statutory right to apply to stay on beyond that age; abolishes upper age limit for claiming unfair dismissal; changes calculation of statutory redundancy payments and Employment Tribunal Awards
Removal of age limit for unfair dismissal claims and redundancy payments.
Extending to nine months the maximum period for which statutory maternity pay, maternity allowance and statutory adoption pay are payable, with the aim of increasing it to a full year by 2010
Establishing a new entitlement for fathers to take additional paternity leave to care for a child and to receive statutory pay if the mother returns to work before the end of her maternity leave period
Increase of £ 0.30 in the main adult rate of the national minimum wage (almost 6%), from £ 5.05 to £ 5.35 (€ 7.68) an hour.
Widening the scope of the existing law on flexible working to enable more people with caring responsibilities to request flexible hours. In particular, carers of elderly or sick adult relatives are now given the right to request flexible working.
These Regulations amend the Jobseeker’s Allowance Regulation 1996 (S.I. 1996/207). Reg. 2 amends the Jobseeker’s Allowance Regulations to change some of the jobseeker’s allowance entitlement conditions. Regulation 2(2) amends the circumstances in which a carer does not have to meet the requirement to be available for work immediately. Regulation 2(3)(a)(i) updates a cross-reference for persons regarded as available for work.
Allows possibility of taking lump-sum payment instead of weekly increments to state pension, as long as individual defers pension for at least 12 months
Regulation 2 amends regulation 60 of the principal Regulations to provide for the payment of a lump sum instead of a guaranteed minimum pension where the payment qualifies as a serious ill health lump sum payment under the Finance Act 2004 (c.12).
Alongside the employment service, using specialist providers in the private and voluntary sector to get longer term unemployed people into sustainable employment through results based payments.
Launch of the ‘Employ Ability’ scheme by the Department for Work and Pensions to encourage employers to make use of the skills that disabled employees have to offer.
Developing the role of Disability Employment Advisers in Jobcentre Plus and moving away from separate programmes of support towards a single integrated programme which provides a more personalised employment service for disabled people.
Providing people with basic skills to allow them to gain work and progress in employment, by offering a package of learning leading to basic skills and employability qualifications, helping Jobcentre Plus customers to secure and sustain employment, by continuing to learn (once they gain employment), using other workforce training measures
Government meeting full cost of tuition for adults studying for a first full Level 2 qualification at a local college or training provider.
Affording greater protection to agency workers
The private sector has continued to be involved in providing capacity to the National Health Service (NHS). Take-up of the wave 1 contracts has continued to rise, exceeding 90% of the contracted volumes in recent months, promoting contestability throughout the NHS. The role of private sector providers is increasing in a number of other areas, including the construction of schools (through private finance initiatives) and provision of training providers available to employers. The government is continually reviewing contracts for NHS doctors, and considering the role of incentives. Incentive pay is being brought into the teacher's pay system.
Increase in the national minimum wage: the main adult rate of the national minimum wage is to rise by £0.17, or 3.2%, from £5.35 to £5.52 per hour
Extension across the country of the In-Work Credit for lone parents (piloted since 2004). £40 benefit (60 in London) is paid to lone parents for the first six weeks of work to ease the transition from benefits back into employment.
The Welfare Reform Act 2007 will replace the current system of incapacity benefits with a new integrated and simplified Employment and Support Allowance (ESA). ESA will have a clearer balance of rights and responsibilities than the current system.
Number of measures to reform state pension: 1) increase to basic state pension (incl. index to earnings and relaxation of qualifying requirements, to help those with low incomes and broken work histories); 2) continues indexation of Pension Credit Guarantee to earnings (help to means-tested beneficiaries); 3) reduces Pension Savings Credit (hurt low-income families); makes S2P more like flat-rate system (reduces accrual for high earners and abolish contracting out)
Reform of the Jobseeker’s Allowance with introduction of a personalised, contracted Flexible New Deal to provide the right support for skills and back-to-work activity so that people can make the most of the employment opportunities that are available
Substantial expansion of local Jobcentre Plus' staff and regional employer engagement capacity through new hiring and redeployment. Doubling the funding for Jobcentre Plus’ Rapid Response Service (RRS).
Increased role of the Sector Skills Councils (SSC) in helping to deliver a more demand-led system, through the development of new 'sector skills agreements'
Increased resources to make training programmes more accessible for employers to train their existing workforce and making the Train to Gain programme more flexible to respond to employers' needs, there including an enhanced offer to SMEs (making them the focus of a £350 million increase in resources between 2009 and 2010-2011).
Further enhancement of the Skills Account with an extra £60 million funding to help ensure that every adult can access investment in his/her skills, focused on Level 3 skills, by providing new opportunities for adults to retrain and realise their potential, testing new ways of training delivery and enabling leading employers to take on more adult apprentices.
Introducing the requirement for all 17 year olds to participate in some kind of education or training.
Sections 15-18 make some amendments to the employment agency standards enforcement regime, affording greater protection to agency workers and confering additional inspection powers on the EAS inspectorate.
Statutory annual leave entitlement will be increased from four weeks to 4.8 weeks from October 2007 and then to 5.6 weeks, with a maximum of 28 days of leave from April 2009
Increasing compliance with the statuary code of practice promoted by the Advisory, Conciliation and Arbitration Service (Acas) sets out principles and general guidance to encourage a more practical, less legalistic approach to dispute resolution at the workplace: expedient handling of issues without unreasonable delay; informing employees of the allegations against them
The Employment Act 2008 is comprised of 23 sections. Sections 1-7 relate to dispute resolution, amend tribunals’ powers by which they may reach a determination without a hearing and allow tribunals to award compensation for financial loss in certain types of monetary claim.
Increase in the adult national minimum wage hourly rate for workers aged 22 years and over from GBP 5.52 (€7.06) to GBP 5.73 (€7.33), i.e. a 3.8% increase.
Sections 8-14 make changes to the enforcement of the national minimum wage (NMW): strengthening and enforcing national minimum wage law.
Similar increases apply to the development rate for young workers aged 18–21 years and the rate for those aged 16–17 years: the former is set to increase from GBP 4.60 (€5.88) to GBP 4.77 (€6.10) and the latter from GBP 3.40 (€4.35) to GBP 3.53 (€4.51).
The statutory right of employees to request flexible working arrangements from their employer has been extended to the parents of children up to the age of 16 years.
Section 19 amends trade union membership law in line with the ruling of the European Court of Human Rights on Aslef v UK
Introducing a new method of calculating arrears; replacing enforcement and penalty notices with a single notice of underpayment, which will include a civil penalty against employers who have not complied with NMW requirements
Creation of the new Employment and Support Allowance (ESA), which will replace incapacity benefits for new customers from October 2008. The availability of Pathways to Work across the country from April 2008 will underpin and support the introduction of the new benefit, as ESA will utilise a Pathways to Work style conditionality regime, and customers will have access to the Pathways to Work service.
Introduction of new incapacity benefit with a 'work preparation' regime replacing Incapacity Benefit; upon work capability assessment, assigned to either work-related activity group (mandatory prep, but not work) or support group (no conditionality)
Introduction of work-tested conditionality for Income Support receipt for lone parents with children (age 12 in 2008, age 10 in 2009, age 7 in 2010, age 5 in 2012); combined with In Work Credit to increase financial incentives
Introduced auto-enrolment by employers of most employees into a private pension (existing workplace pension or new 'Personal Account'); represented step towards mandatory private pension system
The government announced that it would begin indexing the income tax personal (zero tax threshold level of income) and basic rate limit starting in 2009-10 costing around £ 3 billion in the first year. This is in part intended to offset the burden on low-income earners of announced increases in National Insurance Contributions (NIC) set for 2011-12 (see below).
The National Apprenticeship Service (NAS) was established. It makes it as easy as possible for employers to take on apprentices, streamlining the application process, coordinates funding and offering support and advice at every step for both the employer and learner.
Requirements for the long-term unemployed to “work for their benefits”
Lone parents and partners of people with younger children and disabled people who could work with support will be expected to take part in training or other activities.
Employers receive a £1,000 subsidy to employ for at least six months an 18- to 24-year-old who has been out for work for six months or longer. The recruit would also receive free pre-employment training.
8m GBP funding for work-focused volunteering opportunities for those unemployed more than six months and guaranteed job or work-focused training place for all 18-24 year olds before reaching 12 months of unemployment
Provision of 75,000 new training places. This training will be short term and work focussed to meet the needs of employers.
The Community Task Force was part of the Department for Work & Pensions Young Person's Guarantee and helped young jobseekers aged 18-24, by giving them up to 6 months of work experience.
Created BIS as merger between Department for Business, Enterprise, and Regulatory Reform and Department for Innovation, Universities, and Skills, and tasked it with promotion of free and fair markets with increased competition, business success, and improved economic performance
Increasing the statutory redundancy entitlement through raising the statutory maximum weekly pay limit (before tax) from GBP 350 to 380.
The Time to Train initiative introduced a right for workers in companies employing more than 250 staff to ask for time to study or train, on or off the job. The right applies after 26 weeks of service with an employer.
Programme of asset purchases over years introduced by Bank of England reserves to electronically create new money and directly increase private sector spending and reduce inflation to target
Implemented EU Shareholder Rights Directive to implement corporate governance in companies traded on EU regulated markets by enabling shareholders to exercise voting rights and rights to information more easily
Reversal of 2004 efforts to open up NHS to market competition with private and non-profit providers; ruled out competitive tendering for services unless NHS performance poor
Any time off for bank and public holidays can be included in the additional entitlement
Increases in the employee, employer and self-employed rates of National Insurance Contributions of 0.5% starting in April 2011 which together are expected to raise around £ 5 billion in the first year of the increase.
Tax relief on pension contributions will be restricted for those with incomes of £150 000 and over, and tapered down until it is 20%
New top tax bracket of 50% for incomes over £ 150 000
Doubling the number of advanced apprenticeships to 35,000 places over the next two years, with additional funding for advanced (level 3) and higher (level 4) apprenticeships of GBP 17 million.
Supporting apprentices to progress to higher education through the introduction of a new Apprenticeship Scholarships Fund, offering bursaries of up to GBP 1,000.
From April 2011, Jobcentres Plus (JCP) have the flexibility to determine how to focus their resources to best meet the needs of the individual claimant and the local labour market. The core regime of NJI and FJR remains but to support this they also have access to a Flexible Support Fund and a menu of support options via the Get Britain Working Measures.
Increases the number of adult apprenticeships by an additional 75,000, while expecting employers and learners to pay more towards the cost of training. This would mean 200,000 adults starting an apprenticeship by 2014–2015, and GBP 250 million (€295 million as of 15 December 2010) expenses over the spending review period
In the Superannuation Act, redundancy pay-outs to civil servants were capped at 15 months' salary in case of voluntary redundancy, and in 12 months' salary in case of compulsory redundancy.
The introduction in 2010-11 of a number of “Best Practice Tariffs” signals the start of a change of approach through which the tariff will increasingly reward recognised best practice models of care rather than simply reflect average reported cost. There will be a significant increase in the number of Best Practice Tariffs in 2011-12, with the expectation that this expansion will gather pace in future years.
On entry, patients will have the ability to choose between any willing provider that meets NHS standards and prices. On mergers, the Secretary of State would continue, as at present, to decide whether to permit NHS trusts to complete mergers until all remaining NHS trusts have become foundation trusts (FTs). Exit will be provided through allowing commissioners to replace existing services without risk of interruption in access to services for patients.
Introducing a 30-day cooling off period for performers (such as actors, dancers and singers) during which the work-seeker have a right to cancel or withdraw from the contract with immediate effect.
For workers in the public sector earning more than €25,068 (GBP 21,000 as at 15 July 2010), pay will be frozen for a two-year period. Those workers earning less than this sum will get a flat-rate pay rise of €298 (GBP 250) each year of the two-year period.
Brings together over 116 separate pieces of legislation into one act to establish legal framework on rights of individual anti-discrimination and equal opportunity; 9 main pieces of existing legislation merged: Equal Pay Act 1970; Sex Discrimination Act 1975; Race Relations Act, 1975; Disability Discrimination Act 1995; Employment Equality (Religion) Regulations 2003; Employment Equality (Sexual Orientation) Regulations 2003; Employment Equality (Age) Regulations 2006; Equality Act 2006 Part 2; Equality Act (Sexual Orientation) Regulations 2007.
New Universal Credit, to be introduced over the next two Parliaments, which will replace the current system of means-tested working-age benefits with a simple streamlined payment.
The entitlement will be calculated on a pro-rata basis for part-time workers at 4.8 then 5.6 times their usual working week, regardless of whether they usually work on bank holidays
The June 2010 Budget announced a phased reduction in the main rate of corporation tax from 28% to 24% over the next four years. This cut will be in part-funded by reductions in capital allowances; however once fully implemented the package reduces the corporation tax burden by more than £2 billion.
The Work Programme is the biggest single payment by results employment programme ever in the UK established and will replace much of the complex range of existing employment support provision. It will provide incentivised, personalised support to an estimated 2.4 million customers over the next 5 years.
Introduction of new 'back to work' scheme to replace and consolidate 20 welfare to work programmes; features contracted-out employment (mostly private sector) services for long-term unemployed and those in disadvantaged; outcomes-focused payment model, performance market, and market share
To fight youth unemployment: Provide job search support for 16-17 years olds on JSA by making adviser support available to these claimants; additional adviser contact to help a young person focus on getting into a job or education or training; extra time for advisers to help clients amounting to one hour at the front end of a claim and an extra five minutes per week while on benefit; at least fortnightly reviews between the claimant and adviser or more frequently if this is deemed necessary; attendance at reviews and interviews will be mandatory for the claimant with the prospect of sanctions for those on JSA in the event of non compliance; JCP advisers will work closely with local authorities (who currently have front line responsibility for 16-17 year olds).
‘The Work Programme’, the government’s new consolidated approach to active measures, came into play in April and will gradually replace the array of separate programmes on offer. This includes the expansion of work placements for young people aged 18-24 lasting up to eight weeks (the March Budget widened eligibility to include graduates). A key difference is that private and voluntary providers have been contracted (through a process of competitive tendering) to manage the programme with payments based on successful outcomes that includes the duration of employment – a challenging agenda when the job creation potential is currently limited.
Youth Contract: half a million new opportunities for young people in a long list of measures, the key ones of which are summarised as follows: 1) Cash payments to encourage employers to recruit young people – 160,000 job subsidies worth up to GBP2,275; 2) An extra 250,000 Work Experience places over the next three years taking the total to at least 100,000 places per year – an offer of a Work Experience place will be made to every 18-24 year old before they enter the Work Programme (acceptance appears to be voluntary); 3) At least 20,000 extra incentive payments with GBP 1,500 each for employers to take on young people as apprentices; 4)Extra support through Jobcentre Plus in the form of weekly, rather than fortnightly, signing-on meetings; 5) In addition the government announced special help for ‘the most vulnerable’ 16-17 year olds not in employment, education or training (NEET) to get them back into education, an apprenticeship or a job with training (at a total cost of GBP150m).
A new scheme to encourage self employment has been launched by the government. The New Enterprise Allowance (NEA) is open to those aged 18 and over receiving Jobseeker’s Allowance (JSA) with the following features: 1) access to a business mentor to provide guidance and support; 2) possibility to stop claiming JSA and switch to a weekly allowance for up to 26 weeks to a total amount of GBP 1,274 (paid at a similar level to the basic JSA of GBP 65 per week for the first three months, before falling to GBP 33 for the remaining three months); 3) Claimants becoming self employed may be eligible for a loan of up to GBP 1,000 to help with business start-up costs.
The proportion of funding for teaching provided by direct grant is declining. There will be continued teaching grant to support priority and high cost subjects such as medicine, science and engineering.
School Direct allows schools to grow their own new teachers by giving them the opportunity to recruit and train their own staff. To support schools in the most disadvantaged areas additional premiums are available to trainees and schools.
Free Schools introduce greater choice of provision in response to local demand. Half the Free Schools that opened in 2011 are located in the 30% most deprived communities. 45% of those opening in September 2012 are in the 25% most deprived communities.
The government has introduced a new pupil premium for deprived children, which will mean that money will go with eligible children to the schools they attend.
School performance tables are being reformed so that they are more focussed on the essentials that ensure a sound basis for pupils' progression. Gaming will be reduced through a greater emphasis on pupil progress and lowering incentives to offer qualifications which benefit league table positions rather than pupils’ needs.
The government has increased transparency of the Pupil Premium by introducing a requirement that schools report to parents on how they have used the Premium and by including in the performance tables separate results for the attainment of pupils eligible for the Premium.
Education Act 2011: childcare – early years free of charge provisions
The new system, which shifts funding from grants to repayable tuition fee loans, ensures that no first time undergraduate student will have to pay fees up-front, and ensures graduates will only be expected to pay a proportion of their salary towards the cost of their education once they are earning over £21 000.
Employment Regulation (Plan for growth – budget 2011): The UK government announced in October 2011 that, from April 2012, it will be harder for employees to make claims for unfair dismissal. The qualifying period of employment required before an employee can claim unfair dismissal in an employment tribunal will double, from one to two years. The government has also introduced a fee for bringing a case to a tribunal. The changes are intended to make it less risky for businesses to hire staff, but unions are highly critical.
Plan for growth: The government, ‘recognising the particular burden that new regulation places on small businesses’, will exempt businesses with fewer than 10 employees and ‘genuine’ business start-ups from virtually all new domestic legislation for three years from 1 April 2011 (Plan for growth)
The scope of Payment by Results is also being expanded to mental health and some community activities, which should help improve outcomes and efficiency in these areas.
NHS Foundation Trusts already have freedoms to determine pay for their own staff.
Health during pregnancy grant abolished.
General Description From April 2011, self-employed income-related rates of National Insurance Contributions (NICs) will increase by 1%, self-employed additional rates will be raised by 2%. The annual level at which people start to pay NICs will be increased in April 2011 by £570 above the level previously planned for the personal allowance
From April 2011, employer rates of National Insurance Contributions (NICs) will increase by 1% , the employer rate by 13.8% and the main self-employed rate by 9%.
Introduction of a statutory duty on employers to automatically enrol qualifying employees into a minimum quality workplace pension scheme
Legislation prepared Royal Mail for privatisation and transferred regulatory responsibility from Postcomm to Ofcom; Government took pension liabilities; date of sale, October 2013
Education Act 2011: apprenticeship offers + Securing the provision of apprenticeship training + Apprenticeship certificates
From the 22nd October 2012 more stringent rules have been applied to the receipt of Jobseeker’s Allowance (JSA) for those who fail to comply with the rules. Prior to the change, those JSA recipients who were deemed to refuse a job offer or in some other way contravene the benefit rules, were liable to lose their benefit entitlement for up to three months. Under the new rules this has been extended to a possible maximum of three years, though tiered as follows: 1) low level – for failures to undertake a specific action as required by a JCP adviser the sanction will be one month for a first and three months for a second and subsequent failures; 2) Intermediate level – for failures to actively seek and be available for work, leading to disentitlement to JSA and if a new claim is made, then no benefit is payable for up to one month for the first failure and three months for the second and subsequent failure; 3) High level – for failures to comply with the most important job seeking requirements such as refusing to accept a reasonable job offer or leaving a job voluntarily without good reason. Here the sanctions will be for a fixed period that will increase for those with a history of such failure to comply with three months for a first failure, rising to six months for a second failure and three years for a third. Note that the JSA will be gradually replaced by the Universal credit, which also has stricter conditionality.
The Youth Contract, launched in April 2012, is a package of support to help young unemployed people prepare for work and find long term sustainable employment. Provision under the Youth Contract includes: 1) wage incentives worth up to £2,275 each for employers who recruit an 18 to 24 year old who has been on benefit 6 months or more from Jobcentre Plus or through the Work Programme; 2) an extra 250,000 work experience places or places in sector-based work academies over 3 years, taking the total to at least 100,000 a year; 3) a further 20,000 incentive payments to encourage employers to take on young Apprentices, taking the total number to 40,000 in 2012-13; 4) additional support through Jobcentre Plus by way of more adviser time and more frequent attendance; 5) an opportunity to be referred for a careers interview with the National Careers Service 3.63. As part of the Youth Contract, the government is investing £150 million over 3 years (£126 million of it in England) to support the most disengaged and disadvantaged 16-17 year olds. This provides support to help them to get back into education, an apprenticeship or a job with training.
The government has abolished, merged, ceased funding or scaled back the number of government organisations operating in Further Education. Government is developing a single funding system for adult skills for full implementation from the 2013/14 academic year and introducing a standard “rates matrix’ to replace over 6 000 different funding rates currently in place.
The Free Schools programme supports wider choice through helping groups to open new schools. The government has also streamlined the process for establishing academies making it easier for a local authority to open them and encouraging a wider range of sponsors to come forward to run them.
Requiring the Learning and Skills Council to secure the proper provision of courses for learners over the age of 19.1
This reform brings the cap to tuition fee per year up from £3000 to £9000. All higher education institutions in England are able to charge up to a maximum of £9 000 a year for undergraduate courses, compared to up to £3 465 previously.
As of autumn 2012, all higher education institutions in England are able to charge up to a maximum of £9 000 a year for undergraduate courses, compared to up to £3 465 previously. At the same time, the proportion of funding for teaching provided by direct grant is declining. There will be continued teaching grant to support priority and high cost subjects such as medicine, science and engineering.
Some or all of the additional holidays may be carried over to the following year by agreement between the employer and employee
Established PRA to supervise 1700 financial institutions with objectives set out in 2000 legislation, while also facilitating competition; FCA established to protect consumers; Chancellor of Exchequer powers to direct Bank of England during financial crisis
Payment by Results (PbR): Under the Health and Social Care Act 2012, Monitor, the sector regulator, will be responsible for setting national prices and the rules for local modifications to prices. The scope of Payment by Results is also being expanded to mental health, cancer treatment and some community activities, which should help improve outcomes and efficiency in these areas.
UK trade unions can apply for statutory recognition even if 70% employees live overseas;as well as for protection for individual unfair dismissals; extends territorial jurisdiction of the Central Arbitration Committee (CAC)
In March 2012, the British government announced the adult rate of the National Minimum Wage would rise by 1.8% from October.
In March 2012, the British government announced that it has taken the unprecedented step of freezing rates for workers aged 16 to 20. The decision is said to be aimed at encouraging struggling companies to take on youngsters at a time when youth unemployment is rising to alarming levels. The move has been welcomed by employers’ organisations, but trade unions have described it as exploitative.
Establishment of Personal Independent Payments (PIPs) to replaced Disability Living Allowances as assistance to help with costs of health conditions or disability; non means-tested, non-contributory, non-employment related; based on effects of a condition on a person rather than condition itself
Introduction of the Universal Credit. The new benefit replaces six means-tested benefits and tax credits (Jobseeker’s Allowance, Housing Benefit, Working Tax Credit, Child Tax Credit, Employment and Support Allowance, Income Support). The total amount of benefits that can be paid to a single household is capped at GBP 26,000. In sum, the measure is expected to save public funds and increase work incentives. Since the UC is meant to replace six different benefits, it affects families in particular situations in a complex and varied way. For example, effective subsidy rates to childcare costs are decreased as top-ups from the Housing Benefit and the Council Tax Credit will no longer be applicable. The policy intention was announced in 2010, the proposal debated in Parliament through 2011 and passed in 2012. The new credit is introduced gradually in 2013-2014 for new claimants. It is expected that by 2017 most 'legacy cases' will be moved to the new credit and the six benefits it replaces will be phased out.
The smoother taper is intended to improve work incentives by reducing the METR faced by claimants, so that people are better off in work or increasing their working hours.
Established Canal and River Trust to take over canals and waterways; example of transferring assets to a charitable trust to increase local management and funding of waterways
In April 2012 the required amount of working hours for a couple with children to qualify for the Working Tax Credit was increased from 16 to 24 hours per week, with one member of the couple working for at least 16 hours per week. It remains at 16 hours per week for lone parents. In some exceptional cases (age above 60 years, disability, etc.) the requirement remains 16 hours. Note that the WTC will gradually be replaced by the Universal credit, passed into law in 2012. The Universal credit does not have a work requirement: it tapers as a function of income. For this reason, we classified this measure as 'temporary'
Government is also supporting higher apprenticeships through the Higher Apprenticeship Fund which is investing £25 million in higher apprenticeships.
The government has made apprenticeships last for a minimum duration of 12 months as of August 2012. The government is supporting the development of a range of new Higher Apprenticeships to provide more higher-level skills development, critical to the economy. Advanced level apprenticeship starts have increased 75.5% in 2010/11 from 2009/10 and Higher Apprenticeship starts have increased 47.8% in the same time period.
Apprenticeship Grant for Employers (AGE) for SMEs recruiting those aged 16-24 years old was extended to December 2014. AGE provides grants of £1,500 to employers with up to 1,000 employees recruiting 16 to 24 year olds, to encourage them to develop their business and take on new apprentices. The £1,500 is in addition to the training costs of the Apprenticeship Framework which are met in full for young people aged 16 to 18, and 50% for those aged 19 to 24. In July 2013, it was extended to December 2014.
The Claimant Commitment will be rolled out in the Autumn of 2013 and will focus on using a new form of the Jobseeker‘s Agreement that will set out more fully the requirements for continued receipt of benefits. This will include a personal statement developed and agreed between client and adviser with expected tasks set out, along with more regular monitoring and adjustment. Ultimately the agreement will be enforced with the threat of benefit sanctions and follows the introduction in 2012 of a more severe regime on these.
Appraisal provides personal objectives that are aligned with organisational objectives and the KSF specifies the type and level of knowledge and skills required to carry out the job successfully and achieve the agreed job objectives. In exceptional circumstances, pay progression can also be deferred at other points if there are significant weaknesses in performance.
Established new Competition and Markets Authority to replace competition and consumer protection functions of Office of Fair Trading (OFT) and Competition Commission (CC)
The government has announced it will go further in 2013/14. Institutions will be allowed unconstrained recruitment of students with the equivalent of ABB or above, and a further 25 000 places will be reallocated to reward high quality, good value for money institutions
Implementing some of the government's plans to reduce the burden of collective redundancy: Excluding the expiry of fixed-term contracts from the scope of collective redundancy consultation.
Implementing some of the government's plans to reduce the burden of collective redundancy. Most importantly, it provides that: if there are 100 or more redundancies, the 90-day minimum period before the first redundancy can take effect is reduced to 45 days (but no change to the 30-day minimum for 20-99 redundancies).
The qualifying period for unfair dismissal claims has been increased from one to two years. This new rule will apply only to new joiners after 6 April 2012. Those who are already in employment before that date will retain the current one-year qualifying period. The right to claim unfair dismissal applies to employees only (i.e., those with a contract of employment). These changes are expected to cut the number of unfair dismissal claims by over 3,000 claims a year. In certain circumstances, however, dismissals will automatically be considered to be unfair, and employees will not be required to have two years of service before making a claim. These include dismissals for reasons such as pregnancy or maternity leave, trades union membership, whistleblowing, reporting health and safety risks or assertion of statutory rights. These exceptions are all set out in the Employment Rights Act 1996.
Increase from three to four months in the period of parental leave permitted following the birth or adoption of a child. The right to request flexible working is extended to agency workers returning from a period of parental leave.
Employees who agree to become employee shareholders receive shares in their company worth at least GBP 2,000 (€2,330 as at 31 January 2013) but have fewer than normal statutory employment rights. In particular, they do not have statutory rights to: request training and flexible working; claim unfair dismissal (apart from where dismissal is automatically unfair or discriminatory); receive redundancy pay. They would also have to give longer notice of 16 weeks to their employer of their intention to return from maternity, paternity or adoption leave. Employees would be protected against detriment or dismissal on the grounds that they refused to become an employee shareholder.
Required companies to produce Strategic Report on company's objectives, strategies, and performance
The Enterprise and Regulatory Reform Act 2013 introduces a 12 months’ pay cap on the compensatory award for unfair dismissal, alongside the overall cap of £74,200, which had been in place already. The smaller of both caps is relevant.
Government introduce a fee system for litigants planning to go to an Employment Tribunal (ET) on 29 July 2013. There will be a system of fee remission. The new Tribunal Rules of Procedure will come into force at the same time.
This inserts a new Section 12A into the Employment Tribunals Act 1996 to give employment tribunals the power to order that a losing employer pay a financial penalty in specified circumstances. This will apply in cases presented on or after 6 April 2014.
The rate of statutory maternity pay, paternity pay and adoption pay was increased from GBP 135.45 (€159.19 as at 11 June 2013) to GBP 136.78 (€160.77) per week on 7 April 2013.
The Benefit Cap is introduced from April 2013, set at a maximum of GBP 500 per week (i.e. GBP 26,000 per annum). The benefit cap applies to the benefits that the Universal credit (passed in 2012 and being phased in) is meant to replace. Note that the Universal credit also includes a similar benefit cap. The cap will apply initially in four local authority areas in London before being rolled out nationally in the summer of 2013.
No qualifying period will apply for the additional holiday entitlement, and partial days of leave need not be rounded up to the nearest full day.
The Chancellor’s Autumn Statement set out changes to benefits applicable from April 2013. Most working age benefits and tax credits will be limited to an increase on 1 % per year for the three years beginning 2013/14.
Announced at Autumn Statement 2013, the abolition from April 2015 of employer National Insurance contributions for apprentices aged under 21 years and earning £813 per week or less will reduce the cost of employing young people and provides an incentive for businesses to consider taking on more under 21s – providing valuable employment opportunities. This measure will also support jobs for almost 1.5 million young people currently in employment.
Parents with children up to 5 years old will be able to reclaim up to GBP 1,200 (to a maximum of GBP 6,000 for five children) towards their childcare costs to make the choice between working and staying at home more viable. The funding will be in the form of vouchers to be used with registered childcare providers
The State should not interfere in OTE’s management; OTE’s investment programmes should conform to the annual and five-year government investment programmes; International agreements, contracts, and tariffs should be approved by the Ministry of National Economy and the Ministry of Transport and Communications.
Reinstitutes free education on all educational levels, a nine-year compulsory education and abolishes the 1911 constitutional provision on the official language of Greece. It prohibits the establishment of non-state universities.
Credit controls and ceilings are partially leived.
Introduces the payment of an one-off lump sum to employees of the broader public sector upon retirement.
22 private enterprises in banking, insurance and industry belonging to the Andreades Group went under government control by decree.
Ratifies the decision of the Monetary Committee to nationalise the Andreades Group
Nationalisation of the domestic airline monopoly 'Olympic Airways'
Increased taxation of company profits. The tax rate would be raised by 3 % on distributed profit and by 5 % on retained profit to 33 and 35 %, respectively for companies with shares quoted at the stock exchange and to 41 and 40 % respectively for companies with non-quoted shares.
Income tax cuts for lower income groups (estimated revenue loss in 1975: Dr 2.2 billion). Income tax increases for higher income groups (estimated revenue gain in 1975: Dr 9 billion).
Establishes nine-year compulsory education and re-organises the curriculum and exam system in primary and secondary education.
Brings restrictive changes in the rules governing overtime work.
Increases the share of the Greek state in the Commercial Bank of Greece and other banks that went under state control in 1975
Extraordinary contribution of 10 % on average on the outstanding balance of credits and loans in drachmae exceeding Dr 5 million. This contribution should not amount to less than 20 % of net profits in excess of Dr 2 million realised by enterprises in 1975; companies which have not borrowed to this extent will pay an exceptional tax on profits on the same basis. The tax will affect a rather limited number of enterprises and its rationale is the undoubtedly large profits made by firms which borrowed heavily from the banks in a period of very strong inflation.
Flat tax rates on dividends from stock have been increased by 2 to 8 percentage points. Differentiation of tax rates on dividends has been based on whether the shares are quoted on the Stock Exchange or not, and whether they are registered shares or issued to bearer. This differentiation has been introduced mainly in order to promote Stock Exchange operations and the issue of stock to the public.
Price control system reinforced; Transfer of certain goods to the categories subject to price control; Reduction of wholesalers' profit margins for certain essential commodities.
The new law on competition amending the 1914 law and establishing the Hellenic Competition Commission. The legislation transposed European models directly into Greek law in order to conform with EU guidelines. It based Greek competition law and practice on the principle of prohibition of unilateral abusive behaviour and vertical and horizontal restraints. Although these rules appeared adequate, they were rarely enforced, largely because of lack of resources of the competition authorities. This is confirmed by reports that overt agreements among firms about their prices, operating hours, and services are quite common, in spite of the competition law’s prohibitions.
Introduced new rules governing holidays, and working hours in shops.
Changed the terms and condition for the granting of unemployment benefits.
The tax on dividend income is to be increased (expected annual yield Dr 400 million).
Persons with taxable income of less than Dr.60 000 per annum (instead of Dr 30 000) are not obliged to declare their income.
A capital gains tax will be levied following a revaluation of land and buildings to industrial, commercial and financial enterprises (expected annual yield Dr. 2 billion).
Gross income up to Dr 500 000, earned from farming, will not be taxable (instead of previous Dr 250 000).
Personal tax allowances to be increased from 30 to 40 % of the declared income with the maximum allowances to increase from Dr 40 000 to 60 000 and taxes will not be deducted from the pay bill of wage earners with earnings of less than Dr 600 per day instead of Dr 250 per day up to 1977.
Additional personal allowances for each family member to be deducted from the declared tax.
Establishes a system of technological and vocational education.
Pre-notification period for certain price increases raised from 15 days to one month.
Shops are allowed to sell at discount prices whenever they like instead of the traditional two periods per year.
The handicraft industry was granted new tax allowances. Industry was also granted additional tax allowances.
Measures encouraging direct sales of fruit and vegetables from producers to consumers without passing through the traditional wholesale channels, who have high profit margins.
The extension of price controls to all goods and services was announced and also a pre-notification period of four months before price rises was introduced, during which the Ministry of Commerce may veto the proposed price rises. Authorisations for price increases will be based on the rise in raw material prices and on wages and salaries, but not exceeding 10 %.
Price policy changes allowing 10 % increase in prices (from the end of December level) without prior approval by the Ministry of Commerce. Retail prices should not be more than double the price of imported goods (after customs) or the factory gate price for domestic goods. Wholesale profit margins should not be more than 25 % of the price paid by wholesalers.
Fees for professionals and artisan services were fixed.
Increase in incentives given to industrial investment in peripheral areas.
Changes the previous rules governing the operation of the stock exchange, the issuing of bonds, limits to deposit concentration
A package of measures was announced for a 6-month period in order to curb imports: credit to importers will be restricted, except for foodstuffs, raw materials and machinery; an additional deposit, equal to 75 % of the value of the article to be imported, shall be blocked for six months with the Bank of Greece; a 25 % "luxury consumer tax" will be imposed on an extensive list of items; wholesalers' maximum profit rate was fixed at the modified margin of 33 %. For the entire wholesale-retail cycle, the combined profit margin is set at a maximum of 100 %; validity of all Currency Committee decisions concerning the financing of imports or of imported goods is cancelled until 30th June 1980 (an exception has been made for some food items, basic raw materials and capital equipment of agricultural, fishing and industrial enterprises); goods imported on credit from suppliers abroad must have the first instalment of their value paid within six months at the most.
Agreement was reached between the business sector and the Government to voluntarily restrict imports and price rises.
Price freezing measures announced: - prices of certain locally produced manufactures and artisan products can be increased without prior authorisation as much as 10 % from their level in 31st December 1979 if their drachma cost increased correspondingly. For any greater price increases a ministerial decision is requested; - for the rest of the locally-produced goods, price levels of 31st December 1979 can be adjusted according to the cost increases of input materials and labour costs; wholesale and retail prices shall be based on the acquisition invoice value plus the drachma profit margin effective on the 31st December 1979; - prices of imported manufactures and artisan products can be raised (from their level at 29th November 1979), without prior reference to the ministry, by the exact drachma increase in their acquisition. Nevertheless those prices will remain frozen until 15th June 1980.
Introduction of direct State grants for new investment
Introduction of an untaxed allowance on business profits representing an amount equal to a percentage of the investment cost (up to 80 % in certain areas) which will be kept in a special reserve account (the deductible allowance in any one accounting period cannot exceed 90 % of the business's profits)
A subsidisation of certain interest rates (up to 50 % of the contracted interest rates depending on the areas)
For the first time in Greece it is envisaged the introduction of a system of leasing factory equipment and machinery.
Extended employment protection rules to healthcare employees.
Enacts a court decision ruling in favour of a general minimum wage increase.
Reduces weekly working hours, determines the level of extra payment for overtime work.
A doubling was announced of agricultural pensions from 1st June 1980.
The state will guaranteee sufficient financing to SMEs.
Elderly persons who are not members of a provident institution to receive free medical treatment and medicines.
To preserve real wages, the Government introduced an indexation system for increases at four-monthly intervals on the basis of the rise in retail prices in the preceding four months, the first increase to be in May 1982. Wages and salaries will be adjusted according to the cost of living index every four months. Full indexation was provided for monthly earnings up to Dr 35'000. Those earning from Dr 35'000 to 55'000 will receive half the inflation ratio for the part exceeding Dr 35'000, those earning from Dr 55'000 to Dr 80'000 will receive only one-quarter of inflation ratio for the part higher than Dr 55'000: finally, fore earnings higher than Dr 80'000 no adjustment was provided.
Agricultural pensions will be increased by an average of 76 %.
Elderly persons who are not members of a provident institution to be paid a pension out of the central government budget.
Committees within the banking sector will be set up to examine companies with large debts, assess their longer-run prospects and recommend whether they should be closed or aided until they become viable. For some of these companies part or all of their debt will be converted into equities which in due course will be transferred to state-holding companies. Supervisory Committees of Enterprises are to be created to monitor major companies in mineral extraction, cement, steel, fertilisers and shipyards. Consisting of owners, elected worker representatives, local authority members, civil servants and outside experts, the Committee's main task will be to harmonise operations with the Government's overall objectives.
The tax free gross agricultural income is doubled to Dr 1 million per annum (this allowance is reduced to Dr 300 000 in the case of non-personally occoupied farms).
Tax allowances and thresholds will be adjusted for inflation
With effect from 1st January, 1981: for wage and salary earnings up to Dr 250 000 the tax-free allowance raised to Dr 100 000 and for higher earnings to Dr 25 000; for self-employed incomes lower than Dr 100 000, the tax-free allowance set at Dr 25 000.
With retroactive effect from 1st January, 1980: those inhabiting their own houses have Dr 60 000 taken off assessed rent value of their houses plus an additional allowance for every dependent member of their family.
Introduces the legislative framework for the enactment of active training programmes and subsidized business for hiring the unemployed.
Price monitoring and surveillance was reinforced in 1983: prior approval by the authorities for price rises was introduced for many products and services; and actual control over prices at wholesale and retail levels was strengthened considerably, including provisions for heavy fines for those firms contravening the rules.
Re-organises high education, increasing the participation of students in the administration, establishes a framework for postgraduate studies, abolishes general directors and supervisors in the educational system.
Abolishes general inspectors and replaces them with school advisors, establishes educational directorships at local level, introduces new programmes of study for primary and secondary education with a new series of books.
Brought about significant changes to monetary and credit policies by abolishing the Monetary Committee and transferring its competences to the Bank of Greece. This opened the way for the Bank to liberalise the credit system through decisions in the coming fifteen years
It was decided to postpone the automatic pay rises at four month intervals so that pay increases due on 1st January 1983 (to offset price changes over the previous four months) were paid in two stages, half in January (4.5 %) and half in May 1983 (4.5 %). The pay rise due in September (which is the last one for 1983) was fixed at 10.25 %, to compensate for price increases during the first eight months of 1983.
The policy of narrowing pay differentials continued this year: pay rises were fully indexed for the low paid (as in 1982), while pay rises for other groups were graduated so that those with higher earnings received proportionately less.
Penalties will be applied to those firms exceeding the income policy guidelines. Pay rises exceeding the norms will not be taken into account as costs in calculating the permitted rise in prices and they will not be regarded as costs for tax purposes.
Introduces protective provisions for labour union activism and participation, prescribing the terms governing elections in trade unions and industrial action, and introducing a special employment status for the union leaders.
Pension funds can invest in government bonds and treasury bills.
OTE (telecommunications monopoly company) and its subsidiaries officially became parts of the public sector.
Business turnover tax and inland revenue stamps to increase by 1 to 2 percentage points
Income tax on undistributed profits is increased from 40 to 45 percentage points, while tax on dividends is raised from 4 to 6 percentage points
With the aim of mitigating fiscal drag income tax allowances of wage and salary earners raised by 25 %, most tax bands were also increased by the same rate
Surveillance of certain categories of imports was abandoned.
It regulates collective dismissals. It aims to discourage lay-offs. Limits are set for the maximum number of employees who could be dismissed per calendar month. The percentage of permitted dismissals is determined by government at six-months intervals. All dismissals exceeding these limits are considered invalid.
Greater emphasis is placed on controlling the overall volume of different types of credit and total credit expansion to the private sector. To this end, penalty (interest) rates on commercial banks' overdrafts with the Bank of Greece started to be applied for the first time in 1983.
Establishment of the national health system. Creation of regional primary-care health centres. Establishes free medical care, unifies all hospitals under a uniform regulatory framework, prohibits the establishment of new private hospitals and prohibits NHS doctors from undertaking parallel professional activities
Nationalisation of the country's largest cement company
The creation of the Organisation for Reconstruction of Enterprises (OAE) nationalised the highly indebted Under the OAE the state acquired control in a number of industrial sectors (20% in cloth industry, 50% in cement, 40% in paper meal, 50% in fertilizers, 100% in shipyard industry). By 1985 the OAE controlled 44 firms.
Nationalised all companies where the government controlled all or the majority of shares and all government-owned or controlled banks. Describes general terms governing the operation of public enterprises
Law was passed codifying the terms of take-overs and the management of ailing firms by the public sector. The Business Reconstruction Organisation (OAE) was set up as the main instrument of the new policy. The capital of the OAE amounts to Dr 5 billion subscribed by the State. The OAE has relatively easy access to bank credit to meet its obligations (notably to long-term credit by the National Bank of Greece). Shareholders, managers, major creditors, labour unions and the Greek Unemployment Fund can apply for protection under the law, on condition that the firm is in financial difficulties. The application is then studied. If approved, the firm is officially classified as "problematic" thereby being entitled to suspend debt repayments and interest payments for a period up to 36 months (interest payments are charged to the accounts of the firms, but actual payments are postponed). During this period the new management (including a new board of directors) appointed by the OAE assesses economic viability, makes proposals and undertakes the rehabilitation of the firms concerned. If the firm is considered viable a financial restructuring plan is usually immediately put into operation involving compulsory increases in equity capital by existing shareholders, the conversion of part of debt into equity and, normally, the rescheduling of the remaining debt.
The 1984 budget, adopted by Parliament in late 1983, substitutes tax credits for tax allowances on personal income, inheritance and gift taxation.
Ratifies the International Labour Convention 122 of 1964 promoting active employment policies.
Layoffs do not require approval from the Ministry of Labour any more. Now firms could theoretically dismiss up to 2 % of their personnel per month without government authorisation.
Establishes equal pay and employment terms for men and women by ratifying the European Social Charter of 18.10.1961.
The Bank of Greece began to set general rules for credit (instead of taking ad hoc decisions on individual cases). As a result, commercial banks and SCIs now enjoy a greater degree of freedom in the allocation of credit within the ceilings set by the Bank of Greece.
To facilitate consumer credit, an overdraft up to Dr 50 000 is permitted in individual checking accounts.
Commercial banks are allowed to accept deposits in convertible drachmas by foreign residents and are permitted to use these funds to extend loans to banks abroad.
A national collective agreement is signed, providing for full indexation of minimum salaries and wages.
Specifies the conditions on which an unemployed person can be admitted to an employment-strengthening programme.
Obligatory 6-month non-interest bearing deposits on certain imported goods. The deposits will be equivalent to 40 % or 80 % of the value of imports. These deposits will affect about one-fifth of total merchandise imports.
Commercial banks were for the first time authorised in 1985 to extend credit for housing.
Short-term (subsidised) interest rates for "privileged" borrowers have been increased. Short-term interest rates will be at least one percentage point higher than interest rates on savings deposits. In October 1985 the minimum lending rate on short-term loans was raised to 16 %, replacing a number of low preferential rates on loans to agriculture and small- and medium-sized industrial firms ranging between 12 and 14 %.
Marked increase in lending rates to the public sector.
Simplifies the interest rate structure – by reducing the large number of interest rates and narrowing the interest rate differentials between the various types of credit and to increase the whole range of interest rates in real terms. Commercial banks are now allowed to negotiate with their clients the level of interest rates for certain categories of loans and deposits.
Commission fees and charges for services have also been freed (previously these fees and charges were fixed).
Introduces provisions for the training of health practitioners and on the organisation of primary and secondary care.
National collective agreement is signed, providing for full indexation of minimum salaries and wages.
A modification of the wage-price indexation scheme (ATA), by excluding the impact of import prices and by adjusting wages on the basis of projected inflation instead of past price rises (including no increase in pay in January 1986 for high earning categories). Corrective adjustments will be made at the end of 1986 and 1987 if the increase in consumer prices exceeds projected inflation. A law was passed making the new system obligatory for both the public and private sectors up to the end of 1987 and severe penalties will be imposed on companies transgressing.
Introduces rules governing unemployment benefits, offers a definition of the unemployed.
The Decree provided for the ‘socialisation’ of OTE as a public utility company allowing employee representatives to participate in OTE’s Board of Directors.
The state-owned bank ETVA takes control of the shipyard
A once-for-all tax surcharge on 1984 company profits and income from self-employment and rents will also be levied in 1986.
The budget provides substantial tax reliefs (increase in tax credits, increased tax allowances for rents, etc.). Measures are taken aiming at making the tax system more efficient and comprehensive, inter alia through the use of single profit coefficients for the taxation of small business.
Introduces a tax on income from bank operations
Liquidation of new investment by EC residents was liberalised. This opened the way for extension of this provision to all OECD investors in 1986 and all investors in 1990.
The Government imposed a three-month price freeze to the end of January 1987, lifted in March
Banks are permitted to offer certificates of deposits – of a minimum denomination of Dr 5 million, from 3-8 month maturity at freely negotiable rates.
Rates and other terms of time deposits, savings deposits on notice and bank bonds are liberalised.
The maximum interest rate on short-term bank credit is abolished.
Banks and SCIs are permitted to offer 7-day to 3-month term deposits at freely negotiable interest rates.
Both the compulsory reserves on high interest-bearing bank loans and withdrawal ratios on long-term loans are reduced, from 18 % to 10 % and from 5-25 % to 3-10 % respectively. Withdrawals for the other categories of bank loans are lifted.
Commercial bank loans to exporters can be extended without prior authorisation by the Bank of Greece, if such loans are used to acquire foreign fixed assets and equipment for the promotion of exports. Exporters are allowed to use the factoring/forfeiting services of foreign financial and credit institutions and to pay for such services in foreign currency. Commercial firms and co-operatives are allowed to borrow in foreign exchange both from domestic credit institutions and from foreign ones, without prior Bank of Greece approval.
Total elimination of the reserve/withdrawal system.
The non-remunerated part of the primary requirement ratio on deposits with commercial banks is raised by half a point to 8 %.
The minimum interest rate of 21 % on short-term bank loans is abolished.
Blocked bank accounts of EC residents are suppressed. Accordingly, both the balances outstanding at the end of 1985 and the interests on such accounts earned between January 1986 and March 1988 can be freely repatriated.
Introduced the right of workers to participate in working councils at firm-level through their labour unions and specifies their competences.
It is aimed to harmonize Greek legislation with European Council Directive of 14 February 1977 (77/187/CEE). The main provisions are: rights and obligations of the new owner of the firm; Protection of workers' representatives and consultation with workers; Respect of collective contracts.
The income brackets to which the various ATA percentages applied were made more uniform, resulting, as happened, in real income gains for average wage earners of 1.5 %.
The import price effect was not subtracted for the portion of monthly earnings up to Dr 60'000, and in 1989 it was subtracted only from the ATA adjustment for the portion of monthly earnings of Dr 100'000 or more per month.
ATA was no longer mandatory for the private sector and non-government public sector employees, but served as a guideline for free collective bargaining.
The Ministry of National Economy announces that tax deductions for reinvested profits will remain in vigour for three more years. The tax deduction rate is fixed at 25 % for the 1989-1991 period, down from 50 % in 1988. Investments in advanced technology projects will enjoy a 35 % tax deduction.
Changes in personal income are announced. The number of tax scales is cut by half and the maximum tax rate is reduced by 13 percentage points to 50 %.
Corporate taxes on undistributed profits are reduced by 3 percentage points.
Introduced new rules governing subsidies.
The establishment of private television networks
Rates on current account and sight deposits are liberalised. Rates on loans to public enterprises and entities are liberalised as well.
All restrictions on short-term bank financing of commercial enterprises (including import trade) are lifted.
Banks are authorised to provide foreign exchange for relevant transactions. Exporters are permitted to open foreign exchange accounts covering their transactions abroad.
Specifies categories of employees entitled to receive unemployment benefits.
Introduced new rules governing vocational training.
Amendment to law on unfair competition is adopted, so as to impose more restrictive conditions for mergers in the services sector.
The strict and limited opening hours of shops that caused great inconvenience to consumers were abolished in 1990. Now all shops can freely fix their opening hours subject to 81 hours maximum per week, except for Saturday afternoon and Sunday.
Introducing a new system of grants and subsidies for promoting investment
Contractual arrangements can be negotiated between employers and employees for fixed-term contracts. The firms are now allowed to adjust employment upward when there are short-term increases in demand by hiring workers under fixed-term contracts.
Direct investment in EC countries by Greek nationals is fully liberalised.
The requirement on commercial banks to earmark a percentage of their deposits for the financing of public enterprises and organisations (9 %) is reduced, for new deposits, as from 1 November to 6 %, as from 1 January 1991 to 3 %, and will be abolished as from 1993.
Credit institutions are authorised to determine freely the amount of the loans they extend to individuals and legal entities for the financing of fixed assets (prior limit of 70 % of the expenditure), provided these loans are not covered by any state guarantee and the interest rate is freely determined.
Commercial banks are authorised to underwrite new share or bond issues, without prior approval by the Bank of Greece, provided that any part of the issue not absorbed by the public is sold by the bank within 12 months of the date of underwriting.
Credit institutions are authorised to invest in existing corporate shares or units of mutual funds without prior approval by the Bank of Greece, on certain terms and conditions. Previously, they were allowed to invest in new share issues only.
The Consignations and Loan Fund is allowed to invest without restriction and to raise capital on an unlimited basis on the interbank drachma money market.
Commercial banks are permitted to purchase real estate, without prior approval of the Bank of Greece
Lifting the prohibition for the establishment of private clinics, hospitals and nursing homes.
Established a framework in which the state and the social partners can conduct collective negotiations over labour relations, and the terms and conditions governing salaried work.
Orders a minimum 'safety personnel' to work when industrial action takes place in certain public services and industries.
A new law was introduced in 1990 defining the right to strike and providing penalties for those transgressing the law. Under the new law workers (including public sector employees) and even union officials can be fired if the strike has been declared abusive or illegal by the court.
Formally establishes a 5-day working week in the private sector.
Abolishes state intervention and financing of trade unions.
The duration of unemployment benefits is raised from 7 to 12 months.
The ceiling for calculating contribution rates was raised from Dr 220'000 to Dr 300'000 and in the public sector the maximum pension has been fixed at Dr 400'000 per month (about three times the average wage in all sectors).
Contribution rates for private sector employees (35.45 % in 1990) will gradually be raised by 3 percentage points, two-thirds of which will be met by employers.
Civil servants and other public sector employees recruited after 1990 will have to pay a contribution rate of 5.75 % and 7.5 % respectively (civil servants recruited before continue to be exempted and other public sector employees to pay minimal rates - less than 3 % on average).
Receivers of minimum pensions who are working see their pension level now reduced.
Pensions above the minimum level are now linked to civil service wage increase, instead to ATA (private sector wage regulation).
The relation between years of service and pension benefits becomes non-linear for those retired after 1983. Now it corresponds 1/50 for the first 25 years, 2/50 for the 26-30 years, and 3/50 for 30-35 years. From 35 years on full pension is granted.
Lengthening of the minimum contribution period giving a right to pension: in the private sector from 13.5 to 15 years; and in the public sector to 25 years (from 15 for women, it was already 20-30 for men).
Benefit levels linked to earnings in preceding goes from 2 to 5 years in private sector.
Criteria for granting disability pensions moves toward medical instead of "temporary lack of job".
Minimum age for receiving a full pension in the private sector goes from 59 to 60, always with 35 years of contributions.
Public sector retired people no longer can draw a pension upon retirement, they will now have to wait until the age of 58 for women and 60 for men. Up to now many women and men started receiving pensions at the age of 33 and 43 respectively.
Stipulates that any change, directly or indirectly, affecting insurance provisions by law cannot become part of a collective agreement between employers and employees.
Includes ways to curb tax evasion and changes the terms governing income tax and indirect tax. Manufacturing and handicraft companies located in Area A (according to Law 1892/1990) that make investments by 31 12 2004 for the modernisation of their production equipment are entitled to exclude from taxation and enter into a tax-free reserve an amount equal to 60 % of the cost of the investment. The annual allocations are limited to 60 % of profits
Included tax incentives to facilitate investment and job creation.
Tightens competition law, providing restrictions to avoid the abuse of dominant position.
Relaxes restrictions to firm concentrations. Strengthens consumer protection.
In August 1991, it was announced that all remaining price controls and market interventions, including the fixing of profit margins for various trades and products – which was recognised to be a dubious undertaking – would be abolished by 1992, and to this end a law was presented in Parliament in May 1992.
Introduces a new stricter system of student assessment and establishes complementary teaching as help for pupils in public education.
The Committee and the Subcommittees of loans to small and medium-sized firms are abolished. Banks are now solely responsible for the approval and granting of loans to small and medium-sized firms.
The rules governing the granting of loans in foreign exchange to legal and natural persons for their business activity are simplified and codified into a single text.
The rules governing the granting of drachma loans from credit institutions operating in Greece are simplified and codified into a single text.
Payments made through cards by Greek residents travelling in EC countries are liberalised.
The 5 months maximum term of credit extended by firms that have been financed by the banking system to other firms buying their products or services is abolished.
Commercial banks, mortgage banks, and the Agricultural Bank of Greece are authorised, under certain conditions, to issue credit cards and place them through other banks, without prior approval of the Bank of Greece.
Mortgage banks are authorised to finance banks in the service industry for the acquisition of fixed assets.
The Agricultural Bank of Greece is authorised to expand its operations to all categories of loans allowed to commercial banks.
Imposition of a tax on interest income from bank deposits.
Abolition of the earmarking of a share of new deposits for financing public enterprises and entities.
Ceilings per bank regarding bond issues are abolished. Banks are authorised to buy shares in the Securities Depository S.A.
Investment banks are authorised to accept drachma deposits of durations up to 12 months, with the exception of sight and savings deposits. Also, they are allowed to extend loans for working capital to manufacturing, hotel and mining enterprises.
Abolition of the 6 months maximum time deposits in convertible drachmas by foreign residents with commercial banks.
The National Housing Bank is allowed to accept personal current deposit accounts.
Banks operating in Greece are authorised to provide foreign exchange for the servicing of loans in foreign exchange by public enterprises and public organisations subject to prior approval of the Bank of Greece.
Investment banks are allowed to carry out operations in foreign exchange related solely to their business.
A new law was voted, replacing compulsory arbitration, where decisions typically represented government views, by a more flexible and independent system. The new law provides for the creation of a special board, on which would sit three independent professors in addition to three employers' and three union representatives as well as one Ministry of Labour official and a chairman elected by the rest. This board will be responsible for the creation of a group of independent mediators and arbitrators, recognised for their professional qualifications.
Employers and labour unions signed a two-year collective agreement for private sector employees providing for a marked slowdown in wage growth from over 20 % in 1990 to around 10 % in 1992.
Abolishing ATA, or wage setting system regulated by the state.
Makes possible the introduction of a fourth shift (up to now it was practically impossible), thereby permitting factories to operate on a 24-hour basis seven days a week.
The criteria for classifying workers in hazardous occupations (enjoying big pension advantages) have been tightened.
Strict norms have also been introduced for invalidity pensions so as to prevent the widespread abuses of the past, and within the next couple of years all invalidity pensions will be reassessed.
In 1991 19 companies were privatised or liquidated, the great majority of which were small industrial firms, with a few in the service sector, including a small bank. Most of the new owners are Greek companies, some of them in the same business, and only four were bought by foreign investors.
Establishes a legal framework for the privatisation and liquidation of state-owned companies
Workers receiving an unemployment benefit are now eligible to a training programme under certain conditions.
Establishes the Organisation for Vocational Training to facilitate the reintegration of workforce in the labour market.
Restrictions on entry to the auditing profession are abolished.
Following the liberalisation of the oil sector in 1992, competition has in fact intensified in retailing. It has remained limited in refining, however, reflecting the impact of statutory regulations.
Banking hours are extended to 17.00 hours, banks may open on Saturdays, and basic services are also allowed on Sundays in tourist resorts.
Shopping hours are almost fully liberalised. The right to remain open was extended to Saturday afternoon, and on Sundays in tourist areas (which comprise the majority of Greece).
Establishes a system of university assessment.
Reorganises high education in two circles of studies, introduces a system of scholarships, enables the development of postgraduate programmes.
Introduces ongoing training for teachers and establishes a system of vocational training (IEK).
Abolishment of the minimum deposit rate.
The solvency ratio (capital adequacy ratio) was fixed at 8 %. This ratio applied to all banks with the exception of the Agricultural Bank, for which a transition period to 1999 has been provided. ETVA is also exempt.
The minimum capital for the creation of banks was raised to more than twice the amount fixed by the second banking directive of the EU.
The large exposure directive, limiting the size of loans to individual firms and groups of firms and requiring banks to report them to the supervisory authority, was introduced in 1993.
Entry barriers for private entities into the financial markets are fully removed.
Banks can no longer accrue interest (and show it on the revenue and asset sides of their balance sheets) on loans not serviced for more than 12 months, and cannot grant new loans to finance overdue interest.
The interest rate on convertible drachma deposits is liberalised.
The ceiling in relation to own capital for banks' qualifying equity participation in all non-financial companies was fixed at 60 % of own capital and, in a single firm, at 15 %.
A system of banking supervision (lacking until that moment) is set up through the central bank.
In mid 1992 capital movements for the acquisition of real estate and long-term financial assets abroad were also freed.
Export firms are allowed to use their foreign exchange proceeds for re-export operations.
At the beginning of 1992 forward foreign exchange operations, swaps, etc. were liberalised
In July 1992 the Bank of Greece abolished all remaining restrictions on the transfer abroad of funds pertaining to current external transactions.
Opens the health system to private sector. Establishment of a mixed health system whereby patients can choose the health service in the public or private sector. Allows private sector diagnostics and patient's choice of private hospitals, obliges all hospitals to publish balanced budgets and annual fiscal reports.
Replacement rate for workers of industrial sector is reduced.
Civil servants will start paying contributions for primary pensions (3 % in 1993, rising to 6.7 % in 1995). In the rest of the public sector minimum contribution rates are set for employers at 22 % and employees at 11 %.
A levy of 1 % was imposed on pensions of Dr 100'000 per month rising progressively to 5 % for pensions of Dr 400'000 and above.
Contributions of employees are increased by 0.2 %.
Contribution rates to the Social Insurance System (IKA) covering the private sector are raised for employers from 12.5 to 13.3 % and for employees from 5.8 to 6.7 %.
The primary pension to earnings ratio is reduced from 80 to 70 %.
For public sector employees, the minimum period of work giving right to pension on retirement is raised from 32.5 years to 35 years.
For the uninsured the pensionable age was lowered from 68 to 65.
For those who have worked for more than 25, but less than 35 years, the minimum age for receiving a pension is raised from 60.5 to 65.
Sale of the shipyards to the Peratikos family
Corporation tax rates are unified and lowered to 35 % from 42-50 %
Personal income tax rates are lowered, with the top marginal rate falling from 50 to 40 %
Entitlement age for professional education leave is decreased from 18 to 15.
Introduces tax benefits supporting employment creation at local level.
The production of electric energy by private power stations is permitted.
Marriage leave is increased to five days, and maternity leave to 16 weeks from 15 weeks.
Capital movements with EC countries are further liberalised. Companies are allowed to borrow in foreign exchange without restrictions. All forward transactions of more than three-month's duration are now allowed. Investment abroad in financial derivatives is now permitted, as is investment in foreign securities with a maturity of less than one year. Only a few restrictions on short-term (3 month) capital movements remain.
Adoption of rules and regulations setting limits to credit institutions' large exposures (Large exposure directive). All commercial banks must submit statements periodically regarding their financial position, including the claims and commitments of foreign branches.
The ceiling on credit card debits is raised by one-third, to Dr 300 000, and the same limit is set for personal loans.
The Bank of Greece determines the terms and conditions for the authorisation of non-credit institutions to operate as intermediaries on the drachma and exchange interbank markets.
The minimum interest payable by banks on saving deposits is freed.
The 40 % maximum capital share in Greek banks by investors from non-OECD countries is abolished to enhance competition in the banking sector.
A structure of security markets is renovated, widened and enforced.
Non-domestic residents are permitted to borrow in foreign exchange for the construction or repair of assets located in Greece.
The Bank of Greece completely abolishes commercial banks' compulsory investment into government paper.
As from 1 September 1993 an additional social security contribution of 0.5 % paid by employers and of 0.2 % paid by employees will be levied to finance unemployment related programmes.
The partial privatisation of OTE (the Greek telecommunications public monopoly) is approved by Parliament.
Privatisation of the Fix beer company. Full privatisation, sale of brand name by the National Bank of Greece
Introduces tax exemptions to boost private investment, reduces tax on banking operations
Vocational training leave is now obligatory in all firms employing 50 persons or more (previously 100 persons or more) and the age of students qualifying is lowered from 18 to 15 years
Brings back the fundamental provisions of the prior system of public healthcare.
Brings back government financing of trade unions.
A single major privatisation has been achieved in 1994, the Neorion Shipyards on the island of Syros.
A top rate of 45 % is added to the personal income tax scale.
New coding of tax regulations regarding income tax and separate taxation of income from the sale of real estate and mobile assets, automobiles, business and salaried services. Introduction of income specification on the basis of objective assessment of spending (criteria for the assumption of income levels).
Revision of the “objective criteria”. According to the revised system, the income of the self-employed (including farmers) is evaluated on the basis of certain criteria associated with the size and nature of the taxpayer’s business. Taxation is based on the imputed income, if the latter is higher than the declared income. Government bonds are tax exempt, new rules on declaring and paying tax, new arrangement for tax payments in arrears, new rules on tax controls.
Legislation established a general merger control procedure (threshold annual turnover ECU 50 million or market share of 25 %). In addition it re-organised the control mechanism for competition enforcement, whereby two control stages are provided. In the first stage, the competition committee takes a decision based on competition criteria and in the second stage, the Ministers of National Economy and Commerce can decide to permit mergers disallowed by the committee. The committee also has the power to levy fines and introduce provisional measures.
A gradual increase in reserve requirements from 9 to 11 % was introduced between August and October 1995 and the base was broadened to cover liabilities (up to 2-years maturity) to non-residents, including drachma and foreign currency deposits, and loans from financial institutions.
Establishes the protection of bank deposits and transposed Directive 94/19/EC, changed the rules governing the operation of the Stock Exchange
Collective agreement increased entry-level minimum wage in the private sector by 4 % on 1 January and 1 July, and included a catch-up clause in the event inflation exceeded 8 %.
Consolidating the system of employment incentives and unemployment benefits through the introduction of a system of multiple-use vouchers, thereby increasing the flexibility of the system by permitting the unemployed to choose to apply the money value of the voucher to either training, a wage subsidy, or unemployment benefits.
Ten firms have been sold over the past two years, including Greece's second largest privatisation (after the AGET Heracles Cement company) during 1995. This operation was for the Cassandra Gold Mines, which were sold to TVX Gold for Dr 60 billion, and included assurances regarding future investment and job guarantees. Though five of these ten firms have been from the Industrial Reconstruction Organisation (IRO) umbrella, the sale of the remaining firms and the dissolution of IRO is being hampered by legal problems. Government delay has also resulted from the bankruptcy (and re-take-over by IRO) of two recently privatised firms (Kavalla Plastics and Eleusis Shipyards).
Increases the participation of enterprises in the vocational training system, by permitting firms with 150 employees to participate (previously the limit was 300 employees)
Introduced employment subsidies as well as tax benefits for employers who hire new workforce.
Brokerage houses will only be able to trade up to the limit of their equity capital
A guarantee fund to cover settlement risk will be created from transaction-based contributions
Control will be enhanced through internal auditing of brokers overseen by the Capital Markets Committee and traded firms will be required to issue timely audited half-yearly statements.
Lags in clearing transactions – which is one of the root causes of the lack of transparency – will be greatly reduced following the full dematerialisation of shares
Derivative trading is envisaged to commence on the stock exchange
The national collective agreement between representatives of employees and employers in the private sector provided for increases in the entry-level minimum wage of 3.5 % on 1 January and 4 % on 1 July, and included a catch-up clause in the event inflation during 1996 exceeds 6.5 %.
Unemployment Benefit is increased by 10 %. Unemployment Benefits set at a flat rate of Dr 2'710.
A new means-tested old-age pension supplement is introduced.
Introduction of early retirement for older unemployed workers.
Public enterprises are being transformed into a société anonyme. New managers are being hired through public and competitive tenders. And each enterprise is preparing strategic and business plans (often with the assistance of international consulting firms). Management independence is to be strengthened through management contracts based on performance criteria consistent with the approved business plans. Almost all public enterprises have been included in this procedure (about 40), with the notable exception of the electricity monopoly (DEH) which has been granted a grace period to complete its current restructuring and to implement the new national electricity law.
Sale of Skalistiris Mining. Full privatisation
The National Bank of Greece – which is by far the largest bank in Greece and controls about 30 % of the deposit base – made large strides in clearing its non-performing loan portfolio and debt equity participations with loss making enterprises. It wrote off Dr 117 billion by using provisions and not paying a dividend in 1997 and plans to clear the remaining non-performing loans amounting to approximately Dr 200 billion (0.7 % of GDP) before the end of 1997. Moreover, it continued to make progress in selling non-financial interests. The Greek Bank for Industrial Development (ETBA), under its restructuring and recapitalisation programme, is in the process of settling non-performing loans amounting to Dr 328 billion (1.1 % of GDP).
Sale of Chalkis Cement Company. Full privatisation
A small amount (8 %) of the national telephone company, OTE, was sold on the Athens stock exchange in April 1996, raising approximately Dr 128 billion (equivalent to US$550 million)
New rules governing vocational training and creation of a special account for employment and training.
Introduction of new restrictions on shop opening hours.
Establishes a unified type of high schools, changes the system of exams for entry to high education.
Establishes day-long nursery and primary schools.
A new system of hiring teachers based on exams and not waiting lists.
Abolishes the special tax on banking operations
Liberalisation of foreign exchange deposits for Greek residents and reduction of required reserve requirement on these deposits from 70 % to 12 % (similar to that on drachma deposits).
The Bank of Greece introduced a new two-tier interest rate in the interbank market.
Parliament approved legislation granting Central Bank independence and making price stability its primary objective.
Daily hospital rates would be raised for the first time since 1992; the basic rate is envisaged to be increased by 20 % (12.5 % if one takes account of the ‘‘extras’’ that were usually added to the basic rate under the previous system).
Several large charges placed on pharmaceuticals to finance the National Drug Institute.
The Government agreed to a second partial privatisation of OTE, the Greek Telecommunication Corporation
Privatisation of Elefsina Shipyards, raising Dr 30 billion.
Bank of Attica was sold to a social security fund in early 1997 (though management will be maintained by the state-owned Commercial Bank for five years)
Full privatisation (resale after the Peratikos family left) of Eleusis Shipyards
An employer who becomes active in one of the areas which are considered pockets of unemployment will be able to pay new recruits wages lower than those stipulated in branch agreements, but not lower than the National Collective Agreement minimum, for a period of one year, up to 31 December 2001.
Establishes Local Employment Agreements at the regional level in which local government and social partners engage in job-creating activities and work, and strengthens subsidies to job creating programmes.
Early activation for the unemployed aged 20 to 27 within six months of unemployment through wage subsidy programmes.
Opening of the Greek air traffic market to competition, including the removal of any constraints on charter services and full access to the Greek islands, as well as the elimination of Olympic Airways’ monopoly on ground handling.
Measures for newly established enterprises, tax incentives and accelerated depreciation for existing enterprises of growing size, and high technology investments or investments using alternative energy resources or protecting environmental resources. The new legislation reduces investment incentives, classifies investors into two categories – “new” and “old” – and differentiates the incentives granted accordingly. The “new” investors can qualify for cash grants, soft loans, leasing subsidies or tax allowances. The “old” investors can only be granted tax allowances and soft loans. A further distinguishing feature of the new law is that the amount of cash granted is linked to the number of jobs being created.
Regulation of informal forms of employment (teleworking, piece work, work at home).
Employers retain their ability to impose unilaterally a system of rotating work in the event that restrictions on their activity requires this, as the law has specified up to now. The innovation is that this option will be exercised after consultation with workers' statutory representatives - permission from the Prefect is no longer a precondition.
Part-time employment can be agreed, calculated not only on a daily or weekly basis, but on a fortnightly and monthly basis as well.
In the event that an individual part-time employment contract is not reported to the Labour Inspectorate within eight days, the employment is considered to be full time.
There will now be legislative provisions on the obligation to inform workers' representatives of the number of people employed part-time and the prospects for full-time employment within the enterprises. This obligation was already provided for under the 1993 National General Collective Agreement.
The definition of part-time employment is extended by law to include two new forms of part-time employment. These are "rotating work" - alternation of workers (individually or in groups) providing labour, without a break in company operation - and "intermittent work" - periodic employment without prior determination of specific periods of work. As a result, special guarantees and the protection provided by legislation for part-time work are also applied to these forms of work.
Allows "private employers' advisory bureaus" (IGSE s) to be set up for the purpose of finding, on the employer's behalf, persons - Greek or foreign - to fill job vacancies. To set such bureaus up, it will be necessary to obtain approval and permission from the Minister of Labour, following certification from the National Certification Centre (EKEPIS).
A bill was passed widening the access to the Greek stock market to new enterprises. It replaced the obligation of 5 consecutive years of profits by the mandatory publication of balance sheets for 3 consecutive years prior the date of application for listing.
Introduction of a positive list of pharmaceuticals which limit drug reimbursement by the social security system to some 3'000 drugs.
Providing for the conclusion of "local employment agreements" which will set wages lower than those stipulated in branch agreements, but not lower than the National General Collective Agreement minimum, with no time limitation.
Legislation introduced that required labour regulations in loss-making public enterprises to be made more flexible. The Government would act unilaterally if negotiation with public sector unions fail to yield agreement within six months.
For enterprises employing more than 50 workers, employers can agree with a trade union (by collective agreement) or with the works council to increase the working day to nine hours for a period of up to three months, or to 10 hours for a period of up to six months, provided there are objective, technical or operational needs. For enterprises employing between 10 and 49 workers, employers can agree with a trade union or the "union of persons" to increase the working day to nine hours for a period of up to two months. The bill lays down the conditions under which these arrangements can be made. Exempted from the new provisions are Olympic Airways and the other public corporations now in recovery, because special laws apply to them.
Creation of a new contributory scheme for farmers and agricultural workers to improve their current flat-rate tax-financed basic pension.
Pensioners who work and are below the age of 55 will not receive their pension, while those who are above the age of 55 will receive only 30 % of their pension for the amount of pension exceeding Dr 200'000 per month (which effectively excludes over 80 % of all private sector pensioners from any cut in pension from this measure).
Low income pensioners can access the mean-tested pension supplement, if they are above the age of 65.
Survivors’ pensions will henceforth be provided to both sexes – males had previously not been eligible. However, the survivor's pension will be provided for only three years unless the survivor is without work or pension. In which case after the third year the survivor would receive 50 % of the survivor’s pension if above the age of 65 and nothing if below the age of 65. This measure will not be applied retroactively to women but men can apply for survivor's pension if they qualify.
Reductions in segmentation of pension funds: the overall expenditure will increase because of the gradual convergence of pension benefits to the more generous pension funds in the groups. First, a new fund will replace the three large primary funds for the self-employed. Second, the 12 supplementary funds for civil servants and the 48 funds for rural lawyers, respectively, will be unified. Third, the 7 supplementary funds experiencing financial difficulties will be merged with the large supplementary fund for private-sector employees.
Sale of 97 % of the shares of the Bank of Crete by the Greek State to the privately-owned Euro Bank for Dr 93 billion.
Sale of 51 % of the shares of the Bank of Central Greece by the ATE to the privately-owned Egnatia Bank.
Sale of 33 % of the shares of the General Bank by the Greek Army’s pension fund to the Keine Vorschläge insurance group and other institutional investors for Dr 14 billion.
Athens Stock Exchange – partial sale of stock
Sale of 37 % of the shares of the Bank of Macedonia-Thrace by a group of state-owned banks to the privately-owned Piraeus bank for Dr 27.3 billion.
Introduces new regulations governing the assessment and taxation of income, including objective criteria for the presumption of income, as well as the taxation of deposits and profits from construction.
Establishes tax incentives for job-creating investments.
Reduction of prior qualifying work period for early activation for the young and extension of age groups (from 20-27 to 18-29), introduction of subsidised work experience programmes and training for long-term unemployed irrespective of age.
Requirement of account unbundling in gas activities. In response the Public Natural Gas Corporation (DEPA) – a vertically-integrated monopoly of the gas sector – unbundled its accounts in 2001.
The law provides that, on 19 February 2001, consumers totalling 30 % of demand, including all customers with annual consumption over 100 GWh, will become eligible to choose the supplier.
Changes the merger control provisions by: i) abolishing the post-transactions notification provisions of concentrations; and ii) increasing the minimum market share threshold from 25 to 35 % beyond which firms are obliged to seek approval by the Competition Committee for mergers. Furthermore, the new law assigns a more pro-active role to the Competition Committee by allowing the latter to deliver opinions on its own initiative and not just on demand. The personnel of the Committee was significantly increased, but it is still understaffed in international comparison.
A more pro-active role to the Competition Committee on merging issues by allowing the latter to deliver opinions on its own initiative and not just on demand.
Establishment of regulatory responsibilities for the gas sector with the Regulatory Authority of Energy.
The bill is aimed at harmonizing Greek legislation with the EU Directive on the approximation of the laws of the Member States relating to collective redundancies (98/59/EC). A fifth paragraph is appended to Article 5 which states that "the procedure for collective redundancies outlined in the present Article does not apply to workers who are dismissed due to termination of the operation of the enterprise or establishment".
Failure by the enterprise, which has taken the decision on collective dismissals, to notify the employer does not release it from its obligation regarding information, consultation and notification.
Fixed-term or open-ended collective agreements within the public sector enter into force on the date they are published in the Government Gazette and expire when their agreed term has elapsed or when they are terminated. Under Article 9 of Law 2738/1999, an open-ended collective agreement may be terminated one year after its entry into force. A collective agreement may be terminated sooner than one year after its entry into force or before expiry only in the event that the conditions existing when it was concluded have changed significantly.
Setup of a new body of labour inspectors with enhanced capacities.
First law on collective bargaining for the public sector. Collective agreements may contain provisions related to: placement, movement, transfer or posting of the employees included under the provisions of the law; employees' education and training - preliminary, intermediate, advanced training, branch or general vocational training, and continuing training; health and safety measures, provided that obligatory legal rules are not affected; social insurance, apart from pension-related matters; exercise of trade union rights, provision of trade union facilities and the manner in which trade union dues are deducted and paid to the unions; matters related to leave in general; issues regarding working time, on the condition that provision of services to citizens is not restricted or impaired, and that the health and safety of persons or protection of public interests are not placed in jeopardy; and interpretation of the terms of collective agreements.
General collective agreements in the public sector which regulate the overall terms and conditions of employment of employees covered by Law 2738/1999 are to be drawn up following negotiations between these employees' most representative third-level trade union organisation (i.e. confederation) and the state at the central level. Special collective agreements may regulate all issues which by their nature need to be addressed more specifically or have to do with particularities and particular working conditions, on the condition however that they have been accepted for inclusion in the general collective agreement. Such agreements are to be drawn up for Ministries, supervising public entities and independent public services, following negotiations carried out between the competent public sector bodies and the most representative second-level trade union organisation (i.e. federation). In cases where there is more than one representative second-level sectorial or occupational trade union organisation in the respective workplaces, bargaining is carried out between the competent body representing the state and all second-level trade union organisations (on the basis of the positions the latter have formed in common). For negotiations on issues concerning first- and second-level local authority employees, representatives of the Central Union of Municipalities and Communes of Greece (KEDKE) or the Union of Prefectural Governments of Greece (ENAE) respectively shall also be present at the negotiations. In the event that negotiations on drawing up public-sector collective agreements are unsuccessful, the parties concerned may request the services of a mediator. The mediation process begins when the parties concerned lodge the appropriate request, which they may submit jointly or separately within a time limit of five days after the completion of negotiations which resulted in disagreement. If, in spite of mediation, the parties do not reach an agreement within 10 calendar days, the mediator has the right to submit its own proposal, which the parties are requested to accept or reject within 10 days of the proposal's announcement.  "
The mean-tested supplement was increased by about 50 %.
Increase in the calculation base for receiving invalidity pensions for individuals who entered the workforce after 1993.
Sale of the Public Petroleum Corporation: 30% in two stages.
Athens Water and Sewerage Corp. (EYDAP). Sale of stock
Sale of a fourth tranche, 14 %, of the Hellenic Telecommunications Organisation (14%)
Sale of Olympic catering (first and second stake, 32 %), through the Athens Stock Exchange
Partial privatisation of the services division of the Athens Water and Sewage Company, through a public offering of 30 % of the share capital.
The proceeds from the sale of unlisted shares are subject to a 5 % special income tax. The law labelled the 5 % tax as an income tax by inserting it in the Income Tax Code under special income from business.
Payment of a monthly income supplement of GRD 30'000 (€ 88) for long term unemployment hired to work part time for more than 4 hours a day, for as long as the relationship lasts, up to a maximum of 12 months.
Reorganises employment promotion organisations and introduces new tax incentives for job creation.
A reduction of employers’ taxable profits by an amount equal to 50 % of the employers’ social security contribution for each new hire, on the condition that nobody is laid-off.
Establishes subsidies for the social security contributions of minimal wage workers, creating incentives for their hiring.
Introduction of Employment Promotion Centres providing individualised services to the unemployed.
The thresholds beyond which redundancies are considered to be collective are changed. Abolition of the “two % rule” on collective dismissals: upper limit for the number lay-offs per month is raised slightly for firms employing between 50 and 150 persons. In fact, enterprises employing 20-200 workers, a threshold of 4 workers per month has been set.
Starting in January 2000, the length-of-service requirement, with the same or different employers, for entitlement to a fifth week of annual paid leave has been reduced from 12 and 14 years, depending on circumstances, to 10 and 12 years. The total length of maternity leave is increased to 17 weeks, through granting one additional week of leave after confinement. In addition, the current entitlement of mothers or fathers to interrupt the working day, arrive late or leave early is extended to adoptive parents of children up to six years of age.
Abolishes the tax on revenue from banking operations
A reduction of the weekly overtime which is at the employers’ discretion (“unregulated” overtime) from 8 to 3 hours per week (while the contractually agreed workweek of a full-time employee remains 40 hours).
The obligation to work 5 hours per week overtime is abolished. There will be a 50 % across-the-board increase in pay for overtime exceeding 40 hours per week, up to 120 hours annually. Illegal overtime exceeding maximum working hours will be paid at a rate of 150 %.
Setting flexible working time at 138 hours annually, which can be distributed so as to have more working hours in specific periods and fewer in others. Where flexible working time organization are introduced, the maximal average number of working hours per week is 38 (from previously 40). Agreement between workers and management is needed in order to implement periodical increases and decreases in working hours over the course of the year. Reduction of the maximal allowable overtime at the employer's discretion and substantive increase in overtime premiums.
Introduction of opportunity to combine unemployment benefits and part-time work for a while: a new “making-work-pay” measure to encourage part-time employment; the measure provides for payment of partial unemployment benefits (around one third of the minimum unemployment benefit) for a period of one year for the long-term unemployed obtaining part-time work (of at least 4 hours per day). In addition, part-timers working less than 4 hours per day are able to claim an hourly wage augmented by 7.5 %, if they are paid on the basis of the minimum wage.
Article 12 of the new EGSSE finalises the unanimous decision of the social partners that the remaining social security contributions of long-term unemployed people approaching retirement age should be covered by the LAEK. It has also been decided to ask the government and political parties to provide legislative regulation of this decision, thus ensuring its implementation.
2 % reduction of the employer's contribution to the main pension of the Social Insurance Institute (IKA) in favour of those employees who fall under the scheme of full-time dependent employment and are paid with salary or day labour, as long as they work all the working days of the month. The reduction is given for those whose monthly payment is not over of 200'000 drachmas (586.94 €) without overtime.
A new legislation on the labour market comes into force. It reduces employers' social security contributions for low-wage workers.
Full and Partial Pensions can be claimed after 35 years of insurance contributions, and at age 55 instead of 58 and 53 instead of 56 for full and partial pensions respectively, by workers having paid contributions for at least 7'500 working days.
Long term unemployed aged at least 60 for men and 55 for women and whose right to take full pension from IKA falls short within a period of five years, are entitled to ask for the optional continuation of their insurance until they complete the minimum contributions in order to acquire full pension rights. The beneficiaries are insured for main pension to IKA and the Supplementary Funds regardless of the time entrance and the time pause of their liability insurance; they obtain an unemployment card which is registered every month. The costs of this measure are covered by the branch "Account for Employment and Vocational Training" (LAEK).
Sale of the Hellenic Vehicles Industry (43%)
Sale of the Hellenic Bank of Industrial Development (25%)
Changes for the self-employed to the presumptive criteria for assessing income.
Increased annual tax free allowances for low-income wage, salary earners and pensioners
Implementation of a wide-range educational reform programme with various measures specifically targeted on tailoring education and training (vocational and continuing) to the labour market needs
Provision is made for payment of a monthly income supplement of GRD 30'000 for long-term unemployed people hired to work part-time for more than four hours a day, for as long as the employment relationship lasts, up to a maximum of 12 months.
Wage subsidy measures for the unemployed aged 45-64.
Individual action plan for young and older job seekers including assessments of the individual's competences and appropriate activation measures if necessary.
The Greek telecommunication market is fully open to competition since 1 January 2001.
Licensing for second and third generation mobile telephony.
Workers in ailing enterprises should be made aware that the limit beyond which redundancies are regarded as collective redundancies has been changed, and special formalities are now required.
The law has officially introduced the practice of temporary employment in Greece. Temporary Agencies are required to obtain a special permission of constitution and operation from the Ministry of Employment & Social Protection. Employment by an indirect employer under a contract of temporary employment is not permitted (1) when it replaces workers who are exercising the right to strike; (2) when the indirect employer had carried out collective dismissals of workers with the same qualifications in the previous year; and (3) when the indirect employer is subject to the provisions of Law 2190/1994 regarding 'Establishment of an independent authority to select staff and regulate management issues. Every TWA is obliged, in order to obtain an operating licence, to submit two 'indemnity bonds' from banks as a financial guarantees, the first to guarantee the temporary employees' remuneration and the second to guarantee their social insurance contributions. The amounts of the indemnity bonds shall be readjusted every two years, by decision of the Ministry of Labour and Social Security, depending on the number of temporary employees taken on by the company, and in such cases the companies must submit supplementary indemnity bonds within three months, so that their licences are not revoked. Employment under a Temporary Agency contract may not exceed 8 months. Written renewal with the same indirect employer is permitted, on the condition that the total length of such renewal does not exceed 8 months, unless the existing employment is converted into an open-ended contract. In the event that the employee continues in the employment of the indirect employer after the contract expires and the contract is renewed for a period of over two months, the employee's contract of employment with the TEA shall be deemed to have been converted ipso facto into an open-ended employment contract between the employee and the indirect employer. The pay of an employee under a Temporary Agency contract cannot be lower than that set by the sectorial, occupation-based or enterprise-level collective agreements applicable to the indirect employer's staff, and in no case may be lower than that provided for the current NGCA.
The Bank of Greece reduces the minimum reserve requirement for commercial banks from 12 % to 2 %
Workers employed for under four hours daily and receiving minimum wages are entitled to a 7.5 % pay increase.
There will now be a 50 % across-the-board increase in pay for overtime exceeding 40 hours per week, up to 120 hours annually.
Illegal overtime exceeding maximum working hours will be paid at a rate of 150 %.
With regard to working time flexibility arrangements, it is provided that in order to implement periodical increases and decreases in working hours over the course of the year, there must be agreement between workers and management. Employers cannot impose such changes unilaterally in the context of their managerial prerogative. The law requires either: an enterprise-level collective agreement; agreement between the employer and the enterprise-level union; agreement with the works council; or agreement between the employer and an employees' association consisting of at least five workers in enterprises employing at least 20 people. "Flexible" working hours are set at 138 annually, and provided the arrangement is agreed upon, they can be distributed so as to have more working hours in specific periods, and fewer at other times during the same year. Where flexible working time arrangements are introduced, the maximum average number of working hours per week is 38.
Payment of benefits to long-term unemployed people who still need to obtain five years' worth of social insurance stamps in order to acquire full pension rights.
Sale of 15.3% of Public Power Corporation.
The electricity market was only partially privatised in 2001, with the state retaining the majority stake of Public Power Corporation.
The CIT for non-listed companies will be reduced from 40 % to 37.5 % and that for general and limited partnerships from 30 to 25 %.
A reduction in the highest PIT rate from 45 % to 42.5 %, accompanied by an adjustment of all tax brackets by 5 % and an increase in the income tax allowance by GRD 100 000.
An increase in tax credits for families with three or more children. Moreover, expenses for the purchase of personal computers and internet subscriptions will become partly deductible from the tax base.
Reduction of employers’ contribution by 50 % for recruiting older unemployed.
Reduction of employers’ contribution by 50 % for recruiting young unemployed.
The domestic ferry market was liberalised in 2002 (before the expiration of the derogation period). All powers and responsibilities of the Regulatory Authority of Maritime Transport, in terms of competition rules, including imposing fines, were transferred to the Competition Committee in order to obtain a more effective and efficient monitoring of the sector.
The introduction of Law 3054/2002 on the organisation of the mineral oils market is expected to enhance contestability in the refining sector, most visibly through enabling consortia or co-operatives of service stations to obtain oil products directly from refiners, or from imports provided they can meet storage obligations. Under the 2002 law, access to stock capacity can be arranged by a regulated third-party access tariff.
Some progress towards strengthening the links between universities and enterprises through initiatives supporting the establishment of spin-off firms.
Obligation of employer of informing and consulting workers about changes deriving from the transfer of the firm. Rights contains in previous contracts remain unchanged.
Includes provisions for the establishment of Venture Capital Mutual Funds (VCMF) and offers a more flexible legal structure for investing in venture capital operating on the basis of contracts signed by the manager, the depository and the shareholders. Investors in VCMF pay no tax on the returns from their investments
Increase in standard unemployment benefits by 5 %.
Sale of 12% of Public Power Corporation (second tranche)
Stipulates that a joint ministerial decision 5 provide that the state shall hold a number of shares incorporating increased rights (“special share”), such as veto right over the passing of resolutions that have been characterised as having strategic importance. The new provisions have not yet been implemented and are not intended to in the near future. If implemented, they will be in accordance with EU regulations; that is, they will protect public interest, will not be discriminatory, and will support capital movements.
Reduction of 1.2 to 2.5 percentage points on the tax rate on 2002 corporate income (i.e. from 35 % to 34, 33 or 32,5 %).
A 20 % increase in the tax free threshold for all taxpayers
Abolition of the income bracket corresponding to the 5 % marginal tax rate for wage earners (estimated cost € 0.2 billion)
The new law concerning "part time employment and social services" provides for public sector organisations to recruit unemployed people and other groups in a difficult labour market position on part time, fixed term contracts in order to provide certain social services. The target of the reform is: i) Unemployed who are above 30 years old and whose time of unemployment benefit has run out and they still remain registered to OAED records for at least 6 months period after the date of expiration (30 %); ii) Unemployed registered to OAED who are 5 years before retirement (20 %); iii) Unemployed up to 30 years old who are registered to OAED for at least 18 months (20 %); iv) Mothers of young children (10 %); v) People with a disability level above 50 % (10 %); vi) People who have 4 children or more (10%)).
New package of measures providing employment subsidies targeted at unemployed women, youth and elderly workers.
Facilitation of the process of connecting labour supply and demand, through an integrated system that registers the needs of the labour market at national and local level.
New rules governing the operation of the stock exchange and liberalisation of this market
Working mothers who are insured by the Social Insurance Foundation (IKA) and have a child after 1 January 2003 are eligible for the following 'fictitious' pension contribution periods (i.e. assumed periods of contributions for periods during which the woman was not actually making contributions): for one child: one year of contributions; for two children: 2.5 years of contributions (i.e. one for the first child and 1.5 for the second); and for three children: 4.5 years of contributions (i.e. one for the first child, 1.5 for the second and two for the third). The fictitious contribution periods may not be taken into account in the following cases: in calculating the minimum days insured required for special provisions for people in arduous and unhealthy occupations; in meeting the requirements for retirement after 37 years of insurance; in meeting the requirements for retirement after 35 years of insurance laid down in rules in force at any given time; and for people insured under the 'special funds'.
Eligibility of working mothers for "fictitious" contribution periods to count towards old age pensions. The new rules allow women to claim a certain period of pension contributions with respect to time spent having and bringing up children (Law 3029/2002 on Reforms of the Social Security System).
Extension of social security insurance to fixed-time workers of the broader public sector, special provisions for self employed professionals regarding their social insurance coverage.
Third phase of selling the Public Power Corporation (15.57%)
Sale of 11% of the National Bank of Greece
Sale of additional 16.65% of Hellenic Petroleum
Sale of 40% of Duty Free Shops (second tranche)
Sale of 33.4% of Hellenic Stock Exchanges
Sale of 25% of the Piraeus Port Authority
Alignment of the corporate tax rate on companies not listed on the Athens Stock Exchange with listed companies, at 35%.
Abolition of most presumptive measures in determining imputed income of self-employed, except for those targeted at high incomes and at poor bookkeeping.
Harmonisation at 15 % of the tax rate on interest income.
Increase in the tax exemption for children.
Simplification of the system through the abolition of a large number of reductions, exemptions, allowances and special treatments of incomes, and a substantial reduction of the number of taxpayers that have to file tax returns.
Transformation of remaining expense reductions into tax credits, and their capping.
Reduction of the number of tax brackets from six to five in 2003 and to four in 2004, the reduction of the top marginal tax rate from 42.5 to 40%, and a substantial increase in the zero-bracket income. This last measure is estimated to reduce by up to one million the number of individuals who have to file a tax return.
Regulation of Subsidised Employment in the Public Sector. Local authorities and legal entities governed by public law can employ unemployed people and other groups in a difficult labour market position to provide certain social services (using part-time fixed-term contracts subject to private law).
Provision of job placement incentives for unemployment benefit recipients. The measure enables unemployment benefit recipients to be hired or placed in a workplace on a full-time or part-time basis for the duration of the unemployment benefits. During this period, the unemployed is rewarded according to the provisions in effect for the other employees of the same employer, depending on occupation and hours worked.
Employers who hire unemployed youths up to 25 years old, or unemployed people aged 55 or over who have at least 6'000 daily insurance stamps, are granted a reduction of 50 % of the employer’s insurance contribution (the amount of the reduction is paid to the Social Insurance Institute (IKA) by the state).
Incentives aimed at increasing employment of women. Subsidies to employers (corresponding to the employer's social security contributions for that employee, for a total period of one year per child) for hiring unemployed mothers with at least two children. Employer’s social security contributions for hiring unemployed women with at least two children will be subsidised – on condition that the benefiting firm had not proceeded to dismissals over the previous six months. The firm must also pledge not to fire other staff without serious grounds for as long as the measure is in effect. The duration of the subsidy is one year for each child. Social security contributions payable by employers who hire employees of either gender on a temporary contract to replace employees on maternity leave will also be subsidised (on the same conditions as the previous measure).
Specific Housing Benefit for the unemployed who relocate from their place of residence in order to work.
For a fixed-term contract to be renewed, the time since expiry of the previous contract may not exceed three months in public utilities and services and 45 days in the rest of the private sector. The exceptions that prevented certain categories of workers from converting fixed-term contracts into contracts of indefinite duration have been abolished, except for special conditions. The previous precondition of objective reasons for renewal of fixed-term employment contracts has also been restricted substantially. Workers on fixed-term contracts must have completed 24 months of actual employment or three successive renewals of their initial fixed-term contract in order to be considered as having an open-ended contract. Workers may be employed on fixed-term contracts to meet standing, permanent needs of the enterprise.
The public services, first- and second-level local authorities and state law entities that wish to be included in the procedures set out in the new law must prepare special operational plans before the end of February every year. The plans should specify the needs for part-time jobs by service sector and the quality-control method for the services provided. Part-time employees who will be engaged in this context will not be able to work more than 20 hours a week or for longer than 18 months at a time. They will not have the right to be rehired until at least four months have passed since their previous contract expired. The previous law set 24 months as the maximum period of employment and a minimum interval of two months before contract renewal. The part-time workers to be recruited under the terms of the new law must proportionally represent various categories of the labour force that face serious problems in finding and keeping jobs. Such categories include women, unemployed people less than five years from retirement age, people with a level of disability that goes beyond 50%, and long-term unemployed young people. In some cases, inclusion in the Labour Force Employment Organisation (OAED) unemployment register is a necessary precondition for inclusion in the categories eligible for hiring. The operational plans will be submitted for approval to the competent ministerial committee. If the committee finds the proposed recruitment feasible, then each public sector body concerned will issue a notice stating: the reference number of the approval decision of the ministerial committee; the number of people to be hired and the service sectors where they are to be employed; the categories of people from which the workers are to be hired and the criteria for their selection; the authority to which job-seekers’ applications are to be submitted; and the deadline for submitting applications. Next, before a notice of hiring is issued, it is communicated to the Supreme Personnel Selection Council (ASEP), which gives final approval or amends the relevant plan within 10 working days.
Allowing for up to 10 % of the part-time workers recruited to be included in the operational plan of the hiring bodies and employed in services that are not exclusively social in nature; abolishing the requirement to assign the hiring procedure to third parties and transferring all liability to the body doing the hiring (i.e. the public service, local government or state law entity) without intervention by intermediaries.
Regulation of Annual Paid Leave for the private sector labour force: all employees employed under a fixed-term or open-ended contract or employment relationship will be entitled to receive annual paid leave from the time they are engaged by an enterprise, proportionate to the time they have worked in that same enterprise. Beforehand, a basic prerequisite for granting annual paid leave was twelve months of continuous employment with the same employer; the first paid leave was granted during the calendar year following the year in which the employee was hired and referred to the year during which is was granted.
Extension of the pension coverage of the primary sector labour-force. Inclusion of the previously uncovered categories of agricultural workers under the mandatory insurance of the Basic Social Security Fund of the primary sector (OGA). The measure covers the low-skill segment of the agricultural workforce.
Regulation of the insurance regime for the self-employed. Application of the general contribution rules of the wage earners regime (already in place by the Law 3029/2002) to the self-employed. The harmonization of the Insurance Fund of the Self-Employed (OAEE) insurance regime incorporates the general right to retire after 37 years of contribution, at any age.
Extension of the Social Insurance coverage for the totality of the disabled categories. In addition, right to the specific benefit already set up for separate fractions of the disabled.
Additional sale of the Hellenic Petroleum of 8.21%
Additional Sale of the National Bank of Greece (7.45%)
Increase in tax-free income and for reductions in the tax rate for general and limited partnerships (dropping from 25% in 2004 to 20% in 2007).
Administration Code of the Electric Energy Transactions System, a step towards deregulation of the energy market.
Strengthened the independence and legal competences of the Competition Committee.
In May 2005 the government approved the Administration Code of the Electric Energy Transactions System, which will go into effect initially for industry and by 2007 for other consumers. The Code aims at creating an attractive environment for major investment in the electricity sector and at increasing supply options for consumers.
In December 2005 the framework for the transposition of the EU Gas Market Directive was passed into Greek law. The law envisages a gradual opening of the market, with the application of eligibility rights (i.e. the right to choose natural gas suppliers) to all customers residing outside the supply areas of regional gas distribution companies (EPAs) by November 2009. The estimated market opening at that date is close to 90 % of the gas demand volume. Full liberalisation of the market is foreseen, when the concessions of the EPAs expire from 2031.
A single nationwide framework is laid down for opening hours of shops of all types, with the exception of nightclubs and related establishments, filling stations, restaurants, patisseries, florist shops, kiosks and shops in the same class as kiosks, photographic studios, shoe-shining establishments, retail shops selling only dried fruit and nuts and certain shops serving the tourist trade in strictly designated tourist areas, to which special regulations apply. It sets closing times on all weekdays at 9pm and on Saturdays at 8pm, both in summer and in winter. Closing times may be extended in accordance with the conditions and needs of each area or each prefecture, by decision of the competent prefectorial councils published in the daily and local press. Such decisions are taken after inviting all the employer and employee organisations concerned to give their opinions within a deadline of 20 days. If this deadline is not met, the prefectorial council issues its decision in the absence of such opinions. Commercial shops and food stores are free to set their opening hours at any time after 5am.
In the Ministry of Development, Inspection Teams for the Trafficking and Storage of Fuel (KEDAK) is set up, serving as a market monitoring mechanism (Law 3335 was approved in April 2005).
Introduced new rules governing the market for securities.
Establishes a legal and administrative framework to protect capital markets from actions by people with privileged access to information and defines the meaning of the term market manipulation
Guarantees the independence of the Hellenic Capital Commission, changed the corporate law rules governing stock exchange firms, and introduces new rules governing the trading of bonds and stock
Introduction of two flexible working time arrangements, one on a four-month and one on an annual basis (reference period). Within one year, arrangements may apply to up to 256 hours (instead of the 138 hours already applied) and up to 32 weeks of increased working time, with proportionally fewer working hours during the rest of the year. During the period of reduced working time, rates are the hourly wage increased by 30 % for overtime, and 75 % for overtime exceeding maximum working hours. Working-time arrangements emanate from an agreement between the company and company-level trade union or works council. Employees have the right to refuse to work extra hours if they are not in a position to do so and in 'good faith'. Elimination of the obligation to make arrangements by means of collective agreement and referral to mandatory arbitration when no agreement is reached in case of four-months arrangements.
New over-time regime: in companies where a contractual working week of up to 40 hours is implemented, employees may work an extra 5 hours per week at the employer's discretion (8 hours for employees who work a six-day working week). These hours of overtime are compensated at the current hourly wage increased by 25 % and are not calculated as part of the maximum overtime work allowed by current provisions. Weekly working hours beyond the 45th or the 48th hour are considered as overtime and are paid at a rate increased by 50 % of the hourly wage until 120 hours have been worked in one year, and at a rate increased by 75 % of the hourly wage for hours worked beyond 120 hours. Compensation for 'exceptional overtime exceeding maximum working hours' (i.e. overtime worked without permission or approval of the labour inspectorate) is increased by 100 % instead of previously 150 %
Financial and institutional transition from the previous fragmented system to the new coherent insurance regime via the Unified Insurance Fund for the Banking Employees (ETAT), covering all supplementary insurance benefits exceeding those of the general Private Sector Regime.
Unification of separate basic social insurance funds of the banking sector and gradual convergence of insurance rules in line with the General Social Insurance Fund for the Employees of the Private Sector (IKA-ETAM)
Partial privatisation of Football Prognostics Organisation.
Continues privatisation of Hellenic Telecommunications (minority shares stays in state ownership) – 10%
Sale of 16.44% of shares in the State Lottery Organisation
Setting up of a new national system for reconciling vocational education and training with employment, leading to the rationalisation of services, accreditation of professional qualifications and employment-related assistance. Main legal provisions: 1) Progressive reactivation of the National System Linking Vocational Education and Training to Employment (ESSEEKA), 2) Clear definition of the competence of institutions involved, 3) Establishment of the National Committee for Life-Long Learning, with the task to coordinate national-level implementation of policy steps matching life-long learning and ESSEEKA.
The new law on Electronic Communication harmonises the Greek legislation with the regulatory framework of the European Union. The 2006 law improves the regulatory framework to raise investment in electronic communications. It includes measures for the development of the market (such as the removal of obstacles in the licensing of electronic communications networks and services).
Providing that: "all the means of termination of employment contracts which take place with the employer's initiative are assimilated to collective layoffs under the condition that the layoffs are of at least five people".
Increases in the severance pay amount to 5 days' pay for blue collar workers who have completed 25 to 30 years of service and for those with more than 30 years of service.
Extending existing clauses on parental leave to part-time workers.
Transposes into Greek law EU legislation on the stabilisation and liquidation of credit institutions
Strengthens the rules for credit market supervision in accordance to EU law
Partial privatisation of Agricultural Bank of Greece, Postal Savings Bank Hellenic Post Emporiki Bank. Majority shares for all three stay in state ownership, 1,7 billion euros
Creation of the "National Committee for Lifelong Learning". The Committee will be responsible for the diagnosis of the needs of lifelong learning and vocational training, for the general evaluation and coordination of the services and for their connection with the National System Linking Vocational Education and Training to Employment (ESSEEKA).
The Greek electricity market is to be fully liberalised from July 2007 to all customers (apart from those in islands without interconnection). But effective choice is much more restricted than these numbers suggest. The major challenge for the authorities is to foster effective competition in the sector, as effective competition in generation has not emerged, despite the issuing of licences to new entrants.
Gradual liberalisation until 2009 (as enshrined in the EU directive in 2002). This has led to a reduction in the scope of services reserved for the state-owned Hellenic Post (ELTA) – designated as the universal service provider. It currently retains a monopoly only in the delivery of mail weighing less than 50 grams.
Increasing the unemployment benefit from € 311 to € 404, at a level of 55 % of minimum wage.
Setting up a Special Fund for Social Solidarity (ETKA) to provide increased incomes and social protection to long-term unemployed people aged over 50 years, previously working in sectors or regions facing decline and confronted with the danger of social exclusion. The fund is financed by the state budget, European Union financing and part of contributions paid to the Labour Force Employment Organisation (OAED). The support from the Special Solidarity Fund granted to workers consists of either 80 % of pay at the time the employment relationship is terminated or a sum of up to € 900 for people taking part in training and retraining programmes. Additional support may be granted by ministerial decision to people providing services of a social nature in public and non-profit organisations. To receive the income support from the Fund, the following two further conditions must be met: be insured with the Social Insurance Foundation-Unified Insurance Fund for Employees (IKA-ETAM); and have at least 7'500 days of insurance contributions.
The state-owned air-carrier Olympic Airways was privatised.
The tax rate of general and limited partnerships and civil-law associations decreases from 22% in 2006 to 20% in 2007. The tax rate for joint ventures and civil partnerships decreased from 29% in 2006 to 25% in 2007.
Programme for hiring school dropouts (40'000 people, EUR 160 Million).
ALMPs for Women: Job-placement subsidy schemes, combined with targeted training for acquiring work experience. Measures promoting female involvement in SMEs (either as entrepreneurs or as employees) and actions addressing the difficulties faced by women entrepreneurs regarding fund raising and access to credit. Provision of counselling and professional legal services.
ALMPs for older workers: Job-placement subsidy schemes, combined with targeted training for acquiring work experience. General increase in subsidies for older workers (over 50) in all OAED programmes and interventions at the local level. Continued vocational training, combined with skills certification and job placement in related fields.
Working mothers are entitled to an additional six-month period of special maternity protection leave. If a mother does not use the reduced working hours leave immediately after confinement leave, she is entitled to receive the new maternity protection leave upon expiry of her confinement leave, and then use the reduced working hours leave.
Adoptive and foster parents see their parental leave rights equalized.
Increase in the days of leave after 25 years of service: to 26 days (working five days per week) or 31 days (working six days per week).
Amendment to existing legislation governing strike action, aimed at acceleratingappeals hearings on whether or not strikes are illegal. 		When an appeal is lodged against a decision ruling upon the legality of a strike, the head of the Court of Appeals or the President of the Board Governing the Court of Appeals must, exceptionally: a) fix the hearing day for the appeal within 48 hours, and b) designate the panel of the court that will hear the case. The new law also changes the rules governing the designation of the appeals court's panel in cases of deliberation upon the legality of a strike. Measures provide that: when an appeal is lodged against a decision ruling upon the legality of a strike, the head of the Court of Appeals or the President of the Board Governing the Court of Appeals must, exceptionally: a) fix the hearing day for the appeal within 48 hours, and b) designate the panel of the court that will hear the case; the judges must pronounce their decision on the appeal within three days from the hearing of the case. A motion to adjourn the hearing may be granted only for exceptional reasons and, if granted, the adjournment will be only for 24 hours.
Increase in the level of unemployment benefits from 349.5 euro in 2007 to 430.75 in September 2008 and a further increase to 454 euro on 1st of May 2009. Additionally, during Christmas period the unemployment benefit was doubled for all the beneficiaries.
The accumulation rate of pension rights for persons extending their professional activity by 3 years to age 68 was increased from 3.0 to 3.3 % per additional year of work after the 35th.
A pension reform was adopted in March 2008, which scales back from 133 to 13 the number of pension funds. It modifies a number of incentives for workers to stay longer in the labour market and reduce early retirements. It creates an intergenerational solidarity fund (AKAGE), which will start accumulating resources in 2009 so as to help disburse pension payments after 2019.
The list of professions falling under regulation of arduous occupations is being redefined. The change should be finalised by October 2009. It will only apply to new entrants to the labour market. Early retirement provisions for mothers with dependent children have been tightened. Actuarial reductions for early retirement were raised from 4.5 to 6 %.
The two middle marginal tax rates of 29 % and 39 % will be reduced by 2 percentage points annually in 2008–09 to 25 % and 35 %, respectively.
Subsidies for creating new jobs by converting NEB into employment benefit/subsidy for companies hiring unemployed.
Tax incentives for companies hiring young scientists.
Brings changes to competition law, making the operation of the Competition Committee faster and more independent, and simplifying the preventive control of firm concentration.
Freeze of public sector wages for 2009. Applied to wages over EUR 1'700 per month.
SMEs that have reduced working hours will receive a compensation.
Extra financial aid from NEB is now easier to achieve (relaxed eligibility criteria).
Taxation of certain passenger's transport businesses will be based on the presumption of revenue
Tax-free allowances for public servants who see their wages frozen (EUR 500).
New structure for in-place training at SMEs with a budget of EUR 250M.
Special training programmes for tourism workers.
Suspension of every new job offer in the public sector (except education, health care and security).
Introduction of a ratio of one hire to five departures (in the public sector) for permanent employees and for those with indefinite-term private law employment contracts – although a ratio of one hire to one departure is to be established for the health, safety and education sectors.
Subsidies for temporary work agencies placing public sector workers between 55 and 64 years old.
Social security contributions will be cut down for these new incorporations.
Grants a transition period of 2.5 years (until June 2013) to adjust to the new regime. During this period licenses are granted on payment of a levy, which will decrease by 30 % in 2011, and 35 % in 2012 and 2013, respectively. After mid-2013, new entrants will not be burdened by entry fee but only by administrative costs relating to the issuance of the license.
Removes licensing restrictions that have constrained severely the road haulage capacity. Licenses will be granted automatically under the new regime upon meeting certain administrative criteria related to certificates of professional qualifications, tax clearance and social security certificates, and criminal record.
Abolishes administratively set prices. Transportation prices are, instead, to be negotiated freely between the seller and the buyer of the transportation services, depending on the freight volumes and distance. However, restrictions remain for fuel transportation where the administration can still set maximum prices.
The railroad sector is being restructured. The reform aims to make the now loss-making train operator (TRAINOSE) viable and prepare for a possible combination with a strategic partner. A draft bill for the restructuring of TRAINOSE is being prepared, involving the unbundling of the operator and the infrastructure manager, limiting subsidies from the state against an assumption of debts, reducing costs through higher tariffs, suspending of loss-making routes, and lowering personnel costs.
Changes the rules governing the appointment and evaluation of teachers in primary and secondary education.
Collective dismissals see their thresholds lowered from 4 workers on a 20-200 employees firm to 6 workers on a 20-150 employees firm. For firms over 150 employees, thresholds are 5 % of staff or 30 employees (before it was 2 % for 200-people companies).
No limit on "legitimate" redundancies in the event of collective redundancies.
Previously, employers could lay-off staff just by making a statement. However, this was not the case for companies in public utilities and services employing over 5'000 people, where permission to implement employee layoffs was required from the Ministry of Labour. The new law requires consultation between the employer and unions before any layoffs. No employee may be laid off for more than 3 months each year, and after this, another three months must go by before the same employee can be laid off again.
Employers should now proof that 'employees with independent contracts' are in fact working with them for more than 9 months per year.
Intermittent employment. In the event of a slowdown in activity, the employer can, instead of dismissals, introduce (following consultation with the unions or works councils) short-term (intermittent) working on daily, weekly or other basis, for a period up to 9 months (from 6 months previously).
Temporary agencies see their capacity extended, although restrictions holds for substituting previously dismissed employees in the firm, when the risk of the job is high and for construction workers.
Maximum period of work under temporary agencies is extended from 12 months to 36.
Public sector organizations can now use temporary agencies to hire new workers (valid for 3 years).
Notice period for firing white-collar workers with open-ended contracts is diminished, amounting to an indirect reduction of 50 % on severance pay.
Premium of 7.5 % wages for part-time workers is removed.
Part-time shift work is extended from six to nine months.
Probationary period extended from 2 months to 12.
Establishes a financial stability fund to support the Greek banking system's liquidity
Re-organises a day-long hospital operation to increase efficiency, changes the terms determining hospital fees and insurance coverage, changes the composition of hospital management bodies and the working terms for hospital doctors.
Limiting mediation to basic pay issues. Both employers and employees may now request arbitration and mediation services. To ensure impartiality, the board of the Mediation and Arbitration Organisation (OMED) has been reformed, freed from government influence. Arbitration is still mandatory; arbitration proceedings may be initiated freely by only one litigant party, but result in an arbitration award which is binding on both parties. However, should mediation be unsuccessful, from now on not only the trade unions but also the employer may refer matters unilaterally to arbitration if the other party does not accept the mediator’s proposals. In terms of the scope of arbitration proceedings, the new regulations introduce a significant restriction: arbitration awards shall, from now on, determine only minimum monthly and/or daily wages. Other terms of employment, such as benefits, bonuses, working hours, holidays and the regulation of other employment terms (such as structuring and filling job vacancies, recruitment, termination of employment, grounds for termination and termination procedures, severance pay), can no longer be regulated by arbitration awards.
Introduced a new type of company-related agreement, the ‘special company-related CEA’, which may provide for remuneration and other working terms that are less favourable than the remuneration and working terms provided for by the respective sectoral CEA. Minimum wages and minimum working conditions at national and intersectoral level are still laid down by the EGSSE. Law 3899/2010 subjects the conclusion of the special company-related CEA, as well as its extension and renewal, to a preliminary procedure: parties interested in concluding a special company-related CEA submit to the Social Inspection Council of the Labour Inspectorate (SKΕΕΕ) a joint explanatory statement setting forth the reasons that justify their intention to enter into a special company-related CEA. SKEEE’s opinion is not binding, however. This means that parties may proceed to conclude the special company-related CEA despite the Council’s opinion otherwise. Until law 3899/2010 was passed, the principle of applying a regulation that is more favourable to the employee in case of concurrent CEAs applied absolutely; there was no possibility of departing from it.
Company agreements can now predominate over higher level agreements even when provisions are less favourable to workers. The law allows firms to deviate from the automatic extension of sectorial agreements via opt-outs. Such firms are allowed to undertake special firm-level collective agreements, subject to evaluation of the Labour Inspectorate and consent by sector unions in small firms.
Minimum wage frozen until summer 2012, and then expected to increase in line with expected euro-area inflation (a 1.5 % increase in July 2012 and 1.7 % in July 2012).
Decreasing the minimum wage for workers under 25 years of age to 84 % of the minimum national wage set by the National General Collective Agreement (EGSSE). It decreases the minimum wage for underage workers aged 15–18 years to 70 % of the minimum wage set by the EGSSE through the conclusion of apprenticeship agreements.
For "unemployed persons up to 24 years of age, who are registered in the Labour Force Employment Organisation lists, for a period of up to 12 months" the wages now may go down to 80 % of the minimum wage, and social security contributions will be assumed by the State.
The Christmas, Easter and holiday bonuses provided for by any general or special statutory provisions or regulatory acts for pensioners and allowance beneficiaries of the wider public sector are to be paid as long as the beneficiary is older than 60 years of age and the overall pension amount paid each month does not exceed € 2'500. The bonuses are to be readjusted as follows: the Christmas bonus will now total € 400; the Easter bonus will amount to € 200; the holiday bonus will be amended to € 200.
Firm-based collective arrangements can introduce deviations in terms of employment remuneration and conditions from the terms agreed by an industry-level collective agreement, yet not to a level lower than the nation-wide collective agreement.
Further cuts for public sector wages: 12 % in allowances, compensation; 7 % in all earnings; 30 % in extra payments. Also, pay increases in the public sector through collective bargaining is forbidden.
Cutbacks in the earnings of all persons employed in the wider public sector – that is, by 12 % in entertainment expenses and all allowances and compensation, by 7 % in earnings (ordinary earnings, compensation, all types of allowances) and by 30 % in Christmas, Easter bonus and leave pay. However, allowances relating to marital status, career advancement, job hazards and the holding of master’s degrees are exempt from these cutbacks.
Reduction of 3 % of earnings, severance pay and allowances to all private-law bodies controlled or subsidized by the State.
Additional reduction of all public-related wages of 8 %. Extra payments are also fixed at: the Christmas bonus will now amount to € 500; the Easter bonus will total € 250; the holiday bonus will be amended to € 250. These bonuses are to be paid only as long as the ordinary earnings, allowances and remuneration of any kind do not exceed the monthly amount of € 3'000.
Ban on the stipulation of salary increases for employees in the public and wider public sector through collective agreements or individual agreements between the employee and the employer.
In terms of bonuses, the Christmas, Easter and holiday bonuses of all of the above employees – which amount to two monthly salaries and are referred to as the 13th and 14th month salary – are to be readjusted as follows: the Christmas bonus will now amount to € 500; the Easter bonus will total € 250; the holiday bonus will be amended to € 250. These bonuses are to be paid only as long as the ordinary earnings, allowances and remuneration of any kind do not exceed the monthly amount of € 3'000.
Overtime under part-time and short-time contracts should be paid a 10 % extra per hour.
Working time agreements are moved to firm-level bargaining.
30 % reduction in the maximum allowed overtime limit for public sector workers.
During the three years from 2011 to 2013, the social security contributions of employees and employers to the IKA-ETAM will be raised by three percentage points, with an equal reduction of the contributions to the Labour Employment Office (OAED), the Worker’s Housing Organisation (OEK) and the Worker’s Welfare and Recreation Centre (OEE).
Pension benefits are reduced by 6 % per year for people entering retirement between the ages of 60 and 65 who have a contributory period of less than 40 years.
Pensions are indexed to prices and to GDP growth. Before the reform pensions were adjusted by discretionary rates. Increases were ahead of inflation between 1999 and 2008.
The pension award formula in the contributory-based scheme is amended to strengthen the link between contributions paid and benefits received, with the statutory accrual rate limited to 0.8 to 1.5 % a year, depending on the years of service, much lower than the 2 to 3% a year used before.
The period over which the pension benefits are calculated is extended from the top five years in the last 10 years of earnings to the entire working life, with 40 years of contribution needed for a full pension.
As of 1 January 2018, an individual’s entire working life will gradually become the basis of calculation, with the year 2013 being considered as the base.
Access to early retirement is restricted. The minimum retirement age is raised to 60 years by 1 January 2011, including for workers in heavy and arduous professions. The list of arduous professions, which includes about a third of the labour force, will be revised by July 2011 to cover less than 10 % of the working population.
The terms and conditions of granting survivors’ pension are tightened, in particular for persons who can cumulate two pensions or a salary and a pension.
Six pension funds remain for the new entrants from 1/1/2011: IKA (most wage and salary workers, including government employees and the military), OAEE (most self-employed workers), OGA (for the agricultural sector), ETAA (for lawyers, doctors, and engineers), ETAP-MME (journalists), and the fund of the Bank of Greece. The new law however equalizes benefit formulas and retirement ages across all funds except for the Bank of Greece fund.
Integration of civil servants to the Social Security Fund (IKA-ΕΤΑΜ) as of 1 January 2013.
A unified statutory retirement age of 65 years is introduced, including for women in the public sector (phased in immediately after adoption), to be completed by 2012.
A mechanism is introduced to review and adjust the minimum and statutory retirement age every three years as from 2021, in line with the rise of life expectancy at 65. A joint decision of the Finance Minister and Labour and Social Security Minister will be required for such a change.
A separation of pension funds from the health insurance component is introduced.
The new pension system will be composed of a basic pension amounting to EUR 360 per month (12 months per year) and a proportional pension related to workers’ contributions payable 12 times a year. The reform will be applied with a pro rata system for the future pension rights of workers who have already started their professional life.
The corporate income tax (CIT) system is amended in a way that distributed profits are newly taxed at 40%; at the same time withholding tax on dividends is abolished. Non-distributed profits remain taxed at 24%, gradually reduced to 20% by 2014.
The April 2010 reform has rationalised the personal income tax by introducing a single rate scale applicable to most sources of income (including dividends) and broadening the tax base.
Tax exemptions for certain categories of taxpayers have been abolished; the corresponding income will be taxed as ordinary income. Provisions have also been introduced to take into account workers’ objective standards of living in assessing their tax rate (in particular for the self-employed).
Incomes between 12,000 and 16,000 euros are to be taxed at 18 %, compared to the current 24 % rate on incomes from 12,000 to 30,000 euros. This is intended to help low-income earners.
Determination of imputed minimum taxable income, based on the services, assets and estates owned or used by the taxpayer.
A new upper tax rate of 45 % applying to annual incomes above 100,000 euros was added to the changes announced in February this year. The previous top tax rate of 40 % will now apply on incomes from above 60,000 euros ($82,250) to 100,000, instead of the existing 75,000 euro threshold. (9 brackets altogether)
The flat tax rate on certain professional groups and public sector allowances, which ranges from 5 to 20 %, will be abolished.
Reorganises the institutions offering lifelong learning.
Greece has chosen to adopt under the 3rd EU Energy Package the ITO (Independent Transmission Operator) model for electricity and gas transmission under which the Transmission System Operator remains part of a vertically integrated undertaking, but it is ring-fenced within it.
Public Power Corporation has set up two separate subsidiary entities for transmission and distribution.
Allowing tourism enterprises established in EU member states to provide services in a provisional way in Greece; Abolition of the fixed minimum tariffs for tourist accommodation.
The 2011 law introduces a new method of calculating remuneration. For notaries, a pro-rata fee is now based on a regressive scale, and the fixed prices or compulsory minimum fees for other professions (e.g. lawyers and engineers) are removed.
The government has lifted restrictions on the fresh product wholesalers’ right of establishment outside central markets, in response to the European Commission’s request, while it is currently amending the renting criteria of premises inside the central markets, making them objective and more transparent.
A comprehensive reform in early 2011 opened up more than 150 closed professions. Establishes the principle of professional freedom rather than explicitly abolishing each of the unnecessary restrictions in force; it provided for a 4-month period (until 2 July 2011) during which restrictions that are justified on public policy grounds may be reinstated by decree (Ministry of Finance, 2011c). It also removes, as from that date, the requirement for an administrative license to practice a profession, substituting instead simple notification accompanied by the necessary supporting credentials. The new law (3982/2011) reduces the complexity in the licensing system of technical professions and modernises qualifications and certification requirements. Progress has been achieved towards deregulating the retail sector in the context of implementing the EU Services Directive. It aims to facilitate cross-border provision of services and the freedom of establishment. Initiatives include the simplification of the licensing procedures, the abolition of certain requirements for the location of retail outlets and prior application for a site, and the introduction of shorter deadlines for the issuance of relevant decisions. However, the principle of licensing for retail outlets is maintained for reasons of environmental protection.
Abolishes geographical restrictions for lawyers and provides for an increase in the number of notaries between 10 and 20 %.
The authorities have abolished state price control over several goods (vegetables, infant food), but intervention remains possible as an exceptional measure for fuel products and goods sold in places where competition is restricted, or does not exist.
The creation, in 2011, of a unique Business Registry (GEMI) and the operation of one stop services consisting of a wide network contact points are notable initiatives in this regard. For the majority of companies, all registration procedures are now accomplished in one procedure (instead of 15), in one day (instead of 19) and at a single contact point (instead of 8). The expected time for the procedure to be completed is one hour. The estimated reduction of cost from the simplified procedures can reach to 62 % in the case of limited liability companies (Ministry of Regional Development and Competitiveness, 2011).
For the operation of energy markets in electricity and natural gas. Aims to establish a stable and transparent legislative and regulatory framework for monitoring energy markets and for protecting consumers.
A 2011 law reforms the legal framework of the Hellenic Competition Commission (HCC) brings about important changes in the structure and appointment procedure for the HCC board members. It also strengthens the independence of the competition authority and increases its effectiveness by enabling HCC to prioritise its cases and reject low-priority complaints, and by providing it with a more reasonable timeframe for the resolution of cases and stricter penal sanctions for cartels.
The responsibilities and operation of the energy regulator (RAE) are being enhanced as is the economic and administrative independence of RAE. A new system of regulated tariffs has been introduced which is expected gradually to align energy prices to wholesale market prices, except for vulnerable groups. A new social tariff was introduced for this category of consumers.
Brings changes to the way high education is provided, its management and programme of study.
Strengthens the legal framework for the supervision and control of credit institutions by the Bank of Greece, regulates e-commerce and online credit institutions
Changes the terms governing NHS medical procurement to reduce deficits, strengthens controls on healthcare spending.
Public sector organisations have no obligation to recognise nor consult trade unions.
Wage levels established at the national level are no longer a requirement for longer levels.
Introduction of a new (lower) pay scale for public servants, closer to private sector salaries.
Urgent measures for the application of the mid-term support framework of fiscal strategy 2012-2015 – Establishment of a Privatisation Agency and Fund (TAIPED) to sell state-owned assets
Sale of 10% of OTE share capital to Deutsche Telekom
Enacts a national programme to combat tax evasion, establishes a prosecutor for financial crimes, increases penalties for tax evasion, establishes a framework for international cooperation against tax evasion
All rules providing special protection against dismissal are to be abolished and only the common regulations of dismissal shall apply in future. Hence the work rules of some companies (banks, public sector companies) which used to provide more effective protection than that provided by law will no longer count.
Changes in the process regarding the enforcement of administrative and criminal sanctions to illegally operating T.E.A; Provisions for permanent staff requirement, minimum area and equipment to be available by the T.E.A are repealed; Reduction in the amount of guarantee letters from a bank from 146'700 € to 60'000 € for that which is filled with the Employment Directorate of the Ministry of Labour, Social Security and Welfare and from 58'700 € to 30'000 € for that which is filed with the Directorate of Financial Services of Social Insurance Institute (IKA).
The new legislation partially amends the rules regulating temporary employment agency. Some provisions of Temporary Employment Agency Directive (2008/104/EC) had already been implemented in Greek legislation by Law 3846/2010. The new legislation concludes this implementation. The changes primarily concern the legal status of the temporary employment agency, the authorisation procedure, the exclusivity of the purpose of the temporary employment agency and the representation of employees. Pursuant to the modified rules, the activity of temporary employment agency no longer requires the issuance of a Ministerial Decision as a condition. According to the new legislation only a limited number of companies may supply temporary workers. It also provides that individuals may also establish a temporary employment agency while it removes the requirement of a natural or legal person wishing to engage in the activity of Temporary Employment Agencies to have available capital of 176'083 €. Moreover, the new legislation adds activities that can be performed by a temporary employment agency as manpower training, counselling and professional guidance. Concerning the representation of temporary agency workers, the new legislation provides that temporary agency workers shall be included when calculating the threshold above which bodies representing workers are formed at the temporary employment agency. Finally, the new legislation establishes regulations concerning employment hours of the safety officer and the works doctor in the temporary employment agency.
The length of the periods of notice for terminating an open-ended employment contract has been reduced. Namely, the maximum notice period for employees is reduced from six to four months. That means that for employees whose tenure with the dismissing employer is between 15 and 19 years have now a noticed period reduced by 1 month (from 5 to 4); for those with 20 years or more the reduction is by 2 months (from 6 to 4). Tenures shorter than 15 years were unaffected.
The statutory severance pay was capped at a maximum of 12 months (due for tenures with the dismissing employer of at least 16 years) in case no notice is given to the employee. Two separate measures have been introduced for employees with more than 16 years of service in order to preserve the acquired entitlements to severance (up to a certain amount): 1) a limit has been set on severance pay, which will be calculated only for the part of their salary up to € 2'000 for those employees with more than 16 years of experience; 2) length of service shall be capped at 12 November 2012, the date the law came into force, and no further months will be taken into consideration for the purposes of calculating severance pay in case of redundancy.
Arbitration takes place only when there is bipartisan agreement.
Collective agreements are now only valid for 1 to 3 years (before they were indefinite). Ultra-activity is limited to three months.
Minimum wage will not be determined through collective bargaining between the national social partners. Instead it will be fixed at legislative level by the government, following simple consultations with the social partners. Previously collective bargaining had been decided by a National General Collective Employment Agreement (EGSSE).
The government reduces the employer's share of social security contributions by 5 percentage points in a budget-neutral way by rationalizing small earmarked funds.
Pensions will be calculated in an actuarially neutral manner based on workers’ contributions and an adjustment mechanism that guarantees the system’s financial viability.
Workers employed under private-law contracts in the public sector that come from companies that do not longer exist or that complete 35 years of service and turn 65 before 31 December 2013 will be placed on a labour reserve status receiving 60 % of their wages for 12 months. After this period, they will be retired (if they are old enough) or fired without any severance pay.
Public servants who turn 55 and have been working for at least 35 years by 31 December 2013 are automatically put in pre-retirement and non-active status receiving a 60 % of their salary.
Unification of all supplementary social security organisations to a single Fund.
The minimum age for access to means-tested Pensioners’ Social Solidarity Benefit (EKA) was also raised from 60 to 65 years.
Revised considerably the list of arduous professions, aiming to reduce the coverage to less than 10 % of the working population.
Sale of a twelve-year license of the exclusive right to operate the state lotteries
Establishes an organisation charged with supervising primary and secondary education schools.
One-year agreement between social partners, first not contemplating minimum wage or any wage issues, focusing on general measures to tackle the economic crisis and employment equality.
15 years is the minimum insurance period for establishing a pension right.
General qualifying conditions for a full pension are now a minimum age of 62 and 40 years of contribution.
Tax increases on income from rent and sale of real estate, increase of the tax on the sales of stocks, luxury tax on automobiles, yachts and swimming pools; lowering tax benefits for salaried workers, students are considered as 'protected members of one's household'; new rules regarding tax exemptions for business. A new unified Property Tax, ENFIA, was adopted in December 2013 to replace both the PPC tax and the FAP wealth tax. It widens the tax base, and simplifies the tax system to make it more accessible to ordinary tax payers. Numerous tax loopholes have been closed to consolidate the tax base and reduce the potential for erosion.
Capital gains taxes for real estate and financial securities have been introduced for the first time.
Key innovations in the new tax code are tighter and more transparent rules concerning eligible business expenditures and benefits in kind, new rules to avoid tax evasion e.g. through controlled foreign companies, and modern rules concerning business capitalisation and transfer pricing.
Reforms in 2013-14 simplified the tax system and broadened its base, including by removing several deductions and credits of the personal income tax, reducing the number of tax brackets and unifying multiple property taxes.
Determines the process by which the government evaluates, confirms and receives tax income as well as sanctions for tax law violations
Introduces a tax on property paid by property owners, reduces property transfer tax and amends some provisions of the Tax Procedure Code
The new Code also clarifies and reforms the system of tax certificates, an innovative system that uses private sector auditors to ensure the probity of tax accounts.
Provides for the right to establish or join workers' and employers' organizations. These organizations are directly managed by their members. They shall have full freedom to pursue their aims. They shall be established by a minimum of ten citizens of legal age and be registered. The workers' and employers' organizations are entitled to collect funds and to dispose of them, to cooperate with international organizations and to become their members, and to join federations. Sets up procedures in case of dissolution or suspension of the activities of workers' and employers' organizations.
Stricter rules for maximum number of pupils
“National Employment Policy” as a programme of active policy measures. The main goal of these measures was to increase employment in that period. A significant share of young unexperienced persons, long-term unemployed persons and war veterans, accompanied with poor professional qualifications structure and lack of competitive skills, were important reasons for developing active labour market policies.
Workers' councils were removed from power in firms and temporary business boards were appointed.
During or after the transformation stage, private owners may acquire the company using several different methods. First, the privatisation Act gives priority ownership rights and discounts to current and former workers of the company, and employees can acquire ownership interests with a value of up to DM 20'000 at a discount. The employee discount is 20 % plus an additional 1 % for each year of the worker's employment with the company. Employees also receive priority if they purchase additional shares at full price. Employees may purchase a maximum of 50 %.
Free shares were distributed to disabled war veterans and to families of soldiers who had died up to a maximum of DM 20'000 per person.
The Croatian government later implemented several changes to the payment methods and instalment plan. First, the %-ages owed per year were reduced. The 10 % due in year two was reduced to 5 %, and the later percentages were dropped, making the balance (possibly up to 90 %) due in the fifth and final year. Second, the government revised the privatisation Act to allow employees to pay for their shares through formerly frozen foreign savings accounts. These accounts represent money owed to depositors by the government owned banks of Croatia, but which was unavailable because the assets were frozen by Yugoslavia when Croatia gained independence. Although the use of foreign savings to buy company shares does not provide revenue for Croatia, it does ultimately decrease public debt and provide an impetus for privatisation.
The privatisation Act defines enterprises with social capital as those socially owned or mixed ownership companies "in which no ownership rights are acquired on the basis of social resources invested in them." The privatisation Act does not cover banks, financial companies, or insurance companies. The value of a company's social capital is the difference between its assets and its liabilities. Managers may decide not to include the value of company owned worker apartments when calculating the assets of the company.
The transformation of enterprises in the war-affected areas was postponed.
Under the Company Act, the management of a business may decide to transform the enterprise into either a joint-stock company or a limited liability company. Management must submit a plan for this transformation to the Republic of Croatia's Agency for Restructuring and Development ("Agency").' The plan must contain certain financial information about the enterprise, details on how the transformation would occur, the court registration, and a report assessing the value of the enterprise. The Agency's approval of the plan is required, unless the value of the company is equal to or less than DM 5 million. The Company Act required that all socially owned property be transformed into joint-stock or limited liabiity by June 30, 1992.
Provides for conditions for creating handicrafts activity (inter alia, beginning of activity, business process and end of activity) and organization of handicrafts activity (inter alia, Chamber of Commerce and its bodies).
Provides means and conditions of realization of rights to pension, extra-payment for assistance and care and financial compensation for physical injury to personnel of the former Yugoslav Army and to persons whose military activity has been terminated since 31 December 1991.
A provision was made for closed tenders for the sale of CPF-held equity in which the price was to be only one element.
A ceiling of 50 % on equity acquired by insiders, both with and without discount, was introduced.
The role and duties of State Agency for deposit insurance and bank rehabilitation
Conditions for rehabilitations and restructuring of banks
Definition of contribution rate for health insurance
Payment of pension to beneficiaries having realized their right to a pension in the Republics of the former Socialist Federal Republic of Yugoslavia.
To prevent the further massive withdrawal of small shareholders, they were granted the right to obtain the discounted part of the contract immediately after paying the first annual instalment of only 5 %.
Refers to legal persons (mediators), listed in article 2 part 2 of the Act on Placement, who can be involved in student and pupil placement for temporary jobs (article 2). Mediators must have high-level qualifications in social matters and at least three years experience in placement mediation (article 4). Mediators cannot register their activity without agreement of the Ministry of Labour and Social Care (article 6).
Better definition of standardized working hours
Labour Law provides for EPL. This Law prescribed high costs for collective dismissal.
Labour Law provides for EPL. This Law highly protected stable employment.
Labour Law provides for EPL. This Law limited temporal and/or occasional employment as different forms of flexible employment.
Defines the term "specialized qualification". Regulates specialized education of trainees (training period, State specialized examination and organization) and specialized upgrading.
Deals with the procedure for the realization of rights during unemployment, with active employment policy, registration of the unemployed, the Croatian Institute for Employment and financing sources.
Provides for level, period of use and refund of short term credits to finance reconstruction of enterprises destroyed during the civil war, in order to enable employees to return to work and to increase job placement.
Definition of contribution lowest base for payment of health insurance for private farmers
Provides for mediation in job placement and material insurance for period of unemployment (inter alia benefits, health, old age and disability insurance, family benefits, financial assistance).
The law introduced a program of voucher privatisation that benefited only selected groups: refugees and persons displaced by the war, families of disabled war veterans as well as of missing persons, and former political prisoners. The vouchers are not tradable, and they must be exchanged directly for shares from the list of firms setup by the CPF, or for shares of one of the privatisation Investment Funds (PIFs) created by various business groups. These funds will use the vouchers to purchase the firms' shares.
Definition of basic criteria for management and organisations for pre-school provision.
Stricter rules for professional promotion
Definition of basic rights in health care
Provides for a minimum and a maximum amount of compensation for the unemployed.
Provides for co-financing of placement of the unemployed without experience.
Provides for vocational training and upgrading of workers with no experience.
Any trade union association willing to participate in tripartite bodies at the national level must fulfil certain conditions and submit a request in this regard to the Ministry of Labour and Social Protection.
For men: Minimum pension: 0.825 % of average 1998 gross wage per year of service. Maximum pension: 3.8 average percentage points per year of service. For women: no limits.
The basic pension: 0.25 x APV x PP x PF + 0.0025 x WAGE (98) x years of service in new system, WAGE (98) = 1998 average national wage, indexed as APV
The average of the ratio between an individual’s wage and the national average wage for each year of the calculation period, multiplied by total insured years and an initial factor that penalises early retirement. Instead of 10, 40 best out of total insured years will be taken into account. The calculation period increases from 1999 on by 3 years per annum, until 2009.
Permanent reductions for both employers and employees by 0.3 % for each month missing before reaching full retirement age.
Concerns, inter alia, insured persons employed in particularly difficult working conditions. Determines the workplaces and occupations for which the insurance qualifying period shall be adjusted to take into account arduous working conditions.
Regulations on the procedure and conditions for recognition of the right of independent artists to pay contributions for pension and disability insurance.
Major retrenchment was achieved through the elimination of disability benefits based on remaining work capability and the abolition of regional disability commission, which were sources of widespread abuses. The type of disability determines the PF.
Indexation: APV (actual pension value) = 50 % wages + 50 % prices; 2nd pillar annuity = CPI
Cesation procedure established for pension societies and funds. Defining the membership and contributions to compulsory pension funds, and the financing procedure of their activities.
The minimal retirement age increases from 1999 on by 6 months per year, and the pension qualifying period decreases by 6 months per year. 65 yo for men with at least 15 years of contributions, 60yo for women. By 2008 the reform will be definitely phased in.
Extended insurance periods were retained for certain professions and personal conditions, which are determined by special law. This gives the right for a reduction of the retirement age from 1 year every 6 when a year is counted as 14 months up to 1 year every 3 when a year is counted as 18 months.
Provides for the organization, competency, rights and obligations, and financing sources of the Fund for development and employment. The Fund's missions are, inter alia, to develop entrepreneurship, give assistance and support to employment of workers, cooperate for investment programmes and introduction of new technologies, and support the opening of business centres, free zones and technological parks.
A mass layoff is defined as an employer's intention to terminate the work contracts of at least 20 workers within the next 90 days, regardless of the type of work contract the employees have had (Article 120), provided that at least five workers will be dismissed due to severe business conditions, while others can be dismissed on various grounds. This definition is applicable to companies employing at least 20 workers (Article 107(5)), meaning that in theory companies employing fewer than 20 workers can dismiss all of them for various reasons within 90 days.
Redefinition of collective dismissal: from 5 workers in 6 months to 20 workers in 90 days.
An employer (owner) is charged from HRK 31'000 (€ 4'124 as at 22 July 2013) to HRK 60'000 (€ 7'983) if they: offer work contracts to employees other than previous employees made redundant within six months of collective redundancies; do not make a redundancy programme; do not submit a redundancy programme either to the works council or to the governing office of the Croatian employment service; terminate employees' contracts sooner than one month after the submission of the redundancy programme to the employment service or before the expiration of the termination period for redundancies set by the employment service office; do not inform the works council of matters they are obliged to by law, which influence workers' business and social conditions; do not consult the works council on matters they are obliged to such as the redundancy plan, business transfer, changes in technology and organisation of work and other matters prescribed by law; decide without the work council's prior consent to include in the redundancy programme a representative from the works council or a pregnant employee, an employee on maternity leave or an employee who works part-time because of special childcare commitments either during the usage of these rights or within two weeks of the cessation of the usage of these rights. In all of these cases, a manager is charged HRK 4'000 to 6'000 (€ 532 to 798). An additional fine can also be charged to both the employer and manager in all these cases if these irregularities are spotted during an inspection of the premises. The amount of additional fine for the employer is up to HRK 10'000 (€ 1'330), while for the manager it is up to HRK 3'000 (€ 399).
If employers plan to make at least five employees redundant on the grounds of severe business conditions (within a group of at least 20 workers to be dismissed on any grounds) within the next 90 days, they are obliged to consult the works council in order to find alternative solutions (Article 120 of Labour Act). The employer must inform the works council of the reasons for collective redundancies in writing. As well as the reasons for redundancies, the information provided by employers to the works council must include: the number of employees to be let go; their qualifications and job descriptions; criteria for the selection of employees to be made redundant; the expected period in which the selected workplaces will be closed down; the amount of severance pay provided and the way the severance pay is calculated.
Between HRK 61'000 (€ 8'116) and HRK 100'000 (€ 13'304) is charged to the employer if: they terminate work contracts without explanation and without prior notice to the employee; in the case of business transfers, the previous employer does not inform the new employer of all work contracts and workers' rights and obligations arising from them; in the case of business transfers before the transaction is done, if the previous employer does not inform the works council and workers who will be transferred to the new employer in writing of the intended business transfer. A manager is charged between HRK 7'000 (€ 931) and HRK 10'000 (€ 1'330) for the same offences. If the irregularities regarding Article 294 are spotted during inspection of employers' premises, an additional fine of HRK 20'000 (€ 2'661) and of HRK 6'000 (€ 798) is charged to the employer and to the manager, respectively.
An employer can only make employees redundant if there is no possibility of employing them in other roles within the company or at other locations (Article 107(2)), meaning that they cannot train workers to work in other jobs or if the business circumstances are so bad that it is not reasonable to expect the employer to train the workers for work at other workplaces (Article 107(4)). The employer who, after consultation with the works council, still decides to make workers redundant must prepare a redundancy programme. Each redundancy programme must include: the possibilities for technology change or organisational changes in order to employ redundant workers; for employing workers in other positions within the same company; for seeking jobs with other employers; for part-time work; for professional retraining or additional training of workers to be made redundant. When redundancies occur, the employer must bear in mind the age of workers to be let go, their disabilities if applicable and their family commitments.
Employers must inform the Croatian employment service of the consultations with the works council and disclose to them the same document related to the reasons and criteria of dismissals as is provided to the works council. In addition, the employment service needs to be informed of the duration of consultations with the works council, results of the consultations and written remarks of the works council related to dismissals, if there are any. An employer who, after consultations with the works council, still intends to make employees redundant must prepare a redundancy programme. When preparing the redundancy programme, the employer needs to address the possibilities of technology or organisational change, employing the workers in other positions, finding them jobs with other employers, part-time work and worker's prequalifications (Article 121 of the Labour Act). According to Article 122 of the Labour Act, the employer planning collective dismissals is obliged to disclose the redundancy programme to the work council and to the governing office of the Croatian employment service. The works council can submit its remarks on the redundancy programme to the governing office of the Croatian employment service and to the employer.
Legalization of temporary work agencies.
Reduction of the termination period: halving notification (for instance, for 20 year tenure, from 6 to 3 months).
When previous employers, who are obliged to inform new employers of all employees’ work contracts in writing in the case of business transfers, fail to do so, the employees’ rights are protected by the Labour Act (Article 133(5)). If an employer fails to consult with the works council on important matters regarding the workers' social and business conditions, they are charged fines ranging from € 1'330 to 4'130 for employers (legal entities) plus an additional charge of € 1'333to 2'667 if irregularities are spotted during an inspection of an employer's premises.
The termination period starts on the day the notice of a work contract's termination is received, but it does not count during sick leave, pregnancy, maternity leave, half-time work, leave due to special circumstances such as child care, annual leave, leave due to national defence reasons, and other reasonable grounds. The minimum work contract termination period is two weeks for workers employed for less than one year. The standard termination period is a month if the employee has spent more than one year working with the same employer. A termination period of 1.5 months is allowed to employees who have two to five years of continuous service; two months after 5–10 years of service; 2.5 months after 10–20 years; and three months for service of over 20 years with the same employer. The standard termination period is increased by two weeks if a worker to be made redundant is aged over 55, and by a month if the employee in question is aged over 60. The minimum termination period rule for employers is valid even if they have offered changed, alternative work contracts to employees.
Contains provisions on inspectorate's services: legal affairs, general matters, control in several fields (catering, handicrafts, commerce, quality of goods, forestry, agriculture, labour and occupational safety).
Employers must inform the works council on a quarterly basis of expected business activities in the next quarter and of their influence on the business and social position of workers, expected salaries, employment policy, health protection, planned overtime work, and other important issues related to workers' social and business conditions. The employer must completely and promptly present important information to the works council and consult with the works council prior to making a decision that is important for the overall status of workers in the company (Article 149 (1)). Important decisions that affect workers' business and social conditions include: plans on employment policy; workplace change and dismissal (149 -3(2)); expected legal, business and social consequences for workers in the case of a business transfer (149 – 3(3)); the introduction of new technology and related changes in work organisation (149 – 3(5)); adoption of a redundancy programme (149 – 3(10)); and business transfers (149 – (3(11)). Unless otherwise agreed, the works council must submit its remarks to the employer in writing within eight days of the employer’s notice.
Shortening of working time from 42 to 40 hours per week.
Regulates activities of an unemployed person in collaboration with the Croatian Institute for Employment (national employment service) in order to confirm status of unemployed, for vocational training and to increase chances to get a job.
Programme "Experience and profit" (stimulate the employment of women up to 45 and men up to 50 and make the most of their experience)
Provides for accommodation of persons who get a job out of their place of residence. The employer must ensure them appropriate accommodation.
Programme "From university to employment" (employment of young persons with higher education)
Programme "A chance for us too" (stimulate the employment of disabled persons)
Provides for conditions and procedure for authorization granting and organization of activities related to job placement besides the Croatian Employment Agency.
Minimum conditions for an apprenticeship contract
Provides for rights of disabled persons to vocational rehabilitation and employment. Also deals with reduced working capacity, employment and work of disabled persons under specific conditions, labour relations of disabled persons, and establishments for vocational rehabilitation.
Minimum and maximum contribution bases were established, amounting respectively to 35 % and 60 % of the average wage. The upper limit rendered the system symmetrical, since the maximum pension amount (3.8 pension points per year) elicited much contribution evasion. In addition, contributions were fixed at 20 to 15 % to the first and 5 % to the second pillar – and entirely charged to employees
The process and methods of privatisation for electro-distribution
The process and methods of privatisation for INA
Programme "From study to work for all" (employment of young persons without work experience through an apprenticeship programme)
Programme "From school to workshop" (vocational training)
The Croatian Institute for Employment provides, inter alia, for the organization of the Institute, its legal status and activities, and deals with the procedure for rights implementation during unemployment.
The Act stipulates the rules and the system of measures for the protection of competition and regulates the powers, duties and the organisation of the authorities entrusted with the protection of competition.
Fund for vocational rehabilitation and employment of disabled persons aims at implementing a policy of development of vocational rehabilitation and employment of disabled persons, financing of vocational rehabilitation establishments and various rehabilitation programmes.
Employed and retired people who have a registered farming activity, small business or free occupations pay their contributions calculated based on the yearly income instead as previously on a certain amount no matter the income.
Customers can choose electricity provider.
Resuming wage-based indexation, including the 100 HRK + 6 % supplement into the pension base.
Introduced a quota system for employment of the persons with disability .
Establishment of a pensioner fund to be filled by state assets and budget transfers with the exclusive aim of carrying out the 1998 Constitutional Court decision. The fund was to be managed by HPB Invest.
Creation of the Agency for specialized education. The Agency is in charge of planning, development, organization, follow-up and evaluation of school and non-scholastic systems in the field of specialized education.
Education and Teacher Training Agency is a public institution responsible for the provision of professional and advisory support in the area of general education in Croatia.
Adult Education Agency is a public institution responsible for the provision of professional and advisory support in the area of lifelong education and training in Croatia.
Provides for the purpose, composition of bodies as well as means and sources of financing of the new national foundation for financial support of students
Some restriction for employment and higher requirements for employees
The government, after major protests by HSU and various pensioner associations, gave in to the reimbursement of the debt incurred for survivor and maximum pensions, which were previously excluded. This added another HRK 1.4 billion to the pensioner debt bill, to be paid to 43'781 beneficiaries (3'093 of whom were receiving maximum pensions until 31 December 1998).
The payments of workers’ claims for three earned yet unpaid gross salaries and other claims arising from work contracts related to the three months before the initiation of a bankruptcy process are ensured regardless of the type of contract they have. The same applies for the three-month period before the termination of a contract if the contract was terminated within the three months preceding the initiation of a bankruptcy process. The agency decides on the specific claim within 15 days of its submission and the relevant and finite decision on the claim's validity is, in the case of complaints made by subsequent workers, made by the governing ministry of labour and pension system within 30 days of the complaints' submission. Within 20 days of the decision, the agency must pay the claims either to the workers directly if the company has been closed down or to the company's account designated for this purpose, whose transactions are monitored by the bankruptcy manager. The bankruptcy manager must then transfer the received funds to the workers within eight days. The amounts guaranteed to workers are: up to the minimum average monthly salary in Croatia for each month for which the salary has not been paid or for which an employee has the right to receive remuneration for sick leave; up to half of the minimum salary for remuneration claims for unused annual leave days; up to half of the legally prescribed employer’s obligation for severance pay; up to a third of non-appealable remuneration for indemnification. Such claims are paid to workers by the agency responsible for ensuring workers’ claims in the event of an employer’s bankruptcy. Payment comes from a special fund for covering bankruptcy costs if the funds available from the bankruptcy estate are not sufficient. Claims can be paid to workers provided that they have reported them to the agency or to the governing office of the Croatian employment service within 30 days from the governing court's decision on the bankruptcy estate or starting from the 8th day after the announcement of the bankruptcy process in the Official Gazette. Employees' claims above the guaranteed three salaries included in insured employees' claims, but up to three minimum gross monthly salaries in Croatia in total are included in the bankruptcy estate of the employer. It relates to the claims of all workers except those who were in top management positions.
The target groups for this measure are: the employed older than 50 who have worked more than five years with the same employer; disabled employees if they have had a permanent work contract for at least 12 months with the same employer; other specific groups of employees who have had permanent work contracts for at least 12 months, such as recovering addicts, victims of human trafficking, victims of domestic violence, asylum seekers, and people who were raised in orphanages. The subsidy is approved for a period of up to one year for workers who had been made redundant because of their employer's business difficulties and who now work for a new employer. The amount of public funds available ranges from 50 to 75 % of an employee's gross annual salary. The highest subsidy is given to disabled people and the amount of the subsidy is the same regardless of the size of the employer for whom they now work. For those who have completed primary school, the subsidy is up to HRK 29'175.60 (€ 3'879 as at 16 July 2013) per year. For those with a high school diploma, it is up to HRK 53'063.28 (€ 7'055). For disabled people with a university degree, the subsidy is up to HRK 81'635.88 (€ 10'853) per year. Unlike subsidies approved for disabled people, the subsidies for workers older than 50 and other specific groups of employees such as recovering addicts, victims of human trafficking and others depend on the level of education of the worker in question and on the size of the company by which they are employed. Subsidies for employees aged 50 and older and for other special target groups of employees with a primary school diploma and who have had permanent work contracts for at least 12 months and are at risk of redundancy are up to HRK 11'670.24 (€ 1'552) in a large company and HRK 19'450.44 (€ 2'586) in SMEs. For employees aged 50 and over and other special groups of employees other than disabled people with a high school diploma, the subsidy ranges from up to HRK 17'687.80 (€ 2'352) for employment in a large company to up to HRK 29'479.60 (€ 3'919) per year for employment in an SME. The highest subsidy is approved for employees aged 50 and over and other special groups of employees other than disabled people with the university degree – from up to HRK 21'769.60 (€ 2'894) for those employed in a large company to up to HRK 36'282.64 (€ 4'824) for those employed in an SME.
The measure is targeted at employers who permanently keep at least 20 % of their seasonal workers after the end of the season. For these seasonal workers, the employer can request co-financing of pension insurance out of season for a maximum period of six months. The employer must submit the request for pension insurance payment to public employment service on a monthly basis together with proof that they have paid employees' salaries and the corresponding taxes. The publicly funded amount of pension contributions is capped at the amount of monthly net salary of HRK 1'600 (€ 213 as at 17 July 2013). The education of seasonal workers who are not permanently employed and who wish to continue education is not funded. Both the employer and the seasonal worker are obliged to return the amount of publicly funded pension insurance if the employer does not offer the seasonal worker a job in the next season or if the seasonal worker refuses to accept the position offered in the next season. The measure is designed for tourism firms mostly.
This measure aims to preserve the jobs of employees with many years of service who are no longer sufficiently qualified for their role due to the adoption of new or changed technologies. It is likely that these workers would remain unemployed for a long time if they were made redundant. This measure is applied when employers decide to adopt new technologies and when they are legally obliged to do so due to regulatory convergence with sectorial EU rules. To qualify for a subsidy, the company must submit: its financial statements; proof of its size; data from the solvency register; data on the use of other public grants; employees' names, identification, actual job positions and level of education; the specifications of training required and data on justifiable training costs.
Defines the aims and measures of policies and state support in agriculture, sustainable development, institutional support and inspection.
The Act applies to all forms of prevention, restriction or distortion of competition by undertakings within the territory of Croatia or outside its territory, if such practices take effect in the territory of Croatia.
The selection of employees for collective redundancy is made by the employer and must be discussed with the works council. From 1 July 2013, an employer cannot make decisions on collective dismissals without prior consultation with the works council. When selecting employees to be made redundant, care must be taken with regard to their age, gender, level of education, job specification, termination period, duration of work contract, disability status, the number of family members they support and the amount of severance pay required as well as alternative measures of employment and additional training for another position within the company.
An employer who has made employees redundant for business, technical or organisational reasons cannot employ other workers for these jobs for at least six months. If there is, within six months of the redundancies, a need to employ workers for these positions, employers are obliged to offer the work contracts to the redundant workers first.
An employment contract could be concluded for a definite period of time only in exceptional cases, when the end of employment relationship has been pre-determined for objective reasons, such as the meeting of a specific deadline, completion of a task or occurrence of a specific event (Article 10).
During the termination period, employees who are soon to be made redundant have the right to be absent from work for at least four hours per week to look for another job.
An employee whose work contract is terminated by an employer after two or more years of continuous service has a right to severance pay. The amount of severance pay is determined according to the length of the work contract in question. The minimum amount of severance pay for each year of service is one-third of the average monthly salary that the employee had earned in the last three months prior to the termination of the work contract. If there is no special regulation in the form of a collective agreement or labour by-laws, the total amount of severance pay cannot exceed six average monthly salaries, as measured by monthly salary earned in the last three months prior to the work contract termination.
Criteria which the Croatian Competition Agency takes into account before its decision on immunity from fines.
Prolongation of the right to unemployment benefit beyond one year in defined cases.
Annulation of law to privatise electro-distribution.
Creation of an Agency for vocational training and adult education.
The conditions, which agreements between undertakings in the rail, road and inland waterway transport sector as well as the agreements between undertakings providing the liner shipping services (consortia) must contain, are defined.
The notification of concentrations and the assessment criteria of the compatibility of concentrations is defined.
The method and the criteria in defining the relevant market which represents the basis for the calculation of market shares in the proceedings carried out by the Croatian Competition Agency.
This measure is created to foster employment related to investments. 100 % of the maximum grant is approved provided that the following workers are employed: the unemployed who were registered with the Croatian employment service for at least three months before taking a job with the grant beneficiary; first-time workers aged up to 25 years who do not have an exact profession and who were not recorded by the Croatian employment service; first-time job workers with at least a high school degree aged up to 29 who were not recorded by the Croatian employment service; workers aged up to 29 within 90 days of acquiring their qualifications regardless of the level of education, provided that they have been registered by the Croatian employment service; workers whose past contracts were terminated due to their previous employer's bankruptcy. For employment of all other workers, 40 % of the maximum grant is approved. Investments eligible for the grant for creating new jobs must have the following characteristics: the investment project must be pursued exclusively in the business premises of the grant beneficiary and it must be an investment in assets that are subject to depreciation only. The assets must be purchased at market prices from independent enterprises and they must be included in the balance sheet of the grant beneficiary and cannot be sold for at least five years. An employer who creates new jobs with investment in regions where the regional unemployment rate is up to 10 % will be approved a grant of a maximum of 10 % of justifiable investment costs or up to € 3'000 per created job. If new jobs are created in the regions with an unemployment rate between 10 and 20 %, a maximum of 20 % of the costs of opening a new job are refunded (up to € 6'000) per created job. If the unemployment rate exceeds 20 %, a maximum of 30 % of justifiable costs of creating a new job are refunded, which is an equivalent of up to € 9'000 per job created. The basis for grant calculation are justifiable costs related to creating new job positions, which are calculated as an employee's gross salary in a two year period. A maximum grant is calculated as a percentage of justifiable investment costs for creating new positions in large enterprises. The latter amount is considered on the basis that is increased by 10 % in the case of investments by medium-sized companies and by 20 % in the case of investments by small companies. This amount must be in line with regional grant allocation rules. In the case of very large investments, a maximum grant for investments up to € 50 million is calculated as 100 % of the maximum regional grant. For part of investments above € 50 million and up to € 100 million, and for further investments above € 100 million, a maximum grant is calculated as 50 % and 34 % of the maximum regional grant, respectively. This grant is added to other grants related to investment and the cumulative amount of all grants is capped according to the maximum regional grant allocation rules and special grant rules that apply for very large investment projects.
A mobile team is available from each regional office of the Croatian employment service. Mobile teams of the Croatian employment service prepare workers faced with redundancy for conditions on the labour market and help them search for a new job while they are still employed. The teams consist of a labour market advisor, a legal advisor and a psychologist, as well as some other members if necessary. The services they render include: information on the demand in the labour market; business advisory services; visits to potential employers; group and individual advice on termination periods; legal advice and so on. Target employees are those in the termination period, especially those employed by employers experiencing financial difficulties. A mobile team helps prepare the workers to enter the labour market by identifying their strengths and weaknesses and the possible roles in the market for which they can apply. Other activities include: organising training for efficient job hunting; helping workers to write their CVs; helping them prepare for job interviews; recommending worthwhile training and education to improve workers' professional skills; organising training for those willing to establish a start-up company; announcing suitable vacancies on the announcement board in the company from which the workers are to be made redundant; mediating for jobs in the name of workers to be made redundant and especially with employers who have announced job vacancies. Mobile teams also organise public co-financing of gross salaries for employees older than 50 in the case of employment in another company.
This measure is created to foster innovation, employment and investments in general, especially in economically weaker parts of the country. The measure is effective only if a micro enterprise opens at least three workplaces related to their investment and if other companies open at least five workplaces related to their investment. The investor needs to ensure at least 25 % of justifiable investment costs. The amount of a subsidy can be either justifiable investment costs or justifiable cost of employment, whichever amount is higher. For investments of more than € 1 million, the income tax rate is up to 50 % lower than the statutory tax rate for the next 10 years provided that at least five new jobs related to the investment are created. For investments between € 1 million and € 3 million, the statutory tax rate is reduced by 75 % for the next 10 years provided that at least 10 new jobs are created. For investments above € 3 million, there is no income tax rate for the period of the next 10 years if at least 15 jobs related to the investment are created. The statutory income tax rate is reduced by 50 % for the next 5 years for micro enterprises that invest at least € 50'000 on the condition that they create at least three job positions and preserve them for at least three years. There are certain rules that need to be fulfilled regarding the investment: the investment project must be pursued exclusively in the business premises of the grant beneficiary and it must be an investment in assets that are subject to depreciation only. The assets must be purchased at market prices from independent enterprises and they must be included in the balance sheet of the grant beneficiary and cannot be sold for at least five years. Investments must be higher than € 50'000 for micro enterprises and higher than € 150'000 for all other companies. A maximum grant is calculated as a percentage of justifiable investment costs or justifiable costs for opening new positions in large enterprises. The latter amount is considered on the basis that is increased by 10 % in the case of investments by medium-sized companies and by 20 % in the case of investments by small companies. This amount must be in line with regional grant allocation rules. In case of very large investments, the maximum tax credit for investments up to € 50 million is calculated as 100 % of the maximum regional grant. For part of investments above € 50 million and up to € 100 million, and for further investments above € 100 million, the maximum tax credit is calculated as 50 % and 34 % of the maximum regional grant, respectively.
Constitutional Court Decision on cancellation of some articles in the Act on Mandatory Health Insurance regarding the institutions that can provide health insurance.
The Act on the Criteria for Participation in Tripartite Bodies and Representativeness for Collective Bargaining, passed in mid-2012, repealed the possibility of an open-ended application of legal rules from expired or terminated collective agreements.
This measure is aimed at covering justifiable costs of new employees' training. The training can be general or specific. The first benefits workers and current and prospective employers, while the latter benefits workers and their current employers only. A maximum grant for special training cannot exceed 25 % of justifiable costs of training for large enterprises, and 35 % and 45 % of justifiable costs of training for medium-sized and small companies, respectively. General training grants cannot exceed 60 % of justifiable training costs for large companies, 70 % for medium-sized companies and 80 % for small companies. In special cases, when it is difficult to differentiate between general and specific training, the maximum grant amount is calculated as for special training. In every case, the maximum amount of grant awarded, together with the grants approved for investment, cannot exceed 50 % of justifiable costs of investment. The maximum grant amount for training cannot exceed 50 % of the maximum grant allotted for creating new job positions related to investments. The latter rule is prescribed by a special government decree. Justifiable training costs encompass: costs of instructors; trainees' and trainers' travel-related costs; depreciation costs of equipment used in the training process. Investments eligible for the training grant must have the certain characteristics. The investment project must be pursued exclusively in the business premises of the grant beneficiary and it must be an investment in assets that are subject to depreciation only. The assets must be purchased at market prices from independent enterprises and they must be included in the balance sheet of the grant beneficiary and cannot be sold for at least five years.
Determines mediation, vocational trainings and education with aims of greater level of employment, unemployment insurance, promotion of professional mobility, source of financing for the Employment Council and the composition and workings of the Council.
A new quota system has been introduced. All employers who employ at least 20 employees are obligated to employ 2 to 6 % employees with disabilities in relation to the total number of employees in the undertaking (Article 8(1)) in suitable positions, subject to their own choice and under appropriate working conditions. Foreign diplomatic and consular missions and protected employment are excluded from this obligation. It entered into force on 1 January 2014.
Determines the means and conditions for crafts activity, types of crafts, rights and duties of employed persons, education and vocational training, legal persons and the organization of crafts
Until 1 July 2013, the employment service was obliged to disclose any remarks it had on the redundancy programme to the employer within eight days of the programme's submission. The employer is now only obliged not to terminate contracts within the first 30 days after the submission of the redundancy programme to the governing office of the Croatian Employment Service or when the employment service lengthens the termination period for some or all workers due to justifiable social or economic reasons, provided that these workers will be included in active public employment measures.
Amendment from July 2013 (OG 73/13) relaxing the use of fixed term contracts.
Broader implementation of Agencies for temporal employment
Determines rights of disabled persons, their employment and work on the general job market and under special conditions, establishment and operation of institutions for professional rehabilitation, measures to promote employment of disabled persons, and penal provisions.
Self-employed persons are insured in case of unemployment in a similar manner as are employees.
State-owned enterprises have been permitted since January 1989 to transform themselves into either mixed or privately owned corporations. This initial stage was important for the corporatisation of Hungarian enterprises. However, managers of some enterprises used this opportunity to sell state assets to themselves and/or their business associates at bargain prices without open bidding ("spontaneous privatisation").
Hungary introduced PIT. In 1990, personal income tax rates ranged from 15 to 50 %.
Registration at Manpower Service Offices is a prerequisite to receive unemployment benefits.
The wage system became more liberal. Although wage increments still had to be included in the profit tax base (at a rate of 40 %), if a company increased its value added by at least double the wage bill increase, wages could be raised tax-free. Enterprises with wage costs of 20 million forints or less are not subject to the regulation.
Benefit levels were 50-70 % of the previous average income for one year, thereafter it was reduced to 75 % of the benefit.
Unemployment benefits were available to those who had worked for 18 months of the previous 3 years.
On 1 January 1989, Hungary unified the diverse set of social security contribution rates into a contribution rate equivalent to 53 % of the wage bill, 43 % paid by the employer and 10 % by the employee.
Unemployment benefits are introduced in early 1989. Compensation is financed by the unemployment fund.
The abuses of the spontaneous privatisation period led to the passage of the Transformation Act in 1989, which prevented some of the most blatant practices, such as the transfer of assets without transferring liabilities.
Introduction of taxation of company profits at 50 %.
Agreements designed to restrict competition. Abuses of dominant market positions and unfair or deceptive practices are prohibited. Supervision is provided for mergers involving a combined market share of more than 30 % or if sales of the participants exceed 10 billion forints. The Economic Competition Office must be notified of such mergers in advance, then the Office evaluates whether the proposed merger is on balance beneficial. The Office should also be consulted whenever privatisation involves the merger or demerger of state owned enterprises that would negatively affect domestic competition.
Declaring that prices should be primarily determined by market competition and allowed the state to intervene only under specific circumstances and for specific goods.
For interest payments on the pre-1989 mortgage loans, the debtor could choose between either having the interest rate raised from 0 to 3 % to 15 % or having half of the outstanding loan forgiven, while the other half would bear market rates. There is a transitional arrangement for 1991, limiting the additional payment to Ft 1'500 per month.
Switch from tax-based funding to compulsory insurance.
Ownership of health facilities transferred to local governments.
In order to allow the social partners to co-ordinate their views on wage negotiations, a national level tripartite body, the National Council for the Reconciliation of Interests, was created in November 1990 (originally it was created in 1988), with the participation of the government, the unions and the employers. Although this body can only make recommendations, when a unanimous decision is reached it becomes binding.
These acts transferred state-owned property to the State Property Agency (SPA), which had been given the task of managing and arranging for the privatisation of such property.
The SPA selected 20 top quality Hungarian companies for sale. The aims of this programme have been to sell the majority of the shares of these companies to investors in Hungary and abroad, and to identify financially sound strategic partners who would introduce new technology, marketing expertise and managerial techniques.
The SPA introduced its investor-initiated procedure, which permits investors (usually foreigners) to start the privatisation process without the approval of enterprise management. Under this procedure, investors inform the SPA in writing of their proposal to buy Hungarian assets, then the SPA investigates whether other interested parties (the relevant ministry, local councils, and management) are in agreement with the proposal. If management opposes the idea, the SPA may take control of the company.
A further law for the privatisation of the retail trade, catering and consumer services (the so-called pre-privatisation law) was also enacted in 1990 with a simplified procedure which is also administered by the SPA. Potential buyers were limited to Hungarian citizens, and sales were mostly through auctions.
The rate of taxation on company profits was lowered to 40 % in 1990.
The law sets incapacity of finding a suitable job and cooperation with the employment agency as conditions for claiming unemployment benefit. However, the definition of a suitable job is strictly tied to qualifications or skill level of previous job.
The support consists of a 70 % replacement of foregone wages for employees who are subjected to reduced working hours. It is restricted to a maximum of one year and is designed to encourage employers to solve temporary employment problems not by downsizing but by part-time employment of their employees.
Prescribing 110% of unemployment benefit for those who participate in training schemes.
Hungary is to eliminate fully tariffs on a wide range of industrial products until 1997. More importantly, tariffs on the highly protected "sensitive goods" are to be lowered by 35 % - with a total elimination by the year 2001.
Prescribing rules for collective dismissals (defined as the layoff of 25 % or workforce or at least 50 persons), notification and consultation obligation of employers.
Stricter rules for loan classification based on international standards, although not fully in line with them. Banks were required to adopt BIS conventions on capital adequacy, and provision against bad or doubtful loans out of pre-tax income.
A new Accounting Law will be enacted on 1 January 1992. It introduced international standards into accounting.
Encouraged debt collection through not permitting unrealized interest rates to enter the books as income.
Provides for automatic triggering of bankruptcy: any debtor who is in default for more than 90 days is obliged to file for bankruptcy and is subject to sanctions, including imprisonment, if he willingly fails to do so. Self-declared bankruptcy is compulsory even in cases when overdue debt is small, or when the debtor's receivables exceed his debt. Liquidation can be voluntarily initiated, either by creditors or by the debtor. Creditors are entitled to petition for liquidation, after a claim is overdue for more than 60 days.
Establishment of National Public Health Service (responsibility for local hygiene stations transferred from local governments)
Increases of the wage bill up to 18 % are tax exempt; from 18-28 % enterprises have to pay profit tax only on the excess; from 28 % onwards they have to pay tax on the entire increase in the wage bill.
It created tripartite bodies, called Labour Market Committees, at central and regional levels, to decide priorities and determine the allocation of resources.
Decreasing the maximum amount of unemployment benefit from 3 times minimum wage to 2 times.
Decreasing the maximum duration of the unemployment benefit from 2 years (1+1) to 1.5 years (360+180 days).
Benefits are paid in the first half of the term at a rate of 70 % and for the second 50 % of the previous income but the amount cannot exceed three times the minimum wage.
Benefits are paid for those who have been in work for 360 days out of the last 4 years, for 180-720 days depending on the time at work in the past 4 years. Eligibility is extended to young high school or university graduates who are first-time job-seekers. Those voluntarily unemployed do not receive benefit for 90 days.
Setting a 2 years maximum (1+1) duration for the unemployment benefit.
Eligibility is extended to young high school or university graduates who are first-time job-seekers.
Those voluntarily unemployed do not receive benefit for 90 days.
Unemployment benefits are financed by the newly created Solidarity Fund, funded with compulsory contributions paid by employers and employees, 1.5 % and 0.5 % of the wage bill respectively. The Employment Fund is now responsible only for financing labour market policies.
Continued pensions from 1991 onwards were indexed according to the rise in nominal, net wages, in other words, at a rate lower than the inflation rate, since real wages were falling sharply.
Under the terms of the Indemnification Act of 1991, those who suffered property losses after 1939 are eligible to receive compensation warrants of up to 5 million forints. Warrants can be used to purchase state property, to purchase shares in certain companies designated by the SPA, and to buy land. They can also be exchanged for a non-inheritable annuity.
A simplified, self-initiated privatisation process that returned substantial discretion to firms below a certain size. In the first phase, commencing in September 1991, eligible companies were limited to those with less than 300 employees and a book value and turnover of less than 300 million forints, or 430 companies in total. Later, the limits were raised to 1'000 employees and 1 billion forints, which added 277 companies.
In 1991 the SPA started the Preliminary Privatisation, or "Pre-privatisation" scheme. This required enterprises that owned small (less than 10 employee) retail shops, restaurants, or consumer service units to sell these units. The number of small businesses involved was about 10'000. Potential buyers were limited to Hungarian citizens, and sales were mostly through auctions. Municipal ownership of the buildings housing these operations meant that in the majority of cases only leasing rights to the premises could be sold. This programme first progressed slowly, but accelerated in 1992, and by the end of the year 7'637 out of 10'289 eligible units had been sold.
SPA is to privatise enterprises which had already been transformed into economic associations during the pre-SPA period of spontaneous privatisation, and to assess the readiness of state holding (shell) companies for privatisation. Under this Second Programme the SPA will publish every two months lists of up to 15 state holding companies to be privatised, until approximately 80 companies have been put up for sale. The first batch of 12 companies was listed at the end of March 1991.
All tariffs and para-tariffs on industrial products originating in the EU have been bound since March 1992, as have quantitative restrictions and measures having an equivalent effect.
Introducing detailed rules on the termination of contract by mutual agreement, ordinary and extraordinary notice and also on the period of notice. Constraints on regular dismissal: sick leave, pregnancy, only with special justification within 5 years before retirement. All cases of dismissals can be taken to labour court, and the court can order full reintegration of previously dismissed employee (into the same job).
Setting up more flexible conditions for public sector workers than for civil servants but less flexible than for private sector employees.
Anchoring the amount of severance payment to years of employment. Maximum amount equals 6 times the average monthly wage, after 25 years of employment. In addition, three times the average monthly wage is due if the employment contract is terminated less than 5 years before retirement.
Prescribing more stable employment conditions for public sector workers than in the private sector (less opportunities for dismissal, higher severance pay in case of dismissal within 5 years before retirement).
Stipulates a 30 days trial period, but in case of mutual agreement it allows for 90 days maximum.
Mandating the continuity of existing labour contracts in the case of succession of employer.
In 1992 the country began a system of physician compensation tied to the number of patients served.
The government introduced free elections to the self-government of the Pension Insurance and the Health Fund held in May 1993. The elected boards of the two funds had not only the right to advise and consult with the parliament on social insurance issues, but to veto its policies.
The Code stipulates that a Work Council should be elected in every enterprise with more than 50 employees. The Work Council must be consulted by the employer for any decision affecting a substantial group of employees, such as reorganisation plans, steps prior to privatisation, training plans, plans to promote employment and early retirement, and vacation plans.
The Code makes provision for the signing of collective agreements at the enterprise, branch or national levels. These agreements may cover the whole range of terms and conditions of employment, trade union representation and negotiation procedures.
Stipulating 20 days of paid holidays as a minimum and setting up a system of supplemental holidays, sick leave (10 working days, 75 % of wage), parental leave (24 weeks paid, unpaid until the 3rd birthday of the child).
Prescribing detailed working time rules. 8 hours working day, 12 hours maximum under specific circumstances. Allows for working time animalization but an 8 week average should match the full working time. At least 8 hours rest period between shifts. Detailed rules on supplements for non-regular working time.
Beginning in 1993, a two-phase system was introduced. Maximum possible benefits during the first phase (three months) were more generous than in the second phase.
Instead of anchoring it to the minimum wage, lump sums were introduced as minimum/maximum amounts of unemployment benefit .
Decreasing the maximum duration of the unemployment benefit from 18 to 12 months (90+270). The duration of benefits to which an individual is entitled depends on the number of days of contribution. An individual with 360 days of contributions may receive benefits for 90 days. For every additional 120 days of contribution a worker earns 30 more days of benefit entitlement to a maximum possible 360 days’ benefit.
Introduction of assistance scheme for long-term unemployed. Governance of the scheme was decentralized to municipalities.
In 1992, firms were made responsible for the first 10 days of illness each year.
The valorisation of past earnings for wage increases was truncated, by omitting to valorise the earnings of the last three to four years before retirement, which were accepted instead at their nominal value. Those who retired in the early and mid-1990s, during a period of extremely high inflation, lost heavily by receiving very low entry pensions.
First, past earnings as a basis for pension determination were calculated as the average of the ‘best’ (for the beneficiary) three of the last five years before retirement. After 1992, however, earnings for the period from 1988 until the moment of retirement were considered, irrespective of what was ‘good’ or ‘bad’ for the beneficiary. Thus the period for assessing the past earnings of a retiree was increasing by one year each year, so that ‘past earnings’ would become lifetime earnings by the year 2050 (assuming retirement at a statutory age of 62).
The Corporate Income Tax, introduced in 1992 to replace the Enterprise Profits Tax, lowered the tax rate from 50 to 40 %, and eliminated or reduced preferences given to certain industries.
Phasing-out of the "automatic trigger"; the application of qualified majority voting instead of unanimity to approve a reorganisation agreement; withdrawal of the automatic 90-day moratorium on debt service payments making it dependent instead on majority agreement; and a reduction of the period within which a re-organised company could return to bankruptcy from three to two years.
Outpatient care remuneration based partly on a fee-for-service scheme, and hospital care remuneration on Homogenous Diseases Groups-type scheme (inspired by the Diagnosis Related Groups approach).
Voluntary ‘‘Mutual’’ Health Insurance (supplementary insurance operated by private non-profit institutions) authorised.
Before 1993, the decisions of the IRC applied to all sectors of the economy. Since then, separate Councils have been established for the civil and public services.
A legislative and regulatory framework was put in place for complementary private pensions funds during 1993.
The age of retirement for women was supposed to increase gradually until 2003 when the same age would apply for men and women. Increases were enacted in 1993, with implementation scheduled for 1994, subsequently postponed to January 1995. (see 1995)
The privatisation of the state-owned telecom monopoly, Matàv, to a consortium composed of Ameritech and Deutsche Telekom begins.
Special treatment of intellectual work became less generous.
In 1993, one third of estimated fringe benefits, amounting to some HUF 65 billion, (around 2 % of GDP) became fully taxable.
Operators of public work programs (mostly local governments or NGOs) can claim up to 70 % (according to an amendment 1994/CV in the same year up to 90 %) of labour costs from the central government.
Executing a set of tariff and non-tariff barrier reductions.
The act established the legal framework for preventing money laundering.
The government recapitalised the banks by enlarging its equity position in some, and by providing subordinated loans to smaller ones. In return, banks transferred non-performing assets to newly-created bad-debt-workout departments in order to sell them, reach an agreement with the creditors, or write them off.
Social security contributions by employees were made tax deductible, accounting for a large increase in net wages relative to gross wages, and possibly reversing much of the tax revenue enhancement gained in 1993.
In the 1995 Budget a tax credit has been introduced for pension premiums.
The successful completion of the bank- and debtor-consolidation plans paved the way for the privatisation of the major banks. By the end of 1996, the Hungarian banking sector was almost entirely privatised, although the state retained large minority stake holdings in some of the largest banks. In particular, it remains a large minority shareholder of OTP, the National Savings Bank, with a 25 % +1 voting share. For the rest, effective control lies with private-sector investors.
The 1995 budget has introduced a major change in the system replacing the 36 % single-stage tax with a two-part tax system: the general corporate tax rate is halved to 18 % with a further 23 % supplementary tax on dividends. Inter-corporate transfer of dividends are permitted as the higher rate is only to be paid on net dividends.
For 1994, a new maximum tax rate of 44 % was introduced, and all rates and brackets will be continued in 1995 without indexation. There are now six brackets comprising of 0, 20, 25, 35, 40 and 44 %.
In July 1995, the Communal Employment programme was supplemented with money from the central budget to promote the short-term communal employment of those receiving UA. The goals are to reinforce labour force attachment and prevent skill erosion among the long-term unemployed, while filtering out those not truly unemployed.
Hungary has reduced industrial tariffs affecting 75 % of the value of imports from the EU in January 1995 and further liberalisation measures have been programmed until the year 2001.
Hungary is a founding member of the WTO and since January 1995 it has started to implement its agricultural and industrial market access agreements.
Introducing an 8 % import surcharge, to be phased out by 1997. Firms processing imports for re-export are exempted.
First comprehensive public procurement law after transition
By 1997, a complex set of MNC-supporting measures is in place: direct subsidies, tax breaks, infrastructural and administrative support. After the 2004 EU-accession the role of direct tax holidays were reduced, but the generosity of other measures is still relatively high.
A national core curriculum was established in 1995 which is to be implemented by all schools – including vocational schools.
Cost savings in the health system including better control of medicines to save HUF 8 billion in 1995.
Depending upon the drug, medication is reimbursed at a zero, 50, 70 or 90 % rate. While drug companies are free to set their own wholesale prices, the price at which a specific chemical is reimbursed is fixed by the Ministry of Health following negotiations between the experts of the Heath Insurance Fund Administration, the ministries of Health and Finance and manufacturers.
Wages in the budget institutions are to grow by no more than 9 % and in majority state-owned companies by between 0 % and 15 % depending on the profitability of the enterprise and whether its debt is subject to negotiation. With inflation officially projected at some 28 %, these norms imply a significant fall in real wages.
Prior to 1996, benefits under the means tested UA system were of unlimited duration. In July 1995 a two-year maximum was imposed with the benefits of existing beneficiaries expiring in December 1996.
Withdrawal of universal family allowances, maternity pay and leave provisions from July 1 to be replaced by targeted social assistance. The combined net savings were originally expected to be HUF 14 billion in 1995 and HUF 32 billion in 1996 (of which HUF 22 billion is due to family allowances), but will be slightly lower because of amendments added by Parliament maintaining automatic benefits for families with three or more children.
25 days of sick pay to be paid by the employer, with the first five days subject to the outcome of collective agreements.
The retirement age for women, currently at 55, would have been gradually raised until 2003 to that of men (60), but the implementation was partly suspended. An employer cannot initiate retirement for women at the age of 55, but only at 56, whilst the employee has the right to retire at 55 years.
Merges the two state holdings handling state assets and conducting privatisation to a new holding ÁPV Rt. Strengthens parliamentary oversight, and directly controlled by the minister for privatisation instead of the Financial Ministry. Codifies procedures for invitation, tendering, evaluation and the announcement of tender results. Provided the legal framework for the direct, cash sale privatisation of strategic industries, which accelerated from 1995.
An additional 40 % stake in MATAV, the telecommunication company, was sold, bringing its private shareholding to about 70 %.
A majority share in MOL, the oil and gas conglomerate, was sold to domestic and foreign investors; five gas distribution companies were privatised; minority stakes (just below 50 %) in electricity distribution companies and in two nonnuclear power generators were sold to foreign investors.
In 1996, the government introduced a Rehabilitation Fund and another pilot programme aimed at helping disability pensioners back into the labour force.
New competition law, in line with a more fully-fledged market economy.
Changes the system of licensing financial institutions, strengthens supervision, reduces the maximum share held by an individual or by the state in a bank from 25 to 15 %.
From 1 January 1997 banks are allowed to trade in government securities both on their own account and as brokers (via subsidiary companies), although they are still forbidden to trade in corporate securities (except for privately-placed ones). This arrangement is expected to be transitory in the light of future EU membership, which will allow for the establishment of an ‘‘universal banking’’ system.
The Act on Hungarian Banking and Capital Market Supervision merged the Institutes responsible for banking and securities and stock-market supervision into a single new supervisory authority, the State Money and Capital Market Supervisory Board.
The government stipulated for each county maximum outpatient capacities and the maximum number of inpatient beds by speciality. The decision regarding which beds or hospitals to close was left to ‘‘consensus committees’’ in each county. This process led to the elimination of 6'300 acute-care beds (9 % of the acute hospital capacity).
As of January 1997, the previous two-phase system was replaced with a one-phase system, with benefits set at an intermediate level. Benefits are calculated on the basis on the average monthly wage, but are subject to both a floor and a ceiling, which are relatively compressed and have fallen in real terms. In 1997, the floor was 10'350 forints sand the ceiling was 20'700 forints or 1.24 times the minimum wage.
Prior to 1996, both UA and UI recipients were allowed to earn as much as the minimum monthly wage without benefit penalty. Earnings above this limit, which was reduced to one-half the monthly minimum wage in 1996, cause benefits to be cut off.
The days for which firms are responsible have been increased from the first 10 to 15 days.
Phasing out the insurance-based parental leave (GYED) and re-introducing means testing for the previously universal extended parental leave (GYES). (In 1995, the adopted immediate abolishment and introduction of means testing was found unconstitutional by the Constitutional Court.)
Benefit reductions for early retirement and some rewards for delayed retirement were introduced at the same time.
Statutory retirement age raised for men from 60 to 61 years (effective from 1998) and 62 years (effective from 2000), and for women, from 55 years by one year of age in every second calendar year until 2009, when it reaches 62.
A number of important transactions were completed or initiated, including the sale of MHB (Hungarian Credit Bank) and of the HungarHotel hotel chain.
UI benefit claimants no longer receive additional benefit when undergoing training, and a recipient whose benefit expires while on training will see the amount of the benefit reduced to the level of unemployment assistance benefit. Similarly the income support of new entrants involved in training programmes have been lowered to the level of UA.
A new ALMP programme was set up in 1997 aimed at the long-term unemployed who have never benefited from an ALMP. The programme will provide interviews, career counselling and subsidised employment where necessary.
Following the commitments specified in the 1997 Agreement on Basic Telecommunications between Hungary and the WTO, the fixed-line market for all long-distance services is to be liberalised by the end of 2002 and for local services one year later, while number portability is to be introduced in 2004.
Refining the rules for collective dismissals and incorporating them into the Labour Code. The new regulation broadened and refined the former narrow definition of group dismissal and set up the basic rules of the consultation and information procedure.
As a consequence of the 1997 amendment of the act on credit institutions and financial enterprises, capital account was liberalised as of 1998.
Permitting the creation of credit institutions that specialise in mortgage loans financed by mortgage bonds.
Access to hospital care can be gained following referral by a specialist or family physician, while only specialists can order MRI, CT and Digital Substraction Angiography (DSA) scans and only those working in hospitals can prescribe positron emission tomography (PET) examinations.
Co-payments are required if patients normally requiring referral consult directly a specialist or if they deal with a specialist other than the one to which they were referred. In such cases, service providers bill patients directly and the latter must pay with a postal-order. The government decree defines some basic fees but allows the providers (outpatient clinics, hospitals) to reduce or even waive fees. If the patient does not pay the bill, the institution is responsible for collecting the money.
The previous "one union, one vote" consensus-based decision-making process was changed to a three-quarters-majority rule where the votes are now weighted by union size.
The government made access to disability benefits temporary and required more frequent medical evaluations.
The Contributions Act required employers’ contribution to the Social Security Pension Scheme to decrease from the pre-reform 24 % of gross wages to 23 % by 1999 and 22 % by 2000.
Employees’ contributions (up to the ceiling on ‘pensionable income’) were to increase from the pre-reform 6 % to 7 % by 1998, 8 % by 1999 and 9 % by 2000. Of this, Mixed System members were to pay 1 % to the Social Security Pension Scheme and the rest to their Mandatory Private Pension Fund.
The regular benefit equal to between 60 and 70 % of insured wages will be completely phased out by the end of April 1998.
Gradual transition: sustained wage-indexation with a one-year lag in 1999, a 30–70 mix of the price and wage indices in 2000, and the so-called Swiss method (a 50–50 mix) in 2001.
The existing Pay-As-You-Go (PAYG) system is being replaced by a three-tier system, including a modified PAYG system for basic benefits and two fully-funded privately operated tiers, one a new compulsory scheme and the other the pre-existing voluntary system. Workers entering the labour force after July 1998 were required to join the multitier system, placing one-quarter of their total pension contribution into a personalised account with a private pension fund that invests the money in a range of securities defined in state prudential regulations. Already-employed workers were given the choice of opting for the new multi-tier system or remaining in a modified PAYG scheme.
A further five banks passed into private hands in 1997, reducing the state’s share in banking-sector equity by 10 percentage points and bringing the private sector’s share in assets to 88 %. Only seven of the 44 credit institutions (of which 38 banks and six specialised credit institutions) operating that year were state-owned and all but one of the large banks were privately owned. 30 banks representing about 60 % of total equity were foreign owned.
Over 200 companies were sold, of which two thirds were completely privatised and the associated revenues of 350 billion forints (roughly $ 1.9 billion) came close to reaching the 1995 record.
Reduction of corporate income tax rate to 18 %.
Under the new rules, firms employing people whose ability to work was diminished through workplace injury (or other reasons) are expected to make reasonable efforts to find suitable work for them and can receive state financial support to do so. In the event that this is not possible, these workers may then become eligible for a state benefit.
The pre-pension unemployment benefit was abolished and replaced with a less generous early-retirement benefit that is paid at a rate of 80 % of the minimum old age pension. Beneficiaries must now also report to the PES for any work that might be suitable.
In firms employing 20 persons or minimum 5 % of the employees have to be disabled , and if this quota is not met, a fine must be paid into the Labour Market Fund. The fine is equal to 56 % of the monthly minimum wage for each individual below the quota, and the government intends eventually to raise it to 3 % of the gross average wage observed two years before. Firms employing fewer than 20 people, who hire individuals with reduced abilities are eligible for a tax allowance (wage subsidy) of about 3'000 forints monthly.
For unemployed persons with changed working ability, the public employment service (PES) provides vocational rehabilitation and endeavours to find them suitable work, drawing on the advice and assistance of a new network of specialised occupational therapists.
The 1998 National Core Curriculum extended the period of compulsory general education to grade 10 (i.e. from age 14 to age 16). Only then will students choose between vocational and academic tracks. The curriculum replaced traditional mandatory subjects with ten inter-disciplinary study areas under which various educational objectives are expected to be met and provides for the introduction of a voluntary but uniform 10th grade exam.
Laying down the basic regulations for venture capital.
Self-governing Body of the Pension Insurance Fund was disbanded (along with its counterpart for the Health Insurance Fund) and the PIF placed under direct government supervision, mainly by the Ministry of Finance, which also presents the PIF’s annual budget to Parliament.
In 1998, for the first time, the setting of the national minimum wage was based on expected inflation as opposed to past inflation.
The authorities introduced a series of measures that will move workers already certified as permanently disabled to the temporary disability pension.
In January 1999, general eligibility for the family allowance and child-care benefit - made means tested in 1996 - will be restored.
The 1999 budget proposes to significantly lower employer payroll taxes from 45 to 38 %, while increasing those paid by employees (increasing employee social security contributions by 1 %).
Workers are also eligible for a firm-funded early retirement plan, under which companies placing workers into early retirement are now required to make semi-annual payments into the pension fund, which if not paid are covered by the central budget.
Privatisation of state utilities continued in 1998, with the sale of two of Hungary’s three remaining state-owned coal-fired electric power generators – Pécs and Bakonyi. No acceptable offer was made for the third, Vertes.
All earned income will become taxable with the first 400'000 forints taxed at a rate of 20 %, the next 600'000 at a 30 % rate and earnings above 1'000'000 forints at 40 %.
The maximum personal tax credit will fall to 10 % of earnings (from 20 %) with a ceiling set at 36'000 forints, including a 100 % claw back for those earning more than 1 million forints. Families will also be eligible for tax credits with higher amounts for those with three or more children.
Acceptance of a public-works job permits a beneficiary to remain in the UA system and counts towards establishing pension and UI eligibility in the normal way. Refusal results in loss of eligibility, which can only be re-established through re-entry into the labour market and re-establishment of UI eligibility (working for a minimum of 200 days). There is no limit on the number of times that an individual can be asked to accept a public-works job.
At the end of 1999 the government reduced the maximum duration of unemployment insurance benefits from 12 to 9 months, although this can be extended to a total of 18 months if a beneficiary enrols in suitable training courses.
Introducing state-subsidised mortgage loan for homebuyers.
Prior to April 2000, three separate bodies were responsible for financial market supervision: the Hungarian Banking and Capital Market Supervision (ÁPTF); the Hungarian State Pension Fund Supervision (ÁPF); and the Hungarian State Insurance Supervision (ÁBiF). All three agencies were merged in April 2000 to form the Hungarian Financial Supervisory Authority (PSzÁF) and the process of integrating their activities is ongoing.
Parliament passed an amendment authorising “works councils” to negotiate plant-level wage agreements when no trade union has “representative powers” with an employer.
In 1999 the Interest Reconciliation Council (IRC) was replaced by the National Labour Council (NLC) as the consultative tri-partite body responsible for determining increases in the minimum wage and proposing guidelines for wage increases.
Benefits under the new scheme are about 10 % lower than under the old in order to help finance its workfare component, which pays participants a salary commensurate with the job performed.
Lowering the required days of employment for unemployment benefits from 360 to 200 days.
As of 1 May 2000, the existing means-tested UA system was replaced by a new one. Under the terms of this scheme, which is also means-tested, eligibility for benefits can be withdrawn if a participant refuses an appropriate public works job when offered. A two-years transition period was introduced.
Leaving aside the pension law of 1997, the centre right government did not increase the private contribution rate from 6 to 7 % in 1999 and to 8 % in 2000.
Rather than retaining the gradual transformation prescribed in the act the government declared that the indexation rules of the act were not ‘affordable’ in 1999. The reason was that the gradual rules implied a 18.4 % increase in all continued benefits in that year. Instead, the rather inadequate practice of defining flat sums and upper and lower limits was reapplied. Benefits generally were increased by HUF 3'500 per month, but low benefits were not to be increased by more than 25.5 % and all benefits had to be increased by at least 11 %.
The conservative government did not close the gate of return to the mono pillar system by 1999 but left it open until 2002.
The amendment to the Privatisation Act also authorised the ÁPV Rt. to purchase stakes in private companies while managing state-owned enterprises. This new capacity allows the ÁPV Rt. to support the restructuring activities of firms but is also used for the “pursuit of the economic, sectorial or social policies of the state”. Indeed, this latter rationale, whose economic logic is not immediately obvious, appears to legitimise the increasing activism of the ÁPV Rt., which has been subsidising money-losing companies within its portfolio with its privatisation revenues.
Asset sales in 1999, principally the sale of four electricity distributors and secondary offerings of shares in the telephone company (MATAV) and the largest retail bank (OTP) amounted to about 2 % of GDP.
The privatisation act was amended in December 1999, reducing the number of strategic companies from 98 to 93 and allowing for further sales of minority stakes. Among those which can now be privatised are a pharmaceutical wholesaler (Hungaropharma), the monopoly provider of inter-city bus service (VOLÁN), a major steel plant (Dunaferr) and the remaining shares (less a special voting or golden share) in the strategic oil and gas company (MOL).
Separate scheme for the most disadvantaged regions.
Wage subsidies and training facilities for unemployed school leavers
Wage subsidies for the long-term unemployed
Government refuses market-based natural gas price increases and imposes a 12 % rise. Subsequently, the share price of the privately owned dominant producer, importer and distributor (Hungarian Oil and Gas Company) fell 10 % while the company’s CEO resigned.
Government freezes prices of pharmaceuticals.
GP's practices were privatised in early 2000. Under the new law, GPs, paediatricians and dentists were granted ownership rights over their practices and upon retirement or death they or an heir can sell their practice to a replacement.
Introduction of the possibility for the Government to set a minimum wage where the process of negotiations with the social partners did not yield an agreement.
Parliament approves new electricity act, providing for a gradual opening of the market from 2003 onwards, allowing large-scale industrial consumers to buy from alternative suppliers from 2003.
A new telecommunications act becomes effective, providing for increasing competition in the industry. The main fixed line telecommunication market was opened with some temporary exceptions, notably delay in the expiry of local telephone concessions to 2002.
The Communications Act of December 2001 is also aimed at ensuring universal service funding for postal services. The incumbent operator, Magyar Posta (Hungarian Post), which provides universal services and is entitled to the provision of reserved services, has started to introduce a cost-based price system and separate accounts.
Number portability was approved by the Act of 2001, but not implemented until January 2004 in the fixed-line segment and will be implemented in May 2004 for the mobile segment.
In September 2001, the government introduced a new student loan programme. There is no competition, privately owned banks eventually have been shut out from the student loan business.
Temporary agency work was first regulated in Hungary. The legislation was based on the so-called triangle principle, i.e., the temporary work agency signs a contract with the employee on the basis a special sort of employment relationship (it must be indicated in the contract that its purpose is to fulfil temporary agency assignment), while there is a commercial contract between the agency and the user enterprise on the assignment. Compulsory registration of temporary work agencies.
Introducing full convertibility of Forint.
Parliament approves new legislation that abolishes the mandatory nature of the 2nd pillar of the pension system for new entrants and permits all participants in the second pillar to re-switch to the PAYG system until the end of 2002. The new rules become effective in January 2002.
APV sold its minority stake in Budapest Bank on the Budapest Stock Exchange, concluded an agreement for privatisation of the dominant pharmaceutical distributor (Hungaropharma) and privatised CDH, a large state-owned real estate corporation. However, the privatisation program was not concluded in 2001, as previously planned, and privatisation came to a halt.
The government decided to exempt old-age pensions fully from taxation as of 2002.
Introducing job-seeking assistance for long-term unemployed.
As a consequence of the accession acquis and EU rules on state aid, legislative changes became effective in January 2002 that include a general prohibition of state aid with exemptions containing the basic principles of state aid control.
Introduction that the weekly working time is 40 hours; People working on a Sunday receive a 50 % work pay premium; Introduction of the requirement that employees are entitled to an afternoon-shift or night-work premium if any of the working time is between 14.00 to 22.00 or from 22.00 to 06.00 respectively.
20 % increase in the amount of family benefit; introduction of a 13th monthly family benefit, an increase in the amount of birth grant from 150 % to 225 % of the minimum old-age pension.
Pensions raised by 4½ % and the increase is back-dated to January.
Commitment by the new government to accelerate and complete the privatisation process of remaining SOEs, including Malev (airline), Babolna (agribusiness), MVM (electricity utility), FHB (mortgage bank), Postabank, Konzumbank, 22.7 % of the shares  in MOL (Hungarian Oil Company) and Richter (Hungary’s largest pharmaceutical company).
In 2003, a new tax system, the Simplified Entrepreneurial Tax (SET), was introduced for small enterprises with a cut-off for eligibility set at HUF 15 million annual gross revenue (to be increased to 25 million in 2004). Its aim is to reduce administrative costs and thus reduce incentives for tax evasion. The system applies a flat tax rate of 15 % to a base equal to the total revenue earned plus VAT with further corrections for some specific types of revenues.
Introduction of a "job-search allowance" after 180 days of unemployment insurance benefit receipt, whereby upon finding a job (including part-time) recipients can retain half of the subsidy remaining to the end of the disbursement period as a lump sum.
New legislation, passed in June 2003, schedules an opening of a market to large consumers from January 2004 and all non-domestic consumers from July 2004.
The new Telecommunication Act increases powers of the regulatory authority. In particular these powers include the possibility to apply sanctions against operators that are hampering the process of number portability and carrier selection. The new Telecommunications Act also includes measures aimed at reducing price-squeezing.
Hungary has adopted a new Act on Postal Services in compliance with the relevant 2002 EU directive. In accordance with the timing prescribed by the directive the Act includes measures for further liberalisation taking place in 2006.
Limitation of maximum duration of any fixed term contract to 5 years.
Cutting back state-subsidised housing loans. Partially related subsequent rapid spread of FX-loans .
Exemption of the fixed component of the employers' contribution to health care for employers hiring long-term unemployed persons aged over 50.
Adding a 13th month to the first-pillar pension.
The accounting separation of MAV was made in January 2003, with a division of its operations into five independent profit centres (freight services, passenger services, hauling services, rolling stock maintenance, track maintenance, infrastructure management and property management) and a cost centre (financial administration).
The privatisation program has picked up again after a slowdown in 2002. The state-owned Privatisation and Holding Corporation (APV), which had stakes in 167 businesses in December 2002, has seen its portfolio reduced to 157 in December 2003. Also, the classification of some units as “strategic” and not for sale has been dramatically reduced, from 93 companies to 23 in 2003.
Privatisation of the three remaining publicly owned banks in autumn 2003, including Hungary’s third largest bank for household deposits, Postabank.
From 2004 on, corporate profits are to be taxed at a rate of 16 %, reduced from 18 % in 2003.
In 2004 new rates were applied of 18, 26 and 38 % down from 20, 30 and 40 % previously. The threshold for taxable income above which the top rate applies is rather low, slightly below the average earnings of production workers.
Developing the Public Employment Service. The measures aim to improve: 1. The job exchange services 2. The quality of employment services through the training of staff and the promotion of involvement of Roma staff. 3. Labour market analysis, by enhancing the capacity to anticipate changes in labour supply and demand, conduct research and prepare forecasts. 4.The provision of up-to-date labour market information, information on training opportunities to clients together with career guidance services.
Several new railway companies have been granted licences since the opening of freight traffic to competition in 2004 and as of mid 2005 four companies were in operation.
Several measures have been introduced in 2004 to encourage the provision of higher quality rehabilitation services. In particular, the professional certification system has been rationalised and financial incentives to rehabilitation activities have been introduced, together with the launching of an ambitious hospice programme. When allocating surplus resources providers are encouraged to give priority to rehabilitation care and day-to-day treatments.
A 5 % maximum annual increment in the state budget for financing pharmaceutical expenses was defined for 2005 and 2006. Any medicine expense above the given level is supposed to be paid jointly by the state and the producers according to a risk-sharing scheme involving a regressive government contribution.
The pension of employees who have already reached the retirement age but decide not to retire will grow by half a % point for every 30-day service period following the reaching of retirement age.
Replacement of the three-rate personal tax income system (18, 26, 38) with a simplified two-rates (18, 38). Under the new system, employees up to a certain income level pay less taxes.
Conclusion of individual job search agreements with all job-seekers is a prerequisite for the eligibility for job-search benefit or social assistance.
New act on the railway system, first step of establishing the legal background for privatisation and liberalisation. E.g. separating freight and passenger branches, clarifying the right to using the railway network.
The amount of family benefits was raised by 84 % on average.
Renaming unemployment benefit to job-seeking benefit, and reintroduction of the minimum wage as the anchor for minimum and maximum job-seeking benefit level (minimum: 60 %, maximum 120 %) for the first phase (max 90 days), then flat rate 60 % of minimum wage.
Restoring 365 days for eligibility, but unconditionality restored for the entire period of receiving the benefit.
Sale of a majority share of Budapest Airport to BAA after previous unsuccessful privatisation attempts.
Substantial tax cuts scheduled (e.g. the abolishment of local business tax as of 2008).
The new law requires hospitals to introduce a waiting list with a view to increasing transparency and fairness in access to services. These will reduce the use of personal connections and loopholes in the system and may also reduce the widespread practice of under-the-table “gratitude money” to doctors.
Health services have been re-organised according to a tiered structure. One tier covers basic services (e.g. emergency care) and continues to be universally available, no matter whether the individual is insured or not. Another tier of services is contingent on insurance coverage and the payment of small user charges.
The contribution base has been extended. The default minimum contribution base has been increased to double the level of the minimum wage. Employees with dependent relatives who are of working age but not entitled to any insurance coverage must now pay an extra healthcare contribution equal to 9 % of the minimum wage.
As a measure to raise patients’ awareness on pharmaceutical costs, a small co-payment fee of HUF 300 per prescription has been introduced (applicable to drugs fully reimbursed, so far, by the NHIFA). Co-payment is also paid for every visit at a GP, and for ambulant hospital care.
Regulations on pharmacies are being lightened in an effort to improve access and stronger retail competition. Population and proximity based restrictions have been lifted for any new pharmacy willing to provide extra-services, such as extended opening hours. Also, non-prescription drugs (pain killers, for example) can now be sold outside pharmacies, though this is to some extent controlled by a certification system.
From 2007, pharmaceutical producers have been encouraged to strike three-year purchasing price deals with the National Health Insurance Fund Administration (NHIFA). For those producers wishing to remain within the current annual purchase system, purchasing contracts will be contingent upon offering a substantial price reduction or accepting the payment of a 12 % compulsory rebate on the selling price. Any medicine expense above specified limits will be paid jointly by the state and the producers according to a risk sharing scheme involving a regressive government contribution. This will apply for the first 9 % of spending in excess of budgeted levels while above this any government contribution will be discontinued.
The reimbursement system has been changed. The previous system, which used a uniform 90 % reimbursement rate, has been replaced by a system involving three rates (90 %, 70 % and 50 %, respectively).
A recent Act on the efficiency of hospital care aims to close 10 % of beds in 2007 as part of a shift away from acute care to chronic inpatient care (i.e., more rehabilitation and long-term care).
A new body, the Health Insurance Supervisory Authority, was created in 2007. The Authority’s main duties are inspecting contribution payments, supervising quality, ensuring the protection of clients and providing information about healthcare services.
Extended parental leave (GYES) and regular social assistance cannot be paid together. Part of the regular social assistance may be given as a service in kind. Social assistance tops up family income only to a certain income level (only one person per family is entitled to regular social assistance, thus eliminating the unwanted factor of disincentive to work).
Minimum contribution period for advanced retirement pension is 38 years, 40 years in 2008 to 2012. From 2013 at least 41 years of contribution for full pension benefit.
Retirement age for advanced retirement pension is 57 for women and 60 for men. In 2009 to 2012 – age 59 for women and 60 for men. In 2013 – age 60.
Selling the freight subsidiary of state railways (MAV Cargo) to Rail Cargo Austria.
Increase in income tax for those with earnings above HUF 6 million (€ 21'000) creating a new income tax threshold of 40 %.
As of the start of 2008 the electricity market was fully liberalised. However, nothing was done to reduce the dominant position of the incumbent state-owned power company MVM.
Under the previous system for allocating central-government funds for teaching, the government provided funding to cover around 62'000 free places in public higher education establishments. These places were largely based on precedent. In 2007, a new two-step procedure has been introduced in which the central government first sets the allocation of places by subject areas.
Central-government grants to municipalities for primary education have been altered in a way that encourages school mergers. Village schools with less than eight classes have been given two years to establish co-operation agreements with the bigger schools operating in the same area that cover the full primary education programme.
In the new system the government will fund fewer places (around 56'000), which is equivalent to about 60 % of undergraduate places. In addition, a significant share of these students will have to pay a contribution to tuition costs set by central government. Universities will be allowed to charge between HUF 60'000 and HUF 180'000 per semester for each student.
The number of teaching hours per teacher has been increased from 22 to 24 hours per week.
From 2008, persons who have a good chance of returning to the labour market (based on their health) will be eligible for the rehabilitation benefit rather than the disability pension. The benefit will be payable for a given period as its primary objective is the re-integration of persons with altered working ability into the labour market (rehabilitation services will also play a part in achieving that goal).
Only reduced advanced pension benefit available from 2013.
Persons entering early retirement will be allowed to take up regular employment with earnings above the minimum wage only if they simultaneously suspend their pensioner status. The new rule is applicable to persons retiring after 1 January 2008 and will be extended to all persons in early retirement from 2010.
Establishing measures to increase competition on the natural gas market. Retaining protection only for household consumers.
The aim was to identify those long-term unemployed who had the physical capability to work and make financial support for them conditional on their participation in public works organised by local authorities.
The government sets the level of reimbursement of costs associated with transport to work arrangements.
The measure aims to preserve workplaces threatened by lay-offs due to temporary fall in products and services demand for the companies. It provides temporary wage subsidy for the employment of staff in reduced working time that would otherwise be laid off. The employment support is complemented by the training of staff during the cancelled working hours.
The plans include the closure of the less-used secondary railway lines in an attempt to save HUF 70 billion (about € 260 million as at 6 January 2009) on public transport within three years. Additionally, the government plans to cut the subsidies of the Hungarian State Railways (Magyar Államvasutak, MÁV) by HUF 40 billion (€ 149 million). This resulted in industrial conflict, warning strike, and eventually an agreement with most of the major trade unions.
New article states that an employee shall not be dismissed until his or her child reaches the age of three (prohibition of dismissal). This also applies in cases where the employee does not use the non-paid holidays.
Workers employed through temporary agencies cannot be dismissed without notice. The agency has to inform and consult with employee organisations on workforce-related issues at least twice a year.
Companies that face liquidation, and employing more than 250 workers, are obliged to give written notice to employees 30 days before the closure, and also to inform the employment authority and the representative trade union.
Mortgage debt service guarantee scheme (turns out not to be very popular due to strict requirements of participation).
Reducing the replacement rate of sick pay from 70 to 60 %, reducing the time and amount of sick pay that can be claimed by the non-employed.
Changed conditions of entitlement: The benefit amount is fixed and does not depend any more on family composition, but stops after income threshold.
Lowering the employer’s social security contribution by 5 percentage points.
Eliminating the lump sum health contribution for employers.
13th month pensions are abolished. If GDP growth is above 3.5 % a pension premium will be provided, amounting to the minimum of 0.25.
From 2013 (2011 for men) only reduced advanced retirement pension are available.
For advanced retirement pension up to 31 December 2012 a minimum contribution period of 40 years.
Reduced retirement pension: Minimum contribution period is 37 years up to 31 December 2012. Monthly reduction: 0.1 % for minus 1 year, 0.2 % for minus 2 years and 0.3 % for minus 3 years. Same minimum contribution period from 2013 (2011 for men) but reduction will be irrespective of contribution years: 0.3 % monthly if 1 year is missing from the retirement age, that is, 3.6 % for on year, and an additional 0.4 % per month if more than one year is missing, with a maximum reduction of 8.4 %. The minimum contribution period is 42 years for men born in 1952-54 retiring at age 60.
Minimum contribution period for full regular retirement pension is 20 years minimum with no exceptions.
Minimum contribution period for non-full regular retirement pension is 15 years minimum with no exceptions.
Pensions are now indexed to the consumer price index (CPI) (rather than by the “Swiss” method of 50 % wages, 50 % prices) unless real GDP growth exceeds 3 %.
Reduced retirement pension retirement age for women born in 1954 is 60.5 and 61 for women born in 1954. The retirement age for reduced retirement pension is set to increase by 6 months for every year up until 1958.
Until 2021 the advanced retirement age will increase to a uniform age 63 (gradual implementation for different age cohorts until 2021).
Reduced retirement pension retirement age for men born in 1952-53 is 60 and for those born in 1954 is 60.5.
The retirement age for full regular retirement pension will be increased from 62 to 65 by 6 months each year. For those born before end 1951, it will still be age 62, but then increases proportionately (e.g. age 62.5 for those born in 1952, 63 for those born in 1953, up to age 65 for those born in or after 1957).
Up to 31 December 2013 for reduced retirement pension retirement age is 60 for men (born in 1950) and age 59 for women (born in 1952-1953). For men born after 1950 and women born after 1958 it can be obtained before retirement age for full pension.
Retirement age for non-full regular retirement pension set to increase from 62 to 65 at the same pace as the full regular retirement pension.
Fringe benefits, tax exempted for 2009, are taxed with a 25 % rate. Fringe benefits (those often part of cafeteria systems) such as food coupons, local transport tickets, vacation vouchers, support for child's schooling expenses, employer's payments in voluntary pension funds and health-care insurance and to mandatory pension fund belong to this category.
Income brackets in the progressive tax structure have been indexed.
Tax reduction for wage earners is 17 % of wages earned during the tax year, but maximum 15'000 HUF per month in employment. Individuals with annual earnings lower than 3'188'000 HUF are entitled to full tax reduction, while those with earnings higher than this threshold are entitled to partial tax reduction: 12 % of earnings above the threshold is subtracted from the amount of maximal tax reduction.
Beginning on 1 January 2010, tax rates are lowered (from 18, 36, 40 to 17, 32, 32), and the thresholds are considerably raised (for the initial 17 more than doubled).
The personal income tax threshold for the initial 18 % rate was increased marginally on 1 July 2009, retroactive to the beginning of the year.
Temporary halt of the programme of rehabilitation of people with disabilities (until 31.12.2011).
Reduced social security contributions for part-time employees sharing a job with women returning from maternity leave (from 27 % to 20 %).
Opened up for competition for businesses.
Five railway lines closed by the previous government have reopened for passenger traffic and more are to be reopened by the end of 2010.
Rural post offices will be reopened "wherever it is necessary for rural development and to boost the regional economy".
The Casual Employment Booklet (CEB), which acted as a contract for casual employees, was abolished. Employers can now take on casual workers by signing a blank contract or the attendance register, and notifying labour authorities before the start of employment.
Rules governing the employment of seasonal and casual workers were simplified further. Employers now pay a registration fee to the labour authority of HUF 500 (€ 1.80) a day for seasonal work and HUF 1'000 (€ 3.60) a day for casual work. Casual employees are not obliged to pay taxes but are given allowances for pensions and health insurance, in case of accidents, and unemployment benefits.
Under the new act (see 2010. évi CLXXVIII. törvény), industrial action such as strikes will only be lawful if employers and trade unions agree in advance on the minimum level of services to be provided. Should they fail to agree, the Labour Court shall have the final say. No strikes will be allowed at judicial bodies, by the Hungarian Defence Forces, at law enforcement bodies or civil national security services. State administration employees may only strike if the government and relevant trade unions agree on special rules and circumstances, but the professional staff of the National Tax Office have no right to strike.
The reduction in the duration of the maternity pay has been reversed (it is three years again).
The duration of maternity pay has been reduced from three to two years. However, protection against dismissal remains until the child is three years old, regardless of whether or not the employee takes unpaid leave.
Early retirement for women is permitted after 40 years of service, including time spent on maternity leave.
In November 2010, the government stopped transferring social security contributions to the second pillar until the end of 2011, generating budgetary savings of HUF 420 billion (1.4 % of GDP) in 14 months. In the next step, pension fund members were given slightly more than two months to decide between shifting their assets to the first pillar or keeping them in the second. Those who opted not to transfer their assets to the first pillar were subject to a “pension tax”. Despite the payment by their employers of social security contributions (24 % of gross monthly earnings) to the first pillar, they did not accumulate further eligibility to a public pension and thus could lose up to 70 % of their expected pension benefits. Those who did opt back into the state pillar were offered the real yield achieved on their assets (0.9 % of GDP). This was challenged at the Constitutional Court, and was abolished. However, by the time the Court ruled, 97 % of members shifted their assets to the first pillar already.
Introducing a special tax for the financial sector. According to EBRD "The tax [was] the highest such tax in Europe (at about 0.8 % of the 2010 balance sheets of each ﬁnancial institution, including non-bank institutions)".
Income earned from work done in private household is not taxable, but it neither generates eligibility for social security provision.
The personal income tax rate is set at 16 %.
A new public employment scheme has been launched, characterised by a high enrolment rate and a high prevalence of part-time and short-time (2-3 months) employment (220'000 people but 100'000 full-time equivalents in 2011), a fixed budget (of 0.2 % of GDP in 2011, around half of the expenditure on the previous programme), and a stronger involvement of local authorities in its funding. The objective is to create strong financial incentives to resume work by providing a higher income than social assistance, but a lower one than the minimum wage.
Social assistance is also linked to participation in the scheme (note by Labanino).
The law cuts the number of state-funded degrees by 40 % (from 53'500 to 33'927). It adds 15'500 places funded at 50 % by the state, with the Prime Minister personally deciding the numbers of students and the distribution of places among faculties and universities. Students can also fund their own courses.
The government takes over schools from local governments, centralizing the educational system. A new institution will be set up that administers schools.
Mandatory schooling age is lowered to the age of 16 (from 18).
Students in state-funded education will have to sign a contract saying that they will work in Hungary after graduating. Under the new law, students: have to get a degree within a fixed period (although this can be 1.5 times longer than the normal course duration); must work in Hungary for twice as long as it takes them to get their degree within 20 years of completing it; must pay back at least 50 % of the costs if the rules are broken.
The code allows for the termination of fixed-term employment.
It is no longer the duty of employers to re-employ unlawfully dismissed employees at the employee’s request. Reinstatement can now be awarded at an employee’s request only if equal treatment was not respected or the employment was terminated during a period connected to maternity leave or military service, or if the employee concerned was an employee representative. With previous Labour Codes, reinstatement has always been within the power of a court.
The code now makes it possible for employees to be told about the termination of their employment during a period of sick leave. However, the 30-day notice period starts only from the first day back at work.
The code reduces layoff costs for employers by stipulating that lump-sum redundancy payments shall be calculated on basic salary and not on average income.
The new Labour Code has increased the possible period of probation to three months, and within the terms of a collective agreement it can be extended to six months. During probation, employees can be dismissed without explanation, so the extension of the probation period makes this form of dismissal available to employers for longer.
The code introduces the payment of a guarantee deposit for employees handling money or valuables. This precautionary guarantee deposit may be as high as one month’s salary and is taken to make it possible for the employer to cover possible losses.
The compensatory burden on employees for causing harm to the employer, for example through negligent work, has increased. This may be as much as four months’ absence payment. Within the terms of a collective agreement, liability for damages in cases of negligence may exceed the employee’s absentee pay due for eight months. Compensation for damage caused intentionally or through grave negligence shall cover the full extent of losses.
The new code shifts some of the work-related risks from the employer to the employee. It stipulates, for instance, that in case of unavoidable external influences, such as a power cut, the employee is no longer entitled to receive their basic salary. It also stipulates that the employer is only liable for damage which is within the overseeing capacity of the employer, and which the employer could have averted.
Individual work contracts and collective agreements can now set lower standards than the Labour Code.
The new rules raise the statutory maximum for overtime hours from 200 to 250 per calendar year. Collective agreements or work agreements are permitted to raise overtime to 300 hours per calendar year.
Allowing households to repay foreign currency mortgage debt at preferential currency rates. Introducing exchange rate restrictions for FX loans (later legislation tightens regulations further).
The government will gradually take over hospitals from municipalities from 2012.
The Government is changing the tripartite interest reconciliation system, with a new body, the National Economic and Social Council (NGTT) replacing the National Interest Reconciliation Council (OÉT). The NGTT will include representatives of employers, workers, chambers of commerce, and churches, but it can only propose changes.
The Hungarian government will no longer have to consult unions over setting the minimum wage as of 1 January 2012.
Only up to five union officials are entitled to legal protection, depending on the size of a workplace – the former code provided legal protection to all officials; the statutory working time exemption for performing union duties has been reduced from two hours per month each for up to three trade union members, to one hour per month for each of two trade union members; the legal right of union officials to claim financial compensation for unused exempted working time has been removed; the working time exemption for trade union education of representatives has been removed; the code no longer mentions the right of unions to participate in the electoral committee which organises works council elections; the unions’ rights of veto and control over the living and working conditions of employees have been limited; in some cases, unions’ consultation rights have been shifted to company works councils; unions with at least 10 % membership at a company are entitled to conclude a collective agreement.
Works councils now have the right to conclude works agreements with the employer in cases where there is no collective agreement in force and no representative union present at the workplace. The works agreement may regulate terms and conditions of employment in a collective agreement, with one important caveat – it cannot regulate wages and other forms of pay.
Only the president of the works council is entitled to legal protection while holding office and for six months afterwards, providing he or she has served in the role for at least 12 months. The former code provided employment protection to all works councillors during their term of service and for 12 months afterwards, providing they had served as works councillor for at least six months.
The maximum length of job search allowance has been reduced (from 270 to 90 days), eligibility conditions have been tightened.
The job search benefit (previously available up to 90 days) has been terminated (except for older workers close to retirement).
Due to student protests the government made some concessions earlier in 2012. The most important change is that students who received state-funded higher education have to work in Hungary as long as it took them to get their degree within 20 years of completing it (instead of twice as long as planned originally).
The ruling of the Constitutional Court found the student contract unconstitutional partly because of a mere technicality, namely that it was not passed in a law, but a government order. As a consequence, the Government passed a law which was otherwise identical to the order which the Court ruled unconstitutional. The government in its fourth amendment of the new constitution (adopted in 2011) in 2013 march included constitutional base for the student contract ensuring its constitutionality.
The Constitutional Court found the student contracts unconstitutional.
Introducing a permanent financial transactions tax. In a budget amendment in spring 2013, the initially announced financial transactions tax rate of 0.1 % was raised to 0.2 % for most types of transactions, and to 0.3 % for cash transactions.
Codifying government measures intended to curb energy prices.
Nationalizing and integrating savings cooperatives.
A wave of re-nationalizations, mostly in energy and finance.
Prohibited advertising prices of goods below cost
Entitles all employees of at least 13 weeks to a minimum period of notice before dismissal (1-8 weeks, depending on length of employment) or employer and employee can agree on payment in lieu of notice; employee must give at least 1 week of notice
Added earnings-related support to maternity allowance
Entitlement for 3 weeks of annual leave per year, with pro-rata entitlement for less than a year. Also, entitlements for public holidays are included.
Liquidity ratios raised; introduction of a 50% deposit requirement at Central Bank for capital inflows through licensed banks; banks advised not to increase private-sector credit to non-productive sectors (i.e. financial, property companies, and personal)
Irish Stock Exchange merged, along with other regional UK exchanges, to form International Stock Exchange (aka London Exchange)
Held that to try the constitutional rights of an employee retrospectively by enforcing a closed shop agreement on current employees was unconstitutional; did not affect rights of workers who join an employment where a pre-entry closed shop agreement already exists
Expanded means-tested deserted wife's allowance to include social insurance version and created a social assistance allowance for unmarried mothers
Increased social insurance coverage by abolishing income limit for non-manual workers (thereby doubling coverage for partial benefits within public sector); increased pension rates; began lowering pension age (from 70 to 69) that would continue through 1977
Assets of Irish Milk transferred to private sector
Extends redundant payments to all insured workers, provides for additional payments for older workers, and raises the limit on weekly benefits payable to those who have been made redundant (100% of a worker’s pre-redundancy pay)
Established right of men and women to equal pay for equal work, with enforcement provisions through an equality officer or the Department of Labour
Second half of Dept. of Finance central tax reform: abolishment of earned income relief (ending slight discrimination between earned and unearned income) and standard rate of tax chargeable on first band of taxable income reduced from 35 to 26%
As part of 1974 tax reform to simplify tax structure, established single uniform national child allowance (200 Irish pounds per child) to replace 18 different income tax allowances
Half of Department of Finance's central tax reforms: integration of income tax and surtax established with new unified income tax rating schedule with a graduated scale
Wage subsidy scheme to spur employment; evolved into Employment Incentive Scheme in 1977
Basic training and work experience to young unemployed with low skills
Modification of National Pay Agreement, indexing directly pay rises to price rises.
National Pay Agreement covering 1975. Pay increases happen every three months indexed on the CPI including floors and ceilings in the second and third term (4%-5%), but with a safe clause of extra increase in the last round if CPI increase goes beyond 23% by November. Also, firms experiencing difficulties are allowed not to pay all the increases.
Expansion of entitlement period for pay-related unemployment and sickness benefits from 78 days to 203 days.
Increase in allowances for PIT up to 15%, as well as a reduction on top income tax from 80% to 70%.
Old age allowances were raised by 90 % for single and by 190 % for married people.
The increases in personal income tax allowances were roughly 15 %, about 1 percentage point more than the rise in consumer price index since the last change.
Three concurrent measures to target youth unemployment: Environment Improvement Scheme, Temporary Grant Scheme for Youth Employment (Teamwork). And Community Workshops.
Provided for agricultural workers' access to the Labour Court
New National Pay Agreement: two-month pay pause followed by pay increases in two stages close to 15% over 13 months.
Established Irish gas board as commercial state-owned enterprise and monopoly in the field
Overhaul of Irish corporate tax law, replacing Corporations Profit tax with Corporate tax; marked philosophical shift to distinct tax on companies but rules largely derived from income tax system
Income tax rates were not changed although the 10 % surcharge introduced in June 1975 was renewed.
Introduction of a 30-day notification period for collective dismissals.
Collective redundancies should be preceeded by a negotiation/consultation/information period, "including the following matters: (a) the possibility of avoiding the proposed redundancies, reducing the number of employees affected by them or otherwise mitigating their consequences, (b) the basis on which it will be decided which particular employees will be made redundant. (c) Consultations under this section shall be initiated at the earliest opportunity and in any event at least 30 days before the first dismissal takes effect."
Definition of collective redundancies "where in any period of 30 consecutive days the number of such dismissals is— (a) at least five in an establishment normally employing more than 20 and less than 50 employees, (b) at least ten in an establishment normally employing at least 50 but less than 100 employees, (c) at least ten % of the number of employees in an establishment normally employing at least 100 but less than 300 employees, and (d) at least 30 in an establishment normally employing 300 or more employees."
Reasons valid for collective dismissals comprehend the cease of business, the decision of restructuration (any).
Established avenues of redress for employees unfairly dismissed from employment through a Rights Commissioner, the Employment Appeals Tribunal, or Circuit Court; entitles dismissed employee to receive written explanation of grounds of dismissal within 14 days, if requested
Employer should provide substantial grounds to proof a dismissal to be "fair".
Streamlining of service delivery under Hospital Bodies Administration
Regulates lockouts at individual employee level (rather than being regulated as a 'strike' or 'industrial action'); if, at the end of a lockout, employee is not re-instated when others were, is considered an unfair dismissal
New National Pay Agreement with increases between a fixed amount of pounds per week (4.00 - 8.36) payable in two phases.
Extension of legislative protection for workers under 18 with regard to normal and minimum working hours, overtime, and differences in regulations for workers 14-15 years old and 16-18 years old
Basic payment to those on little/no income to function as basic minimum income guarantee
Conclusion of pension age reduction effort that began in 1973, established qualifying age at 66
Special CIT of 25% for the coming three years if employment and sales increase year after year in the company.
First large programme for job creation; temporary public employment scheme to respond to mass unemployment
Mandates approvals for large mergers by Minister for Department of Enterprise, Trade, and Employment; includes a competition policy test (whether transaction would prevent/restrict competition or restrain trade) or operate against the 'common good'
Amended 1968 legislation to include higher education institutions that offer two-year degrees as eligible for students applying for grant aid
New National Pay Agreement of 15 months divided into two phases. First twelve months provides an increase of either 8% or 3.5 pounds per week (whichever is greater). The latter three months will mean an increase of 2%. There is an open clause during the first phase to negotiate an additional 2% increase at industry or firm level.
The corporation tax thresholds for small companies were raised from £10 000 (35 cent rate) to 25 000 and from £15 000 (45 % rate) to £35 000. The new thresholds apply to profits from 1st January, 1977.
Special CIT introduced in 1977 is applicable to manufacturing companies if they increase employment by 3% per year, dropping the requirement of 5% increase in sales.
Established NCEA as statutory body (since 1972 has been founded on an ad-hoc basis). It has the power to be the only extra-university body conferring university degrees in Ireland's higher education system
Introduction of exchange controls and foreign investment supervision in a more reduced manner, allowing higher FDI.
Commencement of European Monetary System with Ireland as full member of exchange-rate mechanism, ending 150 years of parity between Irish pound and British pound sterling. Introduction of exchange controls and foreign investment supervision in a more reduced manner, allowing higher FDI.
Tripartite (state, businesses, and unions) negotiation to integrate government economic policy and wage formation; significantly extended the scope of trade union participation in economic policy development and the corporatist approach to industrial development
Establishment of wholly earnings-related contribution system; movement away from flat-rate payment for pensions
Established Irish National Petroleum Company as commercial state-owned enterprise in oil refining and supply field, as competing market entity
Increase in top personal taxes (above 35% of tax rate).
Established One Parent Family Allowance: additional tax relief for lone parents with dependent children (doubled year after introduction and increased in value steadily thereafter)
Increases in personal income tax allowances of £250 (single persons and widows) and £500 (married) and amendments to lower income tax bands estimated to cost £30 million in 1979
Established NIHE as a category of higher education to provide higher technical education at university level (above then-Regional Technical College System)
Changes from 6th April 1980 in the income tax code principally the introduction of an employee allowance of £ 400 for each PAYE taxpayer, increases in the thresholds for the tax rates from 35 % upwards, and the implementation of income splitting for married couples at a total cost in 1980 of £ 131.5 million (£ 140 million after allowing for the decision not to tax short-term welfare benefits) and, in a full year, of £ 227 million.
Prohibits price-fixing or collusion on resale of goods
Introduction of maternity protection of employees, with a guaranteed leave period of not less than 14 weeks, a notification for the employer being needed.
Added fully earnings-related benefit for women in employment to maternity allowance; provided statutory entitlement to 14 week maternity leave at 80% wage replacement; extended to part-time workers in 1991
Youth Employment Levy of 1% on employee incomes.
Consolidated all social insurance programmes (thereby repealing all existing Old Age Pension and Survivors legislation)
Minimum tax rate of 10% on corporation benefits is imposed.
Rise in the standard corporate tax to 50% from 45%.
Corporate tax lowered to 10% for manufacturing firms.
Held that an employer does not have to recognise or bargain with a union
Extended the immunities of the 1906 Trade Disputes Act (protection from litigation to trade unions; right to strike) to all workers except police and members of army
Increase in top income tax from 60% to 65% (plus temporary tax levy).
Social Employment Scheme: those who have been unemployed for more than a year and receive NEB will be able to do part-time social work for one year more with a wage paid by the Exchequer at 70 pounds per half-week work.
Enterprise Allowance Scheme to facilitate hiring from firms.
The Government introduced, in the 1983 Budget, several changes in the benefit system. Prior to these measures, pay-related benefits were payable as follows: 40 % of reckonable earnings for the first 147 days; 30 % of reckonable earnings for the next 78 days; 25 % of reckonable earnings for the next 78 days; 20 % of reckonable earnings for the next 78 days. With effect from April 1983, only two rates were payable as follows: 25 % of reckonable earnings for the first 141 days; 20 % of reckonable earnings for the next 234 days. Secondly, the waiting period for pay-related benefits was extended from twelve to eighteen days. Official estimates suggest that these measures saved about 40 million annually.
Established An Post as commercial state-owned enterprise in postal services, as a monopoly in the field
Established Bord Telecom Eireann as commercial state owned enterprise in telecommunications, as a monopoly in the field
Abolishment of social insurance-based cash grant for maternity
Social Employment Scheme providing for social employments to long-term unemployed.
Protects financial entitlements of employees who lose jobs as result of employers' insolvency; appeals can be made to Minister for Social Protection or Employment Appeals Tribunal with claims paid out of Social Insurance Fund
Terminated formal guidelines for licensed banks' lending to the private sector; instruments of liquidity management and interest-rate policy to be used increasingly to influence monetary conditions in the economy and to maintain official external reserves at adequate level
Established Family Income Supplement (FIS) as payment to workers rearing families on low incomes; seen as a long-term poverty reduction strategy to social welfare because focuses on increased gains from employment
Abolishment of 25% income tax rate, moving to the 35% bracket. The standard 35% PIT is widened from 8.000 pounds to 9.000 pounds of earnings for married couples (half for single people). Also, the four bands above this rate change to two (from 45, 55, 60 and 65 to 58 and 60).
Large programme for adult long-term unemployed; provided temporary, part-time work experience in non-profit sector for those aged 25 and over, unemployed for over 1 year
Admitting unmarried women into the NEB assistance scheme.
Governments cannot support public companies in difficulty.
The 1986 Transport Act completely liberalised road haulage, as far as basic EC requirements allow.
Deregulation of road, freight and air travel between Ireland and UK.
Established that changes in Central Bank's official interest rates become principal method of indicating to financial markets the Central Bank's views on sustainable levels of interest rates; lending to private sector and Exchequer determined by liquidity management tolls and interest-rate policy
Devaluation of currency (making exports cheaper and more competitive and increasing demand for domestic goods and services)
Single European Market. Large international financial trading centre, with over 500 operations approved to trade; established under set of tax incentives (low corporate tax rates) to attract foreign investors; significantly expanded Ireland's role in international financial services sector , largely operated by unregulated shadow banking sector
Increase in social welfare benefits for long-term unemployed of 5%.
Introduction of national Child Benefit Scheme (replacement for abolished Child tax Credit as universal payment to families with children under 16, or 18 if in full-time education); significantly expanded in 2001.
Tax-free income allowances increased from Ir£3 800 to Ir£4 000 for married couples (from Ir£ 900 to Ir£2 000 for single persons). The standard rate tax band of 35 % widened from Ir£9 000 to Ir£9 400 for married persons (from Ir£4 500 to Ir£4 700 for single persons). The top rate of tax reduced from 60 % to 58 %.
Abolishment of Child tax Credit (Child tax Allowance)
Sanctions-led model of labour market activation, with public focus on fraud
Replaced AnCO as national agency responsible for job training, job creation programmes, and highly localised support; one strand of National Employment Service (NES); purchases employment services from outside providers and runs direct creation schemes; remit to match supply and demand in the labour market
New Job Search Programme for long-term unemployed. Redirecting training resources towards older workers who have been unemployed for more than one year.
Groceries Order (11 December 1987), which includes inter alia, a prohibition of below-cost selling. The order appears to have been designed to protect small grocers from predatory pricing, making no reference to the market power, which is a precondition for such pricing. Given its structure, true predatory pricing would seem to be a remote possibility in the Irish retail grocery market, especially given that sunk costs are low compared with many other industries. In this case, rescinding the Groceries Order would probably encourage greater price competition in a sector largely protected from international trade.
The 1987 Act removed all previous exemptions (such as banking, communications, transport) to competency, apart from local authorities.
Ban below invoice price setting to reduce concentration in retail industry and prevent predatory pricing
Tripartite (government, employer groups, trade unions) national pay agreement organised every three years (replaced 'National Understandings' of the 1970s); usually featured balance of modest wage increases with income tax decreases; first one called 1987 Programme for National Recovery
CIT standard rate lowered from 50% to 47%.
Establishment of International Financial Services Centre (IFSC) and extension of 10% manufacturing rate of corporate tax to internationally traded financial services activities in Dublin; resulting in greatly expanded financial sector
Strengthening CB capacities for supervision giving extra responsibilities for non-banking areas related to stocks.
12% rise in payments for long-term unemployed.
Introduction of social security contributions for farmers and self-employed (3%).
Inclusion of self-employed in social insurance pension coverage (Class S in the PRSI scheme)
Established a commercial state owned enterprise in forestry, as dominant organisation in market; part of belief that activities performed by government departments better suited to commercial environment
CIT standard rate lowered from 47% to 45%.
Widening tax bands, including a higher ceiling on minimum tax-free income.
Standard rate of PIT reduced from 35% to 32%, while the top is reduced from 58% to 56%.
Tax relief for household's mortgage interest payments and life insurance premiums is reduced.
Introduction of deductions for children in PIT.
Linking firm grants from industrial development agencies to employment creation.
Labour market programme for unemployed early school leavers aged 15-20; full-time programme for 1-2 years resulting in a training award with opportunity to continue on into apprenticeship; funded centrally by FAS and Department of Justice, delivered and managed locally
Licensing of a second air carrier (Ryanair).
Health and safety regulations for the workplace; established National Authority for Occupational Safety and Health
Expanded scope of building society’s lending activity from residential mortgages to housing developments and increased loan books faster than deposits; gives Central Bank responsibility for authorising and supervising building societies, including establishment and maintenance by Central Bank of a deposit protection scheme.
Strengthened licensing and supervision powers of Central Bank regarding Irish banking business and certain IFSC institutions and power to Minister of Finance to change exchange rate of Irish pound
Central Bank assumes responsibility for supervision of trustee savings banks
Reducing foreign currency financing requirements to allow more FDI.
The standard rate of corporate profit tax was reduced from 47 to 43 %, with a parallel reduction in the rate of first-year accelerated capital depreciation allowances from 75 to 50 %; these rates are to be reviewed in the 1990 Budget.
Modification of traditional Leaving Certificate programme to increase concentration on technical and vocational subjects
Collection of public, private, and voluntary partners to help long-term unemployed back into the labour market, assist with local economic development (emphasis on entrepreneurship); partners set up as limited companies
Central Bank given responsibility for authorisation and prudent supervision of investment companies with variable capital
Established as a conciliation and advisory service to employers, trade unions, and employees; prepares codes of practice relevant to industrial relations
Landmark legislation regulating industrial action; provides immunities from liability for 'authorised' trade unions involved in trade disputes
The new legislation establishes: guarantees on pension rights, a minimum regime of capitalisation, diffusion of information and equal treatment for men and women.
It creates a Pension Commission: a group of 14 persons in charge of regulating and controlling the development of private pension funds and of informing the Minister of Social Affairs about all issues regarding pension programmes.
A complete information on pension schemes must be assured.
A new law comes into force with the objective of building up a clear framework for the improvement of private pension funds and simplifying the general rules of pension programmes.
Improvements in the portability of private pension rights. Occupational pension plans must be transferred and re-evaluated when a job change occurs.
The standard rate of corporation tax to be reduced from 43 % to 40 % from 1st April 1991.
Reduction of tax brackets to three (30%, 48% and 53% rates) meaning a significant reduction on overall rates, as they used to be six.
Establishment of Lone Parent's Allowance by combining unmarried mother's allowance and other social assistance payments for low-income lone mothers; significant because represented departure from social policy tradition of highly categorical treatment into streamlined programme (that also recognised men as lone parents)
Cuts in the top and standard rate of PIT: from 30% to 29% and from 53% to 52%.
Introduction of means-tested Carer's Allowance; represented policy change for number of reasons: switched payment for care to carer rather than recipient of care, broadened official definition of care, and increased payment value.
Replaced 1953 Restrictive Practices Act with new comprehensive statutory framework for prohibiting restrictive agreements and abuses of dominance across all areas of the economy (except Groceries Order area of jurisdiction).
Prohibition of dominant position abuse in terms of imposing unfair purchase or selling price or other conditions, limiting production or technical developments to the prejudice of consumers, discriminating in price to affect competitors, illegitimate contract obligations.
New competition act prohibiting "all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services".
Setting up of a Competition Authority with the duty of reviewing agreements and making investigations and reports under the requirement of the Executive branch. It is a merely consultative and supportive role.
Replaced Fairtrade Commission; advisory body to study and report on methods of competition and deliberative decision-making body for applications for licenses or exemptions
Established public health coverage entitlement for all ordinarily resident in Ireland (entitlement based on residency rather than citizenship or ability to contribute towards general taxation)
Established for rights of employees regarding payment of wages (right to negotiation, written statement of wages and deductions, and protection against unlawful deductions), with ability to appeal to Rights Commissioner or Employment Appeals Tribunal if needed
Social insurance payments/cover extended to part-time workers. The act reduces the number of hours employees are expected to work to qualify for certain statutory protection from 18 hours to 8 hours per week. Similarly, it reduces the number of weeks in continuous service for qualification for statutory coverage, from 52 weeks or more to 13 weeks or more.
Expansion of social welfare pension coverage (through PRSI contributions under 'Class A' category) to part-time workers.
Privatisation of Irish Sugar (later named Greencore) between 1991 and 1993 by IPO; seen as successful sales, but poorer profits and sales after privatisation (sugar; EUR 210.65M).
Irish Life is privatised (insurance, EUR 601.93M). Privatisation of Irish Life occurred in 3 stages (by Initial Public Offering, IPO) between 1991 and 1995, then merged with Irish Permanent Building Society in 1998.
Exempted employers from social insurance payment contributions for 2 years, in effort to spur hiring of long-term unemployed; employed 4000 people in first two years and expanded after
PRSI Exemption Scheme offering employers exemption from social insurance contributions when adding new employment in the following two years.
Comprised of Back to Work Allowance (1993), hiring subsidy; Back to Work Enterprise Allowance (1992), to support self-employment; and Back to Education Allowance (1996), education payment for unemployed; implemented and funded centrally by the Department of Social and Family Affairs
Definitive removal of exchange rate and FDI controls.
Local bargaining clause included in the Pay Agreement, allowing employers and employees to negotiate productivity increases in exchange for improvements in pay and conditions up to a "cap" of 3% of the wage.
Combined two maternal allowance schemes into/payment; ended entitlement of non-employed women to maternal payment through credit contributions of husband's social insurance; meant only specific maternity provision for non-employed women is means-tested maternity grant and potential supplemental welfare allowance scheme
Trade sale privatisation of B&I shipping; motivated by desire to remove loss-making company from state balance sheet; sold at a loss (value, EUR 10.8M).
The highest bracket is abolished, the lowest is reduced by 2%. Thus, only two brackets a 48% and a 27% remains.
Providers operational autonomy to Institutes of Technology, within an agreed policy, budget, and qualifications framework for accountability; funded by Department of Education with input from local Vocational Education Committees
Programme designed to allow the long-term unemployed to accept jobs while retaining the financial security provided by social welfare system. "Participants, who must be at least 23 years old and work more than 20 hours a week, receive 75 % of their benefits during the first year, 50 % in the second year and 25 % in the third year. In addition, they retain their secondary welfare benefits."
Definition of unfair dismissal is widened and penalties increased. "The reinstated employees are to receive the same terms of employment as other employees doing similar work, even if these are an improvement on the terms applicable at the time of dismissal. Continuity of service with the employer shall not be broken if dismissal was wholly or partly connected with avoiding liability under the Act."
Amendment to Unfair Dismissals Act, 1977 providing that Employment Appeals Tribunal should specify the reasons they adopted a particular form of redress (compensation, reinstatement, re-engagement) vs. others; continues pattern of extending scope of employment legislation to include atypical workers
Independence from London Stock Exchange and establishment of Irish Stock Exchange as autonomous entity limited by guarantee under Companies Act; supervision of exchange by Central Bank
Increased and restructured investment in vocational training.
Establishment of main Direct Employment Scheme (public sector temporary job creation) targeted to older long-term unemployed (replaced Social Employment Scheme) for 12 months; also expanded community and voluntary sector; funded by FAS
Second strand of Ireland's National Employment Service (in addition to training agency FAS); supportive labour market activation for long-term unemployed in disadvantaged areas; managed by local or area Partnership Company under control from FAS
Restructuration of industrial policy agencies: Forbairt for indigenous industry, IDA Ireland with FDI, Forfás for policy advices and coordination.
Increasing the ceiling on annual reckonable earnings to be taken into account in the calculation of the statutory redundancy lump sum payment.
Established general right of employee to return to work and to the position they held before maternity leave
Requires employers to issue employees with written statement of terms and conditions within 2 months of starting position
Ended monopoly of VHI insurance body (semi-state private insurance body); established that competition would be based on differences in packages of benefits offered (over and above Minimum Benefit Requirements) and differences in premium rates; also includes risk-equalisation mechanism
The local bargaining clause has been removed, hence additional pay rises in exchange for productivity increases is no more possible.
Abolishment of the earning-related supplement to NEB.
NEB are raised above the inflation rate.
NEB non-contributory assistance is sharply increased.
People engaged in casual employment are exempted from the necessity of proving a "substantial loss of employment" in order to qualify for NEB.
A person fired by collective dismissal receiving compensation and being over 55 might be deemed as non-eligible for NEB for nine weeks
Expansion of social welfare pension coverage for full-time carers/homemakers; disregarded up to 20 years out of workforce for State Pension (Contributory) or offered homemaker credits.
Pension age for new entrants to public service increased from 60 to 65
Restructuration of public companies focusing on core business through the sale of non-core assets.
Amended Residential Property tax programme in effort to increase revenue yields; increased number of households liable with a flat rate system (instead of proportion of valuation); only resulting in 1500 more households who paid; abolished in 1996
Since 1995, gas consumers with annual usage above 25mcm/year and since August 2000, all power generators irrespective of size, have been able to choose their gas supplier. (This amounts to 6 to 8 large users and about 60 small-scale power generators accounting for about 75 % of demand).
Abolished third level tuition fees for full-time Irish and EU students (50% tuition break in 1995, full tuition break from 1996; universities received block grant from Government in lieu of fees
Clarifies legal validity of netting of obligations under derivatives contracts in Irish law in preparation for implementation of the EU Directive (96/10/EC); designed to facilitate Ireland's growing financial services sector
Integration of new public servants into state pension system and full social welfare system; workers subject to full PRSI, entitled to State Pension (Contributory).
Introduction of a long-term unemployed native leaving certificate, second level completion with a self-contained two-year course; cross-curriculum, rather than subject-based approach; focus on vocational education and preparation; cannot be used to enter third level education
Job start, a new employment subsidy paying 80 pounds per week to employers hiring people who have been unemployed for more than three years.
Programme to provide full-time work for three years for unemployed over 35; operates in LES disadvantaged areas
In 1993, the Minister for Enterprise and Employment decided to double the thresholds for Ministerial consideration of mergers under the 1978 Mergers Act. It now applies to every proposed merger where the value of the gross assets of each of two or more of the enterprises involved is more than Ir£ 10 million or where the turnover of both firms exceeds Ir£ 20 million.
A 1996 amendment to the Competition Act empowers the Authority to begin investigations on its own initiative. Minimum penalties were boosted to Ir£ 3 million or 10 % of turnover along with two years imprisonment. Its ability to act, though, is constrained by its relatively small size of four members aided by a staff of thirteen, although there are plans to increase this to 20. Moreover, it does not have its own budget. Instead, its costs are borne by the Department of Enterprise and Employment.
Establishing the Office of Director for Telecommunications Regulation
Youngsters below 14 cannot be employed. Being 14 they can only be employed in light jobs out of school period; being 15 in part-time based; and being below 18 they cannot perform late night works.
Anyone who has been unemployed for one year or more continues to be eligible for free medical care for three years after entering employment.
Required all open enrolment private hospital health insurance plans to comply with minimum levels of monetary payment for hospital charges and consultant fees
Required efficiency in financial expenditure, but no requirements for effectiveness or quality of service delivery; also created Health Boards Executive to improve integration of service delivery on national basis, including non-state providers
Substituting unemployed-related transfers for universal transfers: the child dependant allowances paid to the unemployed were frozen while rising universal child benefit by 7%. Also, these allowances of the long-term unemployed can now be retained for three months following employment.
Unemployed who have been so for more than six months and at risk of drifting into long-term unemployment can work up to five weeks while keeping their NEB and they are also reimbursed for travel costs.
Introduction of age-related limits on tax-free pension contributions (increase from 15% flat rate on all ages, prior)
Lowering social security contributions: for employers, from 9% to 8.5%; for employees, from 12.2% to 12% and threshold increased by 8%.
Means-tested payment for individuals 16-66 years old with a disability
Trade sale privatisation of Irish Steel Company; similar to B&I shipping, was struggling prior to sale; sold to Indian steel company after protracted negotiations with buyers and trade unions; closed system later
Sale of 20% of Telecom Eireann to private foreign firms.
Firms that are not liable to the 10% CIT see their rate lowered to 28% from 36% for the first 50.000 pounds of firm income.
Local employment services set up to deliver counselling and orientation for long-term unemployed.
Competition Authority guidelines about detecting collusive tendering, send to 200 public sector agencies and local government officials for enforcement
The Dublin taxi industry, which was under State licensing control until 1997, is now controlled by the local authorities. In late 1997 a paper written by some private economists claimed that consumers were paying Ir£ 12 million per year in excessive fees (other than queuing). Since then, 400 new licences have been issued at an average price of Ir£ 15 000 each, compared to only 150 in total over the previous 20 years.
Investment fund to upgrade technical infrastructure of third level institutions; promotes innovation and economic growth; enhances research and development in higher education sector; includes both state and private donation funds
Sets out relationship between State and universities; autonomy for universities in terms of daily management, academics, and fee setting (even though State had abolished fees), with accountability measures
Update of 1977 and 1993 acts mandating that substantial grounds must exist to justify the termination of a contract for employment and fair procedures must be followed in effecting the termination
Empowers Central Bank to regulate payment systems in State
Establishes supervisory authority responsible for monitoring takeovers of Irish 'relevant companies', though between 1997 and 2012, number of takeovers relatively low – indicating "market for corporate control may not be particularly robust in Ireland"
State provides grants to voluntary/community (private) providers in exchange for agreement on specific services, standards, quality control, and accountability measures agencies will deliver
Established more formalised role for collective agreements; for example, collective agreements may be used to legally enforce compensatory rest arrangements; limits hours of work to 48 hours/work, with certain exemptions, and statutory minimum paid annual and public holidays
Established rights to recourse by Employment Appeals Tribunal if needed; expanded Labour Court functions
Established rules regarding mhc working hours, daily/weekly rest breaks, annual leave, and public holiday entitlements.
Age change on contribution conditions for State Pensions (Contributory) – If age 66 is reached before 2012, only 260 paid social insurance contributions are required (instead of 520)
Employees' social contribution lowered by 1pp.
The 38 % rate of corporate taxis reduced to 36 %, while the 30 % rate on the first Ir£ 50 000 of profits is cut to 28 %.
Since 1997, the standard rate and the top rate had been reduced by 6 percentage points and was 20 and 42 % respectively in 2001.
Established One-Parent Family Payment to replace lone parent allowance and function as more inclusive, employment-led approach to broader conception of lone parent (to include role of worker) and promote entry to labour market
Commitment to job-search activity is now a requirement for NEB.
Ireland's activation strategy; managed by FAS Training Authority to engage unemployed with intensive follow-up; characterised by 'Preventive Strategy' – after 3 months of 'signing on' (to Jobseeker's Allowance or Jobseeker's Benefit) referred to FAS for interviews and engagement
All of those people who have been unemployed for six months and are below 25 are called for an extra interview.
Comprehensive governance legislation of Irish school system; including the obligation to provide education for every person in State, inclusive and equal access, accountability and transparency to parents and students; shares schooling decision between national government and schools and established responsibility with Department of Education for curriculum and evaluation framework; emphasised consultation with wide range of stakeholders (public and private for policy formation)
Provides integrated financial support (both Exchequer and private matching funds) for institutional research strategy, programmes, and infrastructure; has contributed to funding of major research centres and projects; intent is to develop Ireland as premier location for research and development investment
Entitlement for men and women to take unpaid leave to care for their young children or family emergencies
Established unpaid parental leave as statutory entitlement to women and men to take up to 14 weeks from employment for birth/adoption of child or family emergencies
Prohibits employment discrimination on basis of gender, marital status, family status, age, race, religious belief, disability, sexual orientation, and membership of Traveller community; established Equality Authority (to replace Employment Equality Agency); expanded Labour Court functions
The basic pension is increased by around 6,5%.
Corporate tax for trading income dropping from 32% to 12.5%.
Ending of the 10% rate for financial services.
Introduction of a 25% CIT for passive income, income from foreign trade and specific (development, mining) activities.
Ending of the 10% rate for manufacturing except for financial services and certain firms calling a "period of grace" relief until 2010.
Reduces tax rate (standard/top rate) 26/48 % to 24/46 %; Increases personal allowance (single/married) Ir£ 2 900/5 800 to 3 150/6 300; Widens standard rate band (single/married) Ir£ 9 000/18 000 to 10 000/20 000; Increases weekly PRSI-free allowance for full-rate employee contributions Ir£ 80
Standard rate: 36 to 32 %, lowest rate (on the first Ir£ 50 000) lowered from 28 to 25 % (from 1999)
Commitment to deliver activation offers for young people before 6 months of unemployment.
The telecommunication market has been opened up to private companies, and the majority share of the state owned telecommunication company was put up as a public share offering.
Independent Commission for Electricity Regulation (CER) is established
Replaced National Council for Education Awards; statutory body with power to delegate award-making power to an individual institution, mainly institutes of technology; subject to policies of National Qualifications Authority of Ireland
Ireland, with 11 other EU countries, adopts Euro; marks advent of access to cheap, almost unlimited, credit
Formalised approach to partnership in health sector, particularly regarding management of change and implementation of national health strategy
The basic pension is increased by around 7%.
Created, among other things, ARFs, in which existing pension funds can be invested and managed by private financial institutions
Irish Telecom - Eircom. First high profile privatisation in Ireland finished; 500,000 citizens purchased shares after successful advertising campaign – initially seen as success until Eircom share prices collapsed and company broke up
Move to classical system regarding taxation on dividends; company subject to corporation tax on its profits and gains and individual shareholders liable to tax on dividends received from company at their applicable marginal increased tax rate
Earnings below 100 pounds do not pay taxes.
Standard rating personal and PAYE (employee) allowances: Widens standard rate band (single/married) Ir£ 10 000/20 000 to 14 000/28 000, increases personal allowance (single/married) Ir£ 3 150/6 300 to 4 200/8 400, increases annual PAYE (employee) allowances by Ir£ 200 to Ir£ 1 000.
Programme to address poverty, unemployment, and social exclusion through local partnership approach; operations in disadvantaged areas targeting unemployed, lone parents, travellers, etc. regarding employment guidance and training
Activation offers after 9 months of unemployment are introduced for older people.
Combination of local and national employment services as contractors.
Fund set up to replace EU Community Support Framework funding to sustain labour market programme spending; established with employer contributions of 0.7% earnings for most employees; emphasis on progression of training and education in Irish ALMPs
Partial liberalisation, since February 2000, 350-375 large users, using more than 4 million kWh annually (representing about 30 % of electricity demand) may choose their supplier.
The High Court decided in October 2000 that limitation of taxi licences in the interests of existing licence-holders could not be contemplated. The government therefore brought in new regulations for the issuing of licences including a requirement to have a vehicle test certificate, a certificate of suitability and appropriate motor insurance and to pay a fee of Ir£ 5 000. The number of licences is no longer limited. As a conciliatory gesture to current licence holders who suffered a loss in the capital value of their licenses, the Minister for Finance has proposed a special tax-relief provision for license holders to write off their capital loss over a number of years.
Raising of the minimum school leaving age from fifteen to sixteen years, or the completion of three years of junior cycle education, whichever is the later
Guidelines of application of grievance and disciplinary procedures and promotion of best practice
Established new social-insurance based Carer's Benefit to facilitate short-term exit from work force for purposes of caring; payable up to 65 weeks, during which full employment protection rights apply
Entitlement for parents of children born between December 1993 and June 1996 to 14 weeks of unpaid parental leave, thus removing the cut off date of 3 June 1996 existing in the original legislation.
Establishes IFSRA within new structure of Central Bank and Financial Services Authority of Ireland responsible for licensing, regulation of banking and insurance, and consumer protection; criticised for not preventing excessive lending to property sector and dissolved bank into Central Bank by 2010
Provides for the representation of, and consultation with, employees in the absence of a trade union, staff association or excepted body. The Labour Court has new powers on pay and employment conditions in companies where trade unions recognition has been withheld by employers.
There is a separate clause allowing for voluntary negotiations at local level under the heading of partnership, which can include negotiations on issues such as work organisation and new forms of financial involvement."
Reinforcement of the inability to pay clause contained in the PPF for firms in "vulnerable" sectors such as clothing and textiles, which are exposed to difficult competitive conditions. Such firms will not automatically be expected to make additional pay awards.
Introduction of a minimum wage: 4.40 pounds/hour.
33-months pay agreement which involves a minimum 15% pay rise (15.75% on a cumulative basis) for all employees as follows: 5.5% for the first 12 months; 5.5% for the next 12 months and 4.0% for the last nine months. In exchange for wage moderation, government commits to ensure that 80% of workers do not pay the top income tax, to enlarge take-home wages by 25% through a lifetime, and "removing all earnings below the minimum wage threshold from the tax net". At the same time, gender equality, programmes for supporting childcare and social inclusion are promised.
In order to claim a disability benefit a claimant should have 13 insurance contributions paid in the relevant contribution year. However, people who are in receipt of a jobseekers allowance, pre-retirement allowance or invalidity pension immediately before claiming a disability allowance are exempt from this requirement. That exemption is extended to persons in receipt of carer's allowance or persons providing full time care (to this respect a Constant Attendance Allowance or Prescribed Relative's Allowance were payable).
Establishing National Training Fund, financed with employers' 0.7% of social contributions. The fund is devoted to activate re-skilling and training in firms not having these kind of programmes. Imposition of a levy in employers devoted to almp and training through the fund.
Refocusing national foundation for training towards guidance and placement from mere training.
Marked adoption of lifelong learning as governing principle of education policy in Ireland; outlined new policies for re-entry of adults to education (third level, community, or workforce training)
Establishment of statutory body with powers to ensure quality teacher education from start of career through continuous professional development, though all resources/financing of teacher education decided and allocated by central government
Protection against discrimination and promotion of equal treatment of fixed-term workers, and temporary agency workers; also aims to improve quality of part-time work; expanded Labour Court's functions
Elimination of the threshold of more than eight hours a week in defining part-time work. Now occupational pensions are included in order to give part-time workers an entitlement to participate in full-time pension schemes. Excluded from this are those whose normal hours of work is less than 20% of a comparable full-time employee. Workers refusing to transfer from one scheme to another cannot have their employment terminated unless the employer can justify it due to operational requirements.
Elimination of discrimination of any kind against part-time workers.
Employees with one years of continuous service with the same employer are entitled to 65 weeks of unpaid leave to care for incapacitated relatives or friends.
Established carer's leave scheme, to complement Carer's Benefit, entitling employees to avail of temporary leave from employment to provide full-time care and attention for up to 65 weeks
Fund used to purchase treatment in Ireland, or in special cases, abroad, for public patients who have waited more than 3 months; intended to shorten wait times for those on hospital waiting lists; became independent statutory entity in 2004
Establishing the Health Insurance Board as a regulatory agent in the recently liberalised sector. Created to regulate private insurance in Irish market and promote competition while ensuring schemes use community rating, have open enrolment, and provide lifetime cover; also oversaw introduction of risk equalisation
Amends Industrial Relations Act, 1990 to allow trade unions to bring employers who did not engage in collective bargaining negotiations before the Labour Court for binding and enforceable decisions; based on agree report from social partners and relevant state agencies
For the purposes of calculating benefits under the Protection of Employees scheme the limit of weekly remuneration is raised from 300 to 400 pounds.
Significant expansion of Child Benefit, estbl. Phase-in of higher CB payment rates to families (from 19 EUR per child/per month in 1987 to 160 EUR per child/per month by 2007)
The National Pension Reserve Fund (NPRF) was established in 2001 to build up reserves so that the fiscal costs of ageing could be smoothed through time. By law, the Exchequer contributes at least 1% of GNP each year and ad hoc contributions have been made from the sale of government assets.
Privatisation trade sale of Irish Petrol, seen as opportunity to de-regulate company's operations and increase competition in light of predicted higher demand in market; seen as example of "pragmatic nature of Ireland's privatisation programme to date with decisions made on case by case basis"
Trade sales of ICC Bank (1/01), TSB Bank (4/01), ACC Bank (12/01) designed to eliminate state involvement from banking sector
Significant increase of the income level at which people enter the tax net, which is 183 per week in 2001/2002 compared with 90 in 1997/1998. (The tax system was transformed in 1999 from a hybrid allowance system (where non-standardised allowances were dominant) to a hybrid credit system where standardised allowances are dominant).
Mandatory interviews with PES for every unemployed person after nine months.
From the beginning of 2004, Dublin Bus will face competition up to 25 % of its network and that further routes will be franchised out over the coming years
Location restrictions were removed in 2002.
Stronger potential sanctions against hard-core cartels and a much-improved merger review process as all ministerial involvement was removed. Decisions about mergers are now made solely by the Authority, applying a competition test. The law does not permit the defendant to avoid liability by claiming ignorance of the cartel’s likely effect on competition. Cartelists granted immunity from prosecution in return for providing evidence against fellow cartelists
Rate of employers' social contribution is reduced from 12% to 10.75%.
Flexibilisation of pre-retirement scheme to encourage people to keep working.
For fixed-term employees who commenced prior to 14 July 2003 and have 3 years continuous service, employer may renew fixed-term contract only one more time and for no longer than one year. For fixed-term employees who started working after 14 July 2003, employer may employ them for two or more fixed-term contracts, but the aggregate duration may not exceed 4 years.
Entitles eligible employees to 2 weeks tax-free statutory redundancy payment for every year of service, plus a bonus week, up to a statutory ceiling
Protects employees' rights and entitlements in case of transfer of business from one employer to another
Linked a monetary authority carrying out functions related to European System of Central Banks and a single regulatory authority, the Irish Financial Services Regulatory Authority; somewhat controversially, also tasked with developing financial services industry in the State
The National Implementation Body (NIB), a group composed of key government, ICTU and IBEC leaders (IE0103233N), is to assume a more enhanced role and can be expected to intervene in any high-profile disputes.
The key industrial relations feature of the new agreement concerns a new set of compliance measures, which will involve the Labour Relations Commission (LRC) and/or the Labour Court intervening where disputes arise in relation to the national pay agreement. Ultimately, the Labour Court can issue binding recommendations on the pay agreement, although these are not legally enforceable.
National minimum wage fixed at 7 euro/h.
A new calculation formula designed to benefit lower-income civil servants by better integrating social insurance with public service pensions is introduced.
Reduction of pension benefits of public servants retiring early.
Increase of the eligible pension age for civil servants to 65 and either eliminated or increased mandatory retirement ages for new government workers.
Allows those aged over 21 years to return to education, while continuing to receive benefit income equivalent to unemployment benefits and a Cost of Education allowance.
Formalisation of process beginning in 1998 regarding cooperation between Department of Social and Family Affairs benefit offices and FAS Employment Services to increase registration of benefit recipients for job search and work assessment
Increase in training and employability goals of Community Employment Scheme(s).
Raising the weekly ceiling of redundancy compensation to 600 EUR.
Extension of equality requirements for those aged below 16 and above 65.
Amends Employment Equality Act 1998 to prohibit sexual and other harassment and shift burden of proof from the complainant to the respondent
Core principle of Irish government regulatory policy being "we will regulate as lightly as possible"; Ex. seen in practice with 2003 Companies (Auditing and Accounting) Act and 2004 CBFSA provisions regarding regulation of financial companies to disclose activities to shareholders not implemented due to 'industry pressure'
Statutory office to deal independently with complaints from consumers regarding individual dealings with financial service providers, funded by levies from financial service providers
Abolished health boards, centralising system with single national body overseeing 32 local health offices operating under annual national services plan; no decision-making role for community/voluntary organisations; took over management of health budget and service delivery for entire public health system from the Department of Health and Children (including with a vote in the legislature)
Increasing linking period of NEB with a previous claim of 26 weeks.
With someone with less than five years of social contributions NEB will last max. for 312 days instead of 390.
Wage subsidy scheme for disabled people to increase their labour participation. It offers financial support to employers (more than 20h. Week contracts). It replaces the pre-existing Pilot Employment Programme and Employment Support Scheme.
Ended higher education funding system of annual block grants from HEA to universities for operations and 'in lieu of fees' (in operation from 1995-2005) and replaced with recurrent grant allocation model (RGAM); established formula model with performance-related benchmarks and a competitive Strategic Innovation Fund
Standardised system of identifying a school's socio-economic disadvantage, with School Support programme to provide school and local communities with additional resources and support
Termination of additional maternity leave in the event of illness.
Increase in the duration of paid maternity leave.
Provision for expectant mothers to attend ante-natal classes without any loss of pay.
Reduction of the compulsory pre-confinement period of maternity leave from 4 to 2 weeks.
Breast-feeding mothers who have given birth in the previous 6 months can either adjust working hours or have breaks without loss of pay.
Counting of an employee's absence from work on additional maternity leave for all employment rights associated with the employment.
Reduction in the qualifying period (meaning time spent on relevant social contribution) for Jobseeker's benefit recipients to qualify for the Back to Work allowance from 3 to 2 and 5 to 2 years (self-employed/employees).
The so-called Preventive Process (assist of progress towards employment of those unemployed through interviews) is extended by reducing the engagement threshold from 6 to 3 months and the engaging age towards 55 years old.
Expanding the Workforce Programme to provide a gateway for women returning into the labour market.
Introduction of requirement for all unemployed of all ages to engage with Training Authority (FAS); failure to do so resuts for long-term unemployed in review of benefits payments
Abolishing the Groceries Act, leading to a substantial liberalisation of the commerce market (licenses, distances, working hours).
Increase in carer's leave entitlement from 65 weeks to 104.
Inter-agency financial committee to deal with crisis management and financial stability issues (Central Bank, Financial Regulatory Agency, and Department of Finance); developed Crisis Management Manual
Increasing the threshold for the payment of the 2% health levy.
Established process of building private hospitals within the grounds of existing public hospitals, as part of government initiative to free up public hospital beds
Freedom to avail of ‘direct’ forms of information and consultation, to suit local circumstances
Trade unions will no longer be the sole channel for employee representation
Established minimum requirements for employees' rights to information and consultation about terms of conditions for employment and employment activities; applies to businesses with at least 50 employees
10% employee trigger mechanism for setting up an information and consultation structure
Increases the employee entry point to social contributions to ensure that minimum wage earners are exempt.
Tapered withdrawal rate from disability benefits for those who start working or decide for self-employment.
Increase of the earnings disregard in the means test for non-contributory pensions from 100 EUR to 200 EUR.
Introduction of a 100 EUR per week earnings disregard in the means test for the non-contributory state pension.
Introduced a minimum allowable pension fund on retirement for tax purposes; SFT limit of 5 million EUR placed on total capital value of pension benefits that an individual can draw upon in lifetime from tax-relieved pension arrangements
Aer Lingus is privatised (EUR 200M). IPO sale of 60% stake in 2006 to various investors; state retained shares until 2015 complete acquisition by International Airlines Group (IAG)
New state owned company established (EirGrid plc) took over national electricity grid, but ownership remained with ESB networks. By the end of 2008, ownership of the transmission network will be transferred from ESB to EirGrid.
The Pharmacy Act 2007 has introduced important reforms, including the abolition of the “three-year” rule that formerly restricted the entry of foreign-trained pharmacists. The number of places to study pharmacy in domestic institutions has increased substantially, and the overall number of pharmacies has grown.
An all-island wholesale electricity and gas market took effect in November 2007.
Introduction of meters and costs/payments for non-domestic users of water.
The Act provides for the establishment of a Redundancy Panel (“the Panel”) in accordance with the terms of most recent social partnership agreement, “Towards 2016”. The three-member Panel will consist of a Chairman appointed by the National Implementation Body, and ordinary members nominated by employee and employer bodies. The Panel will deal with collective redundancies to ensure that they are genuine redundancies as opposed to situations where existing workers are replaced by lower paid workers. This panel then reports to the Ministry, who reports to the Labour Court.
Where the Labour Court holds that an exceptional collective redundancy situation exists and employees are dismissed in any event, but it is open to an affected employee to claim unfair dismissal. In those circumstances, employees may be entitled to compensation of up to five years’ remuneration."
Previously, in order to qualify for a statutory redundancy payment, an employee had to be between the ages of 16 and 66. The Act removes the upper age cap of 66 years for individual and collective redundancies.
Employers are obliged to notify the Minister of proposed redundancies at the earliest opportunity but at least 30 days before the first dismissal takes effect. In the event that (collective) redundancies are effected by an employer before the expiry of this 30 day period, the employer may be liable to a fine, which has been increased by the Act to an amount up to €250,000.
Protects employees from penalisation for reporting employer breaches of consumer protection rights
Financial Regulator added speculative property development loans to class of loans attracting a higher capital ratio
Further increase of the threshold for the health levy. Health levy increases from 2% to 2.5% for income earners above 100.100 EUR per annum.
Responsible for developing health information, setting and monitoring standards, promoting and implementing quality assurance programmes nationally, and cost-effectiveness of health technology; responsible for accreditation mechanisms for publicly-funded health care services
Significantly limited scope of Industrial Relations (Amendment) Acts, 2001-2004, by excluding employers who negotiated with staff not in trade unions, limiting the number of claims against employers who did not engage in collective bargaining
Employee entry point to social contributions further increased.
The regulator has ordered ESB to sell some generation plants to reduce its market share to 40% by 2010.
Special household-based scheme to increase employability of members of houses with risk of exclusion.
Subsidies for employers employing workers with disability (productivity below 80% of what should be normal).
Individual case-based programme for activating people with disabilities/illness.
Increasing the capacity of strengthening public employment services through the development of new schemes for re-skilling and training of the unemployed. Mainly focused on redundant construction workers. Also facilitates the firm's access to subsidies for training workers.
Legislation is in place to facilitate the appointment of an independent regulator for the Greater Dublin Area, but this also gives the incumbent a 5-year guarantee that its routes will not be subject to open tender.
Combined the Competition Authority and National Consumer Agency, "as part of a rationalisation of State agencies", with a dual mandate to enforce competition and consumer law
Establishment of the National Employment Rights Authority (NERA) with greater powers to enforce law and more resources to inspect.
Deposit guarantee scheme is increased from 20000 EUR to 100000 EUR per depositant.
To avoid impending collapse of domestic banking sector, government gave blanket guarantee to depositors and bond-holders of 6 main domestic financial institutions; lasted for 2 years, at which point Ireland forced to enter EU-IMF loan programme in November 2010
Agree on a time-bound process in which the issue of employee representation and the appropriate legislative framework will be addressed; this includes the proposed introduction of a statutory prohibition on the victimisation of employees based on their membership or non-membership or activity on behalf of a trade union, and on incentivising non-membership of trade unions
Prohibiting the use of temporary agency workers in the event of official strikes or lockouts
New pay agreement. In the private sector, the deal provides for a: pay pause of three months, including for the construction sector; pay increase of 3.5% for a period of six months; pay increase of 2.5% for a period of 12 months – or a pay increase of 3% for workers earning €11 an hour or less on the date that the increase is due. In the public sector, that is the public service, the deal provides for a: pay pause of 11 months; pay increase of 3.5% from 1 September 2009 for a period of nine months; pay increase of 2.5% from 1 June 2010, except for workers earning up to and including €430.49 a week (€22,463 a year) on that date who will receive a 3% increase.
The Jobseeker benefit decreases from 15 to 12 months.
Top marginal income tax rate is reduced by 1 % to 41 %.
Introduction of additional tax calculation on gross income prior to most deductions (e.g. pension); exempted those holding full medical cards
Ensuring/allowing qualification of employees in apprenticeship jobs.
Introduction of a Short-Term Enterprise Allowance, providing one year of support for those that are already eligible for NEB.
Back to Work allowance see its requirements broaden: now only one year is needed to qualify.
Subsidies for firms in the manufacture and export sector: "Subsidies of up to €200 per week per full time (working an average 35 hour week) person for the first 26 weeks and then on a reducing scale thereafter to a minimum of €9,100 over the 15 month period to November 2010 may be awarded to successful applicants. The minimum support an enterprise can receive is €500,000".
Back to Work allowance payments are reduced from 4 to 2 years.
Work Placement Programme placing 2.000 young people into work for at least 9 months in order to make them acquire direct job experience.
Back to Work Allowance scheme has been modified so that it will only provide support for those going into self-employment rather than employment
Increasing the capacity of strengthening public employment services through the Activation Programme, including new individual assistance for unemployed.
Offer of part-time higher education opportunities for the unemployed: Back to Education Allowance for those over 21 years old. It permits to go back to education and keeping NEB payment plus a cost of education allowance. Qualifying period is reduced to 3 months for mid-level education and 9 months for higher education.
Renovation and increase in the training scheme for redundant construction workers addressed to redirect their careers to 'green technology' sectors.
A doubling of places to in the education sector to 146 000 places, including 91 000 training places, mostly on 10-week courses, under the Training Initiatives Strategy; 2 000 additional places in full-time third-level education and further 1 500 in part-time university courses; 2 000 places under the Work Experience Scheme for recent graduates; 1 500 places in Post-Leaving Certificate Courses; and over 41 000 places under a variety of other initiatives.
Created as agency of Department of Finance to deal with bad assets of banks and to take care of large loans to property developers
Extension of the Deposit Guarantee Scheme to credit unions.
Reduction of the minimum pay out time of the deposit guarantee scheme from three months to twenty working days
New legislation in 2009 gave the Minister for Health and Children the power to set new terms for payments to health professionals, and the payments to community pharmacists for wholesale delivery and dispensing have been reduced.
Employers and unions withdraw from national pay agreement.
Wage cuts for public servants from 5% to 8% (up to 15% for politicians and senior public servants).
The rate of Jobseekers Allowance paid to new claimants under the age of 20 was reduced from €204.30 per week to €100 per week.
Reduction in all NEB from 204.3 Euro to 196.0 Euro (weekly, minus 8.3 Euro or minus 4.1%).
Also known as 'civil servants' levy'; earnings-related levy on public servants; does not fund public service pensions, but operates as a pay cut for public servants – though it is treated as tax-deductible; on average, it is equal to about 7% of earnings; aims to save 1 billion EUR per year
Increasing the ceiling up to which employers should pay related social insurance from €52,000 to €75,000.
Required National Pension Reserve Fund Commission to make investments in credit institutions to stabilise financial system; resulting in large share of pension reserve fund used to recapitalise Irish banks, post-financial crash; also allowed Minister of Finance discretion in whether or not to contribute to Fund for 2012 and 2013 (change from NPRF legislation in 2000 that required 1% of GNP to be paid into fund each year)
Established scheme in which Exchequer will take responsibility for an insolvent pension fund, so long as trustees pay a lump sum to Government
Creation of the National Asset Management Agency (NAMA) to deal with banking problem assets, mainly purchasing them through public funding and conducting restructuration. Participation in the scheme by banks is voluntary. The assets covered are land for development loans and certain associated loans. In applying to participate, banks would have to agree to sell to NAMA all eligible loans identified by it for transfer. Asset valuation by NAMA is based on the current market value of the underlying collateral, adjusted to reflect longer-term economic value. Here is a risk-sharing mechanism whereby 5% of the government securities or guaranteed-debt used to purchase the assets from the banks is in the form of subordinated debt, which will not be repaid in the event that the NAMA makes a loss on those loans.
Series of liquidators and mergers in domestic Irish banking system that ultimately turned 6 banks into a consolidates (and concentrated) system with 2 broad banks, Bank of Ireland and AIB (included nationalisation of AIB (2009) and INBS (2010), among other actions)
Provision of 3.5 billion of Core Tier I capital each to Allied Irish Bank and Bank of Ireland. The banks have the option to repurchase these preference shares at face value for the first five years and then at 25% premium thereafter. Warrants give the state the option to purchase up to 25% of the ordinary share capital of each institution at strike prices that place a very low valuation on the banks’ equity, prices that were subsequently reached but are below the current level.
Introduction of Non-Principal Private Residence Charge, flat-rate charge of 200 Euro levied on property owner (2009) and Household Charge (2012), requiring homeowners to pay flat-rate of 100 Euro (Household Charge regressive and controversial and very low take-up of payment); both replaced by new Local Property taxing July 2013.
Provision of additional training to part-time workers (for those working three days per week, two days of training up to 52 weeks).
A doubling of training and work experience activation places to 128 000 per year to be provided through FÁS.
Programme for people who have been unemployed for more than 3 months: "Participants are offered a 12 month placement with host organisations in the private or voluntary sectors. In addition to placement, participants undertake a significant education and training component, to be certified in order to improve their skills and competencies in the labour market.
5000 additional places to provide work opportunities by community and NGOs to long-term unemployed people.
If a firm hires a person who has been unemployed for more than 6 months, they will be excluded from social contributions during a year.
Creation of a National Employment and Entitlements Service in order to integrate benefits and activation requirements.
Troika agreement requirement labour market policies reform to increase monitoring job-seeking and sanctions for unemployment receiving social welfare payments
Education sectorial agreement regarding 'efficiency' including longer hours for post-primary teachers; re-structuring Vocational Education Committees, review of hours and employment contracts in technical institutes; increased hours and workload for higher education staff and internal reorganisation
Protocol for pay agreements at different levels signed by employers and employees. "The first paragraph of the new protocol affirms the importance of maintaining employment. It states that both sides ‘are agreed that the minimisation of sustainable employment is the most important objective to be secured during the economic downturn’. This shared commitment on employment means that both parties would accept that ‘the economic, commercial, employment and competitiveness circumstances of the firm are legitimate considerations in any discussion of claims for adjustments to pay or terms and conditions of employment’."
Agreement between the Irish government and public sector unions on austerity measures as part of 2009 EU-IMF structural adjustment programme; pay cuts agreed to in exchange for protection against compulsory redundancies
The rate of Jobseeker’s Allowance for new claimants aged 20 and 21 without dependent children is reduced to €100; for new claimants aged 22 to 24, without dependent children, it was reduced to €144; and for all people aged 25 and over it was reduced to €196.
Condition of Ireland's bailout agreement with Troika that specified nominal value of State pension not be increased (in contrast to usual increases in state pension decided in annual government budgets)
One-off cut to pensions from all areas of public sector; progressive cut applying to Irish gross public sector pensions over 12,000 EUR per year; average pension reduction was about 4% of gross benefit in 2011
Changes to the restriction of relief measures to ensure that high earners, subject to the full restriction, pay an effective income tax rate of 30% instead of 20%.
Now "benefit rates can be cut by almost a quarter for refusal to engage in job search or in activation programmes".
In response to slippage in NEAP activation targets and pressures on employment services, FAS restructured to separate training divisions and public employment service functions
Additional 20 900 activation places, with an emphasis on training for the unemployed in need of re-skilling to new sectors, adults returning to education and work experience placements.
Series of reforms led by Higher Education Authority to improve sustainability of higher education funding; implemented new student contribution of 2000EUR in 2011 (replaced Student Service Charge) that will increase annually at least through 2015, with some means-tested assistance
Funds free part-time higher education courses for unemployed in areas with labour market shortages; example: joint government/individual information and communications technology (ICT) Action Plan developed to meet technological individual needs
The law includes a mechanism for addressing creditor rights (e.g. review by a special assessor to determine relevant compensation, if any) subject to limitations in situations involving public financial support.
Resolution measures may be supported with resources from a dedicated fund administered by the CBI (e.g. in the form of financial incentives for the transfer of assets and liabilities or to establish and operate bridge banks). The resolution fund will be financed by a levy on credit institutions. Moreover, the law provides for the preparation of recovery and resolution plans and contains specific provisions on orderly liquidation.
The CBI may seek a court order for the transfer of assets and liabilities (or parts thereof) to another institution when it decides that the intervention conditions are fulfilled and, having regard to any adverse consequences (e.g. creditor interests), a transfer order is necessary in all the circumstances to address one or more of the reasons for those intervention conditions being fulfilled. The law contains further guidance in relation to the implementation of transfers, for example, on the pricing mechanism. This resolution power allows the authorities to take prompt action in transferring certain parts of a failing institution (e.g. deposits) to another institution while maintaining access to deposits. The residual entity would typically be liquidated thereafter.
The CBI has the power, if it is in the public interest, to establish a bridge bank to accommodate the transfer of assets and liabilities from an institution.
Once the intervention conditions are fulfilled and the CBI decides that a special management order is necessary in all the circumstances, the CBI may request that a special manager be appointed by the court to manage the institution – for an initial term of up to six months – with a view to either restoring or winding down its operations.
The CBI may at its discretion apply various measures in cases where an institution does not meet its license or regulatory requirements, and the CBI: (i) has serious concerns relating to the financial stability of the institution that could not be resolved using the direction of powers of the CBI, or (ii) it encounters a serious threat to the institution’s financial stability or the financial system in the State, and where the CBI determines that an immediate winding-up of the institution is not in the public interest.
The Health Professionals (Reduction of Payments to Community Pharmacy Contractors) Regulations 2011 reduce wholesale and retail margins paid to community pharmacy contractors.
High Court held employment regulation orders (EROs) (proposals for minimum rates of pay and terms and conditions) to be invalid; employers no longer obliged to offer terms and conditions to employees starting after 7 July 2011
Immediate 10% reduction in the pay of all new entrants to the public service, leading to a further sustainable reduction in public service pay costs over the medium term. In addition, all new entrants will start on the minimum point of the scale.
Increase in the earnings limit for a graduated rate of payment for Jobseeker's Benefit.
Changes to the number of contributions needed to qualify for Jobseeker's Benefit. Now, at least 104 weeks paid since the person first started work are needed AND to have 39 weeks PRSI paid or credited in the relevant tax year (contributions must be paid for a minimum of 13 weeks); or have 26 weeks PRSI paid in the relevant tax year and 26 weeks PRSI paid in the tax year immediately before the relevant tax year.
Reduction from 8.5% to 4.25% in the rate of employers’ social security contributions (Pay Related Social Insurance, PRSI) payable on weekly wages up to EUR 356 (5.5% above the national minimum wage), to stay in force from 1 July 2011 to end-2013. For the full amount of weekly wages above EUR 356, a rate of 10.75% continues to apply.
The employee’s annual earnings ceiling for social contribution is abolished and is now payable on all income
Enabled pension fund purchase of Irish government bonds ('sovereign annuities') instead of low-risk, low-yield German and French government debt; easier to match assets and liabilities, and higher yields will reduce cost to pension funds of securing pensioner liability
Reduction in the Standard Fund Threshold (currently over €5 million).
Recapitalisation process of Irish banks, post-bailout; including individual loans loss assessment exercise; Prudential Capital Assessment Review (annual stress test of capital resources regarding recapitalisation costs; Prudential Liquidity Assessment Review (funding targets for banks to decrease dependence on central bank funding)
Tax on entire accumulated pension fund; stamp duty levy of 0.6% applied to market value of assets; legislation allowed trustees to make corresponding reduction to personal benefits provided (including in defined benefit schemes) or for pension industry to meet levy by cutting costs and fees
Establishing Irish Fiscal Advisory Council, independent and with mandate of assessing: (i) the soundness of official macro-fiscal forecasts; (ii) the appropriateness of the fiscal stance (including the government’s stated medium-term budgetary objective); and (iii) the consistency between budgetary plans and fiscal rules (the latter are to be specified in a Fiscal Responsibility Bill by year-end). The IFAC will submit, at least three times a year, written reports to the Minister for Finance, which will automatically be communicated to the Oireachtas within 24 hours.
Reduced income tax credits and bands by 10%, which will lower the threshold at which income becomes taxable.
Introduction of new income tax to replace income level and health levy; as of 2016, individuals must pay if income over 13,000 Euro (but income threshold originally started at 4,000 Euro in 2011)
Eligibility for One Parent Family Payment was restricted, with age limit for youngest child brought down from 18 to 14 (April 2011). For existing claimants, the change will be phased in gradually.
Series of reductions in private pension relief to produce savings in tax expenditures: 2011 – reduction of annual earnings cap for personal pension contribution, elimination of PSRI and health levy exemption on pension contribution for employees and 50% PSRI tax exemption rollback; 2012 – phased reduction of income tax relief on private pensions (41% to 34% in 2012, and down to 20% by 2014), and elimination of all employer PSRI exemption
Establishing enforcement mechanisms to penalise non-compliant jobseekers, e.g. those that do not attend required interviews, refuse to participate in trainings or to take up jobs.
Strengthening linkages with employers to ensure that higher share of vacancies is filled by people from the Live Register, such as by developing systems to better match employment vacancies with candidates, extending the Employer Job PRSI Incentive Scheme til end-2012 and lengthening its coverage to the first 18 months of employment.
New unified unemployment service with full conditionality to active participation in almp-programmes and active job search.
Identifying jobseekers at a risk of long-term unemployment quickly so they can benefit from early interventions such as profiling, group interviews and subsequent one-to-one interviews and be directed to appropriate training programmes. Jobseekers will be assigned individual case workers, which should strengthen their engagement with unemployment services. "[M]ore engagement with the unemployed; greater targeting of activation measures; incentivising the take-up of opportunities; incentivising employers to provide more jobs for the unemployed and reforming institutions to deliver better services to people who are unemployed" (Doorley et al, 2013).
Intended to strengthen enforcement of competition law (and Competition Authority jurisdiction) and combat white-collar crime, with additional measures to assist juries in considering complex financial and economic evidence in competition law cases
Providing treatment for temporary agency workers equal to those who are directly recruited.
Overhaul of Joint Labour Committee (JLC)/Employment Regulation Orders (EROs) and Registered Employment Agreement (REA) wage setting systems; allows JLCs to consider rates of unemployment and competitiveness when setting wage rates, employers to seek exemptions – due to financial difficulties – from paying REA or ERO rates; and JLCs to set basic adult and two higher wage rates
Sale of Bord Gais Eireann to various groups, renamed Ervia as holding company of 3 distinct utility firms (Gas Networks Ireland, Irish Water, and Aurora Telecoms); last of series of deregulation and restructuring steps from early 2000s
Replaced 33 Vocational Education Committees with 16 Education and Training Boards to better integrate skills and training into education system; boards expected to focus on skills connected to labour market to assist employed and unemployed individuals and assist students' transition into the workplace
Public sector agreement that made significant cuts to HSE staff numbers, fees, and allowances for certain health professions, health care staff salary cuts, and agreement to review work practices to increase efficiency in service delivery
Held that Registered Employment Agreements (REAs) (pay/employment condition agreements registered with Labour Court and legally enforceable) as invalid; after 9 May 2013, new employees cannot be covered by REAs, only ordinary employment legislation regarding minimum wage, rest periods, and the like
Privatised Irish Water as subsidiary of Bord Gais Eireann; controversial effort that spawned multi-year protests across Ireland
Introduction of latest version of household residential property tax, based on market value of a property and replacing both the Household Charge and Non-Principal Private Resident Charge; VAT and Stamp Duty remained in place
Volume export duty on marine products raised to 40%.
Price Control Board announces average increases in wholesale percentage markups of 7 % and in retail percentage markups of 10 %.
Raw white fish prices for period January to May raised by 11.5 % on average. FPEF reference prices for frozen and salted white fish for the same period raised approximately in line with the expected market prices.
Tariffs reduced in accordance with EEC and EFTA agreements
Capelin prices for freezing and reduction raised by an estimated average of 92 and 77 % respectively. At the same time, the government decided to impose a new 5 % export levy on all capelin products, with proceeds to subsidise fuel oil for the whole fishing fleet. FPEF reference prices for capelin season imply some payments to the Fund (possibly of order Kr. 100 to 200 million).
Price Control Board decision that the percentage markups should only be applied to the 30 % of higher import costs due to the devaluation.
Amendments to legislation on customs duties: involving mainly reduction in tariffs on machinery and raw materials; consequently tariff changes according to the EFTA and EEC trade agreements; reduction of various fiscal tariffs (e.g. on imports from third countries).
Prices of capelin cut by 10 %. FPEF reference prices unchanged.
Imported machinery for use in import competing industries is exempted from sales tax according to the provision in the 1975 Budget.
The Oil Fund for Fishing Vessels was established. Financed by export duties (4%) the fund subsidises fuel oil prices.
Rise in allotment accruing to Capitalisation Fund for Fishing Vessels to 15% from 10%.
Maximum rate of payments and receipt of Fisheries Price Equalisation Fund raised from 50 to 75 % (because of difference between market and reference prices). Move designed to help freezing plants to which payments are expected to accrue.
Reduction of import deposit scheme in stepwise abolition. Deposit rate reduced from 25 to 20 %, with four reductions of 5 percentage points each to follow at monthly intervals from end-September.
Special agreements concluded separately with all unions within Federation of Public Employees and most unions within Federation of University Graduates, providing mainly for reclassification of jobs. Together with initial increases under wage agreement, the estimated effect is to raise income on average for all public employees by just under 20 %, with a slightly higher increase for lower paid.
Wage agreement between Treasury and Federation of Public employees and Federation of University Graduates, providing for Kr. 1117 increase in basic monthly salary rates as of April 1.
The wage indexation system is replaced by a pay equalisation scheme for low-income recipients. Compensation payments amount to Kr. 3 500 per month on ordinary-time earnings up to Kr. 50000 per month, with sliding scale reductions thereafter up to monthly income of Kr. 53 500 at which equalisation payments cease. Total wage and salary bill for the whole country is expected to increase by 6.6 %. For the lowest earnings the increase will amount to some 10 %. Provision for review of scheme if the cost of living index increase exceeds 358 points.
Wage indexation is suspended to avoid increases parallel to soaring inflation rate.
Wage agreement between merchant marine mates and ship-owners for period to September 1, 1976 (thus ending 19 days strike by officers) providing for initial increase of 22 % in basic rates and further increases in three subsequent instalments of 3 % each.
The Federation of Labour and the Employers' Federation sign a new two-year "frame" agreement (for period February 26, 1974 - March 30, 1976) providing for initial average general increase in basic rates of about 12 %, special increases for lowest-paid and reclassification of jobs (altogether bringing initial pay increase up to about 20 % on average). Further 3 % general increases on December 1, 1974 and June 1, 1975. Agreement covers directly about 60 % of total wage bill and indirectly additional 10 %. Subsequent settlements by individual unions (particularly of skilled workers) tended to exceed frame agreement provisions in many cases by 5 to 10 % for initial pay increase. Indexation clause stays unchanged except for the exclusion of changes in alcohol and tobacco prices from compensation index.
Occupational pensions were made mandatory for dependent employees.
State personal income tax reduced through increasing personal allowances, raising tax brackets, reducing marginal tax rates (maximum rate lowered from 44 to 40 %) and introducing tax credits. Net effect on revenue estimated at Kr. 3400 million reduction (annual rate). Tax credits exceeding State income tax primarily intended to offset other State or local taxes, but may be paid out under certain circumstances.
General sales tax increased by 4 percentage points (effective March 25) Resulting price increases are excluded from the wage compensation index.
Payroll tax increased by 1 % (effective April 1), proceeds to accrue to State Building Fund to finance construction of dwellings especially for lower-paid.
Extension of fishing limit from 50 to 200 miles.
Herring fishing resumes with individual vessel quotas. With a resumption of herring fishing, the government issues quotas to individual vessels as a share of the total recommended catch. Unlike the present system, where there are permanent rights, the quotas are issued annually to eligible fishery concerns that apply. They are not transferable, although the fisheries circumvent this somewhat.
Provisional agreement between Federation of Labour and Employers' Federation covering period March-May. Ordinary time monthly earnings up to Kr. 69'000 increased by Kr. 4'900, with sliding scale reduction up to earnings at Kr. 73 900. This implies 13 % increase for lowest paid and 10 to 11 % increase on average for those covered by the agreement.
A new agreement between the Federation of Labour and the Employers' Federation for the period June 13 - December 31, 1975, providing for immediate increase of monthly earnings of Kr. 5 300 and further increase of Kr. 2 100 from October 1. Maximum pay equalising addition to wages (see October 1974) and provisional increase from March of Kr. 3 500 and Kr. 4 900 respectively now payable to all wage earners. Indexation suspended for the rest of the year unless threshold of 11.9 % increase in the cost of living index exceeded from May 1 to November 1. (Excluding rises in alcohol and tobacco prices and wage element of agricultural prices; effective threshold thus becomes an increase in the cost of living index of 14.5 %). This agreement was subsequently signed by the Federation of Public Employees. Average increase in basic wage rates of all employees estimated to some 10 % in June and 3.5 % in October.
Additional 1 % tax on personal incomes to be levied by municipalities. Revenue earmarked for social security.
The tax credit system was extended to include personal allowances deductible from taxable income and family allowances previously paid by the social security system.
EEC Council decision to activate tariff reduction on Icelandic fish products according to agreement of 1972. From July 1976, cut of about 80 % of existing rates; most tariffs to be entirely abolished as from July 1977.
Tariffs are reduced in accordance with the EEC and EFTA agreements.
national legislation to ensure the step-wise EFTA and EEC tariff reductions in 1977-1980
substantial but gradual cuts from 1977 to 1980 in tariffs on raw materials, machinery and other investment goods to industry
Gradual tariff reductions 1977-1980 consequent upon the EFTA and EEC trade agreements on imports from countries outside EFTA and the EEC.
Reform of the Fisheries Fund system: The Oil Fund for Fishing Vessels was abolished, grants from Insurance Fund were reduced by about one-half, implying reduction of export levies from some 16-17 % to a maximum of 6 %. Levies accruing to the Capitalization Fund for Fishing Vessels cut from 15 to 10 % (from 21 to 16 %) of value of the catch landed on Iceland (abroad). Raw white fish prices increased by 32 %, of which 24 % resulted from the reform of the Funds. Share allotment rules revised due to increasing operating and fixed costs of boat owners. On average, fishermen's share was reduced by 14 %.
New legislation enacted to change arbitration rules for public employees. Limited strike right introduced.
Conclusion of a final wage contract with individual unions within the Federation of Public employees and University Graduates, either by agreements or Arbitration Court decision. Apart from same wage regulations as stipulated in general agreements from March and April, these contracts provide for reclassification of jobs within existing pay scales.
Revision of the agreement from December 1975 between the Federation of University Graduates and the Treasury. New agreement in line with the February central wage agreement.
A new central wage agreement was signed after 10 days of general strike. Covering all unions within the Federation of Labour except the fishermen's unions, the agreement stipulates the following increases in April 1977: as from March 1976, Kr. 1500 rise of monthly day-time earnings up to Kr. 54 000, 1 % compensation to cover all special claims and 6 % general wage rise; as from July 1976, 6 % general increase; as from October 1976, 6 % general increase; as from February 1977, 5 % general increase. Threshold clauses made the agreement subject to price indexation if the wage compensation index rises by more than 9.9 % from February to June 1976, by more than 5.2 % from June to October 1976, and by more than 4.4 % from October 1976 to February 1977.
Individual effort restrictions in the major demersal fisheries are introduced. With the introduction of the 200-mile jurisdiction and tighter overall catch limits, the government introduces restrictions on the number of fishing days. However, free entry is allowed and the fleet grows considerably in the next few years.
Interest rates were divided into two factors: basic rates and a price compensation factor subject to discretionary changes at regular three-month intervals with a view to price developments. Initially, the total of this price compensation factor (in all instances 8 % p. a.) and the basic rates were set equal to the previous rates of interest on all deposits except interest premium deposits, cf. (i) below, whereas lending rates were raised, cf. (c) below. (b) Basic rates on one-year interest premium deposits were raised from 16 to 18 % and the interest premium (price compensation factor) was raised from 6 to 8 %, entailing a total rise from 22 to 26 %. (c) Interest rates total on all rediscountable loans were set at 1 1 % p. a. but had previously ranged between 8 and 15 % p.a. (d) Other lending rates were raised as follows: discount rates by Vt percentage point, oilier interest charges by 1 percentage point.
The Federation of University Graduates and the Treasury signed an agreement on the revision of the present contract (originally signed in December 1975) resulting in a 7.5 % general rise in salary rates on top of the 6.7 % indexation rise of 1st June and the contracted 4 % rise on 1st July.
New central wage agreement signed after extended negotiations. The main features of the new agreement were: 1 An immediate 26 % increase (of Kr. 18 000) on basic monthly rates of low-paid workers, 2 A flat rate increase of Kr. 18 000 for other categories of workers; 3 Further increases of 5.7, 5.4 and 4 % on 1st December 1977, 1st March 1978, and 1st September 1978 respectively for low-paid workers; 4 Adjustments equivalent to the above in absolute terms for other categories of workers; 5 Full (and virtually immediate) indexation for low-paid workers as from September 1977 (indexation based on a « price compensation index» derived from the cost of living index but excluding alcohol and tobacco and rises in the wage component of farm prices); 6 Partial indexation for other categories of workers giving them the same absolute increases received by low-paid workers between September 1977 and March 1978, and full indexation thereafter.
The additional 1 % tax on personal incomes, liable to local income tax and earmarked for social security, was raised to 2 %.
Personal income taxes were lowered through an introduction of a new 30 % tax bracket and the raising of the 40 % bracket.
All cod fishing banned from 1st to 7th August. Further, cod fishing by stern-trawlers was banned altogether for 30 days during the period from 11th July to 15th November, with a minimum of 7 consecutive days each time.
A single entity (the Competition and Fair Trade Authority) was established under the responsibility of the Ministry of Commerce to tend to both competition matters and unfair trade practices harmful to consumer interests.
Introduction of temporary limits in wage indexation.
By provisional legislation, the limits set by the February legislation on wage indexation were partly eased, especially with respect to the lowest incomes.
Full indexation reintroduced with a flat rate ceiling for higher incomes.
The Althing (parliament) introduced provisions on foreign borrowing for public investment projects within a limit of Kr. 4.9 billion and decided that up to 40 % of the Pension Funds' disposable funds should be invested in fully indexed bonds issued by the Treasury, with the whole amount accruing from the bond rates being channelled on to the Investment Credit Funds.
The objective was that inflation adjustment be applied to the business sector in such a way that firms should be able to maintain the real value of their equity (i.e. they should not be taxed on purely nominal income). Depreciation provisions are based on the original purchase costs revalued to the price of the year of depreciation; taxable capital gains were defined as the difference between the sale price and the original cost expressed in prices in the year of sale. Corresponding adjustments were made to prevent firms benefiting from the falling real value of their debt due to inflation. The decline in the real value of debt was counted as income.
Taxes increased for higher income groups and corporations.
Instead of special tax on profits, depreciation allowances were tightened.
Additional wealth tax levied on persons and corporations until the end of the year (revenue estimated at Kr. 1 380 million). Special tax on higher incomes and on gross profits of firms, estimated revenue in 1978 of Kr. 1'880 million.
Certain herring vessel quotas are made transferable.
Decision to implement a quota system for pricing of milk production in 1980 and meat production as from autumn 1980.
Regulation of farm output enacted. Under conditions of excess production the Agricultural Production Board subject to approval by the Farmers' Federation and the Ministry of Agriculture is authorized to: introduce price differentiation according to volume of production; reduce subsidies paid directly to farmers above a certain production level; levy a production tax for price equalization purposes; levy a tax on imported feedstuff consumed by the sector, the revenue of which may be allocated as price compensations for farmers who reduce output.
New legislation opens up the possibility of decontrol of prices in trade and commerce where competition is deemed to be sufficient for this purpose.
preparation and implementation of industrial development programmes aiming at improving productivity and securing the operational conditions of industry
Detailed provisions on the indexation of savings and credit, where the emphasis is placed on positive provisions for authorizing the general use of indexation, replacing the earlier legislation which prohibits the general use of indexation. The Economic Management Act provided for two different kinds of indexation, either through a full and direct indexation of loan principal, or through a supplement - a price compensation factor - to the interest rate. Whereas the former was mainly aimed at longer term assets, the price compensation supplement to the nominal interest rate applied to short-term debt obligations where direct indexation of the principal was thought to be difficult to administer. Full indexation of the principal has followed a credit terms index, calculated monthly since June 1979 on the basis of the cost-of-living index (with a weight of two-thirds) and the building cost index (one-third).
Full indexation reinstated for public employees.
Individual vessel quotas for capelin are introduced. Landings have increased over six-fold in the 1970s, posing a problem of overfishing. Owners of large boats designed for capelin fishing meet and request that the Ministry of Fisheries limit entry and allot shares of the total allowable catch. Licenses with individual catch limits are subsequently restricted to 52 vessels, where 68 were fishing the year before.
Act on Wage Earners´ Terms no. 55/1980 states that an employer is obliged to deduct from an employee's wage his contributions to the relevant trade union, according to rules set forth in the wages and terms agreements.
Occupational pensions were made mandatory for self-employed people.
The Federation of Labour signed an agreement with the Employers Association on November 16th. This agreement, an extension of the previous one until 15th May 1982, included the following: i) All wage rates were to increase by 3.25 % as of 1st November 1981. ii) The price compensation for the period commencing on 1st December was to be in accordance with the provisional law of 31st December 1980, i.e. the same percentage as the percentage rise in the cost of living index one month earlier (excluding changes in alcohol and tobacco prices). iii) Price compensation for the period commencing on 1st March 1982 to be according to rules stipulated in the Economic Management Act of 1979. This agreement was followed by similar 6-month agreements made by the Bank Employees, the Public Employees and the University graduates.
limiting the maximum margins that producers could apply
The Price Commission Board authorized to decontrol prices in trade and commerce where competition is deemed to be sufficient. Governmental approval is no longer required.
The prospective indexation rise in wages on December 1, 1982 is to be reduced by one-half. Such a reduction also applies to the wage component of farm prices and production and distribution cost of farm produce as well as fish prices.
New wage agreement signed between the Federation of Labour and the Employers Association. The agreement is an extension of the previous one until August 31, 1983, including: i) All wage rates were to increase by 4 % as of July 1, 1982. ii) New clauses on seniority and reclassification within the pay scale. The clauses together with the 4 % increase add to an estimate of 6.3 % in basic rates as of July 1 , and 9.3 % for the whole period for members of the Federation, iii) When calculating the price compensation for the period September-November, 2.9 % is to be subtracted.
Law on incomes policy providing a suspension of all indexation in law and wage contracts up to May 1985. Wages to be increased by 8 % in June and by 4 % in October. All wage contracts extended until January 31, 1984. Minimal income, however, to be increased by 10 % in June.
Removing of the automatic link between prices and wages
The social security tax was set at 2 % of taxable income (i.e. above 237 thousand kronur) in 1984.
Starting in 1984, individual vessels were allotted permanent quotas, expressed as a percentage of the total limit, that were based on their average share of the catch from 1980-83. Vessels can apply 20 % of their unused quota to the next fishing year, and because Iceland’s grounds are of mixed stock, they can overfish each species other than cod up to 5 %, as long as an equivalent amount of quota in other species remains unused.
Individual transferable quotas are introduced for demersal fishing. With a sharp decline in demersal stocks and landings, the parliament amends the Fisheries Act in December to allow for individual vessel quotas for large boats. The ministry issues regulations that are in effect for one year.
The ceiling on agricultural subsidies was raised by 188 million kronur to 468 million kronur, through a special import tariff on animal feed.
The rules for capital transfer were eased, allowing an individual to transfer 1'500 dollars when travelling abroad and 250'000 kronur upon emigrating.
Overdraft rules were tightened in late 1984, with less emphasis being put on penalty rates, and more on the direct prohibition of such loans. DMBs that overdraw their accounts in the Central Bank have to provide explanations and apply for short-term accommodation in another form. The accommodation is conditional on agreements on ceilings on credit expansion.
The Central Bank introduced new rules to limit the access of deposit money banks to overdraft facilities at the Central Bank, and modified the method for allocating discount bill quotas to the deposit money banks. The Government authorized a special reserve requirement up to 5 % of total deposits.
The Central Bank announced that it would no longer regulate all interest rates. Thus the deposit money banks were allowed to decide their own rates, except for general savings deposits, which the Central Bank raised from 15 to 17 % per annum, penalty rates on overdue payments, which were raised from 2.5 to 2.75 % per month, and rediscountable produce loans. The deposit money banks responded to these changes by raising other rates by 2 to 7 percentage points.
The patients' share of medical and dental care costs was increased, corresponding to a 300 million kronur reduction in social security benefits.
A new wage contract was signed between the Icelandic Federation of Labour (IFL) and the Employers' Association. Basic wage rates were raised by 5 %, while minimum wages were increased by 15.5 %. The new agreement raised incomes by 7.7 to 8.3 % for unskilled workers and 5.6 % for skilled, commercial and clerical personnel. Wages were scheduled to increase by 2, 3 and 3 %, respectively, on June 1, September 1 and January 1, 1985. The contract was to expire on April 1, 1985, although the wage component could be rescinded on September 1, 1984 and January 1, 1985.
1. On November 1 all wages rise by 10 % on average from their August level. 2. Each full-time employee receive a 2'500 kronur payment for September and a special 4'000 kronur payment on November 15. Part-time employees shall receive proportional amounts. 3. All wage rates rise by 800 kronur on December 1. 4. On May 1 , 1985, all public employees move up one wage bracket, which is equivalent to a wage increase of 3.5 %. 5. The agreement expires on December 31, 1985. The parties to the agreement will monitor price and wage developments during the contract period and assess changes in the purchasing power of wages. Each party can re-open negotiations on the wage rate provisions after June 1, 1985 and cancel them effective September 1, 1985. 6. The contract is estimated to yield an average increase in wages of 20-21 % during the contract period. Similar contracts were negotiated in the various municipalities.
On November 6, a new wage settlement was concluded between the Federation of Labour and the Employers' Association. The main provisions of the agreement are as follows: 1. All wages rise by 9 % from their August level, effective immediately. 2. All employees move up one bracket immediately with additional bracket moves scheduled for January 1, March 1, and May 1, 1985. Each step entails a wage increase of about 2.5 %. 3. The agreement expires on December 31, 1985. The agreement, however, stipulates that renegotiations on the wage rate provisions of the settlement shall begin in April 1985 and if negotiations are not concluded by June 25, 1 985 the contract will automatically expire on September 1, 1985.
The corporate income tax rate was set at 51 % and provisions for investment tax deductions were eased.
Tax brackets for 1984: income and property taxes were set at 23 % on the first 170'000 kronur of net taxable income, rising to 45 % on income exceeding 340'000 kronur. The personal allowances were set at 29'500 kronur and child allowances at 6'000 to 15'000 kronur per child.
An effort quota is introduced. Because the system introduced in late 1984 proved to be successful, it is continued for boats 10 GRT and over. Annual shares can be traded, but the permanent share adheres to the original vessel. The vessels are given the option to opt out of the system, and instead agree to a limit on the number of days at sea, as well as an individual catch limit for cod. These boats can then re-enter the system later with a higher track record and thus a higher quota in demersal species other than cod. Entry of new large boats is restricted to replacing existing vessels. Boats under 10 GRT are allowed free access and no entry restrictions apply to them.
The rediscounting system was abolished in 1985, when all produce loans were recalled. Discounting of foreign currency denominated as loans to produce exporting goods was replaced by a limited SDR facility (equal to about 16 % of rediscounts), apportioned among the banks according to size, and not directly linked to particular lending activities. The SDR facility carried rates in line with international ones. For the rest, the banks were allowed to borrow directly from abroad, up to a maximum of 75 % of export stocks placed as collateral. For many of the banks, the SDR facility is thought to be sufficient to finance all loans for producing exporting goods granted, making it unnecessary to look for funds in international markets.
The next step in financial reform was granting the deposit money banks greater authority over their interest rates. As of August 1984, the DMBs were allowed to decide all interest rates except those on general savings accounts, rediscountable produce loans and penalty rates. Nonetheless, the Central Bank reserved the right to veto the DMBs' decisions and it used this authority on several occasions in 1985.
Capelin quotas are made partly transferable. Permission is still needed, however, to transfer quotas to a vessel that does not own some yet.
Banks are to maintain a minimum of 5 % capital and reserves ratio, after a transition period of five years.
A new legislation on the Central Bank came into effect. Interest rates on bank loans and deposits were deregulated, and the use of Bank overdraft facilities by the Treasury was limited to the financing of the Government deficit within the year.
A provision that allows the Bank to intervene if real interest rates become "higher than those generally prevailing" in Iceland's trading partners or if there is an "inordinate margin between deposit and lending rates of interest".
Agreement was reached in the 1987 national wage negotiations. Minimum wages were raised, with effect from 1st December 1986, but there were no immediate changes in other wage rates. The settlement provided for general wage increases of 2 % in March 1987 and 1 % in both June and October of that year.
The agreement addresses the wage agreements of civil servants. Industrial disputes in the public sector are taken to the Labour Court. Act no. 70/1996 applies to the rights and duties of the civil servants. There are also various special rules that apply to certain groups of employees on the Icelandic labour market, for example fishermen and sailors, industrial apprentices, agricultural workers and bank employees.
In February 1987 the primary reserve requirement, for which the only eligible assets are deposits held at a blocked account with the Central Bank, was cut from 18 to 13 % and a liquidity ratio of 7 % was introduced. The base for this secondary reserve requirement includes deposit and other liabilities except relent foreign loans. Eligible assets have maturities of not more than three months, and include Treasury Bills. Some 60 % of the reduction in the primary reserve requirement was paid out in the form of such bills, and the rest deposited on current accounts, so that the total reduction became eligible towards the secondary requirement.
The regulations governing foreign borrowing by leasing firms are tightened. Foreign funds can no longer account for more than 70 % of the purchase price of the leased item, or more than 60 %, if such credit carries a guarantee or represents re-lent funds of a domestic bank, insurance company or public investment credit fund.
Beginning in 1988, the income tax will be levied on a pay-as-you-earn (PAYE) system.
Vessel quotas are made transferable in all fisheries and the system is extended. The parliament enacts general-purpose legislation on individual vessel quotas. At the same time, it extends the system to other important species such as offshore shrimp so that coverage is about 90 % in value. The system is also applied to boats between 6 and 10 GRT, and the effort quota option is made less attractive. The moratorium on additions to the stock of vessels is applied to all boats.
wage controls are introduced. Wage increases in contracts not yet settled are limited to those already signed by other unions. All labour contracts are extended to April 1989. During this period, strikes and other actions in support of pay are prohibited.
The new income tax system will have just one rate, 35.2 %, composed of a state tax rate of 28.5 % and a municipal rate of 6.7 %. The tax base is gross earnings, without exemptions other than those concerning capital income and without either the standard deduction or most of the itemised deductions of the previous system outlined above. Unlike the old system, withholding is on the basis of current income (PAYE), made administratively simple by the single tax rate, since employers merely pay 35.2 % of earnings less than the personal tax allowance. The negative tax elements of the system - child benefits and first-home benefits - are paid directly to recipients by the tax authorities. The final tax will be assessed on the basis of a tax return filed after the end of the year, taking account of earned income.
The Ministry of Trade issued a provisional act introducing a change to the composition of the Credit Term Index (CTI). As of 1st February 1989 the CTI was composed of three indices, the Consumer Price Index, the Building Cost Index and the Wage Index in equal proportions.
The Minister of Commerce announced that, effective as of 1st November, the rules on suppliers' credits and foreign borrowing for the import, domestic production or leasing of listed machinery and equipment for industrial purposes, and repair of ships either domestically or abroad, would be further liberalised. After the change, importers can freely obtain suppliers' credits for up to one year for industrial shipments from the date of arrival in an Icelandic port. The maturity must conform to general practices in international trade for respective goods. If, however, a domestic financial institution acts as guarantor, the credit must not exceed a period of six months. The rules on foreign borrowing for the import, domestic production or leasing of listed machinery and equipment for industrial purposes, and repair of ships were changed so that foreign borrowing can be used to finance up to 80 % of the value if the transaction is not guaranteed by a domestic financial institution or if the funds are relent by such an institution. Otherwise, the ratio is 70 %.
The second paragraph of the 9th Article of the Central Bank Act, concerning interest rates was rewritten to read: "The Central Bank may upon the approval of the Minister impose limits to the determination of interest rates by deposit money banks in order to ensure that real interest rates of deposit money are moderate and not higher than those generally prevailing in the major trading countries of Iceland as well as to reduce any inordinate margin between deposit and lending rates of interest while including other earnings of deposit money banks."
On 23 June the Central Bank announced new terms on the indexation of deposits. The announcement states that the indexation of switching-terms accounts only applies to six month time-deposits.
The Ministry of Trade and representatives from the Industrial Bank, The Bank of Commerce and the Union Bank reached an agreement on the banks' purchase of the government-owned shares in the Fisheries Bank of Iceland. On 29th June the contract was signed with the condition that the four banks merge into one by 1st July 1990.
The new Price Equalisation Fund for the fishing industry is established in law. Unlike its predecessors, the new fund is designed to smooth disposable income without providing a subsidy to the fishing industry.
Rules governing outward portfolio investments are liberalised. Residents can purchase foreign securities up to a limit (which is scheduled to be abolished on 1 January 1993) and subject to some restriction (the securities must be quoted on an OECD country stock exchange and the transactions must pass through a licensed resident broker who is a member of the Icelandic Securities Exchange). Rules governing outward portfolio investments are liberalised. Residents can purchase foreign securities up to a limit (which is scheduled to be abolished on 1 January 1993) and subject to some restriction (the securities must be quoted on an OECD country stock exchange and the transactions must pass through a licensed resident broker who is a member of the Icelandic Securities Exchange).
Liberalised foreign exchange regulations come into force. Licences will no longer generally be required for most foreign exchange transactions. Inward direct and portfolio investment by both residents and foreigners is to be allowed up to a limit (which is scheduled to be abolished on 1 January 1993) and subject to other legislation (for example, ownership of land, fishing boats and equity are still subject to restrictions).
A wage/price restraint agreement between unions, management and government comes into force. The unions agree to accept only limited wage increases, with modest indexation to price developments. The government agrees to maintain the krona exchange rate and not to raise certain administrative prices beyond already-scheduled amounts. Farmers agree to limit food price increases. The agreement will expire in September 1991.
The Fisheries Rationalisation Fund is introduced. A fund paid for by large boat owners is set up to subsidise retirement of the fleet. Although the original amount paid, 30 % of the vessel’s insured value, is generous, little headway occurs. The Ministry of Fisheries raises the subsidy in subsequent years.
For 1991, fishing quotas will be inherited from the old system. However, their nature has changed significantly. They are no longer tied to effort, but rather specify the allowed catch explicitly, and all fishing vessels are now to be brought into the quota system. For both of these reasons, the new system should increase the ability of the government to regulate the fish harvest. The new quota legislation is also of indefinite duration, which should help to remove speculation of any return to uncontrolled fishing.
A uniform system of transferable quotas for boats 6 GRT and higher is applied. The effort quota option is abolished. Permanent quota shares can now be traded, while restrictions on trading annual quotas are relaxed, and trading subsequently surges. The authorities emphasise that this regime is permanent. An exception to the system, however, is included where only half of the November- February catch of long liners is subject to the quota.
Skipaûtgerd rikisins (coastal shipping line) is disbanded and assets are sold to private lines. Proceeds Ikr 233 M.
Equity trading on the Stock Exchange began.
Increased financial demands on healtchare users, albeit with certain protection provided to the needy.
With regard to drugs consumed outside of hospitals, user charges have been increased.
Doctors must now indicate to pharmacists whether generic drugs can be substituted for their branded equivalents.
New wage pact agreed, with a pay rise of 1.7 %, a special low income allowance paid on income under 80 thousand krônur, and an increase in social security benefits.
The basic pension was made subject to an earnings ceiling. It is reduced by 25 % of all earned income in excess of Irk 65'800 per month, but the overall marginal "tax" rate (including loss of various supplemental benefits) in part of the relevant income range rises to as much as 80 %.
Islensk endurtrygging (insurance) 33% sold (entire Treasury holding) for Ikr 162 M.
Menningarsjôdur (arts fund) sees its publishing unit sold for Ikr 57 M.
Ferdaskrifstofa Islands (travel agency) 33% sold (entire Treasury holding) for Ikr 19 M.
Prentsmidjan Gutenberg (printing) privatised for Ikr 83 M.
Prôunarfélag islands (venture capital) 29% sold (entire Treasury holding) for Ikr 130 M.
ATVR (alcohol and tobacco) production facilities, trademarks and patents are sold. Proceeds Ikr 15 M.
Jardboranir (geothermal drillers) 50% sold (entire Treasury holding) for Ikr 120 M.
Beneficiaries must register each week with an employment exchange, and their benefits may be denied if they refuse a job offer. Decisions on the law to a loss of benefits are made by a Benefit Allocation Committee which is composed of union and employer representatives (union representatives are a majority)
The Act allows the Council to impose "administrative fines" of up to IKr 40 million (about $600 000) or even up to 10 % of the previous calendar year's turnover if the violation can be shown to have yielded more than IKr 40 million in gains. Daily penalties are also allowed for in case of noncompliance. Criminal sanctions are also available.
A new competition law was passed and took effect on 1 March 1993. Its text begins by stating that its objective is "to promote effective competition", and thus to increase the efficiency of the means of production'' by preventing unfair trade practices and other barriers, limitations and restrictions" and by facilitating new entry.
The Competition Act of 1993 allows the authorities- ties full discretion over mergers that result in a firm acquiring or strengthening a dominant position, including the power to reverse one that has already taken place. While the Act makes provisions for the timetable of rulings on mergers – six weeks for those that firms bring to the attention of the authorities and two months otherwise – unlike many OECD countries, there are no notification requirements.
The Act prohibits horizontal price-distorting agreements, whether binding or guiding in nature, regarding: prices, discounts or margins; market sharing by area, type of customer or sales volume; or collusive tendering (Article 1 0). Such agreements when vertical in nature are also prohibited, even if recommending resale prices and determining maximum resale prices are permitted (Article 11). The same prohibitions apply to measures to restrict competition by associations and their officials (Article 12). Derogations are allowed for if the Competition Council determines that this will enhance competition, if the advantages of the restrictions are expected to outweigh the disadvantages or if specific welfare considerations argue for such a course of action, and, in any case, they cannot restrict competition more than is necessary (Article 16). This is more constraining than the exemptions allowed under the 1978 law under which, for example, book publishers had been permitted to co-ordinate their prices and margins on cultural grounds. But members of a single economic unit (Article 14) and holders of intellectual property (Article 15) are allowed to enter into agreements which serve to limit competition. Finally, a new provision of the 1993 law is a "de minimis'" rule (Article 13) which allows the Council to authorise competition-restricting agreements which would have only limited effects on the market in question.
A five-person Competition Council, appointed by the Minister, is the main decision-making body. Rulings may be appealed to a three-member Appeals Committee, whose final decisions can, as a general rule, be overruled by the courts only on narrow grounds of legality. The law applies to a wide, possibly very wide field of activities. Article 2 specifies that any economic operation is covered, other than those pertaining to collective labour agreements which have long been centralised in Icelandic tradition.
EEA membership approved by the Althing (parliament). Regulations regarding short-term capital movements liberalised in line with the EEA agreement: capital movements and foreign exchange transactions related to imports and exports of goods and services are now unconstrained. Though the Central Bank can temporarily limit short-term capital movements if they cause exchange-rate instability.
A new foreign exchange market is established. Beginning liberalisation of cross-border capital flows.
National wage agreement is passed, which is freezing wage rates (tentatively through end-1994, with the freeze to be reviewed in November 1993).
Unions confirm the extension of the wage freeze through end- 1994.
Full basic benefits have been set equal to wages for eight hours of daytime work in ordinary fish processing, based on the seniority level of seven years, which equalled IKr 52'728 (nearly $800 per month) in 1996. In addition, there are child benefits that amount to 4 % of basic benefit per child under the age of 18.
Beneficiaries are eligible for 52 weeks of payments, and in the following 16 weeks no benefits are paid, whereupon eligibility is renewed and the cycle repeated. Beneficiaries can eliminate the waiting period between cycles by attending retraining and vocational training courses or taking part in other programmes run by local authorities. Thus, benefits can be received for an indefinite period.
The unemployment benefits programme was overhauled in 1993 when eligibility was expanded. Now all wage earners are eligible, instead of just union members, as well as self-employed and those working short hours. Wage and salary earners must have worked a total of at least 425 hours during the previous 12 months to be eligible for the minimum benefits and 1700 hours for full benefits. For the self-employed, eligibility is based on previous social security tax payments, and they must close their business to be eligible. Workers whose hours have been reduced because of a decrease in activity at an enterprise are also entitled to a partial benefit and are, therefore, counted among the registered unemployed.
Another provision (Article 14) allows the Council to order the financial segregation of monopoly operations in the public sector from those operating in rivalry with private competitors in order to prevent cross-subsidisation. This is a provision which is unique to Iceland. In addition, the Council must inform the government if it believes that laws, regulations or administrative practices are detrimental to competition (Article 19).
Sr-mjol (herring processing) completely privatised. Ikr 736 M.
Ryni (fisheries quality control) completely privatised. Ikr 5 M.
EC tariffs on Icelandic fish products are reduced.
The government enforced equal prices for a number of products (gasoline, cement, fertiliser) throughout the country through a system of levies or taxes in order to offset differences in transportation costs. Since then only transportation costs have been equalised, and prices have not been regulated.
The Central Bank introduces new regulations on the indexation of deposits and credits. From the beginning of 1995 sight deposits cannot be indexed.
The Ministry of Commerce introduces a regulation on limitations to commercial banks', savings banks' and other credit institutions' credits and letters of credit to a single customer. The limit is 40 % of the institution's own capital and will be phased down to 25 % by the year 2001.
The Icelandic State Herring Oil and Meal Factories are privatised through sale to a consortium of 21 fishing firms and 4 financial firms for $10.3 million.
Pomodur rammi (trawlers and fish processing) sold 18.5% (entire Treasury holding) for Ikr 88 M.
Lyfjaverslun islands (pharmaceutical manufacturing and distribution) entirely sold for Ikr 402 M.
Since the 1995/96 fishing year, a government decision has limited the cod catch to the maximum of one-quarter of the average fishable stock and 155 000 tonnes, leaving no discretion to government.
In agriculture there was a new agreement on sheep meat in 1995 which was intended to move it progressively to a more market-based system.
The automatic catch rule for cod comes into effect for the 1995/96 fishing year. Instead of the Ministry of Fisheries setting the quota based on advice from the Marine Research Institute, the quota is automatically one-quarter of the estimated fishable stock, with a minimum set at 155 000 tonnes, which happens to be equal to the total allowable catch in the previous fishing year. This minimum applies in the first year, but subsequently the stock grows sufficiently, so that the total allowable catch remains above the floor ever since.
Quotas for cod have been set based on a catch rule.
Short-term capital movements are fully liberalised.
Long-term capital movements are fully liberalised.
A general private non-bank sector wage agreement is reached covering the period through end-1996. The agreement comprises an increase for this year of IKr 3'700 per month (about 8 %) for the lowest paid, sliding to about 3 % for high earners. Increases for 1996 will be IKr 2'700 per month or 3 %, whichever is greater. Overall, the average increase is about 7 % over the two years; wage drift may add further 2 percentage points or so. Fiscal concessions are more limited than is often the case, but centre on the gradual phasing-out of the 4 % employee contribution to private pension funds from the personal-tax base.
Boats under 6 Gross Registered Tonnes (GRT) had been scheduled to be brought into the catch quota system, but the 1994 law keeps them under the effort quota system yet. This would give the Ministry of Fisheries the ability to control the size of the overall catch of these boats by adjusting the number of days at sea in light of catch developments, should it so choose.
The longline exemption is abolished, and the small-boat system is modified. Boats under 6 GRT are allowed to join the regular system or compete in an ‘‘Olympic’’ system to fill an aggregate quota. About 250 boats currently remain in the effort system and are restricted to about 23 fishing days.
New restrictions on the transfer of allotted vessel quotas and added provisions to cut the quotas of vessels that do not fully utilise them.
A new levy of one kronur per kilogram of cod-equivalent quota, indexed for increases in fish prices.
Creation of the Fisheries Development Fund which will assist in reducing the size of the fleet. The Fund is financed over the near term by levies on fishing industry assets, including fleet tonnage and real estate owned by the fish-processing industry.
Another institution (the New Business Venture Fund) was also created by removing parts of their existing activities from the four funds (The Fisheries Fund, the Industrial Loan Fund, the Export Credit Fund, and the Industrial Development Fund) before they were merged into the IIB. This institution is publicly owned, with its activities circumscribed to the provision of start-up and seed capital for new business and the promotion of new businesses in rural areas. The activities of the new fund will be limited as it will not be allowed to issue bonds, loans or other redeemable securities to the public and is authorised to borrow only to balance its short-term cash flow. Its initial assets, with a total value of IKr 4 billion, are composed of a 7 % stake in the only private commercial bank plus a ten-year claim on the Icelandic Investment Bank that will be redeemed gradually. The annual cash flow from these sources is likely to be less than IKr 200 million. In addition, the government will provide further capital of IKr 1 billion. This money will be used to fund rural development projects, but such loans will be managed by private institutions on a competitive basis and will be repaid to the treasury after seven to ten years. The Fund will be run by a board with five members: two from the government, two from the trade associations and one from the trade unions. The government has made a proposal to reform the
With respect to the industrial investment credit funds, the new legislation partially rationalises the fishing sector by creating a new institution, the Icelandic Investment Bank (IIB), which consolidates most of the activities of four existing funds: the Fisheries Fund, the Industrial Loan Fund, its subsidiary the Export Credit Fund, and the Industrial Development Fund. The first two of these funds have been profitable, earning respectively a real rate of return of around 6 and 13 % on their equity in 1996. As such, they will form the core of the new institution.
From 1996, direct payments are no longer directly linked to production levels and instead depend on past quota levels.
New regulations restrict the indexation of deposits and loans. Beginning 1 January 1996, indexed loans must have a minimum maturity of three years and beginning 1 January 1998, indexed deposits must be tied for at least three years and the minimum maturity for loans will be lengthened to five years.
Central Bank withdraws from market-making in the foreign exchange market. Banks assume the responsibilities for market making in the interbank market for foreign exchange. The daily fixing meetings are abolished. The Central Bank issues new rules on foreign exchange exposure, reserve requirements and liquidity.
Parallel imports of pharmaceuticals are now allowed.
A new labour law was enacted to speed the collective bargaining process. Beginning with the 1996-97 negotiations, unions are required to submit formal demands before the end of the contract. Union leadership must now submit formal strike votes to a secret ballot. Before, votes authorised the executive committee to call a strike, but did not set the conditions nor the strike deadline. These changes were seen as conducive to creating a more national focus for labour negotiations.
The Althing enacted a legislation to clarify and tighten eligibility criteria, place some limit on benefits duration and shift the focus to a national job market. The work criteria will be shifted from a criterion based on hours to weeks of full-time work. Full benefits will require 52 weeks of work rather than 1700 hours in the previous year. Benefits will last for up to five years, provided that the beneficiary is willing to take job offers. After the five-year period, eligibility can be reestablished by working for at least six months out of the following twelve.
Public servants' pension reform. Pensions are to be fully funded as the government contribution rates rise from 6 to 11.5 % and the base is shifted from daytime to total earnings.
As part of the Telecommunications Agreement made in March 1997 under the auspices of the WTO, Iceland agreed to liberalise essentially all basic telecom services. First, in summer 1997, the government granted a licence to a private company to operate a mobile phone network, breaking the telecommunication's monopoly. Then, at the beginning of 1998, the Post and Telecommunication firm was corporatized as two separate companies. The shares of these enterprises may be offered on the stock exchange in the future.
Allowance of some indirect ownership in fisheries. However, a 1997 act permitted foreign investors to own 25 % stakes in firms that own shares in the fisheries.
In the summer of 1997 the domestic airline industry was liberalised.
Iceland ratified a treaty that partially freed the ownership of domestic airlines by exempting citizens of the EEA from existing restrictions.
Administered prices for poultry and eggs were terminated in 1997.
Wage negotiations come to a head. Most non-bank private-sector employees sign agreements which are for three years and provide for increases in base wages of 4.7 % on signing and a total of around 13 %. In addition, minimum wages are to rise substantially, reaching IKr 70'000 (over $1'000) per month in most cases as from 1 January 1998. For its part the government offers a major personal tax reduction to help secure the agreements.
The government boosted unemployment benefits by 2 % and removed the previous automatic linkage to wage rates in fish processing.
Benefits were equal to 2 percentage points of final daytime earnings (about two-thirds of annual earnings) for each year worked and were indexed to wage growth on retirement. From now on benefits will be based on average life-time total earnings adjusted for inflation. Pension rights will accrue at 1.9 percentage points of earnings per year.
A new independent regulator will enforce control on pensions. It has been formed from the relevant regulatory departments of the Central Bank. This agency will oversee solvency and compliance with regulations. Despite these improvements, there are several uncertainties about the likely development of the pension system in the new environment.
The second type of pension rights can be purchased with the difference between the total 10 % contribution and the contribution rate necessary to meet the minimum pension set by each fund. Each pension fund must specify the portion of the contributions necessary to reach its minimum target given the current actuarial position of the fund. These additional contributions can be invested, at the individual’s discretion, in individual defined-contribution accounts with competition between intermediaries to manage them. This will increase individual liquidity as the accounts can be drawn down in equal yearly amounts from the age of 60 or in a lump sum at the age of 67.
In the area of pension funds, the parliament passed a legislation introducing a new regulatory framework at the end of 1997. Securing a stable environment for these funds is particularly important in that they depend entirely on their assets and future contributions to pay pension benefits. Private-sector employers have, in general, no liability to meet deficiencies in a pension fund, and there is no other guarantee for the benefits. Moreover, the beneficiaries of the scheme are unable to withdraw their assets.
A new law – the 1997 Occupation Pensions Act – governing pension funds has been passed. The key objective of this law is to ensure that pension schemes remain solvent. To this end, funds whose estimated liabilities are 10 % greater than their assets in a given year, or 5 % greater for five consecutive years, will have to submit a plan to remedy the situation either by reducing benefits or increasing contributions. The Ministry of Finance will licence pension funds, so ensuring that funds offer the minimum benefit provision specified in the legislation. It will also set regulations governing their investment policy.
The new legislation will introduce more competition between pension funds. In the future, minimum contribution and benefit rates will be established for all economically active persons, but it will be possible to negotiate higher contribution rates collectively, and individuals will be able to make voluntary contributions. Contributions over the minimum will accumulate in defined contribution plans, with individuals free to choose their own fund manager. These excess contributions will be tax deductible in the same way as normal pension contributions.
In 1997, the government reformed the civil service pension scheme. Since then, all new employees have been placed in a funded system. Existing staff was able to choose to stay in the existing scheme or move to the new system.
The new Act specifies that contributions can now be used to acquire two different types of pension rights. The first are rights to benefits under the existing funded occupational system. The Funds must provide a minimum retirement benefit until death that is equal to at least 56 % of life-time average earnings for a contribution period of 40 years (i.e. equivalent to 1.4 % of average lifetime earnings per year of contributions) as well as associated survivors and disability pension insurance. Pension rights are now of the order of 1.5 % of average lifetime earnings per year of contributions. In some funds they are now as high as 1.8 %, partly reflecting the high returns the funds have earned over the past one to two decades and the age-structure of fund members. Prior to 1997, full pension rights were only earned for the first 30 years’ contributions thereafter, pension rights accumulated at half the normal pace.
Funds will be licensed by the Ministry of Finance, which will approve their benefits, as well as the rules and regulations governing their investment policy. A minimum size will be established for a pension scheme, so increasing the speed of consolidation in this sector. Moreover, the legislation foresees that funds whose estimated liabilities are 10 % greater than their assets in a given year, or 5 % greater for five consecutive years, will have to submit a plan to remedy the situation either by reducing benefits or increasing contributions.
The new legislation also specifies the asset classes in which funds can invest, but the list is so wide as to permit most investments. Moreover, there are no limits on the proportion of total assets that can be invested in any given security. The major limitation on the funds is that any residential and commercial mortgages must be limited to 65 and 35 %, respectively, of the value of the collateral asset.
Until 1997, the pension fund system operated without a comprehensive legislative framework enabling effective enforcement of the mandatory nature of the funded pension arrangements or government regulatory oversight of the funds and their operation. The 1997 legislation codified the principle of a mandatory payment of at least 10 % of wages and salaries in order to acquire pension rights. This is now to be overseen by the Tax Authority which will notify pension funds of a person who has made no contributions in order that the person be forced to make contributions to the appropriate fund. Occupational pension funds are fully funded, although, until recently, those guaranteed by the employer (the public and banking sectors) have been exempted from this obligation.
Public servants who delay their retirement until after age 65 will boost rights by 6 percentage points per year, while those retiring early will have their rights cut in the same proportion.
At the beginning of 1998, the legislation transforms the two state banks into corporations subject to commercial law. Newly issued liabilities of these corporations will not carry a government guarantee, though deposits will continue to be insured. Secondly, the government has the intention to open the capital of these two companies to the public. The implementing legislation gives the government the authority to sell new shares to the public up to a limit equivalent to 53 % of the existing equity, effectively limiting the eventual total private sector participation in the new banks to 35 %.
Skyrr (data processing) 28% sold for Ikr 81 M.
Bifreidaskodun (automobile safety inspection) 44% sold for Ikr 91 M.
The marginal tax rate on capital income set at 10 % since 1997.
The personal income tax rate will be cut by 4 percentage points in three annual steps, the first of which is 1 January 1997.
Contributions to the public servants' pension system used to amount to 10 % of daytime earnings (6 % by the government and 4 % by the employee). Contributions cease at age of 65 if the employee keeps working, but benefits continue to rise by 2 percentage points per year. The new system has much higher contributions, 15.5 % of total earnings (the employee still pays 4 %), rather than just daytime earnings.
A price commission is set up, and quota trading is restricted to an exchange. In response to an ongoing complaint by fishermen that fishing firms and processors are manipulating landed prices to the detriment of their compensation, the government sets up a commission to arbitrate disputes. It also restricts quota trading to an organised exchange, except for trades of equivalent value. It also prohibits the selling of more than 50 % of a vessel’s quota. Previously, boats were required to fish at least half of their quota every other year.
In September 1998, that part of the 1995 Sheep meat Agreement that abolished administered prices was implemented.
New legislation creates a commission that will oversee fish prices and fishermen’s salaries based on their share of the catch. Another law establishes an open market for trading quotas, while a third law limits the transfer of each vessel’s quota to 50 % annually.
The government stopped administering prices for wool in 1998.
The government and the farmers’ association negotiated a new dairy agreement, effective from September 1998. A committee will decide minimum milk and dairy prices at the producer and wholesale level, as opposed to a fixed price, with the proviso that wholesale prices will no longer be administered as from June 2001.
The securities market has also continued to grow and develop. In 1998, the government passed a legislation that turned the Icelandic Stock Exchange into a limited liability company. It also revoked its monopoly on exchange trading, while relaxing some restrictions on its activities. The exchange can now branch out into trading electricity and fish quotas.
The reform took the banking inspectorate out of the Central Bank and merged it with the insurance inspectorate into a new agency under the Ministry of Commerce. The legislation contains provisions to ensure close communication between the Financial Supervisory Authority and the Central Bank, while the Bank has created a committee to monitor the overall stability of the financial system.
Separate legislation allows the Central Bank to engage in transactions with credit institutions besides depository institutions. It also instructs the Bank to maintain a sound and efficient payments system.
In the middle of 1998, new rules for the interbank market in kronur ́ became effective, where participants are now obliged to post bid and asked rates for short-term credit.
In 1996, it passed the Industrial Relations Act that sets down a timetable for negotiations and provides a mediator to speed the bargaining process along.
In 1998, the Parliament further encouraged retirement savings by allowing an additional 2 % of workers’ earnings to be placed in tax-sheltered defined-contribution accounts. If the employee saves the full 2 %, the employer adds an additional 0.2 %, with this amount recovered through lower social security charges. These funds can be established with a wide range of financial institutions competing for these accounts and broadly follow the same rules for withdrawal as for the optional second type of the occupational pension benefits.
Landsbank ́Islands hf. (Commercial bank): Issue of new stock that amounts to 15% of capital (Ikr 1725 M.).
Bu ́naarbanki ́Islands (Commercial bank): Issue of new stock, 15% of capital that amounts to (Ikr 1067 M.)
Merging four investment credit funds into two entities, a relatively small new business venture fund and a much larger Icelandic Investment Bank (FBA), and selling 49 % of the latter.
Fja ́rfestingarbanki atvinnul ́ıfsins hf (Icelandic Investment Bank): Sale of 49% Treasury holding for Ikr 4996 M.
́Islenska ja ́rnblendife ́lagi (Ferro-silicon plant): Sale of the entire 26.5% Treasury holding for Ikr 1033 M.
Islenskir a alverktakar hf (Icelandic Prime Contractors): Sale of 12.1% Treasury holding for Ikr 266 M.
Islenskur marka ur hf (Retail store): Sale of 56.4% Treasury holding for Ikr 90 M.
Outlawing of discriminatory tariffs and other measures that distort competition. In order to achieve this, the operational licences impose the following duties: to provide open access to leased lines within a network; to allow non-standard network termination points; and to set charges for inter-connection between networks based on costs, taking into account a reasonable rate of return on investment. In particular, an operator with “significant market power” is obliged to offer reasonable requests for network termination points. The Act specifies that the different operators should first attempt to negotiate tariffs and terms. If no agreement is reached, then the regulator may intervene. Moreover, the number of licences to be issued can be limited only to the extent required to ensure the efficient use of radio frequencies. If the licence involves the allocation of a frequency band, then the Government can decide to allocate by tender.
The legislation created a new company to register securities electronically, which should start operation before the end of 1999.
Stofnfiskur hf. (Fish farming): Sale of 19 % Treasury holding for Ikr 12 M.
́bur arverksmijan hf. (Fertiliser plant): Wholly sold for Ikr1257M.
An act, which came into effect on 1 January 2000, gives the regulatory powers defined in the Telecom Act to the Post and Telecom Administration (PTA), an independent government agency reporting to the Minister of Communications. It has the responsibility of issuing licences according to the terms of the Telecommunications Act and ensuring compliance with all the provisions of the licences that are granted. Decisions of the PTA can be appealed to the Ruling Committee for Telecommunications and Postal Affairs whose Chairman and Vice Chairman must be qualified to serve as Supreme Court judges. Its decisions can be appealed to a court of law. The PTA is financed by one-quarter of 1 % levy on the telecommunications revenue of all operators.
Under the act, a person may not be made redundant solely because of the family responsibilities he/she bears. Three principal conditions must be met to demonstrate the existence of family responsibilities on the part of an employee. Firstly, the responsibilities must be towards the employee’s own children, spouse or close relatives. Secondly, the person or persons concerned must live in the employee’s own home, and thirdly, the person or persons involved must need the care or guardianship of the employee himself in connection with illness, disability or comparable circumstances. All three conditions must be met in order for the employee to be regarded as bearing responsibility for the relevant individuals in the sense of the act.
A parent who has been active on the Icelandic employment market for six months preceding the first day of maternity/paternity leave has the right to receive payments during the leave period. These payments amount to 80% of his/her average gross wages or calculated remuneration over the twelve-month continuous period ending two months before the first day of the leave.
A special Maternity/Paternity Leave Fund, which is financed by social security tax, was established in order to make these payments. The emphasis is on flexibility in the taking of this leave: parents are able to take their leave in a continuous stretch, or in several shorter periods and/or to take it by working part time. Employers are obliged to make efforts to meet employees’ wishes with regard to the taking of maternity/paternity leave.
The main features of the new system that will follow the amendments are that women and men each have an equal, non-transferable, right to take a three months' leave in connection with the birth, first-time adoption or fostering of a child, irrespective of whether they work in the private or the public sector, or are self-employed. They are also able to divide a further three months’ leave between themselves as they wish.
There is also a provision stating that institutions and enterprises with more than 25 employees are to set themselves equality programmes or to make special provisions regarding gender equality in their employment policies.
An act that contains provisions on the reconciliation of family and occupational obligations. This is intended to meet the rising demand by women to be accepted as fully valid members of the workforce, and of men to play a greater role in their families.
An act that prohibits discrimination of all types, direct or indirect, on grounds of gender. Employers are not permitted to discriminate between their employees as regards wages or other terms on the grounds of gender. The same applies to promotion, continuing education, vocational training, study leave, working conditions and other matters. If an employee seeks redress on the basis of the Act, the employer is prohibited from dismissing him or her for that reason. If evidence is presented of direct and indirect discrimination due to sex, the employer shall be obliged to prove that other reasons than sex were the criteria for his/her decision.
Establishment of a special institution, the Equal Status Bureau (Jafnréttisstofa), which is administered by the Ministry of Social Affairs and is entrusted with the monitoring of the application of the Act. In addition, each ministry is required to appoint a special equality co-ordinator to monitor equality issues within the sphere of the ministry in question and the institutions working under the auspices of the ministry.
New rules on indexation go into effect, with the permissible difference between credit institutions’ indexed assets and liabilities extended from 20 % to 30 % of equity.
Wage agreements valid into the year 2003 are signed for the majority of private-sector workers. Under these agreements, monthly wages below ISK 70'000 (about $1'000 at the time) increase by 8.9 % in 2000, with smaller increases for higher earners. Overall, the average increase is estimated at 5 % for 2000.
Employers are obliged to take the necessary measures to enable men and women to integrate the demands of their work and their duties towards their families. These measures are to be aimed at increasing flexibility in arranging work and working time so as to accommodate both the needs of the economy and of the employees, including enabling them to re-enter employment after taking maternity/paternity leave or parental leave or periods of leave necessary to meet urgent family requirements.
Landsbanki and Bunadarbanki are merged and privatised.
The powers of the Finance Minister to mandate capital ratios in excess of 8% if warranted by a bank's risk profile are extended.
Cut in corporate tax rate from 30% to 18%.
The Act creates the legal pre-conditions for competition in generation and sales. However, in practice there remain substantial obstacles to the emergence of competition, especially in generation.
A separate company was established that took over Landsvirkjun’s transmission activities.
The privatisation of state-owned banks is completed.
Restrictions to purchasing foreign currency, effectively fixing the exchange rate.
Banning of any movement of capital across borders without Central Bank authorization.
The Finance Minister takes powers to run banks without the need of purchasing assets.
Nationalising Glitnir bank, purchasing a 75% stake (EUR 600M).
The authorities’ strategy to downsize the banking system was to split each bank into a new bank and an old bank. The new banks covered the domestic operations funded by local depositors. The old banks included activities in foreign branches and subsidiaries, mainly funded through the issuance of bonds and foreign deposits. Derivatives and unrecoverable assets were not transferred to the new banks. In each of the three banks, the FME replaced the board with a resolution committee in order to ensure the continued operation of the banks as domestic commercial banks. The FME was put in charge of splitting the banks and making a preliminary assessment about asset quality. Large provisions were made in both the new and the old banks, bringing loan values in line with expected market values. Once the split was completed, international auditing firms would, within 90 days, conduct a second valuation to ensure that assets were properly valued. At that point, a tradable bond issued on market terms would be given from the new banks to the old banks, in order to compensate creditors in the old banks. The Ministry of Finance appointed a new board in each of the new banks. After the second evaluation is completed, the government will recapitalize these banks to a capital adequacy ratio of at least 10 %. The authorities estimate a total capital injection of 385 billion Króna (200 billion in Landsbanki, 110 billion in Glitnir, and 75 in Kaupthing). Looking forward, the intention is to privatise the banks when confidence is restored and the banks are operating normally. The resolution committees will be in charge of liquidating the old banks. The amount recovered by depositors and other creditors will depend on the funds collected through the asset sales. The shareholders of the old banks remain the legal owners of these banks, but they are essentially displaced from decision-making under Icelandic bank resolution laws. All important decisions made by the resolution committees are to be confirmed by the FME.
The minimum income for payment of (national and health) insurance contributions for full-time employees was raised to a level equivalent to the minimum wage (as defined in the Minimum Wage Law – 47.5 % of the average wage in the economy), and accordingly for employees who work on a part-time or daily basis.
In the area of benefits, amendments were enacted in Disability and in Unemployment Insurance. A number of amendments were introduced following the strike of the disabled population. These amendments served to expand the rights of disabled persons limited in mobility, of families of disabled children eligible for benefit for disabled child or for attendance allowance and of disabled housewives eligible for attendance allowance.
Among the amendments to the Unemployment Insurance Law passed in the framework of the State Economy Arrangements Law – 2000, the only one actually put into effect shortened the period of entitlement to unemployment benefits (to 100 days and to 138 days, in accordance with family composition) for unemployed persons under the age of 40.
1999, the minimum income for payment of insurance contributions for employees was equalized to the minimum wage as defined in the Minimum Wage Law (47.5 % of the average wage), in accordance with the extent of the position (full or part time).
The maximum income liable for payment of (national and health) insurance contributions was raised from four to five times the average wage. This rise applied both to the share of the employee in payment of national insurance contributions and to the worker’s share of the self-employed – but not to the share of the employer (or to the employer’s share of the self-employed).
Children branch, the allowance for the fifth child and subsequent children was raised in January 2001, as was the maternity grant paid under the Large Families Law.
The payment of income support benefit at the increased rate was cancelled for persons who had received the benefit at the regular rate for 24 months (from April 2002). In other words, recipients of the benefit who had been in the system for 24 months (whether consecutive or not) during which they had been entitled to the benefit at the regular rate, will not be able to receive it at the increased rate – higher by about 25 % than the regular rate – at the end of this period.
In 2001, the short-term nursing benefit paid for a period of 60 days, mainly to patients having acute functional difficulties – for example, upon release from hospital or in the process of convalescence at home from a severe illness – was paid for the first time.
The second stage of the legislation on benefits for disabled persons, following their first strike (that began in 2000) was implemented. In the framework of this legislation, the rights of disabled persons (both adults and children) limited in their mobility as well as of housewives, were expanded.
The maximum period for payment of work injury allowances was reduced from 182 days to 91 days (for those injured from February 2002). At the end of the 91 days during which he has received injury allowance, the injured person may receive a disability pension – if the Medical Board authorized to determine temporary or permanent disability decides that the disability results from a work accident.
The significance of the amendment is the reduction of the level of benefits by 1.2 %. This shall apply to old-age and survivors’ pensions with and without income supplement, income support benefits, and alimony payments.
Raising of medical threshold for entitlement to disability pension from 40 % to 60 %, unless there is a disability degree of 25 % or more from a single impairment.
Payment of an additional monthly benefit to a disabled child who receives a disability pension at a rate of 100 % or more.
Cancellation of 1.4 % adjustment of child allowances. The value of a full credit point was reduced from NIS 174 per month to its 2001 rate of NIS 171 per month.
Payment of a special benefit to persons entitled to attendance allowance, suffering from a severe disability. The rate of this special benefit goes up with the rise in the degree of the disabled person’s dependence on others.
Taking the full amount of unemployment benefit into account for purposes of determining entitlement to income supplement and its level. Prior to this amendment, unemployment benefits were deducted by a sum equivalent to 13 % or 17 % of the average wage, according to family composition.
Additional amendment (in January 2002) limits the period of entitlement to unemployment benefits to 4 years for unemployed persons who have already exhausted one maximum period of entitlement.
Cancellation of the income support benefit at increased rate to those who are entitled after they received a benefit at regular rate for 24 months, whether consecutive or not. (At that time the regular rate had been about 20 % lower than the increased rate.) The change was implemented in April 2002.
Reduction of maximum amounts of income support benefit at both regular and increased rates, by 8 to 23 %, depending on family composition.
Reduction of amount of income from work not taken into account (disregard) for purposes of determining entitlement to income supplement and its level – from 13 to 5 % of the average wage for a single person, and from 17 to 7 % of the average wage for other family compositions.
An additional reduction of income support benefit paid to single claimants under 25 and to couples without children, one of whom is under 25, with a few exceptions (persons unable to work for health reasons). The benefit paid to young claimants is at the rate of 80 % of the new maximum amounts determined in this law.
January 2002 cancellation of 1.2 % adjustment of those benefits linked to average wage – benefits determined in law as percentages of the average wage (old-age and survivors, income support and alimony). This measure was carried out by freezing the average wage at its 2001 level (NIS 6'964 per month, as compared to NIS 7'500 in January 2002.)
10 % reduction in rate of unemployment benefits paid to participants in vocational training.
Extension of qualifying period for unemployment benefit. Only unemployed persons who worked at least 360 days out of the 540 days preceding their unemployment are entitled to benefits, as compared to 180 days out of 360 or 270 days out of 540 before the amendment.
Cancellation of exemption from employment test (reporting to the employment bureau) for mothers of children aged 2 to 7; that is, only mothers of children up to age 2 will continue to be exempt from the employment test. The exemption was also cancelled for widows receiving survivors’ pension or income supplement. These widows had been exempt from the employment test regardless of the age of their children. The exemption will continue to be in effect for single parents entitled to alimony, regardless of the age of their children.
Cancellation of the income support benefit at increased rate to claimants aged 46-54. This change applies to “new” claimants only (who begin receiving benefits in January 2003 or thereafter, either for the first time or after a 6-month break).
Cancellation of the situation entitling to benefit, “a person unsuitable for placement at any job”, with a few exceptions. The labour exchange is no longer permitted to exempt recipients of income support benefit from reporting regularly to the exchange – except for persons aged 55 or over, who at the time of the law’s enactment were classified as “persons permanently unsuitable for placement at any job.”
Payment of an old-age pension at the rate of the disability pension (including the “additional monthly pension”) paid before the disabled person had reached the age entitling him to an old-age pension. This amendment applies to disabled persons who reached 65 on January 1, 2002 or thereafter.
Raising of insurance contributions by one percentage point to employers and self-employed, as against the lowering of the contributions paid by the government (indemnification) by one percentage point.
As of January 2003, the Employment Service no longer has the right to classify a claimant for income support as being either temporarily or permanently unplaceable in a job. The Income Support Law, in its new format, specifies those who are not required to report to the Employment Service. The main change relates to mothers of small children, who, prior to the amendments, were exempt from the employment test if their youngest child was under the age of 7, and since the amendments, are exempt only until their children reach age two. A widow was granted parity to a mother with small children with regard to the employment test: until January 2003, widows with children (under 18) were exempt from reporting to the Employment Service, regardless of their children’s ages. No changes were made with regard to the situation of women eligible for maintenance, and under the new legislation, they continue to be exempt from the employment test.
Cancellation of discount in payments for doctors’ visits (amendment of National Health Law).
Cancellation of automatic 70 % discount on municipal tax to new recipients of income support benefit: those entitled to benefit on January 1, 2003 or who were previously entitled and became re-entitled after 6 months elapsed since payment of benefit ceased. These new recipients will be entitled to discount according to a means test specified in the relevant regulations of the Ministry of the Interior. Those aged 50 or over who began receiving benefit after January 1, 2003 will continue to receive a 70 % discount, but only in 2004. These rules apply to women receiving alimony benefits from the NII as well.
Extension of temporary order regarding non-adjustment of most benefits linked to the average wage as well as child allowances, until the end of 2005 benefit recipients will not be compensated for non-adjustment of these benefits upon renewal of the adjustment process in early 2006.
Cancellation of linkage of benefits to average wage and their adjustment to price rises only, as of 2006. From 2006, all benefits will be expressed in terms of a “basic amount” adjusted in accordance with price rises.
Reduction of lump-sum grant paid to persons whose medical disability, as a result of a work injury, is lower than 20 % from a sum equivalent to 70 benefits to a sum equivalent to 43 benefits.
The replacement of the “average wage” by the “basic amount” affects wage-replacing benefits (such as unemployment benefit, injury allowance and maternity allowance) as well. The maximum sums for payment of injury allowance, maternity allowance and reserve service allowance will be increased the rate of the price rise, as will the wage scales in the calculation of the unemployment benefit. However, the level of the latter benefit will still be limited by the rate of the average wage (or two thirds of this wage), as to be calculated from time to time.
7 % reduction of benefit to elderly in the lower level of entitlement led to an additional decrease of ¾ of an hour in the number of care hours (from 10.5 hours to 9.75 hours) for these elderly.
Unemployment benefit to participants in vocational training who have less than 12 years of schooling will be paid for a period of 138 days, even if the participant is entitled to a maximum period of 50 or 100 days.
Entitlement to unemployment benefits denied to controlling shareholders who work in their companies as well as to students who are not available for work due to their studies.
The formula for calculating unemployment benefits was amended, to a uniform formula for those having incomes lower or higher than the average wage.
Health insurance contributions imposed on housewives (married women who are not employed outside their households).
Equalizing rate of health insurance contributions imposed on soldiers in the standing army to the rate deducted from workers’ salaries. Previous to the change, the former paid a lower rate of these contributions.
Payment of unemployment benefits to participants in vocational training restricted to the maximum period of entitlement to benefit.
Cancellation of linkage of the ceiling to changes in the average wage as of 2006, and the adaptation of its level to price fluctuations. The other parameters of the contribution system determined as percentages of the average wage will continue to be adjusted in accordance with changes thereof.
In mid 2004, with the implementation of the Retirement Age Law, the age of entitlement to old-age pension was gradually raised for both men and women. The conditional age for men was raised from 65 to 67 and therefore their entitlement at ages 67-70 is conditional on a means test, while the absolute age for men did not change. The conditional age for women was raised from 60 to 64 in two stages: first to 63, and after a break of 3 years, to 64, while the absolute age for women was gradually raised from 64 to 70, so that entitlement at ages 62 (or 64) to 70 is conditional on a means test.
Obligating recipients of early pension to pay national and health insurance contributions on the full amount of their pension (instead of on half their pension), and at the same rates imposed on workers – except for the Unemployment branch.
From Income Support to Secured Employment/"Prospects of Employment" grounds. The planners of employment objectives who are stationed at the employment centres are the ones entrusted with work placement and with providing required assistance, as well as with forming a personal plan for each participant (according to the recommendations of the professional committees in cases referred to special diagnosis).
The cuts in the child allowances continued in 2005, and in January of that year the third stage of the gradual process of equalizing the allowance for all children was implemented, while the policy of non-adjustment of the allowance continued. In comparison to 2004, in 2005 the (monthly average) allowance to a family with 2 children decreased by about 2.8 % in real terms, while that paid to a family with 5 children (without “new” children) decreased by about 13 %. The accumulated decrease since 2001 amounted to about 35 % for a family with 2 children and 52 % for a family with 5 children.
Similarly to unemployment allowance and maternity allowance, the injury allowance paid in the Work Injury branch was eroded by about 2 % in real terms.
The basic disability pension and the benefits derived from it were eroded by about 1.3 % in 2005.
In 2006 – for the first time since 2002 – child allowances also increased by 8.5 %. The reason for this increase is that at the beginning of 2006, the temporary provision pertaining to the cutback of NIS 24 per month in the allowances paid for the first three children and all “new” children, and of NIS 5 for the fourth child onward, expired.
This is the fourth consecutive year that the trend of declining payments to the working-age population has continued: unemployment benefits continued to decrease by 3.6 % in 2006 (and cumulatively by 48.7 % since 2002) while income support payments further declined by 6.5 % (and cumulatively by 30.5 % since 2002).
Various old-age and survivors pensions were increased: in mid 2006, the 1.5 % reduction in old-age pensions was rescinded, the basic pension increased by 1.3 % and the pension for income support recipients was raised by 4 %.
As of May 2007, paid maternity leave will be extended by two weeks, from 12 weeks to 14 weeks.
Unemployment insurance for persons up to the age of 28 was reduced by about 25 %
Attempt to convert the in-kind benefit into a cash benefit: the long-term care benefit is not paid in cash but granted to those entitled to it through organizations for whose services the NII pays. However, at the beginning of 2007, the Knesset approved NII’s proposal to run an experimental cash-benefit program in four regions, to be implemented as of June 2007 for those who accumulated at least 6 points in the dependency test and require full-time care throughout most of the day.
Unemployment insurance: Unemployed persons aged 25 to 28 are entitled to a maximum period of 67 days (instead of the 100 days in effect prior to the amendment).
As of July 2007, a demobilized soldier requires a qualifying period like any other unemployed person, whereby compulsory army service will be considered as 6 months out of the mandatory 12-month eligibility period.
The Minister of Industry, Trade and Labour expanded the agreement to apply to all workers who did not have pension coverage, including those not associated with the Histadrut – workers who earn the minimum wage or even less.
Implementation of mandatory pension coverage (pension fund or directors' insurance) to working men aged 22 and over and to working women aged 20 and over who did not previously have any beneficial pension arrangement.
Another change pertains to the realm of collection: The reduced employer rate decreased in 2007 from 4.98 % to 4.14 %, as part of the process of reducing insurance contributions for employers.
Since April 1, 2008, the same rules for medical treatment of victims of work-related injuries apply to both workers from the territories and to foreign workers. Treatment is provided by the Clalit Health Fund.
In addition, an amendment to the law was passed in July 2008 on the basis of which a single parent can receive an income support benefit, even if he is studying in an institution of higher learning, above secondary level, or taking a course that lasts over 12 months.
An increment to the basic old-age pension is paid for a spouse and for children, as well as a seniority increment and a deferred pension increment. In addition, under a recently approved government decision, a special increment is paid beginning in April 2008 for an insured person who turned 80 years old (80+ increment).
In March 2008, the Knesset approved a government bill to increase the rate of the old-age and survivors' pensions. Under the bill, beginning in 2008 the basic pension for an individual shall increase by 1.9 % (from 16.2 % of the basic amount to 16.5 % thereof) and a special increment at a rate of 1 % of the basic amount shall be paid to eligible persons aged 80 or over. Moreover, old-age and survivors' pensions with income supplement shall increase according to age: by NIS 29 on average for persons under 80 and by NIS 200 on average for persons aged 80 or over.
A survivors’ pension is paid to the survivors of an insured after his death. Increments are added to the basic pension for children and seniority, and as of 2008, also an increment for a survivor who has reached the age of 80, as above. A widower is defined as eligible for a survivors’ pension as long as he still has dependent children or he meets the criteria of the means test, as required by law.
A survivors' pension is paid to the insured person's survivors after his death. The basic pension is paid with an increment for children, and beginning in April 2008, also an increment for a survivor aged 80 or over. A widower is defined as being eligible to a survivors' pension if he has children and passes the means test as required by law.
In December 2009, subsequent to the economy’s recession, a further agreement was implemented, making it possible to extent the maximum period for paying unemployment benefits to young unemployed individuals who accumulated rights in Unemployment insurance. Under the agreement, young unemployed individuals under the age of 25 will be eligible for an additional 15 days, but not exceeding 65 days, of benefit. 25-28 year old unemployed individuals will be eligible for an additional 30 days, not exceeding 97 days. 28-35 year old unemployed individuals will be entitled to a maximum period of 125 days instead of 100 days – an additional 25 days.
According to the agreement, any unemployed individual aged 25 or over who has been dismissed from his job and worked for 9 out of the 18 months prior to being unemployed will be eligible for a benefit from the NII. It should be remembered that under normal eligibility criteria, an unemployed individual must have worked 12 out of 18 months in order to be eligible for unemployment benefits.
Several amendments were approved for the Income Support Law during 2009, to take effect in March 2010. Among these are: rates of deductions (disregarding work and rate of additional deduction from the income) from recipients of income support whose chances of finding employment are slim (i.e. recipients of a benefit on the grounds that they are employed in a "protected plant") will be adjusted to the level at which they were before the cutbacks of 2003; a person responsible for a person who is under house arrest (the child or spouse of the person under house arrest) is exempt from the employment test as a condition for benefit; a prisoner who spent six continuous months in detention will be entitled to benefit for the first two months after his release.
In August 2009, Amendment 109 to the National Insurance Law (the “Laron Law”) came into effect, whose objective was to improve the conditions of disability pension recipients who found work, out of a desire to improve their quality of life, integrate them into society and improve their public image. The amendment allows the disabled person to increase his income from work without losing his eligibility for the pension and assures that his combined income from work and the pension will always be higher than the amount of the pension alone.
A host of regulatory adjustments mostly implemented in 2011 have strengthened telecoms competition. These include: regulation to force reduction in the cost of international cell-phone calls and reduction of termination charges.
In the 2011-12 school year compulsory education to grades 11 and 12 will increase to apply to 35 % of students. The budget to fund the cap in class size has been increased (in 2010-11 it was NIS 200 million).
Agreement has been reached for further increase in mandatory second-pillar contributions. Increases were supposed end in 2013 (at 15 %) but will be increased to 17.5 % in 2014.
Privatisation of the existing ports and the construction of a new port edges forward.
At the end of 2012 an amendment to the law was enacted abolishing the differences – in terms of eligibility and determining the wages for benefit calculation – between unemployed people who had worked on a monthly basis and daily workers. From March 2013, the qualifying period for unemployment benefit is the same – 12 months of work out of the 18 months prior to unemployment – for all, regardless of the number of days worked in a month.
Early retirement for all employees in public sector. Two schemes: right to pension to all employees in public sector after 20 years of seniority (actual: 19yrs 6mm 1 dd) with a 5 years reduction for married women with children; alternatively: "privileged retirement" for incapacity due to service reasons with a substitution rate of 1/40 per year of seniority with a floor (44%) and a cap (80%)
Establishment of Institute for workers' orientation and training: ISFOL is a technical institute supporting the Ministry of Labour for monitoring activities and technical assistance on labour market and training policies
Rate of prior import deposit drops to 25% for beef.
Prior import deposit is abolished for certain farm goods.
Removing credit restrictions for large firms (above L 500M of loans) and exporting firms.
Importers were required to deposit in a non-interest-bearing account with the Bank of Italy for a period of 180 days the equivalent in Italian lire of 50 % of the value of their cif imports of certain products, chiefly consumer goods, in excess of 1 million lire (about 40 % of total imports). To guard against the possibility of external financing for Italian importers, the banks were instructed not to underwrite the external transactions of the importers affected by this measure.
Leaving the price control system except for a small number of staple food products (meat, pasta, oil and sugar) as well as for rents.
Establishment of the stock exchange commission (Consob)
Transfer of management of hospitals to regions; free assistance extended to those not covered with a small fee
Higher rates of tax on corporate bodies (up from 25 to 35 %), private financial companies (up from 7.5 to 10.5 %) and public financial companies (up from 4.6 to 8.8 %) (estimated yield: about 80 billion lire)
Introduction of an exceptional surtax ("una tantum") of 5 % on personal incomes of between 10 and 14 million lire and of 10 % on incomes in excess of 14 million lire (estimated yield: about 50 billion lire).
Reform of the tax system: introduction of a single tax on personal income, a deduction of 15 % from bank interests on deposits and a deduction, at variable rates according to the type of security, on income from bonds.
Ceiling on export insurance raised from L 1400 B to L 2500B, as well as cover for transactions insured increased to a ceiling of L 1000B and ceiling on interest subsidies for export credits raised by L 100B in 1976 and another 100B by 1977.
Import deposit requirement is abolished.
Organization and functioning of stock exchange; compulsory audit of quoted companies' balance sheet; regulation of stockbrokers
Duty of the employer to inform trade unions, "joint exam" without any obligation for an agreement.
Unification of COLA amount: COLA is computed in points paid every 3 months
Request procedure for sectoral wage integration fund; 40% for part-timers financed by a special sectoral fund.
Increase of replacement rates to 80% for all wage integration funds.
Extension to 12 months for ordinary scheme; the extension of the extraordinary scheme subject to governmental Decree.
Increase of replacement rate for special unemployment benefit to 2/3 for 90 days extended to 180 days in case of sectoral crisis
Italian workers returning from abroad are entitled to unemployment benefits for up to 180 days.
Increase in pension allowance financed through raising the contribution of employees by 0.4% in 1975, up to 1% from 1976.
Increase of substitution rate: from 1.85% to 2% per year worked: it implements what was set in the 1968-1969 pensions reform.
Increase in the compulsory financing of short-term export credits from 30% to 50%.
Exporters who were allowed terms of payment of up to 4 months are required to obtain financing in foreign currency from Italian Banks to the extent of 30 % of the amount of the credit granted.
Importers are again required to set up a deposit for advance payment of imports in foreign currency: all purchasers are required to deposit 50 % of the value of the transactions for a period of 90 days in a non-interest-bearing account with the Bank of Italy. Very few exceptions are made.
Regions promote public-funded sheltered job ("lavori socialmente utili") to projects addressed to environmental protection and maintenance, support to social, cultural and environmental services, agriculture. These are offered after having attended a training course, directly or indirectly by means of youth cooperatives.
Promotes youth employment; launch of training programs: regions mainly in charge of operative actions, coordinated and supervised by a tripartite national employment committee; establishment of a regional tripartite committee on employment; establishment of a special unemployed list composed by youth aged 15-29 only: they could be hired with a specific "training contract" with max 30% of training hours and employers benefit of a specific public contribution, provided they didn't fire anyone in previous 6 months; regions promote training courses of max 6 months with a grant to participants.
Employers foreseeing redundancies have to inform the regional employment committee.
Abolishing indexing mechanisms for certain industries and discontinuation of indexation of leaving allowance.
End of contract payment (severance pay, "trattamento fine rapporto") no more based on last month earning, but on indexing the cumulated defferred wage; exclusion of COLA from end of contract payment.
Men can take leaves when lone parents or their partner work. Leaves cannot be accounted as absence and thus discriminate the work career.
Equal pay and anti-discrimination between men and women is ruled.
Mutualistic institutes liquidated by transferring their tasks and personnel to regions
Abolishment of "anomalous" COLAs with wage increases higher that inflation.
No night work for women except those in managerial role and health care.
Prohibition of night work can be derogated by collective bargaining.
Increase of inability benefits in case of work accidents to 60% for the first 3 days and later 75%.
Unemployment benefit for occasional workers having worked 101 to 150 days with a 40% substitution rate.
Increase on budget contributions to social security payments to L 24.500 per worker and month.
Establishment of universal health care replacing mutualistic sectoral/company level funds. Key principles: universality, prevention, planning, decentralization, participation
Introduction of patients' co-payment. Patients are required to contribute to the cost of medical prescriptions: L 200 for products below L 1000, L 400 for products between L 1000 and L 3000, L 600 for the rest.
Increase in social security contributions paid by self-employed.
Budgeting of social security contributions is made permanent and extended to affect women including a complete exemption for monthly salaries below L 400,000.
Introduction of early retirement: early retirement allowed for those aged 55 (50 in case of women) with 15 years seniority.
Adjustments of pensions for wage increases cannot exceed 2.9% in 1979, being 5.9% the previous rate.
Increase of payrolls by 0.30% addressed to financing continuous vocational training, as co-financing of rotation fund: transfer of IVT 2-3 years courses to regions while 5-years the Ministry of Education retained the 5-years ones.
Decentralization of vocational training to Regions. They can organize it directly or by stipulating agreements with private non-profit organizations
Requests for ordinary wage integration fund treatment cannot exceed 3-month and can be prolonged for further 3 months.
Promotion of inter-firm mobility and training of redundant employees: regional employment committees can derogate from professional requirements regulation in order to favour inter-firm mobility; promotion of training courses
Employers with at least 20 employees have to communicate any redundancies to trade unions and employment services which will try to intervene in recomposing the conflict and to re-employ fired workers. The tripartite regional committee manages the mobility list and criteria for their re-employment.
Financing regulation of NHS by self employed; regulation for sickness absence certification
Further budgeting of social security contributions in industry, up to a 10% of gross wages.
Accompanying benefit for those holding a disability pension unable to those no more self-sufficient: it generalized a benefit hereto reserved to war disabled (the so-called "grandi invalidi di guerra")
full deduction of health-related and surgical expenses: increase in deductibility of health expenditure notwithstanding the introduction of NHS in 1978
Voluntary price control on twenty main food items, initially lasting only two months.
Early retirement allowed for redundant workers in the industrial sector in case of restructuring.
Lowering eligibility criteria: eligible workers having worked for 15 years aged 55 (50 in the case of women) with a public funding of payrolls from the date of dismissal to the date of retirement
Personal income tax reduction of 3 % up to an annual income limit of 30 million lire. In effect from 1982.
Minimum taxable income is raised from L 2M to L 3M per year.
Limitation to new openings of small shops, authorization to their small widening.
Partially restoring indexation of private sector severance payments.
Introduction of the end of service allowance as an alternative to re-admittance (which is the default option for unjust dismissals): annual wage/13.5 per year of service in the company. Past years are revaluated by 1.5 + 70% of the annual inflation rate.
Slight increase in the openness to international capital in the financial markets.
Leaving some entry barriers to financial competitors from a market that was completely controlled.
Establishment of ISVAP, the national agency supervising the insurance companies
Introduction of patients' co-payment for diagnoses and limits to medicines per receipt. Low-income and disabled people and patients with chronic diseases are exempted
General corporate income tax type from 25 to 30 %.
Tripartite agreement introducing more employer discretion in hiring young people
Introduction of securities investment fund in Italian Law: authoritative regimes, supervising authorities, legal and organizational requirements
Patients' contribution to medical expenses is now proportional to income.
Reduction of indexation of the cost of living adjustment (COLA) and introduction of non-repetitiveness clause in company level bargaining: increase in the amount of COLA points, by reducing its sensitiveness by around 14%.
Employers can hire on a nominative basis, 20 hours of working time reduction on yearly basis.
Reduction in weekly working hours to 40 by mid 1985.
Budgeting now also includes the commerce sector.
Integration to the minimum pension means tested: when the calculated pension is below the minimum benefit, it is paid only if earning are below the double of minimum pension.
For people drawing more than one pension below the minimum pension, only one of these will be aligned on the minimum pension.
PIT reformed. The number of brackets reduced from 32 to 9, the scales in future to range from 18 to 65 % (instead of 10 to 72 %); the tax-free allowance and tax exemptions for dependants increased. (The new scales: 18, 27, 35, 37, 41, 47, 56, 62, 65)
Firms hiring staff between 15 and 29 years old will receive reductions in social contributions through professional training schemes.
Employees of enterprises who signed collective solidarity contracts, which include reductions of working hours in order to avoid loss of employment, are entitled to receive a wage compensation from Cassa Integrazione dei Guadagni, as its so called "extraordinary" interventions, equal to 50 % of the income loss.
Tax allowance equal to 15% of the first year's salary of new employees for firms hiring under the collective "solidarity contracts". The second and third year the allowance is of 10% and 5% respectively.
Firms can hire up to half of their staff on a nominative basis instead of taking employees following the order set by employment agencies' lists.
Introduction of "training and work contract", a sort of 2-years apprenticeship on the basis of training projects agreed among social partners for 15-29 year-old people
Agreement on conflict proceedings and freezing clauses. Strikes cannot be declared in vacation periods (Christmas, Easter, August) and in case of elections. Definition of entitled organization according to the level (national, regional, provincial), 10 days of minimum alert time, duration no more than 2 days. Not specified sanctions in case of violation. Effectiveness limited to signing confederated "autonomous" trade unions are quite relevant and have the so-called "vulneration power", esp. Cockpits, train machinists, and flight traffic controllers
Predetermination of COLA increase with control of public services rates: cut of 4 points of COLA in 1984-1885.
Two new schemes: the "defensive" one, subsidizing non-worked time with a 50% hourly benefit (lower than wage integration fund, 80%); and an "expansive" one, subsidizing new hiring without any compensation for wage reduction due to working time reduction.
Tightening eligibility criteria for invalidity pensions by supressing special environmental, economic and social circumstances for qualifying.
Index-linking retirement pensions including a ceiling. The number of indexation percentage points is set at 9 for 1984.
Workers paying pension contributions and who are to retire in 2 years are entitled to receive a pension if they accept to work not more than half time.
10% increase on tax deduction for wage earners and of tax allowances for family changes
10% increase of the maximum level above which tax allowances are not applicable.
Limitation to interests deductibility: non deductibility of paid interests for debt facing purchases of state-issued bonds
Reinforcement of Consob inspective and prescriptive powers; compulsory communication of shareholders with at least 2%, further communication at 10% share; information requirement for companies applying for IPO
Change in COLA mechanism, by lowering indexation, for public sector employees: wages fully indexed up to 580,000 liras, then 25%. Update every six months.
Self-employed and micro businesses income calculated indirectly: by setting the principle of "inductive calculation" in the inspective phase, evasion is expected when income is inconsistent with a set of indicators. Transition from the "equity principle" to "efficiency principle" in the income tax administration
The right to job preservation is limited to 180 days of sick leave within 3 years
Increase of co-payment for diagnostic exams to 25% with a cap and on drugs; co-payments for specialists. Low-income and disabled people and patients with chronic diseases are exempted
Implementation of the non-compartmental agreement signed on 18 December 1985 for public sector employees by extending to employees in both public and private sectors. The COLA scheme will expire on 31 December 1989.
Payment of COLA fractions left unpaid, promotion of joint training projects for work-and-train contracts, forfeited 2 COLA points, job protection below 180 days of sickness leave over 3 years.
Change in the budgeting of social security payments. Now deduction is a fixed amount instead of a percentage of salaries. The amount is to be indexed with inflation, and the same deduction now applies to all employees without gender discrimination.
Sale to FIAT yielded over L 1 trillion to IRI in 1987
Review of legislation on income tax: from equity to efficiency, minimum tax on self employed and small and micro businesses on the basis of sector
Reform employment services by introducing at regional level a labour market observatories and an employment agencies promoting experimental training programs and with derogatory powers on hiring, especially for youth unemployed; promotion of partnership with employers for training programs.
PES are authorised to impose a quota of long term unemployed on employers seeking labour.
Restrictions on shop opening hours in retail trade were eased in 1987, but the scope for greater flexibility appears to have been used only by large supermarkets. Elsewhere, shop opening-hours within a given region have remained uniform.
Restrictions to the freedom of concluding a contract.
Flexibility for fixed-term contracts is increased.
Wider use of fixed term contracts when agreed on collective bargaining, fixing the circumstances as well as the maximum percentage per firm.
Apprenticeship contract length is set by sectoral agreements with a top of 5 years.
Age limit for craftsman's apprenticeship goes up to 29 years from 20.
Sale to Marzotto marked the exit of the public holding ENI from the textile sector.
Sale of the diesel engine subsidiary by IRI, and SIR fine chemicals.
Partial relaxation of previous regulation for new openings, especially large retailers, maintaining an authoritative approach
Banking supervision is gradually strengthened.
Indirect insurance scheme is set up for high income citizens.
Contribution to the cost of medical prescription is introduced.
Medicines are delivered in therapeutic doses (smaller quantities).
Replacement rate of unemployment benefit is set at 7.5%-8% of the average wage.
Unemployment scheme for seasonal workers in agriculture is set.
The possibility of combining wage earnings and retirement pension is forbidden.
The amount of overtime work counting towards pension is reduced.
Increase in the minimum number of contribution years to be eligible for a retirement pension, from 15 to 20.
Pension benefits are calculated on the basis of 10 years instead of 5.
The lowest rate is reduced from 12% to 10%
Increase in co-payments, adding also co-payment in hospitalisation.
Local health authorities and hospitals are transformed into enterprises.
Unemployment benefit increased to 15% of daily wage
Reference wage for pension computation cannot be below what is established by the national labour contract.
Income tax schedules are fully linked to inflation in case that it goes beyond 2%.
9 to 7 brackets from PIT, and significant reduction of the rates (10, 22, 26, 33, 40, 45, 50)
The Commission ("Autorità Garante della Concorrenza e del Mercato") is a collegial independent body responsible for enforcing the new anti-trust Law, with associated powers of investigation and decision-making. The Commission has the right to impose substantial fines. In addition, it may initiate investigations into the competitive practices of any sector in the economy. In addition to acting as an anti-trust authority in the banking system, the Bank of Italy is also given powers to maintain the traditional separation between industry and banks.
Anti-trust actions are increased in order to protect competition applied to horizontal or vertical agreements, abuses of dominant positions (price setting, unfair conditions, preventing or restricting production, barring access to markets or technologies to the detriment of consumers, discriminating between commercial partners), and mergers (prior notification is compulsory for companies reaching a certain threshold). It covers all firms, including the natural monopolies.
General aim: reform of degrees (3+2 years) opportunities to organize further courses by conferring didactic autonomy: the reform aligns teaching to EU standards. It opens to private Law actions for training activities and participation to consortia.
The employment guarantees in form of 'compulsory coverage' in case of dismissal on disciplinary grounds are extended to firms with a workforce below 16 employees in the same production unit or 60 in the same plant.
In case of unfair dismissal (settled by the arbitration), the firm has more room to choose between re-hiring the worker or paying a compensation: the 'real coverage' is extended to firms of non-commercial organisations employing more than 15 employees in the same production units or more than 60 workers overall.
Firing cannot be ad nutum also in firms with less than 15 employees: revision of workers' statute in order to avoid referendum addressing the 15 employees threshold for the application of "justified reason" for any firing, by restricting firing in micro firms. Invalidity of discriminatory dismissal.
Limitation of strikes rights in essential public services by extending auto-regulation codes issued by union confederations in 1981 and 1984: definition of essential services of public interest as those covering the whole day. Establishment of a guarantee committee nominated by the government assessing the respect of regulatory framework, that can differ strikes and commit fines in case of infringement.
Transformation of public banks into joint stock corporations. The Public Administrations can sell up to 49% of the banks' equity by creating non-bank financial intermediaries.
Sopal food processing (sold by EFIM in 1990)
Mobility indemnity (one to three years according to age) associated with almps, conditional to acceptation of equivalent job within 50 km.
Incentives for hiring of unemployed enrolled in mobility lists
The criteria of calling by order of incorporation to work of unemployed workers from the list of PES is abolished, making it possible for employers to use recruitment by name, but obliged to reserve a 12% of new hiring for people belonging to certain disadvantaged categories.
Workers dismissed in collective layoffs on the basis of predetermined criteria have priority for re-employment in any hiring by the company that has dismissed them.
Regulation for non-state universities in terms of administrative requirements and accountability of their activity
The employer engaging into collective dismissal has to pay to the National Labour Institute a sum equivalent to nine months' allowance for each employee (three months if an agreement was reached).
Criteria to be applied for electing the dismissed workers: tenure with the employer, dependent family members, organizational reasons related to production. If the criteria is not followed, the employer has to readmit the workers and restart the procedure.
Union representatives have to be informed by the employer about the reasons for collective layoffs. The external unions have to be equally informed of reasons, number and level of dismissals, dates, measures to mitigate the consequences. Unions and representatives might request in a week an examination of the reasons as well as new possible agreements to avoid dismissals. 45 days are available for a new agreement. If this fails, the Labour Office takes up to 30 days to conciliate the situation. If the procedure is not appropriately followed, employees have to be readmitted.
Norms on insider trading with specific obligation on managers and sanctions: Consob not always managed insider trading cases in a suitable way.
Regulation of all financial operators along the various phases, and the regulation of financial markets. Inspective powers shared by Consob (market operating) and Banca d'Italia (financial institutions)
Reduction of profit margins for pharmaceutical producers and distributors as prices are lowered. New prices are more linked to the therapeutical value, including comparison with other European countries and establishing more rigid procedures for the addition of new products to the list of refundable items.
Time limits for the wage integration fund system for industrial workers: complete firing and cutting of the benefits after two years of "extraordinary" wage integration, and then transition to a new NEB system.
Inclusion of clerks in the NEB system for industrial workers.
End de facto limitless special unemployment benefits "wage integration fund"
For industrial workers aged more than 50 (3 years length) the "mobility indemnity" used as a pre-retirement tool. Its conditionality to acceptation of any job usually bypassed by PES by communicated informally (i.e. by phone) and not formally the available position.
Regulation of IPOs and take over. Central turning point in Italian stock markets posing strong powers in Consob hands: IPOs; supervision of Consob, requirements of prospect and rules when demand is higher than supply; take-over: threshold requirement (when buyer seek for a dominant position, directly or indirectly or by means of syndications) set by Consob for each company exchanged on stock markets (at least 10%), updated every year; right of withdrawal for dissenting shareholders in case of merger; information requirements in case of takeover launch; behavioural and information stds.
Banking supervision is further strengthened: requirements of bank operators and managers, authorities surveillance and sanctions.
Requirements of bank operators and managers, authorities surveillance and sanctions. Strong liberalisation in the banking sector, by removing licencing mediating Banca d'Italia and banks
Establishing a clear demarcation between financial and provision institutions in the HC system.
Restriction in health care including increasing co-payments.
Revision of 1978 reform. It introduces minimum standards, transforms local units into companies, although with a public status, acting as operative bodies of regions. The largest hospitals and those hosting faculties of medicine are established as autonomous organizations. Public-private competition, new financing system where targets are set on the basis of available resources.
New bargaining system in craft sector: two levels (national and regional) and regional-level bipartite bodies mutualizing temporary unemployment risks
Limitation to add up pensions to 20 years (before there was no specified limit).
Phased increase in the reference period for calculating pension entitlements, to the last 10 working years for people with more than 15 years of contributions and the whole working life for the rest.
Increase of the reference calculation period from 5 to 10 years.
Eligibility increased from 15 to 20 years by the year 2000
Eligibility for seniority pensions increased for public servants to the same level as that of private workers: 35 years of contributions.
Abolition of pension payment indexation to real wage growth.
Introduction of private pension funds with 15% withholding tax on deposited funds.
Gradual rise of the retirement age: 65 for men and 60 for women.
Public utilities may have a non-public shareholders' majority
The national railways, FS (Ferrovie dello Stato), formerly directly operated by the Ministry of Transport (Ministero dei Trasporti), was turned into a public holding in 1992.
Adoption of Law 35 enabling State-owned firms, including enterprises which are held under the umbrella of State-holding corporations, to be transformed into joint-stock companies (SpA). Provides legal base for privatisation.
Decree 487 starts procedures for the liquidation of EFIM, the third largest public conglomerate employing 37 000 people. Reimbursement of EFIM's debt by the state spurs a dispute over state aid with the EC Commission. The largest State-holding companies IRI, ENI, ENEL and INA are transformed into joint stock companies under direct control of the Treasury.
Transforms deduction of life insurance and interests on real estate mortgages into detraction by topping its rate at 27 %
The upper 5 brackets from PIT are increased by 1 % each (10, 22, 27, 34, 41, 46, 51)
Establishment of ICI, a wealth tax on real estate in favour of municipalities
Support for youth entrepreneurs and cooperatives; establishment of mobility lists (without benefits) for redundant employees fired in those firms not benefitting of wage integration fund and mobility benefit; training plans agreed among social partners or by the employer with trade union; priority rights for those having worked as seasonal workers for open-ended position
Introduction of competition in airport-related services.
Wealth and honourability requirements, Consob inspective powers; recorded on a bulletin board managed by Banca d'Italia; limits in investments by risk of assets. Further step in widening the set of financial intermediators.
Reduction in power of the inter-ministerial committee for credit and savings (cicr) competitiveness among inspections criteria together with stability and efficiency, introduction of single authorization, despecializzazione del sistema creditizio banks can buy shares in manufacturing companies. Manufacturers cannot hold more than 15% of a bank. Regulation of transparency in banking contracts.
Reorganization of the Ministry of Health. Establishment of National Agency for Health Services with a monitoring role costs, services, claims and transferability
Revisions address increasing budget control mechanisms
Transfer of bargaining powers for national labour contracts from public administrations to ARAN (National bargaining agency for public sector) who also collects data on workers' representatives elections in order to ensure trade unions representativeness and collective bargaining; the employment relations is submitted to private Law regulation.
Rationalisation of industrial relations system; agreement on labour market controlled liberalisation; privatisation and liberalisation in the product markets; establishment of annual tripartite definition of planned rate of inflation; national labour contracts every four years and wage bargaining every two years with realignment mechanisms in order to ensure purchasing power; company-level bargaining can include wage increases performance-related according to agreed plans.
Ordinary Wage Supplementation Fund replacement rates are raised to 30% of last earnings.
The Special Wage Supplementation Fund is extended temporary to firms of commerce, tourism and security with more than 50 workers.
Regulatory framework for both collective and individual pension funds. Employees contributions are 1% from their current wage + 1% from their several pay account + 1% from the employer: gradually implemented by means of collective bargaining and the implementation of bipartite pension funds financed with end-of-work treatment
Freezing entitlements to early retirement.
Revision of inability pensions schemes; "authentic interpretations" on rectifying unsolved issues after Constitutional Court's judgements: mandate to the government to review inability pensions; indexation of pensions below 1ml Liras; integration of minimum pensions; combination of pensions and earnings form work;
The EC's refusal to allow state aid to the bankrupt iron and steel subholding of IRI, Ilva, provoked its break up into profitable and loss-making plants and financial restructuring in view of full privatisation.
Share of IRI's largest banks, Credito Italiano, was sold by public offer to domestic and foreign investors, yielding around L 1 800 billion
EFIM's subholding for glass, Siv, had been sold raising L 210 billion
The industrial activities of IRI's food and catering subholding, Sme, had been sold (raising a total L 747 billion) and the sale of the remaining distribution and catering activities was underway
Taxation of self-employed and micro businesses based on "sectoral studies" setting standards of expected income according a set of indicators
Exclusion from mobility benefits of those employers having just changed the firm denomination; incentives to those employers increasing employment levels and working times flexibility; youth insertion plans
Competition introduced in the national airline routes, leading to Alitalia's loss of its monopoly.
Competition is introduced in the cellular telephone market, with a second licence awarded to a consortium led by Olivetti.
Establishment of regulatory framework for water management: priorities in using a public good, standards, optimal dimensions (ATO: optimal territorial area), water depuration, regulatory pattern in service concession, pricing
Establishment, authorisation by the Ministry of Treasury after Banca d'Italia opinion; capital, accountancy and honourability requirements; ownership; management rules, taxation.
Increase of replacement rate from 15% to 30% of daily wage
Coverage of Special Wage Supplementation fund extended to construction workers with at least three years of experience on Solidarity Contracts and Mobility Lists.
Coverage of Special Wage Supplementation fund extended to commercial contracts with more than 200 employees, but with a reduced coverage.
Wage Supplementation Fund is extended to small and medium sized firms, as well as to bank, trade and public utilities sector.
Early retirement allowed for workers in the steel industry, large enterprise workers and Alitalia workers.
Pension funds of self employed registered in professional registries are transformed into private non-profit organizations subject to ministry of labour supervision and inspective powers.
A new telecommunications company (Telecom Italia) is created through the merger of Sip, the old domestic operator, and Italcamble, the old international operator.
Transformation into a company with public status and separation of postal administration from telephonic long-distance network (ASST)
IRI sells its 51 % shareholding in Banca Commerciale Italiana through a public placement.
The Parliament approves a new Decree Law on privatisation, which introduces proportional representation on the board of privatised companies.
The Treasury sells its shareholdings in IMI through a public placement.
Obligation to all Italian ports to privatise any service companies owned by them.
The Treasury sells its shareholdings in INA through a public placement.
Wage incentives for part-time and flexible contracts.
Introduction of self-handling rights, whereby a maritime company can be authorised to execute a large number of terminal operations using its own manpower.
End of the triple role of harbour authorities in setting fees, issuing permits and owning companies which render services separation between port authorities and compagnie portuali, which were turned into competing private companies operating under concession. Under the reform, the responsibilities of the port authorities are restricted to supervision and co-ordination, whereas the concessionaires are responsible for infrastructure developments, fee determination and terminal assistance.
Parliament approved a new Law modifying the Merloni reform on public work contracts. The Law relaxes some of the tight Merloni rules regarding the possibility of price changes and entrusting contractors with the planning and execution of public work projects.
In November 1995, Parliament approved legislation establishing regulatory authorities for electricity and telecommunications.
Entry in the financial market is granted for most competitors from within and abroad.
Hospital financing is now based on Diagnosis Related Groups, being payments allocated according to diagnosed medical conditions and standardised treatment costs in order to increase incentives towards more efficient treatment.
Introduction of a new classification of pharmaceutical products in three types with different state contribution, including more stringent rules for the total exemption of charges.
Benefits are a function of residual life expectancy at pensionable age and of the long-run of the economy.
Pension amounts are now to be linked to contributions paid over the lifetime period and capitalised based on nominal GDP growth (five-years moving averages) instead of earnings. Transformation rates calculated every 5 years on the basis of demographic trend and economic growth in order to ensure that the share of pensions will not exceed 15% of GNP in 2050.
The link between pension benefits and residual life expectancy allows for flexibility in retirement age, granted from 57 to 65 years of age.
From 2008, seniority pensions will require 40 years of service or 35 plus a minimum age of 57.
Elimination of the possibility of retiring after 35 years of contributing work (from 2013).
Reduction of incentives for early retirement.
Partial harmonisation of pension provisions across categories of income earners and between sexes. Employees with more than 18 years seniority still with defined compensation, defined contribution only for new employees, mixed for others
Introduction of payroll for parasubordinate workers (self employed, often bogus, working on the behalf of employers)
The Treasury sells the second tranche of INA to a core group of reference shareholders.
Italtel 1 000 Ilva Laminati Piani 2 513 (steel) ENI1 6299 (national oil company)
The Treasury sells 19 % of IMI (L 1 .2 trillion) through private placement, retaining ownership of a small stake.
For motorway tolls, a price-cap formula has been introduced in concession agreements from 1996. Now adjustments become a function of consumer-price inflation, company-specific productivity gains and changes in the quality of service. The level of toll rates is no longer fixed, but represents a ceiling, allowing price differentiation to attract customers during hours of low traffic intensity.
Abolishes banca d'italia's control on liabilities and new emissions in order to secure financial market stability.
More stringent criteria in order to be elected to be exempted from pharmaceutical expenses.
Review of companies' taxation: lower overall rate, incentives to company capitalization, introduction of dual income tax, harmonization of capital taxation. Neutrality between companies and individuals.
Reductions in social security contributions in Southern Italy are extended for one additional year, if after the first two years a training contract is converted into an open-ended contract.
Reduced social security contributions and pension provisions for atypical contracts.
Reorganization of employment services by decentralizing PES to regions and setting minimum requirement for private operators. Transfer of public employment services to regions and merger of decentralized tripartite committees; establishment of national labour information service; minimum requirements for authorization of private employment services.
Private business can now provide employment intermediation: private employment services. They have to follow specific requirements: "employment activities must be the organisations' sole activity - they cannot also be either temporary work agencies or training centres; they must have a minimum of two employees in their office in each region; and they require authorisation from the authorities in the regions where they operate. The private employment services provided will be paid for entirely by the enterprise which hires the worker, and completely free for the latter."
Local public transports includes also local railways transports. Regions auction services and buy transportation means by setting service standards.
Schools have organizational and didactic autonomy from the Ministry of Education, by setting their didactic plans. Schools are still public but they now compete with their educational supply and can autonomously raise funds from private.
Incentives for temporary work via private agencies.
Tightening the extension window of apprenticeship contracts: from no minimum length and 5 years max. to a minimum of 18 months and a maximum of 4 years.
Removing automatic transformation of temporary contracts into open-ended contracts. More specifically, if the worker continues to work after the expiration of the contract, it is converted to a permanent one after a transition period. This period lasts for 20 or 30 days, depending on the duration (less or more than 6 months respectively) of the contract.
Easing the use of apprenticeship contracts: minimum age of 18 and maximum of 24, from the previous 20. There is a preferential clause for the South that allows a maximum age of 26.
Temporary Work Agencies are allowed to operate. "The agencies can employ workers for an indefinite duration, and for these employees a reduced "availability pay" level is set by the agreement for those periods in which they are not employed by a user company.  Italian Law prohibits the use of temporary workers for: dangerous work; low-skilled jobs; replacing workers on strike; or substituting for workers who have been dismissed with the previous 12 months. The precise definition of cases where the use of temporary workers will not be allowed will be the object of further negotiations between the trade unions and employers."
Relaunch of apprenticeship; regulation of trainees and internships; reorganization of training system and promotion of CVT activities; reorganization of sheltered jobs by concentrating them on environmental and cultural protection. Apprentices: minimum of 120 hours per year of formal training; trainees and internships by acknowledging them credits.
The stock exchange and securities markets are transformed from public institutions into corporations.
Review of the classification of pharmaceutical products towards higher restriction.
Rules for the election of workers' representatives in order to ensure representativeness of trade unions signing national collective agreements. Workers' representatives are elected from lists representing trade unions. Only those with more than 5% of consensus (average of membership and votes collected) can participate to the bargaining process. A national collective agreement is in force when signed by organizations ensuring 51% of representativeness or 60% of electoral consensus. This model is replied in the private sector by the 2011 intersectoral agreement and the 2014 consolidated text on representativeness signed by Confindustria and Cgil-Cisl-Uil
Establishment of IRAP (regional tax on productive activities) calculated on added value, regional and municipal quotas of income tax. IRAP replaces the previous local tax on companies and health payrolls, by reducing labour cost.
The government announces the merger of STET with Telecom Italia.
The Treasury sells the third tranche of ENI, the national oil company, through a public placement (L13.2 trillion).
The Treasury sells the totality of its stake in Istituto Bancario San Paolo di Torino through public placement (L0.3 trillion) and 60 % of its stake in Banco di Napoli through competitive bidding (L0.1 trillion), and Banca di Roma.
The Treasury sells 32.9 % of the capital of Telecom Italia through public placement and 6.6 % through private sale to a ‘‘stable core’’ of shareholders, reducing its stake from 44.7 % to 5.2 %. At L22.9 trillion this is the largest privatisation operation mounted in Italy to this date.
The Treasury sells the totality of its stake in SEAT, a publishing company, through competitive bidding (L1.6 trillion)
It favours assets’ reallocation within the group boundaries without any taxation of capital gains by favouring companies' reorganization. This measure makes easier any subsequent outsourcing decision.
Taxation of capital gains: flat rate 12,50 % allowing compensation of gain and losses.
In the telecommunications sector, the government in February 1998 granted national mobile telephony licences to Wind, a joint venture between the electricity company (ENEL), Deutsche Telekom and France Télécom.
In April 1998, parliament approved legislation to liberalise the electricity market, setting the stage for ENEL (electricity company) to be split into three divisions (production, transmission and distribution) in accordance with the EU electricity market directive.
Simplification of the issuing of licences which are to be assigned at the level of the company and no longer according to truck-ownership
Under the new rules, which replace legislation dating from 1971, the categories of shops have been reduced from 14 to 2, the remaining distinction being one between food- and non-food stores. There are no longer restrictions governing the creation of non-food-shops with a surface of less than 250 square metres in towns with more than 10 000 inhabitants.
The fixed segment of the telephone market is deregulated by assigning licences to two new companies with foreign participation, Albacom and Infostrada.
Sunday openings are restricted to 12 Sundays per year, including the December Sundays prior to Christmas. Shops can be opened for 13 hours per day within a time range from 6 a.m. to 10 p.m. (excluding Sundays).
New regulatory authority for air transport begins to work.
Increasing the compulsory schooling to 10 years, applying until the age of 15.
For redundant public servants, flexible working hours, economic assistance or transfer to other offices are now possible, to be bargained with Aran, the public sector bargaining agency.
Senior civil servants can be now dismissed due to failure to achieve goals or manifest incompetence.
Job sharing: a special contract where two or more workers assume the responsibility of a single work obligation.
Wages of temporary work agencies' workers should be equal to those of regular workers in the firm with similar positions.
Firms may use a normal or an "urgent" procedure to hire temporary agency workers. Under the normal procedure, the plant-level trade union representation structure should receive notification before the hiring. In the urgent procedure, it might be done three days after the hiring. Also, once per year the firm must communicate to the employers' association to which it belongs the number of contracts as well as the reasons for hiring them, specifying the time covered and the qualifications of the workers involved.
Temporary employment will be allowed only where skills are required which are not found within the intermediate"category of skilled workers (it is possible to hire young people on work/training contract to fill the latter category of jobs)."
Training activities organized by a firm must be provided also for temporary agency workers.
Duration of a contract under temporary work agency can be extended up to three times for a max. of 24 months.
Rights are granted for temporary work agencies' workers, namely "the right of assembly in the host undertaking, the right to appoint union delegates who have the right to paid leave to perform their role, and the possibility of being elected as members of the executive bodies of the association of temporary workers".
Temporary agency work will be allowed only in three cases: intense periods of production; implementation of a project that lasts only for a fixed period of time and that needs new personnel; special tasks that require the use of particular workers with competences different from the current company workforce.
Temporary agency workers must not exceed an average of 8% of the company's workforce with permanent position in any quarter. In small companies the figure is fixed at 5 temporary agency workers and always below the number of permanent workers.
Flexible forms of employment are introduced in the public sector (training contracts, temporary work).
Regulatory framework for trainees and internships: they are increasingly used for entry into the labour market
A joint bilateral body is established to bargain for temporary working agencies' workers, particularly in the issues of vocational training, income support programs, mutual management of time off union representatives.
Pay determination for temporary agency workers is done at firm-level bargaining.
Senior civil servants are appointed on a fixed term basis of five years (renewable).
Public servants can now be moved to other organizations within the same geographical area.
Supervisory authorities, goals and target of inspective activity, information requests, requisites of managers, introduction of new financial operators; new regime of takeover: takeover regulation less restrictive with less Consob discretion.
Explicitly stated LEA (minimum assistance levels), the citizens' freedom of choice in health care, integration of health and social services, doctors' exclusivity relationships with public health by allowing them to practise private specialists visits according standard rates
New criteria to access the health care system. There is a new 'economic situation indicator' that determines, based upon a financial declaration from the citizen, whether each person is entitled to receive health care. Citizens will be divided into three categories following their 'economic situation indicator'. The first category will be exempted from co-payment in health care services; the second category will have to pay partially; the third category will have to pay fully. There will be maximum limits for payment. Also, age of family members and the presence of a disabled person in the household is taken into consideration.
Limiting overtime in industry: here weekly working time in a company exceeds 45 hours the firm should inform the Ministry of Labour within 24h.
Overtime in industry can only be used for particular technical or production needs; for cases of major force; for trade fairs or shows linked to the firm's activity; when agreed in collective bargaining.
Upper limits for overtime in industrial firms are set: 80h per quarter and 250h per year.
Airports can opt for the system of company-based management.
The postal company (Ente Poste) is transformed into a joint-stock corporation controlled by the Treasury.
The Treasury sells the fourth tranche of ENI through a public placement (L 12 trillion, or 0,6 % of GDP).
Partial privatisation (50%) of Rome airport.
Integration of Alitalia and KLM and selling of 25% of publicly-owned Alitalia.
Existing tax rates have been reduced to two (12.5 % and 27 %), while the tax base has been broadened by making capital gains and incomes from derivatives trading taxable. Capital gains are taxable on an accrual basis.
A two tier system has been introduced whereby income gains attributable to increases in own capital are subject to a lower tax rate of 19 %, while the ordinary 37 % corporate tax rate (Imposte sui redditi delle persone giuridiche, IRPEG) continues to apply to residual profits. Under the new rules, a floor is set for the average tax rate (27 %).
The structure of the tax credits for employees and the self employed has been revised to lower the tax burden for medium- and low income earners.
As part of the ongoing process of fiscal decentralisation, a special provision allows the regions to introduce a regional surtax (half a percentage point of the total IRPEF tax base until the year 2000). After the initial phase, the regional surtax will vary between 0.5 and 1.0 %. Tax credits for large families are also provided for by the new IRPEF.
The number of income brackets has been reduced from 7 to 5, the minimum tax rate raising from 10 to 19 %, while the top rate has been lowered from 51 to 46 %.
Job offers to disabled workers must take into consideration both workers' skills and employers' necessities.
Freedom for all EU members to transport Italian goods in Italy's territorial waters.
A list specifying services reserved to the publicly-owned Poste Italiane for the following 15 years, including several areas that were considered as liberalised before.
Introduces competition in gas distribution
A greater number of operators is allowed in the electricity sector, wider access to the network and reduced controls. More specifically, from 2003 no operator will be allowed to retain (directly or indirectly) more than 50 % of the electricity produced or imported. The liberalisation takes the form of concessions (until 2030) from the Ministry of Industry. A provision allows for the identification of an initial number of big clients (clienti idonei, of which there were nearly 700 by February 2000) eligible to choose their electricity suppliers. The eligibility threshold will fall gradually from 2000 to 2002 and companies in the same municipality or in nearby municipalities can be eligible by forming a consortium of buyers. A single purchase system will be established for non-eligible consumers: the “single buyer” will make both purchase contracts with the generators and sales contracts with the distributors for resale to the franchise market.
Competition in generation, import-export. Market of electricity.
Authorization of units by non-national universities and higher education institutes.
Compulsory evaluation of university activities; incentives for professors; progress in the implementation of university autonomy.
School autonomy in didactic supply according a plan (within ministerial stds.), administrative and organizational: the school director is granted of managerial competences about organization, HR and budget management
Use of low-skilled temporary work in agriculture is now permitted.
Employers and trade unions agree on extending temporary work agencies' fields to agriculture and building sectors, leaving to decentralized bargaining the definition of specific tasks and activities allowed in each branch.
Setup of a fund for temporary agency workers' training, formed by the sectorial social partners and being responsible of managing and monitoring of training.
Use of low-skilled temporary work in construction is now permitted.
Definition of minimum standards of services, multi-level planning (national, regional, local-level), concertation of local (public) health companies with local governments, private right accounting criteria, accreditation rules for both private and public health providers, financing according to standard costs (DRG system), regulations for accreditation of health establishment (public or private); incentives of continuous vocational training with a credit system and a national committee
Introduction of complementary pension for public employees
Tax incentives for investing in pension funds: lower taxes for insurance firms (11% instead of 12.5%) and higher tax deduction (from 6% to 12%) for contributions paid to funds. This latter benefit is subject to collective agreement, de facto favouring funds set by unions.
Sale of the entirety of the state’s shareholding in Mediocredito Centrale to Banca di Roma through private placement. The 1999 timetable also included Banco di Sicilia and Credito industriale sardo, as well as the 16 % of Banco di Napoli remaining in state hands.
Sale in October of the first tranche of ENEL (electricity, 30 % was sold). Receipts totalled L 32 trillion, or around 1.5 % of GDP.
The production and distribution of electrical energy will be liberalised through the sale of a significant proportion of the power stations owned by Enel
Some specifically targeted groups should report themselves as unemployed to the centres and the centre is committed to organize an interview in six months proposing a scheme for work entry, training or reskilling.
Not reporting to the PES or not attending to the interviews will lead to the loss of the unemployed status. This will also happen if a job offer within the skill profile of the person and for more than 4 months is rejected (if it is within a radius of 50km). This includes also the loss of benefits.
Lump sum for companies hiring under open-ended contracts, with additional money if the worker is from specific regions with higher UR than the national average.
Restructuration of PES lead to, apart from decentralization, basing the match between demand and supply based on databases made with firms' needs and jobseekers' profiles instead of pre-configured categories.
Bipartite intersectoral funds for financing training is now allowed, addressed to cover programs in risk areas at a 100% rate and at a 50% rate in the rest.
Joining a bipartite intersectoral fund grants a reimbursement of 0.3% of social security contributions to the firm.
The fixed segment of the telecommunication market is fully opened to competition.
Regulation of the status of non-public schools: private schools are granted a public role if they meet certain provisos.
Public sector and trade unions agree on introducing temporary agency workers on the public administration, "only to meet periodical, non-continuous or exceptional personnel shortages". The rest of conditions are equivalent to those for workers from temporary work agencies in the private sector, except for the limit of this kind of workers as a percentage of the total workforce of the organization: 7% instead of 8%.
More flexibility in working time for part-time workers: more flexible distribution of working hours along the year and leaving a ban on overtime. More specifically, part-time work might be now 'horizontal' (hours reduced day by day) or 'vertical' (full-time works during certain periods of the week, month or year).
Part-time workers have preference if applying for full-time jobs involving the same tasks they perform in their firm. Same is valid for full-time workers who apply for part-time jobs.
Repealing the possibility of allowing collective bargaining to set limits on the proportion of part-time to full-time workers, but the right to be informed about the number, type and level of part-time work is hold by the unions.
Collective bargaining can permit the combination of vertical and horizontal part-time work.
Introduction of paid training leaves for CVT/adult education: training leaves regulated at regional level by bipartite agreements: usually workers contribute by using overtime posed in time accounts up to 50% of the leave. In practice if workers have to take unpaid leave or vacation
Parental leave: could be taken until the child is aged 8 and paid (30% replacement rate) until aged 3, additional month when partners take them for at least 3 months, opportunity to take them on daily basis.
Employees with a seniority of 5 years or more in the same job may ask for a non-paid training leave of 11 months during their working life.
Regulation of strike rights for self employed (e.g. Lawyers, physicians); introduces sanctions on non-complying organizations: reinforcement of sanctioning powers by the national guarantee committee.
Extra hours are paid at the same rate of ordinary hours up to a limit set by bargaining, with a statutory limit of 10% per week. Before this limit (or the one set by bargaining) there are no extra payments. From that limit an extra 50% should be paid.
Employer has to include into the labour contract the working time schedules and to communicate any change to both the worker and the employment service in advance
NEB replacement rate for unemployed over 50 is raised from 30% to 40% of the reference wage.
NEB duration from 6 to 9 months if the unemployed is over 50.
Reduction in social security contributions for firms: -0.8%.
If a worker entitled with a seniority pension delays his retirement by 2 years or more, he might decide not to pay social security contributions.
Taxation regime of parasubordinates (economic dependent self-employed) as employees: economic dependent self-employed pay payrolls like employees, with a lower rate.
Above 40 years of contributions it is possible now to sum up pension income and dependent employment/self-employment income. Below 40 years of contribution a reduction of 30% in pension is applied.
Aggregating contribution periods for pensioners, allowing workers who have passed through different pension schemes without accomplishing the minimum year limit (20) to be entitled with a retirement pension to aggregate all of them. These periods should be of at least 6 years each.
The legal separation between railway services and infrastructure becomes operational.
With Law 354, the government extends the exemption base for the personal income tax and reduces the tax rate for the second bracket of the personal income tax rate from 26.5 to 25.5 % (fiscal “bonus”).
Tax credits for low income earners (below L 15M) are entitled for a further tax credit of L 150000.
Taxation for pension funds: regime favouring subscription to second- and third-pillar pension funds
Black market workers who regularize their situation are exempted from social security contributions during years 2001-2003.
Firms with less than 20 employees hiring temporary workers are exempted from a 50% of social security contribution.
Employers who hire workers in poor regions are exempted from social security contributions
Local authorities are forced to separate between network owners and service providers in network industries.
Forces local governments to outsource both public utilities and social services, to auction them, by limiting the increase in their budget
Easing the access to parental leave, that may be substituted with temporary workers.
Setting waiting times LEA (minimum levels of assistance) for hospital services and outpatient visits by setting 3 levels of priority
Employers' contribution for maternity is reduced by 0.2%.
Final and complete privatisation of the Rome airport.
Elimination of inheritance and gift taxes.
The top marginal rate was reduced from 37 to 36 %.
Launch of inter-professional training funds: employers can opt to destinate 0,30% for CVT (see Law 845/1978) to bipartite training funds established by social partners at national level.
Changes of Decree 181/2000: tightening of requisites: unemployed lose their status if they refuse a proposal from employment services
Exempting employees from paying social security contributions in case they regularise their previous situation by paying tax and social security debts at a rate of €103.29 for each past year that they intend to regularise. Workers will be able to regularise no more than five years of past irregular work. The 'reconstruction' of the workers' past social security position will be gradual and proportional to the work performed after emergence - workers will be able to recover a contribution period of 20 months for each 12 months worked after emergence.
Informal workers regularizing their situation will pay a reduced contribution (6%, 8% and 10% respectively for the first three years).
Establishment of a minimum wage for regularised worker.
Employers regularizing informal work will benefit from tax incentives during the first three years.
Private and public employment services are placed on equal level giving also the opportunity to provide job placement to university organizations, local authorities, upper secondary schools, employers' associations and trade unions.
liberalisation of establishment of inter-professional training funds (art. 48)
Partial divestiture of ENEL generation plants as well as service granted for foreign importers.
Tax credits and vouchers for families choosing private schools.
Patents for university researchers are allowed
Increase in patients' contribution to examination, diagnostic and thermal cures, as well as the rate charged for pharmaceuticals.
Availability allowance is increased from 48 to 84 months for workers dismissed for reasons of workforce reductions if the company is eligible for special intervention from the Wages Guarantee Fund. And 48 months more if the workers come from the textile sector in high unemployment regions. Measure has a top of 630 workers in general and 120 for the textile sector.
Availability allowance is reduced by 20% during the new extension period
Pension for citizens living abroad increases if the person lives with less of 6,714 EUR per year (or equivalent in living cost for the country).
Workers (employed and self-employed) aged over 58 who have been paying social security contributions for more than 37 years will be entitled to cumulating pension with income from work without any reduction to pension amount
Extension of the first 3 income tax brackets and increase in the first 2 lowest tax rates. The new income brackets and tax rates are: up to 15,000 € 23%; from 15,000 to 29,000 € 29%; from 29,000 to 32,600 €31%; from 32,600 to 70,000 € 39%; over 70,000 45%
NEB transfers are now conditional on accepting available job offers.
Regulation of private employment services and terms of private-public partnership; apprenticeship and trainee: authorization and accreditation for labour market private operators with general restriction, including creaming, by including schools, universities and social partners; anti-discrimination clauses; tripartition of apprenticeship in fulfilment of school duty, upskilling by means of training on the job and technical learning, high training including the attainment of a post-secondary diploma: regulation delegated to regions. Establishment of a insertion (aged 15-29 and disabled) and reinsertion (aged over 50 and long-term unemployed) contract lasting 18 months. Establishment of summer trainees for students.
Guidelines for labour market reorganization, trainees and internships, apprenticeship: principles for labour market: accreditation of private employment services by reducing constraints on their operations and scope; setting a national "jobs stock exchange"
Temporary Work Agencies are used for reinserting NEB recipients into the market. They are also allowed to provide training.
Freedom to choose electricity providers for consumers above 100,000 KWh.
Opening the electricity trading system to all wholesale purchaser.
Freedom to choose electricity providers extended to small business below a consume of 100,000 KWh.
Open access of both international and domestic companies to the network for freight and passenger international transport.
Elimination of price control in road freight transport.
Local governments can manage in-house local public utilities; outsourcing in health services
The power of granting telecom licenses is moved from the independent Communication Authority to the Ministry of Communication, who has claimed the right for market control and company monitoring.
Increase of compulsory schooling from 10 to 12 years.
The obligation for firms to re-hire a worker in case of wrongful dismissal for a justified reason: changing it for a financial compensation to firms with more than 15 workers, and it is being implemented first on an experimental basis for a period of three years.
Fostering outsourcing and leasing for companies. Firms may 'lease' workers from employment agencies; a staff leasing agency should meet equal requirements to a temporary work agency.
Job on call: the worker is available to be used by the employer during a pre-agreed period for a limited number of days.
New contract: supplementary work, of occasional nature, done by people at risk of social exclusion or newcomers to the labour market, as well as people about to retire.
New contractual form for freelance work continued with a specific employer, in order to link more specifically the job relation with a specific contracts. The final goal is to avoid 'fake' open-ended contracts to be established through this type of relation.
Removal of limitations to the use of temporary agency workers set by Law 196/1997: removal of limitations in non-skilled positions and extent over time; part-time: wider discretion on working times, alert time, request of overtime, removed the opportunity of consolidation of "structural overtime" as normal working time; regulation of job-on-call with and without benefit for waiting time; regulation of job sharing and project-related self-employed workers without a clear definition of what is project; compensation of casual
New contract: work entry contract for youngsters below 32 and long-term unemployed people above 45, as well as for women resident in areas with high female unemployment rate. Goes from 9 to 18 months.
New training contract: apprenticeship, for youngsters between 18 and 29 in order to serve the following purposes: fulfil the educational period of the person; gaining a qualification including a diploma. It has a maximum length of 3 years. Exemption of social security contributions.
Introduction of a certification to bipartite bodies of labour contract not codified by labour Law.
More flexibility in part time job by introducing elastic clauses allowing employers to increase working time and modify schedules under a framework of previous collective agreement.
End-of-service allowance must go to a supplementary pension fund unless the worker has particular exigencies.
Establishment of 16% ceiling to state contribution on drugs. Establishment of a Drug Agency promoting research and monitoring cost, by setting the list of drugs eligible to state contribution on the basis of their cost and effectiveness. The Agency negotiates with producers the price of drugs eligible to state contribution. Establishment of an individual health card in order to monitor expenses in medicines, including those non eligible but granting tax deductibility.
The definition of a night worker is a worker who works at least three hours in the period between midnight and 05.00. A night worker may not work for more than eight hours in a 24-hour period.
Unifying the regulations on working time regarding weekly working time, overtime, breaks, daily rest, weekly rest, annual leave, night work. Applied (and this is new) to public sector, not only private workers.
A worker is entitled to 11 hours of consecutive rest in every 24-hour period. Exceptions are made for split work schedules - the shifts typically worked, for example, by cleaners and supermarket personnel. If daily working time exceeds six hours, a rest break must be provided in a form to be determined by collective bargaining. In every seven-day period, a worker must have a minimum uninterrupted rest period of 24 hours. Exceptions are made for shift work, split work schedules, and railway workers. Finally, all workers are entitled to annual paid leave of at least four weeks.
The maximum level of working time cannot exceed 48 hours per week. Over a year, however, workers may work up to 250 hours of overtime. If the weekly limit of 48 hours is exceeded, companies with more than 10 employees must inform the provincial labour office. The obligation does not apply to companies with fewer employees.
Increasing NEB replacement rates from 40% to 60% on the first six months after dismissal and to 40% first and 30% later in the following two quarters (it was 0).
Maximum duration of ordinary NEB is raised from 6 months to 1 year.
Derogation wage integration fund; now it is reserved to micro firms in a selected sector of each Northern Italy region according to its specialization. The derogation WIF is paid through craft sectors bipartite bodies
Self employed occasional workers are obliged to pay social security contributions if they exceed EUR 5.000 per year in income.
Social security contributions paid by the employer for workers newly recruited on open-ended contracts by up to 5 percentage points.
Extending the possibility for combining pension and labour income.
Workers who intend to take up the incentives for remaining in work after becoming entitled to a pension will not be subject to the usual practice of dismissal at retirement age, followed by rehiring on a new contract. The employment relationship will instead continue automatically.
A worker may continue working after 65 (official retirement age).
The financial institution Cassa Depositi e Prestiti (CDP) is transformed into a joint-stock company separated from government, of which 30% was purchased by bank foundations while the rest remained under direct public control.
Transformation of ANAS, the public company owing highway infrastructures, into a joint stock company.
Partial privatisation of the financial institution Mediocredito Friuli Venezia Giulia (34%).
Changes to the first three income tax brackets, raising tax rates for the first two (the lowest to 23%) and reducing it slightly for the third. A deduction was introduced that results in a minimum income below which no tax is payable (“no tax area”), and decreases linearly up to an upper income limit (€ 30 500 to € 33 500) close to the average wage.
No energy company will be allowed to hold more than 20% of the gas network company from July 2007.
Unification of the electricity holdings Terna and GRTN. Companies will not be allowed to hold more than 20% of the new group after July 2007.
All households are free to choose electricity providers.
Defining rules for telework on the ground of general rules for general working conditions (voluntariness, equality of treatment, privacy, health and safety, organisation, training, etc.) as well as granting the right for collective bargaining.
Bonus for workers deciding to continue working even when they acquire their pension rights before the reform in 2008. This is a tax-free increase in the gross salary equal to social security contributions (32.7% on average). More specifically, "half of the contributions saved go to the worker, who may decide to pay them wholly or partly into a supplementary pension scheme, while the other half is used to reduce the employer's labour costs - although this is possible only if the worker undertakes to remain in work for at least another two years."
Tightening eligibility for early retirement: "1) as of 2008, the possibility to receive a pension at an age lower than 65 for males and 60 for females ("seniority pension") is allowed to those with 40 or more years of contributions, or to those with no less than 35 years of contributions and of 60 years of age, in the case of the employees, and 61 for the self-employed; 2) the age limit is to rise by one year from 2010 and by an additional year from 2014, thus reaching 62 and 63 years of age for the employees and the self-employed, respectively; 3) a further postponement of pension payments is envisaged with respect to the moment in which the requirements are met, by way of the so-called ‘finestre’; 4) the same postponement is also applied to workers under the contribution-based system; 5) for the period 2008-2015, the possibility to receive a seniority pension having satisfied the requirements laid down in the previous legislation (at least 35 years of contributions and a minimum age of 57 for the employees and 58 for the self-employed) is provided only for women who choose a pension treatment calculated according to the contribution-based method."
A fortification of a private pension pillar by moving a 6.91% of workers' wages to company severance payment schemes. These will automatically go to private pension funds unless the worker objects explicitly.
Selling of ENEL directly-held assets, 19%.
The top marginal rate was reduced from 36 to 33%, while the former special 19% rate on new investments funded by equity issue was eliminated
Introduction of Borsa Elettrica, Italian electricity trading system with a limited number of electricity companies to supply to a single purchaser for delivering electricity to lower-demand consumer.
Separation of managing and supervision of highways, trespassing roads from ANAS to other public organizations.
Raise of age limits for compulsory education and training from 14 to 18 years, with the possibility for those between 15 and 18 to alternate school and working periods.
Two-steps professors recruiting process (national habilitation and university call, with a premium in case of contest); score-system for universities recruiting opportunities. Researchers could be recruited also on a fixed-term basis.
Introduction of maternity, sickness and occupational accident coverage for people working under project contracts" and definition of fixed deadlines for the payment of the annual remuneration as well as basic training and trade union rights."
Increased consumers' protection, more power to the sectoral authority, simplification: authority regulatory role more based on soft regulations and open consultations.
Banca d’Italia changes its legal status, with increasing role of the government, and by moving anti-trust competences to Anti-trust Authority: significant power reduction of Banca d'Italia.
Women employed with insertion contracts in areas where they employment rate is 20% below that of men (or they unemployment rate is 10% of that of men) must receive a salary equal or above what has been established by collective agreement.
Pay increases are linked to productivity and mobility for public sector workers. More specifically, at least a 0.5% of the increase has to be allocated to productivity.
The previous system of 5 statutory tax rates – 23, 29, 31, 39 and 45% applying to income thresholds of € 15 000, € 29 000, € 32 500, and € 70 000, respectively – will be replaced by three basic statutory tax rates 23, 33, and 39% at income thresholds of € 26 000, € 33 500, and € 100 000. Additionally, there is a “solidarity contribution” of 4% for incomes above € 100 000, bringing the effective tax rate at these levels up to 43%.The “no-tax area” defined by the first phase of the reform in 2003 remains intact but will now be phased out at a lower income threshold (€ 26 000 for all income types). Horizontal equity criteria will be introduced into a system of deductions, taking into account family situation and special factors such as disability and purchase of first home, while declining slowly with income. A safeguard clause will give individuals the right to file their taxes under the old rules, if that is to their advantage.
Social contribution discounts for every new hired employee on an open-ended form: deduction of EUR 5.000 per worker and year (10.000 in Southern Italy), 50% of total taxable amount in the first half of 2007 and 100% in the second half.
For companies below 10 workers and apprentices the social security contribution is lowered to 10%.
Conversion of dependent self-employed to standard contract has extra support for paying social security contributions.
Pilot program to workers above 50, aimed to re-employ 3000 of them through agreements between the Ministry of Labour, employers' organisation and trade unions, supporting dismissed workers for three years (four in Southern Italy). They will be provided with long-term NEB for older workers in the industrial sector as well as close tutorship from PES. This will be conditional to job acceptance.
Taxi licenses are partially liberalised, allowing cities to expand their numbers.
Private bus services are allowed to compete with public service in cities.
Companies bundling several professional services are allowed.
Quantitative restrictions on the production of bread are eliminated.
“Outstanding sales” (promotional sales, destocking and rebates) are fully liberalised.
Minimum tariffs for all professional services are abolished, and advertisement, only for informative purposes, is allowed.
Local public services are to be assigned through competitive tendering.
The scope of antitrust power is enlarged, its independence and capacity of reaction strengthened, financial and administrative penalties enhanced.
The Decree Law of June 2006 enhances the Antitrust’s capacity of reaction and power of sanctions.
Restrictions related to market shares (both predefined and calculated on regional sales volumes) are removed, but the authorisation system for opening up stores (including large outlets) remains for food products.
The range of products sold in retail outlets is no longer restricted.
Pharmaceuticals delivered without prescription can now be sold in supermarkets (this concerns 10% of the drugs sold in Italy), but pharmacists’ counsel is still required.
Requiring notaries to certify transactions on used cars is no longer obligatory.
Restrictions imposing minimum distances between similar stores are lifted.
From 1 January 2007 onwards, workers will have six months to decide whether to keep their end-of-service allowance in the company or to transfer it to a supplementary pension fund. If a worker does not express a preference, the allowance will be diverted to the pension fund set up by the collective or company agreement. After 1 July 2007, the employer must transfer the accrued allowance to the scheme selected by the worker from the date of his/her subscription to the fund. There will be a tax compensation for transferring the end-of-service allowance to funds. The agreement defines the compensation to be paid both to companies with more than 50 employees, which will be subject to the compulsory transfer of the end-of-service allowance, and to companies which will have to make the transfer to pension funds either because of deliberate decision or the tacit consent of their employees. The compensation will essentially derive from subtracting from the company’s taxable income the proportion of allowance allocated to supplementary pension schemes, and also the proportion allocated to the INPS fund; it will also derive from a 0.19% reduction in the employer contributions paid to finance unemployment, as well as sickness and maternity allowances. If workers decide to keep their Tfr in the company, an employer with fewer than 50 employees may continue to manage the Tfr as before. If the company is larger, the annual flow of Tfr is transferred to the National Social Security Institute.
Banks will be obliged to provide clients with the option of closing their accounts (and moving to another bank) at no cost in the case of changes in contractual conditions.
Insurance brokers are no longer required to market a single exclusive insurance company contract.
Fixing a maximum level of social security contributions of 16% for all dependent employers except for dependent self-employed who have not other forms of coverage (23%).
Lowering the threshold for the top rate from EUR 100000 to EUR 70000.
Law 125/2007 enacting the Directives 2003/54/CE and 2003/55/CE on internal market of energy and gas. The Law provides for the full opening of the electricity demand.
In the natural gas market, the liberalisation Decree of January 2007 and subsequent legislation seek to introduce a degree of competition: ENI should be forced to reduce its share to 20% in Snam Rete, the company which owns the gas network, and a gas exchange marketplace should rapidly be put in place.
Barber shops are allowed to open on Mondays.
Gas stations' opening hours are liberalised; and minimum distance between stations and ban on sales of non-oil products removed.
Telecom operator fees for recharging prepaid cellular telephones are abolished.
Small firms are allowed to buy natural gas on line instead of importing it from abroad which requires a strong contractual power.
Restrictions on minimum distances between cinemas are removed.
Ceiling to fixed-term renewals to 36 months
Repeal of the contract for providing labour on indeterminate time frame.
After three years of existence every fixed-term contracts should be stipulated at the provincial employment office with the assistance of trade unions. Otherwise the contract becomes automatically open-ended.
Modification of regulation of discontinuous work in tourism and theatre sectors in order to fight against informal work.
Increased protection of minority shareholders, reduced regulatory uncertainty favouring actions, fairness of treatment irrespective of nationality, reduction of compliance costs for bidders.
Abusive clauses related to bank account fees are forbidden
Penalties on early extinction of home mortgages have been abolished; transferring a mortgage between banks should be made easier.
Implementation of MIFID directive: inclusion of financial consulting, obligation to customer profiling, all financial intermediaries operating as ltd, supervision and control shared by Consob and Banca d'Italia, transparency obligations; increased opportunities for leverage.
Public servants in Ministries see their pay linked to productivity through collective evaluations where citizens grade the work of public officials. Also, an individual review related to pre-established targets is included. Productivity will be paid in percentages of the achieved targets. Employees are entitled to protest for their evaluation assisted by their trade union.
NEB replacement rate is raised to 60% for the first six months and 50% for the following two months, being 40% for the next four months. For the reduced requirement workers who have paid contributions for 78 days at least over the last year) the benefits are increased from 30% to 2% for the first 120 days and 40% up to the maximum of 180 days.
In the agricultural sector a single amount for the replacement rate is set now at 40% of the last wage.
NEB are increased to 8 months for workers below 50 and to 12 for those over 50.
Setting up a fund to grant low interest loans to young workers having periods of low income level of unemployment, up to EUR600 per month to be paid back after 2 or 3 years.
Social security contributions of dependent employees increase from 16% to 18%.
25% of social security contributions are avoided by companies who negotiate with their employees productivity-related wage scales. Equal tax relief is offered to employees.
Young unemployed people (or those employed with atypical contracts) are allowed to pay voluntary social security contributions when they are out of the labour market.
The social security contributions of dependent self-employed with no additional coverage is increased gradually from 23% to 26% in 1pp per year.
Four exit windows per year are established for those workers who have contributed for 40 years or more.
Minimum years of contribution for retiring are increased from 35 to 36 years. For certain professions carrying a particularly high level of stress, the years are kept at 35.
Early retirement age is gradually increased from 57 to 61 years between 2008 and 2011 (62 for self employed). A lower level is set for certain professions carrying particularly high stress levels: up to 3 years less, with a floor on 57.
A favourable fiscal treatment of overtime and performance-related pay was adopted on an experimental basis for 6 months (July to Dec. 2008), entailing lower revenues for about 650 mln in 2008.
Extends the experimental scheme for tax relief on productivity bonuses introduced by the ‘Agreement on work', increasing the range of beneficiaries: employees in the private sector earning annual incomes of less than €35,000, rather than the €30,000 allowed for in 2008, will now be eligible for the tax relief. Moreover, the amount of the bonus to which tax relief applies will also be increased, from €3,000 to €6,000.
Encourages privatisation of those services managed by local governments by easing from the respect of budget constraint.
Renewed possibility for companies to use on-call work.
The total sum of employment periods, even if not continuous, of a worker who is hired in the metalworking sector by the same company and for the same job under a temporary agency or fixed-term contract cannot exceed 44 months.
Apprenticeship contracts: duration limits are removed.
Apprenticeship contracts: definition of what is the training content of a "qualifying" apprenticeship is left to collective bargaining.
Increase in the maximum duration of fixed-term employment: making it is possible to exceed the time limit of 36 months for stabilising employment relationships.
Assigning to collective bargaining the task of determining the terms of renewal of fixed-term employment contracts beyond the 36-month time limit.
Working times bargaining decentralized to regional level. It was not signed by CGIL.
Companies with more than 201 employees are allowed to use 5 instead of 4 Saturdays a year for overtime per worker (over the collectively agreed 39.2 hours in the industry), while companies with fewer employees can request their staff to work overtime on 6 instead of 5 Saturdays.
Derogation wage integration fund and mobility benefits are provided to all situations not covered by "normal" WIF/MB: its coverage varies according to regional agreement. It is funded by ESF provided that those benefitting participate to ALMPs and training activities for at least 1/3 of the duration of the program. Bipartite bodies in small and micro firms sectors co-finance these benefits for the first 90 working days per year. the employer communicate the selected employees, assisted by local trade unions.
The definition of social shock absorbers is extended to workers in economic activities not covered by the standard shock absorbers, such as retail trade and tourism, as well as to project workers, temporary agency workers and apprentices. Project workers, in particular, will be eligible for a one-off payment or ‘una tantum’ equal to 10% of their pay in the previous year if they have worked on a single-contract basis in ‘crisis’ sectors or regions for at least three months without contributions being paid for at least two months.
Improving and clarifying the procedures for the application of sanctions in case of refusal of a suitable job offer or training proposal by the PES. The access to unemployment benefits is now made conditional upon declaring immediate readiness to work or participate in a training offer.
Reductions in social charges due by the employer and, in some cases, the payment to the employer of a part of the unemployment allowance "saved" thanks to the hiring. Such new incentives concern particular categories of unemployed people (such as unemployed people over 50 years of age or the unemployed who have already paid at least 35 years of pension contributions and will be entitled to a special pension but haven't yet reached pensionable age).
Creation of a full voucher scheme for occasional job opportunities. Voucher incorporates social security contributions for the employer.
Integration of wage integration funds/solidarity contracts to full wage paid by the employer in case of on-the-job training. The agreement must be signed at the Ministry of labour: this restricts in practice the access to large firms
Program of Support to Entrepreneurship and the Creation of self employment (PAECPE) including the creation of self employment by recipients of unemployment benefits.
Makes compulsory the following rule: subcontracting 10% of local public transports by means of bids-
Open-ended contracts for workforce supplying can now be signed with reference to following activities: IT services and consultancy; cleaning and custody services; carriage services; marketing and business consultancy; human resources consultancy and recruitment; and other cases expressly provided by collective agreements.
Lowering of state contribution to medicine expenditure from 16% to 14%
Reduction of wage increase with inflation by removing imported inflation, and lower taxation on company-level wage increases. Subsequent budget Laws granted lower taxation to any company-level wage increase, including overtime, individual wage increase. Opting out clauses are allowed according to national labour contracts provisions. It was not signed by CGIL.
Increase of retirement age for women in the public sector.
Set of incentives to hire unemployed workers aged above 50 by granting a reduction of social contributions to employers
Different incentives envisaged in case of hiring through job centres, which results in open-ended contract or fixed-term contract longer than 2 years.
Unemployed people who have paid social contributions for at least 35 years and who accept a job offer with a wage level 20% lower that the previous one receive incentives for workers benefiting from income support schemes not linked to layoffs, in order to integrate the remaining social contributions until their retirement age, which must be reached by December 2010
Intermediation of labour may be performed by the following bodies: directly, by public and private universities, employers association and trade unions, bilateral bodies; under authorisation, by chambers of commerce, high-schools, local administrations.
The enforcement tools of the Antitrust Authority have been strengthened and now include a leniency program, and the power to order interim relief and to accept commitments concerning future conduct.
Harmonisation of public sector computation of end-of-service allowance on the same level of private sector.
Stricter requirements for the authorisation of temporary-work agencies. Authorisation for temporary-work agency is conditional on work agencies' contribution to a professional fund in favour of agency workers, for training and income support for agency workers. This fund is aimed to finance training and income support benefits for agency workers.
Conciliation for the settling of labour disputes, which used to be mandatory before taking the case to court, is now optional and only required in case of disputes arising on certified contracts. Voluntary conciliation is always possible on request of one of the parties of the contract to the provincial labour office, to the certification commission or to an ad-hoc conciliation and arbitration body established by the parties. Conciliation is immediately executing. During conciliation, the parties may also devolve the dispute to arbitration by the same body. The result of certification can be challenged before court only in case of wrong qualification of the contract, forced consensus and differences between the certified contract and the effective functioning of the underlying labour relationship. In any case, if a dispute arises on the certified contract, before going to court, conciliation has to be tried in front of the relevant certification commission.
Implementation of incentives for craft firms to join bipartite bodies. Firms joining bipartite bodies will be paid 125€/year per employee, those not joining will pay 25€ monthly as additional wage + the right to bipartite bodies services paid by the employer. Bipartite bodies in craft sector provide extensive welfare provisos and play a definite role in managing "derogating wage integration fund" established by Law 2/2009 and then unemployment benefits, according to new regulation introduced by Law 92/2012.
Increase of eligibility threshold for invalidity pension: eligibility threshold increases to 85%
Recentralization of regulation of apprenticeship; recalibration of tripartition introduced by Decree 276/2003; apprenticeship as main entry way into permanent position: opportunity of attaining a degree or PhD by means of high training or research apprenticeship; setting of skills standards of competences certification
Control of related parties in banking loans and cross-participations.
State financing of regions for public health services based on standard costs
Tightening of procedures for reducing health budget deficit at regional level
Opting out of both national collective contracts and Law.
Extending the freedom of opening hours to all shops, not only those located in tourist resorts or touristic cities.
To raise the incentives of local authorities to award services through public tender, exclusive contracts for local public service provision in municipalities with more than 10 000 inhabitants have been subjected to a mandatory opinion by the AGCM regarding the existence of suitable and sufficient reasons for assigning such exclusive rights.
The powers of the AGCM have been significantly extended. It can now appeal through the regional administrative court (TAR) against the actions of any public administration at the national, regional or local level violating the principles of competition.
New independent regulatory authority, to be responsible for highways, airports, ports, taxis and railways both at the national and local level
Reduced restrictions on minimum distances between commercial outlets.
The reform allows the labour judges to graduate the sanction in case of unfair dismissal depending on the severity of the case rather than, as previously, requiring reinstatement.
Employers will face stricter limits on the use of “atypical” contracts. Tests to re-classify persons as employees who claim to be independent contractors, but who work almost exclusively for one company, have been introduced.
1.4 percentage point surcharge on employers’ social contributions on fixed term contracts
The cooling-off period between two fixed-term contracts has been extended.
The justification for the first fixed-term contract is suppressed, provided that its duration is no longer than one year.
The procedures for dispute resolution have been streamlined through the introduction of mandatory conciliation and simplified court procedures for dismissal cases
Introduction of a homogeneous and universal unemployment benefit system, merging previously separated schemes.
Enlarging eligibility and coverage of non-contributory scheme, including apprentices and workers with short work experience. Where workers have less than two years’ contributions, but have worked more than 15 weeks in the previous year, benefit is available under the same conditions, but its duration is linked to the number of weeks worked over the past year; this provision is particularly relevant for people previously ineligible for any unemployment insurance, such as new entrants and those with discontinuous careers
As from 2012, all workers are able to retire earlier, regardless of their age, if they have accrued at least 42 years and 1 month of contributions (for men) or at least 41 years and 1 month (for women)
Retirement age for females increased from 60 to 62, 63.5 for self-employed, and further increases are foreseen in subsequent years to align their age requirement with that for all workers by the beginning of 2018 at 66 years and 7 months
National subsidies for the expenses for facilities of compulsory education schools for students-rapid-increased areas.
Removal of co-payments for health-care services for persons over the age of 70 (partial amendment of the Welfare Law for the Aged enacted in 1963).
Regular increases of benefits and premiums; level of pensions increased to the levels prevailing in other OECD countries.
Change of computation formula for benefits, i.e. from calculating the fixed amount of payments, to targeting the 60% replacement rate for an average income worker.
Introduction of cost of living indexation and wage indexation.
Anti-Monopoly act against abuse of dominant position.
Maintenance and improvement of school education standards by raising the wages of teachers of compulsory education schools.
The authority for the statutory auditors for the company having share capital of JPY 100 million or less shall be limited to accounting matters (and not to business matters).
Authorises statutory auditors to check the business conducted by directors, in addition to the then-existing authority to check accounting matters. The related provisions were also added in the commercial code.
The statutory auditors are elected at the shareholders' meeting. The quorum of the shareholders' meeting is generally set by the articles of incorporation. The amendment prohibits to set the quorum for selecting statutory auditors below one third of the number of shares outstanding.
Extends the term of office of the statutory auditors from one year to two years; except that the term of office for the statutory auditors at the establishment of the company is one year.
Companies having a share capital of JPY 500 million or more need to have an audit on their financial statements and supplementary schedule by certified public accountants or audit firms.
The article of association can exclude cumulative voting in its entirety. Prior to the amendment such provision had been superseded if more than one fourth of the number of outstanding shares required the cumulative voting.
Prohibits statutory auditors of the parent corporation from assuming a position at a subsidiary company of the corporation.
The expansion of unemployment insurance (unemployment insurance was first introduced in 1947). Increase of the unemployment benefits entitlement period for older workers.
The expansion of unemployment insurance (unemployment insurance was first introduced in 1947). Employment insurance extended to workers on contracts of less than one year.
Adjustments of pension benefits according to cost of living (increase of the benefits about 16.1% from August 1974 in EP and September 1974 in NP).
Personal income tax reduction for salaried workers.
Enactment of the Employment Insurance System (E1S) (shifting the emphasis from unemployment compensation to promoting employment by establishing the Employment Stabilisation Fund. This Fund finances a variety of subsidy programmes, the largest being a subsidy to encourage the hiring of difficult-to-employ persons, such as the elderly or the disabled, by private firms.
Foreign investments in retail trade business, computer and 12 other industries liberalised.
Introduction of subsidies for private schools.
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefits for old age worker (from August 1975).
Adjustments of pension benefits according to cost of living (increase of the benefits about 21.8% from September 1975).
Institutionalization of Specialized Training College.
Institutionalisation of independent graduate schools.
Increase in health insurance contribution.
Increase in childbirth benefit and in burial expense compensation.
Improvements of survivor's pension and disabled pension (from August and October 1976).
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefits for old age worker (from August 1976).
Introduction of the first surcharge system in AMA (Anti-Monopoly act) framework, against cartels or output constraints that affect price.
Revision of the textbook-authorisation process by the Ministry of Education.
Expansion of unemployment benefits to workers in depressed industries.
Adjustments of pension benefits according to cost of living (increase of the benefits about 9.4% from August 1977 in EP and September 1977 in NP).
Employment Stabilisation Fund started to grant subsidies to firms recruiting workers between 45 and 64 years of age.
Increasing the numbers of officials for the Central Labour Relations Commission.
Expansion of unemployment benefits to workers in depressed areas.
Adjustments of pension benefit according to cost of living (increase of the benefit about 6.7%).
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefit for old age worker.
Banks permitted to issue negotiable certificates of deposit (CDs).
Adjustments of pension benefits according to cost of living (increase of the benefits about 3.4%).
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefits for old age worker.
Raising of pensionable age from 55 to 60 in National Public Service Mutual Aid Association Pension (gradual increases for 10 years).
Amendment to the Foreign Exchange and Foreign Trade Control Law changed the basic principle behind foreign exchange control from "prohibition with exceptions" to "freedom of transactions with exceptions".
Increase in possible level of health insurance contribution.
Decrease in co-payments by employee's dependent family members.
Improvements of survivor's pension (retroacted from June and August 1980).
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefits for old age worker (from June 1980).
Establishment of University of the Air (The Open University of Japan).
A liability provision was added concerning misstatements of the audit report. The statutory auditors might be liable to a third party under this provision.
The duty to report to the board was added in case that a statutory auditor finds a board member's breach of its duty.
The independence of statutory auditors from the board was strengthened.
Disqualification standards for statutory auditors were set.
The provisions regarding statutory auditors for a large corporation were added. A large corporation should elect various statutory auditors and one of them should work for it on a constant basis (not a part-time basis).
The independence of statutory auditors was strengthened. The remuneration for statutory auditors should be decided separately from those of board of directors at the shareholders meeting or under the articles of association. The remuneration was proposed by the board of directors to the shareholders meeting, but the statutory auditors have the right to express their opinion at the shareholders meeting. The fees incurred by the statutory auditors shall be reimbursed by the company unless the company demonstrates it is not necessary for the audit.
The scope of audit on financial statements was expanded not only to companies having a share capital of JPY 1 billion, but also to companies having a debt of JPY 20 billions.
The definition of interested transaction was expanded. Certain transactions between the company and a third party which is related to the director could thereafter be an interested transaction.
Disqualification standards for board members were set.
A liability provision was added concerning misstatements of certain disclosure documents. The board members would be liable to a third party under this provision.
Shareholders who meet certain requirements can make an agenda proposal for the agenda of the shareholders meeting.
Prior to the amendment, at the shareholders meeting, the shareholders approved the business reports. After the amendment, directors just need to submit the business report.
Prohibition to provide benefits to corporate racketeers. At that time, lots of racketeers attended the shareholder meetings and tried to disrupt it. Lots of companies had paid money to avoid it.
The authority for the board to monitor each director was set and ancillary provisions were set.
Adjustments of pension benefits according to cost of living (increase of the benefits about 7.8%, retroacted from January 1981).
Extension of eligibility for foreigners in NP.
The Office of the Trade Ombudsman (OTO) set up.
Approval of the public Universities' employment of foreign teachers.
Introduction of fiscal adjustment between health insurance schemes in order to share the burden of health expenditures of the elderly aged 70 and over.
Introduction of small fixed amount co-payments by the elderly aged 70 and over.
Adjustments of pension benefits according to cost of living (increase of the benefits about 4.0%).
The Office of the Trade Ombudsman (OTO), set up in January 1982 to review complaints about import testing procedures and related matters, has been strengthened.
The successive law of Act on Unemployed Workers in Specific Depressed Industries.
Integration of three Public Corporation Employee's Mutual Association pensions (National Railway, Nippon Tobacco & Salt Public Corporation, Nippon Telegraph and Telephone Public Corporation) into National Public Service Mutual Aid Association Pension, Integration of Local ordinance annuity and mutatis mutandis annuity and Municipal Employee's Mutual Aid Association Pension into Local Public Service Employee's Mutual Benefit Association Pension, Regular increases of premium in NP.
Decrease in co-payments by the retired ex-employees (from 30% to 20%) aged under 70.
Increase in employee's co-payments (from small fixed amount to 10%).
Premium introduced for unemployment benefits beneficiaries who find a job well before the termination of their benefit periods.
Unemployment benefits revised to make the benefit duration depend once again on both age and insured period (the general result being a lengthening of the benefit period for younger and longer-insured workers, and a shortening for older and shorter-insured ones).
Adjustments of pension benefits according to cost of living (increase of the benefits about 2.0%, retroacted from April 1984 ).
The government transformed Nippon Telegraph and Telephone (NTT) from a public enterprise to a joint stock corporation.
Nippon Telegraph and Telephone (NTT) partially privatised.
Introduction of competition in telecommunications sector.
Abolition and reduction of national subsidies for teaching materials and personnel costs.
Labour dispatch service is allowed in 13 industries (later expanded to 16 industries).
Relaxes requirements to protect female workers (ex. Relaxing regulations regarding extra work and on holidays).
Beginning of the liberalisation of interest rates for large time deposit (smallest amount deposit was 1 billion).
Introduction of money market certificate.
Futures market in government bonds set up.
Introduction of 5 year "departmental health care plan" that limited the number of private hospital beds in each department.
Deregulation of ownership criteria of small medical institutions.
Equal employment opportunity act requires equal treatment of men and women.
Reduction of accrual rate in EP (=25% benefit cut, gradual decrease for 20 years).
Adjustments of pension benefits according to cost of living (increase of the benefits about 3.8%).
Establishment of pension eligibility for housewives on an individual basis by the establishment of BP.
Raising of pensionable age from 55 to 60 for female employee in EP (gradual increases for 15 years).
Privatisation of Japan Tobacco and Salt Corporation (JTSPC), which has not meant the transfer of governmental business to the private sector, but rather a process of "corporatisation" with the government divesting itself of financial and operational control but retaining an equity stake in the "privatised" company.
Japan National Railway (JNR) was privatised.
Putting much emphasis on job training by companies.
Measure protecting the status of dispatched workers.
Opening of Japan Offshore Market, in which restrictions on interest rate etc. are not imposed regarding exchanges between non-residents in Japan.
Increasing deposit protection cap to ¥10milion.
Increase in employee's health insurance schemes' contribution to fiscal adjustment system created by the 1982 Health Care for the Aged Law.
Increase in small fixed amount co-payments by the elderly aged 70 and over.
Opening of the issuance of domestic commercial paper.
The revised Labour Standard Law is enacted, introducing flexible working hours ('discretionary work', sairyo rodo).
The revised Labour Standard Law is enacted, aiming at the reduction of working hours to 40 hours work per week.
The revised Labour Standard Law is enacted, shortening maximum weekly hours.
Adjustments of pension benefits according to cost of living (increase of the benefits about 0.6%, retroacted from April 1987).
Imposition of the one-year training upon new members of the teaching staff.
Reform of the class of the teaching license and introduction of "Special License".
Flexibility of the years required for graduation from part-time course and correspondence-course high schools.
Beginning of future trade of financial goods.
The insider trading regulation was introduced. The insiders (such as managers) cannot transact the shares based on the non-public material information.
Increase in state and department financial contributions (transfers) to the National Health Insurance for the non-employee (independents, retired) managed by local municipalities that suffered (suffers) financial crisis.
Adjustments of pension benefits according to cost of living (increase of the benefits about 0.1%, retroacted from April 1988).
Improvements of Employees' Pension Fund, i.e. promotion of EPF as corporation pension (from September 1988).
Relaxation of regulations on liquor sales.
Relaxation of entry regulations (a firm must own a minimum of five to ten trucks, depending on the region, to enter the business).
The Ordinance for Partial Revision of the Standards for Establishment of Graduate Schools introduces more flexibility to the graduate school system.
Simplification of the standards of the textbook-authorisation process by the Ministry of Education.
Introduction of small money market certificate (smallest deposit of 3 million).
Employment insurance extended to part-time employees working more than 22 hours a week.
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefits for old age worker (from April 1989).
Introduction of cost burden adjustment project between EP and Mutual Aid pension (from April 1992).
Change of indexation method from irregular adjustment, i.e. sliding on the occasion for the cost of living index to climb over 5%, to annual adjustment (from April 1990).
Establishment of the National Pension Funds for the self-employed (from April 1991).
Improvement of disabled pension for University students (from April 1990).
Relaxation of regulations (prior government approval of prices was replaced by a system of minimum and maximum fares and notification of changes).
Auction market established for rice, created in Tokyo and Osaka, trading around 6 % of rice consumption.
The construction of gas stations is in principle liberalised.
The Employers must try to hire workers until they reach 65.
Establishment of financial futures and options markets.
The minimum capital for establishing a corporation was raised to JPY 10 million.
Further increase in state and department financial contributions (transfers) to the National Health Insurance for the non-employee (independents, retired) managed by local municipalities that suffered (suffers) financial crisis.
Re-increase in state financial contributions (transfers) to the National Health Insurance for the non-employee (independents, retired).
Promotion of life-long education (open-market policy about life-long education (including vocational education)).
The surcharge rate on illegal cartels was raised by up to four times.
The Diet passes the revised Large Scale Retail Store Law, simplifying and shortening opening procedures.
Deregulation of the Standards for Establishment of Universities, including deregulation of curriculum standards.
Set up rules on rights to take child care leave and work shorter hours.
Interest rates are liberalised for time deposits of Y 3 million and over.
Beginning of the liberalisation of interest rates on small time deposits.
Charges criminally both the security company and the customer when they commit misdeeds such as loss compensation.
Increase in state contribution to cover health care expenditures of the aged 70 and over.
Increase in co-payments by the elderly aged 70 and over.
Regular working hours per week without overtime are, in principle, set officially at 44 hours.
Revision to shorten the time needed to open a large store.
Revision to abolish the Council for Coordinating Commercial Activities.
Revision to minimise additional regulations by local authorities.
Introduction of referral system for high-tech hospitals: if patients of high-tech hospitals don't have a referral from other medical institutions, they have to bear higher co-payments.
Decrease in health insurance contribution of the small and medium companies' employees' scheme and decrease in state contribution to this scheme.
Partial deregulation of hospital advertising for the first time after the enactment of the Health Care law in 1948.
Bills introducing a five-day week for government officials are passed by the Diet.
Enhancing the benefit for workers taking child care leave.
Enhancing the benefit for elderly workers.
Free entry in telecommunications market.
The government decides to open partially the rice market.
Permission for sales of excessive electric power by individuals.
Abolition of price controls in petroleum products.
Relaxation of price controls in telecommunications.
Reformation of the high school education system, including a credit system in high-school.
Employers must try to secure appropriate work condition for part-time workers.
Relaxing the requirements for taking paid vacation.
Financial System Reform Act allowed banks and securities companies to move into each others' market through wholly-owned subsidiaries.
Commissions on stock: Liberalisation of commissions.
New Saving Accounts with market interest rates introduced (complete liberalisation of interest rate on time deposits, following the gradual liberalisation of interest rate and smallest amount of deposit on large time deposit and small time deposit (including MMC)).
The number of statutory auditors for large corporations was raised to three from two.
The term of office for statutory auditors was extended to three years.
The fee to initiate a derivative suit was lowered and fixed to JPY 8,200 for any monetary damages litigated.
Shortening of weekly work hours to 40 hours.
Rice sales: Abolition of government controls.
Free entry in large-scale sales in electricity.
Alcoholic beverage sales: Relaxation of licensing.
Liberalisation of control of discounts to allow reductions of up to 50 % for all passengers in air transportation.
Encouraging companies to hire their workers until they reach 65 years.
Liberalisation of interest rate on liquid (non-time) deposits, completion of liberalisation of interest rate.
Improvement in some benefits (ex. childbirth benefit).
Introduction of co-payments for hospital meals.
Measures to promote employment of elderly workers (ex. paying benefits to workers over 60 whose salary decreased a lot comparing their income at the age of 60)/ measures to assist employment of female workers (ex. paying childcare leave benefit), etc.
Measures to assist employment of female workers (ex. paying childcare leave benefit).
Employment insurance eligibility for part-time employees lowered to 20 hours a week (from 22 hours a week).
Improvements of survivor's pension and disabled pension in EP (from April 1994).
Change of computation formula for imposing premium on EP insured, i.e. from monthly based wage to yearly remuneration which includes bonus (i.e. second-tier contribution rate raised to concern one % of bonuses (this includes the payment for the first-tier benefit)).
Change of indexation base from nominal wage to disposable income in order to contain premium rate under 30% of worker's income at the peak of old age population (from December 1994).
Integration of three Mutual Aids (Japan Railway, Japan Tobacco, Nippon Telegraph and Telephone) into EP (from April 1997).
Law preventing employers from imposing a mandatory retirement age of less than 60 years after April 1998.
Raising of pensionable age from 60 to 65 for EP's fixed amount component (for men from April 2001 to April 2013).
Raising of pensionable age from 60 to 65 for EP's fixed amount component (women from April 2006 to April 2018).
Exemption from employee's premium for maternity leave (from April 1995).
Promoting the incentive for work to pensionable worker, i.e. improvement of pension benefits for 60-65 old workers (from April 1995).
Electric utilities were allowed to buy power from outside sources through open tender.
Relaxation of the geographic limits on the areas of operation.
Facing prospective layoffs due to strong yen etc., the government can ask companies to take necessary measures to prevent unemployment and make their employment stable.
Sets up measures to shorten work hours of workers taking family care leaves.
Regulations on cross-border transactions have been relaxed (the government lifted restrictions preventing insurance firms from making overseas loans in foreign currencies).
Removal of the rules preventing foreign firms from bidding to manage the funds of the Employees' Pension Insurance system and relaxation of the licensing requirements for such companies.
Liberalisation of imports of refined petroleum products (any company with sufficient capacity to store a 70-day supply allowed to import such products as petrol, kerosene and diesel fuel).
Measures to deregulate the trucking industry.
Introduction of a price-cap scheme in railways.
Deregulation of prices in air transportation.
Cosmetics: Abolition of retail price controls (4.6 % of national income).
Increases the numbers of industries where labour dispatch service is allowed to 26 industries.
Allowing securities firms to make yen-interest rate swap agreements with foreign investors that buy yen-denominated bonds.
Elimination of the requirement for the overseas subsidiaries of Japanese banks to obtain government approval when they extend loans of more than one year to foreign firms.
Permission for subsidiaries of life and non-life (property and casualty) insurance companies to enter each other's business fields.
Preparation for the complete guarantee for bank deposits (which lasted until March 2002).
The second-tier contribution rate raised to 17.35 % of basic earnings (excluding bonuses), split equally between employees and employers.
Further opening of the market to manage the funds of the Employees' Pension Insurance system with the increase of the share of any single pension fund that can be managed by an investment advisory firm from a third to a half.
Institutionalisation of entering a university without graduating from a high school.
School system reform: Notice of Flexible Implementation of the School Catchment Area System.
Introduction of term of office to university teachers.
Fully liberalising foreign exchange transactions.
Liberalising entrance to foreign exchange business.
Securities firms allowed to handle unlisted stocks.
Securities firms can establish bank-type accounts for customers.
The stock option as remuneration to managers was introduced.
Lifting of ban on holding companies (the holding company that is engaging only in holding subsidiary shares was permitted).
The penalty for giving benefits to corporate racketeers was raised.
Private providers permitted to offer long-term care services.
Introduction of the universal "Long-Term Care Insurance" covering all elderly people in need of nursing care.
Increase in health insurance contribution of the small and medium sized companies' employee's scheme.
Increase in employee's co-payments (from 10% to 20%).
Increase in co-payments by the elderly (fixed amount).
The 1985 law was amended to prohibit (rather than discourage) discrimination (including to remove some special protections for female workers, such as those governing overtime and night-time work).
Establishes support system to aid insured workers taking training programmes.
Institutionalisation of integrated junior and senior high schools .
Loans can be transformed to asset-backed securities.
Liberalisation of stock trading commissions and securities transaction fees.
End to uniform premiums on auto, fire and personal accident.
Banks permitted to sell mutual funds over the counter.
The financial reporting should be consolidated basis. The financial statements on the consolidated basis (rather than stand alone basis) reflect the performance of a business as a business group (rather than individual company).
Financial holding companies were allowed (banks, security companies, and insurance companies allowed to enter under the control of the same holding company).
Reinforcement of private hospital beds restriction.
Increase in employees' health insurance schemes' contribution to fiscal adjustment system for the aged 70 and over created by the 1982 Law (this increase was required to reduce state contribution: reduction of state contribution is the permanent priority after the 1992 reform).
Reinforcement of penalty for medical institutions that made false claim in order to receive more insurance payments.
Integration of the National Enterprise Labour Relations Commission and the Central Labour Relations Commission.
With the permission of planning-type discretionary work, the obligation is introduced for employers to obtain each workers' consent to the use of this type of discretionary work, with the prohibition of unfavourable treatment of workers who do not give their consent.
With the permission of planning-type discretionary work, the obligation is introduced for employers to obtain unanimous approval of the labour-management committee in a company when they intend to introduce this type of discretionary work.
Discretionary work is allowed also for 'planning-type' discretionary work (kikaku gyomu gata), in addition to the 'professional-type' (senmon gyomu gata), which had been introduced with the 1987 amendment to the Labour Standards Law.
Reduces benefits to those who become unemployed after they reach 65 years to around 50%.
Tariffs can be set freely except for price caps in some areas.
Tariffs in utilities to be set freely except for price caps.
Competition law extended to electricity and gas (allowing victims of unfair trade practices to go directly to court).
The maximum period of one year is imposed with an exception of the three-year maximum period for the original 26 occupations requiring professional and technical skills stipulated in the 1985 Temporary Work Agency Law and the 1996 Amendment.
Prohibition of temporary work agencies from serving only one specific user company (moppara haken gaisha) to prevent user companies from avoiding their responsibility as real employers and replacing regular workers with temporary agency workers.
Deregulates job placement service and allows private companies to deal in almost all industries.
The ‘‘positive list’’ regulation of using temporary agency work, which had allowed them to operate in 29 categories was replaced by a ‘‘negative list’’, which prohibits them from activities in five areas (construction, port transportation and security guard services, which where for the time being regulated by different laws, and the manufacturing sector).
Insurance firms can establish banking and securities subsidiaries.
Securities firms’ trust banking units allowed to enter the pension management business.
Commercial banks allowed to issue long-term debentures.
Financial assets to be assessed at market, rather than book, value.
Removal of controls on banks’ securities subsidiaries.
Share exchange and share transfer were introduced as methods of business combination.
The establishment of professional graduate schools which are specialised in two-year master courses has been allowed.
Opened a bit more than one-third of the gas market to competition as large industrial consumers were allowed to choose suppliers and negotiate rates.
The electricity market for large clients was liberalised.
Liberalisation of postal services sector (free entry into the parcel and special letter segments; in principle there is also free entry to the standard letter segment, but new market entrants are subject to part of the same universal service obligation as the – recently incorporated – incumbent).
New patent law designed to make it easier for plaintiffs to prove patent infringement in court.
Approval of the appointment of the non-qualified for teaching as a principal.
Establishment of the Institution for University Evaluation.
The corporate split was introduced as a method of business combination.
The Osaka District Court upheld that the directors shall have the obligation to establish internal controls to deal with risks.
Increase in maximum amount of co-payments per month.
Increase in co-payments by the elderly (from small fixed amount to 10%).
2 years clinical training became obligation for interns.
Harder hospital staffing criteria (from one nurse per 4 patients to one nurse per 3).
Partial deregulation of hospital advertising.
Partial deregulation of hospital equipment criteria (outsourcing of bedclothes washing, disinfection, specimen examination).
Reduction of benefits to standard unemployed workers.
Increase of benefits to workers who were laid-off (therefore quit their jobs against their will).
Reduction of EP benefit for 65-69 years old worker (from April 2002).
Reduction of accrual rate in EP (=5% benefit cut, from April 2000).
Widening the base of premium calculation from a monthly salary to annual income (from April 2003).
Exemption from employer's premium for maternity leave (from April 2000).
Change of indexation method from wage and cost of living indexation to cost of living one (from April 2000).
Raising of pensionable age from 60 to 65 for EP's fixed earnings-related component (for women from April 2018 to April 2030).
Raising of pensionable age from 60 to 65 for EP's fixed earnings-related component (for men from April 2013 to April 2025).
Half exemption of premium in BP (from April 2002).
Government can use Employment insurance funds to assist employers making their re-employment plan.
The new law establishes the principle of asymmetrical regulation based on market power and compels dominant carriers (including mobile operators) to open their networks to outside firms.
Flexibility of the class organisation standard (approval of fewer students-number class organisation than 40 ).
Abolition of the mandatory article about setting up catchment areas of public high schools.
Bans unfair treatments of workers taking child care or family care leave.
Expands the eligibility for child care leave from those workers who have kids under 1 year old to those whose children are under 3 years old.
Sales of certain insurance services by banks permitted.
The reasons that the company may repurchase its shares were extended. Prior to the amendment, the share repurchase and holding such shares were generally prohibited with exceptions. After the amendment, the share repurchase was generally allowed with exception. The holding limitation was lifted.
The limitation of liability for managers was introduced. There are three ways to limit their liabilities. First, the liability for directors can be exempt to some extent at the vote of the shareholders meeting. Secondly, the article of incorporation can give authority to the board of directors to exempt to some extent. Thirdly, the contracts to the outside directors can limit the liability.
Makes labour department give instructions or advices and sets arbitration for individual disputes between the labourers and the management.
Employers must submit a plan for helping their workers to get another job.
Expansion of the safety net for the unemployed not covered by unemployment benefits such as self-employed and for those whose unemployment benefits have run out by introducing a loan scheme for these people.
The scheme has been expanded to cover more temporary workers (coverage is narrow with only 40 % of the unemployed receiving benefits) by abolishing the minimum requirement for annual income and monthly days of work.
Introduction of Defined Benefit Corporate Pension (from April 2002).
Introduction of new system of corporate pension funds, which allows firms and employees to choose either a defined benefit or a defined contribution scheme.
The government decided to abolish seven major special-status public corporations, including the Japan Highway Public Corporation, the Government Housing Loan Corporation, and the Japan National Oil Corporation.
Employment and training subsidies for firms in 15 new and growing sectors.
Employment subsidies for firms that hire middle aged workers from 45 to 60 years old.
Employment subsidies for firms that accept transfer of workers from other firms.
Approval of the independent employment of teachers by municipalities.
Lifting the complete guarantee for time deposits (other than quick deposits) introduced in 1996 .
Obligation for large corporations to prepare the financial statements on consolidated basis.
The financial reporting at the exchange should be quarterly rather than semi-annually.
The U.S. style board committee system was introduced as a new option of corporate governance.
The board committee that is in charge of division of assets and borrowing money was introduced as a new option.
Health insurers were allowed to sign a direct contract with medical institutions that could enable insurers to purchase services at lower prices than national public prices. HOWEVER, the ministry of Health set so strict conditions that insurers didn't use this system (virtually no liberalisation).
Increase in employee's co-payments (from 20% to 30%).
Increase in health insurance contribution of the employees' scheme.
Decrease in co-payments for children aged under 3 (from 30% to 20%).
Increase in co-payments by the rich elderly (from 10% to 20%).
Existing employee pension funds (covering 28 % of employees) must be managed independently or made into foundations not linked to the sponsoring company.
As from 2002, no new funds of the type company-based pension or retirement saving vehicles can be created and existing reserves have to be transformed into employee pension funds (or similar institutions) by 2012. (Most employees have access to company-based pension or retirement saving vehicles. The government has announced the progressive ending of one of these funds – tax-qualified pensions – as they are subject to excessive risk. Under this system (covering 18 % of employees), reserves are held on the balance sheet of the company but are not secured by any specific asset and have been limited to 40 % of liabilities by corporate tax law).
Teito Rapid Transit Authority was privatised.
Establishment of one-year vocational education courses at professional graduate schools allowed.
Eligibility conditions for employment subsidies have been eased by accepting applicants not only from public job-placement services but also from private agents.
The subsidy for trainings to individuals contributing to the Employment Insurance System has been cut by limiting the amount and the period of the benefit.
Joint stock corporations are allowed to engage in agriculture by leasing agricultural land in the approved special zones.
Japan Fair Trade Commission (JFCT) transformed from an external organ of the Ministry of Internal Affairs and Communications to the Cabinet Office, giving it statutory powers to require heads of ministries or agencies to take necessary measures to eliminate and prevent the involvement of public servants (however, there are no explicit sanctions).
More funds are being allocated to universities that have been selected as a Centre of Excellence (COE) to enhance competition in research in higher education.
The entry of joint-stock corporations and NPOs into formal education, together with eased requirements for schools to own land, has been allowed in the approved special structural reform zones.
Incorporation of national universities intended to make universities more competitive, abolition of civil servants status (quasi-guaranteed jobs for life) for national university staff.
Approval of the school choice system of public elementary and lower secondary schools.
Any dismissal of workers that is not objectively justifiable and that is not considered to be acceptable by society’s standards shall be deemed as an abuse of power and is therefore invalid. (Judicial precedents have set four conditions in this regard: i) the necessity of the firm reducing its workforce; ii) whether efforts were made to avoid dismissals, such as taking alternative measures that could achieve the necessary reduction; iii) whether the selection of employees for dismissal was reasonable and objective; and iv) whether the overall dismissal procedure was judged to be acceptable.)
Raises the ceiling of fixed-term labour contracst from 1 year to 3 years for the occupations that had already been legalised by the 1999 amendment.
User companies of agency work services are obliged to offer a regular contract (koyo moshikomi gimu) in the case of the continuation of a contract beyond the maximum three-year legal period applicable to non-professional and non-technical occupations (in the 1999 amendment, the obligation of user companies was only to make 'efforts' to offer a regular job; however, user companies could easily get around this obligation by redefining a job, and, in addition, there was no stipulation that automatically assumed the conclusion of a regular contract if user companies violated this obligation).
Government approval is no longer required to establish certain categories of private job-placement agencies.
The 26 occupations stipulated in the 1985 Temporary Work Agency Law and the 1996 amendment were permitted for an indefinite period.
Lengthens the labour dispatch contract year from 1 to 3 years.
The ban on having workers from temporary employment agencies (dispatched workers) in manufacturing plants has been lifted.
Expands the permission of labour dispatch service even more by abolishing the restriction on the maximum commission which private agencies are allowed to collect from client firms.
Expands the permission of labour dispatch service even more by allowing private agencies to charge client job seekers in the field of management and technology whose annual income is 12 million yen or above.
For-profit joint stock companies were permitted to run medical institution under strict conditions, as their scope is limited to services not covered by national health insurance (the first (and last?) joint-stock clinic was opened in 2006)
Providing longer benefits to the unemployed who are in the late middle age (thus promoting re-employment, putting more emphasis on those who are in difficult position to get another job).
The postal saving system was transformed into an independent corporation.
Privatisation of Narita International Airport.
The Establishment of J-POWER Privatisation Fund Co., Ltd.
Introduction of the "Japanese version of the community school".
Introduction of the "Brock-Grant System" in the national subsidy for compulsory education expenses.
Employers must hire workers until they reach the age of 65.
Act on Special Measures for Strengthening Financial Functions, which provided a framework for the injection of public capital in depository institutions (initially thought to expire in 2008, but reactivated in 2008).
The Tokyo High Court applied the main purpose rule, under which the issuance of shares is permitted if the purpose of finance is more significant than other purposes (such as anti-takeover), to a civil case in deciding whether a company very unfairly issues its shares to a third party. It rejected to enjoin the issuance of shares. This ruling essentially gave the managers the room to issue shares within the main purpose rule.
The minister of Health and the minister of Regulatory Reform agreed to admit some types of price deregulation for medical services (but the scope of deregulation was quite limited).
Re-examines the Labour Relations Committee's reviewing process of unfair labour acts to speed up the review.
Establishes the labour tribunal system as a speedy, fair, easy, and inexpensive option for individual labour disputes.
Raising of national subsidy percentage from a third to a half in BP.
Requirement of the average replacement rate for a couple with a dependent spouse to remain above 50% (reduced from 59% to 50.2% in gradual increases for 28 years, see other measures).
Reduction of replacement rate from 59% to 50.2% (gradual increases for 28 years).
Limiting of pension spending through “macroeconomic indexation”, which adjusts the growth rate of benefits based on changes in the number of contributors and life expectancy. Indexation will be introduced once the consumer price index rises 1.7% above its 2005 level (a condition not yet met in 2009).
The Japan Highway Public Corporation privatised and separated into three expressway companies.
Expansion of the capacity for job counselling at the public employment service.
Introduction of a Leniency Programme that provides total immunity to the first firm that voluntarily co-operates with the FTC in each case.
Improvement of Investigation and Hearing Procedures.
Introduction of Compulsory Measures for Criminal Accusations.
Strengthening of enforcement Power: Increase of the Surcharge Rate.
Lifting the complete guarantee for time deposits introduced in 1996 (including quick deposit).
A new LLC-like company was introduced. The LLC (limited liability company) is similar to the corporation in terms that it has the limited liability function to its LLC holders, but is different from the corporation in terms that its governance can be set by the article of association.
The flexibility for class shares was expanded. Each class can specify the terms, for example, on dividends, liquidated amount, voting (including the selection of directors), transfer of shares, repurchase.
The flexibility for choosing the internal organisation (board, directors, statutory auditors, board of statutory auditors and others) was increased. For example, certain companies can decide by themselves, for example, whether to have a board of directors and a board of statutory auditors.
The Tokyo High Court applied the main purpose rule to a civil case in deciding whether a company very unfairly issues its options to a third party. It granted to enjoin the issuance of the option. This ruling is considered a limitation of the anti-takeover measure.
Whistle-blower Protection Act came into force.
Reduction of the rate of the national subsidy for compulsory education expenses (from 1/2 to 1/3).
Enforcement of the 2002 approval of independent employment of teachers in all municipalities from April 2006 by Act No.18 of 2006.
Creation of registration system of investment funds.
Strengthening of penalties for insider trading.
Introduction of new type medical institution that can issue corporate bond like private companies (but this was hardly used because of its complexity).
Reform of the rules for the combined provision of insured and non-insured medical services (in order to make the process of introducing new technologies and drugs faster and less expensive).
Introduction of the Health Care System for the Elderly Aged 75 and over (integration of different health insurance schemes into one system) in April 2008.
Increase in co-payments by the elderly aged from 70 to 74 (from 10% to 20%) in April 2008.
Increase in co-payments by the rich elderly (from 20% to 30%) in October 2006.
A law to extend the mandatory retirement age step by step to 65 between 2006 and 2013 has been implemented.
Prohibition of discriminatory treatment of part-time workers who have the same job description, degree of job rotation, and labour contract as regular workers (but no penalties imposed on firms that fail to do so; although the government can issue orders to improve the situation).
Introduction of administrative penalty (up to 100'000 yen) on employers that fail to explicitly disclose the possibility of wage hikes and whether the employee will receive the retirement allowance and bonus payments.
Request of employers to implement measures to shift part-time employees to regular employee status.
Obligation to put basic rules on labour contract (including rules established by the court, such as doctrine of abuse of right of dismissal) in the statutory form.
The supreme court upheld a company's issuance of options as a takeover defence because it would not give economic harm to the potential bidder.
Law articulates that workers have right to maintain a minimum standard of wholesome and cultured living, but this law does not set specific minimum wage standard.
Prefectural labour market dispute resolution mechanism opened to part-time workers.
Integrates the eligibility of the insurance of regular workers and those of part-time workers.
Allows flexible paid holiday system (such as allowing employees to take paid holiday not only on daily basis, but also on hourly basis).
Permission of the injection of public funds in the Central Financial Organisations (CFOs) of financial co-operatives.
Revision to encourage banks to apply for capital injections by relaxing the conditions.
Reduces overtime work (ex. employers have to pay at least 50% more, if the employee works extra time over 60 hours a month). Allows flexible paid holiday system (such as allowing employees to take paid holiday not only on daily basis, but also on hourly basis).
Created as a safety net for people who are not eligible to receive unemployment insurance benefits in order to provide comprehensive support to them in relation to vocational training, reemployment and daily life.
Increase in maximum jail terms for cartels and bid riggings.
Expansion of types of conduct subject to surcharges to exclusionary type of private monopolisation and certain types of unfair trade practices.
The Broadcast Act was revised to enable the creation of holding companies with plural broadcasting entities.
Revision of the threshold for share acquisition notification.
Introduction of the prior notification system of share acquisitions.
Employers must allow workers with kids under 3 yeard old to work short time and exempt them from working overtime.
Help large troubled non-financial institutions through equity investment by the DBJ (Development Bank of Japan) together with insurance provided by the JFC (Japan Finance Corporation).
Creation a registration system for agencies and reformation of their regulation based on the four points listed in the IOSCO code of conduct: i) duty of good faith; ii) establishment of control systems to prevent conflicts of interest; iii) prohibition of ratings in cases where analysts/CRAs hold shares in the rated entities; and iv) disclosure of information on the rating policy.
Eases the requirements of eligibility for the insurance (shortening the continued employment requirement from 1 year to 6 months) in order to strengthen safety nets to cover more non-regular workers.
Launching of a fund to reduce the burden of tuition at private high schools by paying subsidies to families.
Tuition payments by households for public high schools eliminated and replaced by transfers from the central government to prefectures.
The supreme court applied the business judgment rule to a civil case. This is the first case that the Supreme Court recognised the business judgment rule. The business judgment rule gave board members the authority to judge business matters without second-guessing by the courts.
If a director's compensation exceeds JPY 100 million per year, it should be disclosed publicly.
Measures to alleviate health insurance contribution paid by the elderly.
Lengthens the terms in which formerly ineligible unemployed workers can receive the benefit retroactively.
Expands the eligibility for non-regular workers through relaxation of the eligibility requirement from workers employed at least one year to those employed 31 days or more.
Creating a support system for job seekers, under which people who are not qualified to receive employment insurance aim to find a job earlier by improving their skills through job training.
The government provides subsidies to firms that expand job opportunities for older workers.
Law promotes the promotes the establishment of certified childcare centres in large cities according to demand and provides financial support to various types of childcare, such as small centres.
Law promotes the establishment of “Centres for ECEC" (Nintei Kodomo-en), which provide kindergarten and childcare services, in part by streamlining supervision and financial support.
Revision to the labour law requires firms to keep all workers who wish to work until 65.
Bans dispatching workers to their former workplace unless it has passed one year after they have turned over.
Revised law requires the dispatching agency to disclose the gap between the fees it receives and the wages paid to the workers and, in deciding the wage of dispatched workers, to consider the balance with workers directly hired by the firms and engaged in the same type of work.
Law prohibits employers from hiring fixed-term workers on unreasonable terms.
Law prohibits the dispatch of workers for employment lasting less than 31 days (to promote their employment security and stability, although it may limit their employment opportunities).
The Childcare and Family Care Leave Law, which included the shortening of working hours for parents of young children and the establishment of family-care leave, was extended to employees in all firms in July 2012.
Approval of public-established and privately-managed schools.
Law includes "Social guarantees for unemployed citizens" comprising public work programs.
Law includes "Social guarantees for unemployed citizens" comprising "training and refresher training of unemployed citizens".
Allowed government to regulate some product prices (set floors and ceilings) respectively to impose excise.
Labour Exchange and municipalities must be informed in case the employer intends to make a group of employees redundant.
The first amendment of Soviet Labour Code
Creates two tier banking system in Lithuania. Allows commercial banks to operate and regulates and specifies Central Bank functions (monopoly for printing money, monetary policy, issues governmental bonds, regulates circulation of money and credit).
This law allowed four type of insurance companies to operate in Lithuania: state insurance agencies, insurance companies, insurance societies and mutual societies.
Law allowed to establish private companies (individual, general partnership, commanded partnership, public limited companies, private companies).
The law specified limited company ownership, establishment, property rights etc…
The law specified state enterprises' establishment, reorganization, governing rules, property rights etc.
Benefit is calculated in percentage of the average monthly wage received in the previous place of employment: During the first two months 70 %; during the next two months 60 %; during the following two months 50 %.
Benefits are paid up to a maximum of 6 months over a 12 month period.
Eligible are unemployed persons who, over the past 3 years, have been employed for 24 months or more under an employment contract and who have an unemployment insurance.
Sets the minimum old-age pension: 80 % of the minimum standard of living (used to be 100 % of the minimum wage).
The first law in independent Lithuania that raises all pensions. In addition it creates conditions to get pensions (compensations) for citizens that suffered injustices by the Soviet regime.
This law allowed employees to purchase up to 10 % of the state owned company they are working for.
This law imposes first income tax rate that is 35 % on corporate income. Some exceptions: for agricultural companies the income tax rate is 10 % of the taxable profit, production companies and organizations that use workers with limited ability have the possibility even fully reduce their income tax.
Natural person income from registered commercial/economic activity is taxed 5 %, 10 %, and 20 %.
Labour income taxed with rates from 10 to 33 %. The basic tax-exempt amount of income was RUB 100.
Introduces a four-stage teaching program into vocational schools. Introduces the program of advanced vocational studies in technical advanced schools, which used to provide special secondary education.
The Labour Exchange (LLE) is responsible for job-brokerage as well as for managing a range of active labour-market programmes. It also has responsibility for ensuring legal employment guarantees
Framework law, establishes education system of the new republic of Lithuania. Establishes that education is a state-supported priority sector in the development of the Republic of Lithuania. Children up to 16 years, are obliged for compulsory education.
Increased autonomy of higher education institutions, new education levels: bachelor's degree, master’s degree, doctorate. In addition the law legitimized the creation of non-state institutions of higher education.
The law empowers employer with more possibilities to make employees redundant.
Increase paid annual leave (holidays) up to 28 days (used to be 15 working days). In some exceptional case paid annual leave can be extended up to 58 days. In few specific cases employee has a right for 30 unpaid leave days per year.
The law established a National Health Insurance Fund, which financed national health care institutions and ambulatory service. In the beginning the health care instructions were financed through municipalities rather than through NHIF, which meant a decentralization of the health care system from national level to municipality level. From 1993 to 1996 most of the financing was done directly through NHIF, however.
Law imposed tax for health insurance, specified compensated medicine list. Beginning of compulsory medical insurance.
Trade unions are free, independent and autonomous organizations which represent and defend the occupational, economic and social interests of their members. Their activities are governed by the Constitution, the laws of the Republic, ILO Conventions and their own rules. The activities of a trade union can only be suspended under procedures provided for under its rules or by judicial decision. Trade unions have the right to take legislative initiatives.
Regulate the organization and legal basis of the formation and implementation of collective agreements between employers and trade unions. Makes invalid collective agreements whose provisions make working conditions worse than existing laws.
Minimum monthly wages (MMG) were increased by 22.5 % up to 225 RUB from 100 RUB. In the following years, due to unstable economic situation the MMG was increased numerous time.
The law specified that wages must be higher than average wage if working at night, on holidays, or in higher risk environments.
Employee wage depends on the labour supply and demand in the labour market, the work quality and quantity, and the enterprise's financial performance.
The new law changed almost all Soviet social security legislation, it established new system based on social insurance (PAYG system), differentiated the social security funding and administration pf employees and self-employed. It founded the Foundation of National Social Insurance Agency (SODRA).
In addition it established voluntary social security insurance.
Program of voucher to all citizens, inspired by Czech experience. Designed to achieve greater economic self-management. Provides significant insider advantages. Most of the privatised property was limited only to Lithuanian citizens, although part of companies were privatised for convertible currency (in order to attract foreign investment). Ensured that the government would maintain its monopolistic dominance in the energy, communication and the transport sector.
The corporate income tax decreased from 35 to 29 %.
Introduction of social insurance contributions including i.a. 3 % of the payroll tax allocated to health care benefits and about 2 % allocated to sick leave benefits.
The law created a possibility for self-employed (in some cases) to pay 0 % to social insurance system (though lack of payment may lead to loosing pension rights).
First law on competition, which forbids market monopolization, prohibits abuse of dominant position in the market, and bans agreements between economic entities that restrict or hinder competition.
According to the constitution forced labour is prohibited, in other words person can chose freely where to work.
Establishment of securities issuance and public trading and stock exchange provisional regulations. Security papers must be registered at Security Commission, company trading or advising about securities cannot operate without registering at Security Commission. Main rules about trading securities: open information, same purchase conditions for every buyer. There are capital requirements for establishing broker firm, limitations as to who can establish broker firm. Regulations also describe the rules of broker firms' activities.
Extends the regulatory authority of the central bank over commercial banks, including stricter rules for the establishing commercial banks. Gives the central bank the right to set minimal capital requirement, etc.
Introduction of interim currency (talonas). Becomes sole legal tender in October.
According to OECD and other sources the state played an active role in bankruptcy proceedings. The law is relatively lax and not well enforced.
The State Sickness Fund constitutes a kind of purchasing agency under Ministry of Health supervision and funding. Its role is to finance the recurrent costs of health care institutions on the basis of contracts with prospective payments.
The new law specified who can organize strike - employees, labour unions (when their members have majority of employees in the company) and “employee groups” (which were not specified). In case for illegal strike, labour unions would be held responsible and would have to compensate for the damage done to the company. An employee that participates or organizes illegal strike can be punished with fines. In addition the law imposes restrictions on lockouts (for example employer cannot replace workers that are participating in strike with new ones).
After independence, the new Constitution stated that the state shall guarantee the right of citizens to old age and disability pensions, social assistance for unemployment, sickness, widowhood, survivors benefits and other cases provided by law.
Corporate income tax for reinvested profits was decreased to 24 % (instead of 29 %).
New VOCTR system governed by the Ministry of Social Security and Labour (MoSSL) and operated through the Labour Market Training Authority (LMTA). It operates a network of 14 Labour Market Training Centres and a network of six Labour Market Training Services. They focus principally on the unemployed but also provide short courses for the employed whose present qualification is in low demand, and non-formal vocational training programmes for adults.
Introduction of permanent currency (litas).
Corporate income tax for reinvested profits was decreased to 10 % (from 24 %). In addition a tax rate of 10 % for all taxable profit applies to agricultural producers of legal entities and companies specialized in providing agricultural services.
This law introduces more regulations in Bank sector to increase safety and efficiency. The regulations include that banks cannot lend more than 1/10 of its capital to one person or company, and provides more defined central bank monitoring functions.
Establishes governance, objectives and functions of the Central Bank. Objective is narrowly limited to maintain price stability. However, the bank is required to support the government's policies provided that this does not conflict with the bank's monetary stability objective.
Introduction of currency board. Exchange rate 4 litas per 1 USD
Currency board established in Lithuania. The litas was pegged to the U.S. dollar.
Requires international audit for the largest banks' accounts.
Emergency care is provided free of charge to all permanent residents irrespective of their insurance status.
Describes the structure and the main principles of the national health system. Funding is based principally on the municipal level, but also from the state budget.
Creates State's Medicine Control Agency that carries out regulatory and control functions by granting marketing authorization, classifying prescription status (prescription-only versus over-the-counter drug), conducting pharmacovigilance, inspecting the pharmaceutical industry and pharmaceutical product distribution companies (including pharmacies), controlling the quality and advertising of pharmaceuticals, and supervising clinical trials.
Specifies the procedures of the collective agreement process, e.g. need of employer to provide relevant information, sanctions in case of non compliance, etc.
Amends the provisions relating to the trade unions' statutes.
Social security benefits are paid only for insured.
Includes social assistance pensions, orphan's pensions, targeted compensation for nursing expenses, nursing allowances, and relief compensation for parents.
Basic pension level was raised three times higher. Pension benefit can not be lower than 110 % of minimum living standard.
Benefits include a basic part based on established levels and a supplementary part based on contribution records. Pensions are diversificated based on contributed pension fees.
Abolished the right for some professions to have an earlier retirement.
Requirements for retirement were tightened.
This law imposed stricter eligibility requirements for the disability pension. Only the disabled, parents that nursed a disabled child (and also mothers of many children) were henceforth eligible.
Establishes four types of pensions: old-age pension; work incapacity pension; survivor’s and orphan’s pension.
Starts land privatisation. Uses vouchers.
Requires investment funds to apply for a license either as a mutual fund or as a holding company.
Sets basic principles governing foreign investment. Provides certain guarantees such as unrestricted repatriation of profits, income or dividends after payment of taxes.
Government regulation sets the terms of payment for children who attend state pre-school institutions. Parents normally have to make a 60 % contribution to the cost of their children’s sustenance (though there are exemptions or reductions, e.g. for single-parent families, families with three or more children, or families where the father is in military service). The state will also provide support in the form of compensatory payments when children of preschool age are brought up at home. Additional support for children in pre-school institutions may be funded from municipal budgets, as well as from the resources of institutions themselves, enterprises or other organisations.
This law was set the decreasing of commercial bank reserve requirement ratio in motion. Reserve ratio was decreased from 12 to 10 % in 1995, in 2000 it further decreased to 8 %, in 2002 to 6 %, in 2008 to 4 %, and in 2013 decreased to 3 %. (NOTE: This law did not force or require the following reserve ratio decline.)
This Law establishes grounds for the activities of credit unions, terms and conditions of membership, and the principles of self-governance, regulates the establishment of credit unions, their activities, the rights and duties of their members, their reorganisation and liquidation, management and supervision of activities. This Law restores the cooperative credit system and aims at accelerating its development in Lithuania.
Strengthened regulations on auditing and reserves for investment funds.
Formed by 15 members representing trade unions, employers’ organisations and the government, it is the main platform to discuss economic and social development policies as well as labour relations. The council deals with issues such as employment, occupational safety, illegal labour, taxation and healthcare. It can develop and coordinate draft legislation and has the right to conclude collective labour agreements.
Initiates second phase of privatisation, for cash (contrasts with previous strategy of voucher privatisation). Creates Lithuanian privatisation Agency. Foreign citizens enjoyed the same conditions as Lithuanians.
Free economic zones are established: Siauliai, Kleipeda and Kaunas, and offer corporate tax holidays, no customs taxes and no VAT.
Describes the procedure for granting concessions, the rights and duties of government institutions and those of enterprises, both Lithuanian and foreign, which operate on the basis of concession contracts in the following areas: objects of exclusive rights of the state (continental shelf, Baltic sea economic zone), land mass, internal waterways, roads, historic, archaeological and cultural objects of national significance, or state owned enterprises which are not privatised.
Law that allowed foreign banks establish branches in Lithuania.
Tighter regulation of the securities market. Issuers must register at the Security Commission, furthermore issuers must provide periodic financial statements and disclose any major event no later than 5 days.
Creates State Insurance Supervisory Authority in charge of supervising insurance companies.
Replaces previous law and implements a more elaborate set of rules for insurance companies. It gives more tools for state institutions to monitor and control insurance sector. It also implements stricter requirements for insurance companies.
Commission becomes an autonomous institution reporting directly to the parliament.
Establishes Deposit Insurance Fund. Insurance covers only deposits in licensed and branch banks that are held under the name of individuals.
International Accounting Standards (IAC) introduced
People without statutory insurance should pay out of pocket for all non-emergency health services.
Sheds the Soviet healthcare system and establishes a system based on health insurance. Establishes the compulsory health insurance scheme and introduces a single payer, (the health insurance fund, which comes under the supervision of the State Sickness Fund) with independent budget but administratively subordinated to the Ministry of Health. Health Insurance Fund has ten regional branches, as well as territorial funds (one such fund for each county).
Stipulates that health insurance can be provided by: State Insurance Agency, joint stock companies, insurance societies or mutual insurance societies.
Law established Compulsory Social Insurance Fund (CSIF) that amounted almost up to 100 million LTL (or 7 % of GDP). CSIF was an autonomous compulsory health care insurance fund that was separated from state budget; CSIF financed ambulatory service, stomatology service, some stationary service, some sanatorium service, some medicine and other medical goods; all citizens must be insured; establishment of Territorial Health Insurance Fund; funds financed by state decreased dramatically; private health sector was expanded; private healthcare insurance compliments state insurance.
Public ownership of healthcare facilities is combined with private ownership depending on the level, type of care and type of institution.
Enables the formation of an autonomous provider network. The vast majority of health-care providers (except for parallel health systems of the Ministries of Defence, Interior and Justice) are public non-profit-making enterprises. The administration of these non-profit institutions is free to decide on internal expenditure structure as well wage policy (following agreement with trade unions).
Patient rights include the right to high-quality health-care services, the right to choose a provider and physician, the right to information, the right not to know, the right of access to medical records, the right for privacy, the right to anonymous care and the right to receive compensation for damage to health. No care can be provided without the patient's consent.
Law allowed to reorganize most of health care institutions from budgetary authority to non-profit organizations thus increasing their responsibility and autonomy. Part of medical institutions that lacked equipment or were unable to provide sophisticated medical services were reorganized into nursing hospitals.
Imposed limits on prices for services provided by profit seeking health care sector companies.
Amends section 8 relating to the statutes of trade unions.
Establishes obligation compliance of newly incorporated workers and non-unionized workers with collective agreements.
Provides for a modification of the Act's title, replacing "employment of the population" by "support of the unemployed". Benefit consists now of a fixed and a variable part. The fixed equalling the state-supported income and the variable depending of the contribution record (25 years of contribution qualifies one for the maximum amount). Benefit cannot be lower than the state-supported benefit and cannot exceed two minimal subsistence levels.
The definition of unemployed was changed which allowed to increase the level of coverage.
Municipalities adopt a major responsibility for social services provision.
Allows self-employed to be insured for an income corresponding to the minimum wage. Any additional coverage is optional.
Law allowed privatisation of Lithuanian National Health System property, which led to privatisation of stomatology sector.
Congress revokes Civil Code provisions that fully guaranteed individual deposits in state-owned banks.
Functions as an autonomous arbiter of heat, gas and electricity prices.
Incorporates all previous "off-budget" support funds and investment programs for the sector; reduces list of products receiving support; support for commodity prices are reduced; and tightening of production volumes eligible for support.
Aims at monitoring government subsidies that may distort competition.
Changes are mainly institutional. Makes State Competition and Consumer Protection Office (SCCPO) more independent from government and lobby groups (follows EU directives).
Organizes the external evaluation of higher education institutions, makes suggestions for quality improvements, assesses new study programmes, and evaluates the requests for establishing new institutions. Quality reviews are based on internal quality assessment (self-study) and external assessment by peer reviewers.
Bank for International Settlements (BIS) capital adequacy ratios.
10 % capital requirement for risk-weighted assets.
Limited scheme, coverage and co-coverage are phased decreasing in two years (1999 and 2000). Includes foreign-denominated deposits, with larger insurance coverage.
Supervision of consolidated banks' accounts.
Streamlines bankruptcy procedures and improvement of the prioritization of creditors' claims (follows EU directives).
Despite that the new bankruptcy law enacted in October 1997 – in response to EU concerns – the state still appears to be playing an active role in bankruptcy proceedings, whether or not state-owned companies or debts to the state are involved. A particularly important decision is whether the enterprises concerned should be bankrupted, or should be "rehabilitated". This latter option is being considered in the case of large regional employers, and the resources may be drawn from the Privatisation Fund for this purpose. Examples from other transition countries suggest that this approach to enterprise restructuring can lead to misplaced incentives and a deterioration in financial discipline.
Centralizes functions of privatisation and adopts Treuhand direct-sales model. Intends to speed up privatisation, as well as to change the weak and fragmented corporate structures emerged from voucher privatisation, through selling control packages. Replaces Lithuanian privatisation Agency for State Property Fund, which had the power to act as the owner of property that was being privatised. (Previously, due to a lack of such power, the privatisation process was slower than expected).
Earmarks two third of the privatisation proceeds for restitution of savings lost by individuals during the transition process.
The framework law defines two types of VOCTR: 1) initial (under Ministry of education) and 2) labour market (under ministry of labour and social security). Stipulates that initial vocational education and training shall be funded from the state budget, municipal budgets, Vocational Training Fund and other sources. The main foreseeable involvement of social partners is their role in qualification examinations.
Defines in general terms types of duties that may be applied, instances for applying them, and procedures for establishing, approving and applying tariffs.
Increase in tariffs for selected agricultural products; introduction of binding minimum import prices.
Changes public procurement requirements to favour domestic producers.
Different types of subsidies and protections for domestic producers to cope with Russian crisis, among which: loans at preferential terms, credit guarantees and tax relief to specific food processing companies, and export subsidies.
Makes education compulsory for all children up to the age of 16 (inclusive). Thus, compulsory education now involves four years of primary education followed by six years of basic (lower secondary) education (10 years in all). Compulsory education is provided not only in publicly-maintained schools of general education, but in private schools that receive state support if they adopt the state curriculum.
Applies to education for people aged 18 or over who undertake courses that do not lead to a state-regulated qualification. It regulates non-formal adult education activity in adult schools and centres, vocational education and training schools, colleges, higher education institutions and registered private providers.
Lithuanian State Research and Higher Education Fund grants loans to partially cover living expenses making use of the budgetary subsidies for that purpose.
Basel requirements introduced and implemented.
Transforms Stock Exchange and Central Securities Depository from non-profit companies to profit-seeking public limited companies.
Implementation of Core Principles for Effective Banking Supervision approved by the Basel Committee on Banking Supervision.
Single shareholders that acquire a majority stake in a company registered at the Stock Exchange has to submit a tender offer for all remaining shares at the weighted average price of its share purchases. The rules are not applicable in the case of privatisation to a strategic investor
Increases the age of admission of students to vocational schools to those aged 14.
Law allows foreign companies to open branches in Lithuania.
Introduction of minimum prices for customs valuation, as well as new mechanisms for calculating reference prices.
Establishes the concept of "strategic investor" (invests over 200 million LTL and meets a series of other requirements). Gives government discretion to grant tax benefits and grants investors tax invariability for 5 years, extendable at government's will for another period.
Equalizes foreign and domestic firms' legal status and liberalises former restrictions imposed on foreign investment to such an extent that, in practice, foreign investment will be allowed in all legal activities in Lithuania.
Competition Council would not have to be notified about merger or acquisition if combined aggregate income of the economic entities is less than LTL 30 million in previous year.
Prevents bank mergers that might result in one bank having a share of over 40 % of the market.
Independent regulatory commission responsible for tariff calculation and increases in water and sanitation services.
The new law complies with EU regulations, in addition it has broaden the boundaries of the prohibited acts, and specified the Competition Council's functions (which was renamed to National Price and Competition Authority). State and local authorities cannot limit competition.
Expansion of Small and Medium Business Promotion Fund, including a compensation for up to 50 % for loan interest payments for a period of up to 3 years.
Methodology for calculating liquidity is strengthened. E.g. Certain securities can no longer be included as liquid assets.
Banks are required to write off loans classified as losses for two quarters.
Establishes the legal foundations for private voluntary pension funds and paves the way for the eventual establishment of a multi-pillar pension system.
Self-employed must pay full pension contributions (which means they will get full pension).
State social insurance contribution rate was increased to 34 %.
Applicable to properties above a certain nominal value
Makes it easier for investment companies to establish in the country.
Establishes the principles regulating the generation, transmission, distribution and supply of electricity. The law provides for the gradual liberalisation of the electricity market, beginning with large customers.
Empowers the Competition Council to cancel state aid to enterprises if they do not comply with the provisions of the Europe Agreement and other legal acts.
Elimination of price support for grain, meat and milk.
Regulates commercials: allows the Competition Council to make sure that commercials are not misleading, limits comparative ads (they are allowed only if all products are objectively represented in the ad).
Changes finance formula from a yearly budgetary lump sum allocation, to a system of funding based on agreements between higher education institutions and the ministry of education. These agreements are signed on the basis of development plans (3-5 years) discussed between higher education institutions and the ministry of education.
Establishes a binary system of higher education (universities and colleges) and advances in the state regulation of the autonomy of institutions, study programs and vacancies for degree programs.
The law defines various forms of support including students accepted to state-funded positions, loans to students who are paying for their own studies, loans to help pay living expenses, scholarship grants and other social assistance. The law provides that students accepted to state-funded positions are to receive a state loan corresponding to the cost of studies.
Regulates securities transactions conducted outside the stock exchange and establishes procedures for dissemination of information on these transactions.
Establishment of Central Credit Union that ensures credit unions liquidity, provides guaranties and financial support for credit unions, monitors them, etc.
Provides better protection of policy holders in line with EU directives
Requires a qualified two-thirds majority of shareholder votes at the annual meeting in order to pass significant resolutions related to the company’s activities, and provides for better transparency and disclosure for shareholder meetings.
Tightens rules on related party transactions.
Minister of Health issued a decree defining a list of health conditions subject to free emergency care.
Establishes conditions and procedure of resolution of individual labour disputes between a worker and an employer, arising out of labour relations, as well as the competence of the institutions resolving such disputes. This law introduced the binomial system for individual labour disputes, where first instance remained in the labour dispute commissions, and afterwards disputes are submitted to the Court.
Previous resolution granting social assistance benefits to unemployed persons who have exhausted unemployment benefits is eliminated.
Registered unemployed persons who have exhausted their unemployment benefit rights can receive social assistance benefits.
The law imposed pension limitations (reduced pension) for working pensioners.
Envisages separation of distribution and transmission assets before privatisation.
Sets out the framework under which the state energy monopoly is to be restructured and privatised. In particular, the law specifies the ways in which different assets could be divided and the company unbundled.
Reforms the post-secondary level of studies, eliminates the provision of upper post-secondary education and creates a new segment of education and qualification system: non-university higher education studies. These are given at new institutions—colleges—on the basis of advanced vocational schools.
Simplifies rules for the registration of legal entities.
New independent regulator for the telecommunications industry
Introduction of minimum prices for grain and sugar.
Law introduced new principle of financing for schools; financing comes with enrolled pupils; further funding categories were specified - student's education, education environment (school infrastructure) and specific projects. Parents were thus allowed to choose school freely.
The new law changes financing model for universities; students pay a fixed fee, except for the best 30 % of applicants.
Establishes Reserve Stabilization Fund (RSF) to enhance transparency and effectiveness of management of privatisation proceeds.
Allows market participants to avoid collateral registration procedures for overnight loans and similar instruments.
Changes exchange rate peg from USD to euros
Harmonizes deposit insurance legislation with that of the EU and increases coverage of insurance to deposits held by legal entities and deposits in non-bank institutions (e.g. Credit unions). It also reduces insurance premium (from 1 % to 0.45 % of average deposits in banks and 0.2 % in other credit institutions).
Modifies accounting, auditing and disclosure requirements in order to bring in line with EU requirements.
The law is expected to enhance the effectiveness of bankruptcy procedures. It changes the definition of insolvency of an enterprise. The bankruptcy procedure is streamlined to increase the efficiency of the process while protecting the rights of the bankrupt company.
Improves minority shareholder protection in the privatisation of state-owned companies. The amendment requires buyers of majority stakes to purchase shares from minority shareholders at the same price as from the state.
This law regulates the consolidated financial reporting, approval, notification, auditing requirements, and sets requirements for companies that are required to prepare consolidated financial statements.
Enables firms in financial distress to negotiate restructurings with their creditors.
Law ensured patients freedom to chose preferred healthcare facility.
Limits the Health Insurance Fund's (HIF) expenditure in pharmaceuticals.
Amends provisions relating to trade union constitution and guaranties of labour rights to trade union members.
Extends mandatory full pension insurance to certain groups of self-employed.
In addition, there were new tax reliefs: small enterprises' income (up to 10 employees and income up to LTL 500'000) is taxed at 13 % tax rate and tax payers, whose income over the last 3 months did not exceeded 100'000 Lt, income is taxed at 10 % tax rate.
Income tax on all taxable profits is decreased from 24 to 15 %.
Eliminates tax exemption on reinvested earnings.
Elimination of all remaining export taxes.
Companies with big market share are regulated. Regulations include that such companies have to declare information to the CRA, and cannot abuse their dominant positions in the market.
This law demonopolizes and liberalises (de jure) the telecommunications market in Lithuania, and creates opportunities to establish new operators. It simplified legal procedures to engage in telecommunications activities and licensing of telecommunications activities was simplified by replacing it witha common licensing system, as provided for in the new package of EU directives in the field of telecommunications.
Communications Regulatory Authority granted legal and administrative measures to regulate the telecommunications market.
Abolishes the right for municipal authorities to stop dismissals.
Prevents the signing of a new temporary contract within one month on the expiry of a previous one.
Establishes a prudential limit on bank lending to connected parties.
Intended to harmonise Lithuania’s securities regime with the requirements of the EU. Includes provisions that lower the threshold for requiring mandatory public take-over offers by a party (or parties acting together) acquiring shares in a listed company. It also revises the procedures for submitting share prospectuses and reporting on major events.
Establishes minimum criteria for the disclosure of information (quality, content, frequency of publication).
Establishes the need for consolidated supervision of the whole group, when at least one company in a financial group is a credit institution.
Sets forth requirements on financial institutions for evaluating and limiting the risk arising from investments (capital or voting rights) of other companies.
Bank of Lithuania establishes methodological recommendations to banks on their anti money-laundering responsibilities.
Enhances the process of appointing administrators and introduce simplified bankruptcy procedures.
Establishes a minimum amount of fund transfers from the state budget to the Health Insurance Fund (HIF).
Provides for the appointment of standing labour disputes committees in enterprises for up to two years.
Permits the government to extend collective agreements to the whole economic sector at the signatory parties’ request.
Foresees possibility to reduce minimum wages for specific groups of workers.
Administration and financing of cash transfers are transferred back to central government.
Establishes a voluntary fully-funded pension pillar. People have the possibility to transfer part of their contributions to authorized private pension funds.
Gradual increase of statutory retirement age, to 62.5 (men) and 60 (women) as of 2006.
Law specified companies, which could not be privatised due to their strategic importance for national security.
Increased from 214 LTL to 250 LTL per month.
The new law sets contributions for private pension funds to 2,5 % for 2004, and it will be increasing by 1 % every year till 5,5 % in 2007.
Designed to stimulate employment in depressed areas through subsidised job creation and other policies.
Law specifies requirements for European Economic Interest Grouping in accordance with EEC requirements.
Law strengthening of municipal responsibility for access to education and the quality in the municipal area; Strengthening schools independence – school makes an agreement with parents to take all responsibility for the quality of education.
Guaranteed free pre-primary education for children from poor families.
Enhance the supervisory capacity over banks of the Credit Institutions Supervision Department of the Bank of Lithuania.
Aims at unifying supervision of the whole financial sector.
Addresses many of the weaknesses identified by the International Association of Insurance Supervision (IAIS).
Replaces previous insurance law. Main changes: complies with EU laws, included international insurance organization recommendations, new requirements to have solvency margin, in case a company does not meet them it must inform Supervision commission and immediately increase its solvency margin or create financial recovery plan. Established intervention methods aimed at insurance companies, so that creditors interest would be protected.
Central Bank approves new regulations enabling banks to develop their own rules for assessing and classifying doubtful assets and the formation of specific provisions.
Variable part of benefit depends now on the level of income of the previous 36 months and the officially approved insured income each year. It also establishes a celining of 70 % of the insured income each year.
Payment extension for unemployed nearing retirement age: 2 additional months for those retiring in less than 5 years, and until retirement age for those retiring in less than 2 years.
Duration of benefits is set according to contribution record: < 25 years = 6 months; > 25 but < 30 years = 7 months; > 30 but < 35 years = 8 months; > 35 years = 9 months.
In order to be able to benefit, persons must be permanent residents in the Republic of Lithuania, and pass an income and property test. This includes foreigners with permanent resident status.
Contribution record needed to receive benefits decreased to 18 months in the last 3 years (previously 24 months in 3 years).
Provides targeted cash benefits to low-income families. Includes two types of benefit: cash transfers and compensation for heating and hot water costs.
Law abolished pension limitations (reduced pension) for working pensioners.
The law made additional voluntary pension accumulation possible and stipulated that it does not require any additional cost from the employee. Everyone can participate in private pensions system (expect those who are already pensioners and those who are not eligible for basic pension).
Increased from 250 LTL to 290 LTL per month with an additional + 29 LTL for each child.
Reduces marginal tax rate; PIT rate for second job wages is reduced from 35 to 33 %.
Coverage is extended to residential property.
School leaving examinations and qualification provision are transferred to the employers—regional chambers of commerce, industry and crafts.
Provides possibilities for persons with lower employability being employed in social enterprises.
Authorized the Communications Regulatory Authority to carry out surveillance of electronic communications markets, to conduct market research to identify the dominant players and put ex-ante obligations on them as well as enforce other competitive market principles.
Amendment liberalised the terms of notifying the competition authority about mergers and acquisitions (prolonged the period by 1 month).
New provision liberalises the regulation of part-time work, allowing deviations from the legal framework in terms of the length of part-time work. More freedom is given to the social partners to negotiate the organisation of working time.
The amendment provides that foreign workers posted to Lithuania will be subject to Lithuania’s labour laws.
Renewed law on Banks that replaces the old one and complies with the EU regulations.
The threshold of maximum shareholders that a private limited liability company can have increased from 100 to 250 shareholders.
Provides that all enterprises employing 20 or more workers, or upon the request of workers, must establish a workplace committee. In enterprises with less than 20 workers, they may elect a staff representative. Committees are comprised of 3 to 15 worker elected representatives. They benefit from 60 hours a year of remunerated work time to accomplish their mandate.
The law expands the list of who is insured under the unemployment insurance – officials from State Security Department, Special investigation service, Department of prisons.
The law forbids to terminate employees on the basis of age, even if the employee reached retirement age.
Rest days coinciding with the holidays shall be transferred to the next nearest working day.
Introduction of international financial reporting standards (IFRS).
Increase in the minimum monthly wage (MMW) up to LTL 550 (EUR 159).
Increase in the minimum monthly wage (MMW) up to LTL 600 (EUR 174).
In case workers from energy sector (electricity, gas, heating) want to strike they must inform 14 days in advance. Employees who work in national defence with labour contract have a right to strike.
In case of illegal strike organized by work councils, all damages can be covered from funds dedicated for wage premiums for workers working with collective agreement.
The allowed overtime limit per year increases (up to 160 hours from 120 hours per year) if an agreement between employee and employer is signed.
For employees who manage their work time shift themselves working time accounting rules are set by the employer with an agreement from the employees' representatives.
According to the new amendment professional soldiers' wives/husbands are insured under pension and unemployment insurance.
Reduction from 27 to 24 % in January 2007.
Provides the legal background, aim, and tasks of the employment support system for jobseekers, the functions of the institutions (agencies) implementing the employment support policy, and the measures, organisation and funding of the employment support.
According to the new law water provision and wastewater management infrastructure belongs to the state. In other words this law bans any private ownership.
Updates Lithuanian legislation and education system to Bologna process.
This law allows men to take paternity leave.
Law expands list of who is insured under unemployment insurance – one of the parents (adoptive parents) or a person appointed in accordance with the child's guardian raising a child up to three years.
Private pension funds must specify and inform customers about investment risk.
According to the new law every consumer has the right to choose his natural gas provider.
This law regulates the prospectus preparation, approval and publication, periodic and ongoing information disclosure and protection, official bidding procedure, as well as determine Lithuanian securities commissions rights and duties. In addition it complies with EU laws.
Renewed law on financial instrument markets that replaces the old one and complies with the EU laws.
New evaluation criteria for reimbursed pharmaceuticals. The main criteria for reimbursement are medical benefit provided by the pharmaceutical, results of pharmacoeconomic evaluation and the impact of reimbursement of that pharmaceutical on the budget of the health insurance fund.
The new amendment implemented new limitations on the unemployed allowance amount – the law forbids for the allowance to be higher than 70 % of the amount of the current year’s income subject to insurance, most recently approved by the government.
Persons with an employment record higher than 30 years are eligible for pension premium.
Increased from 280 LTL to 320 LTL per month with an additional + 32 LTL for each child.
The new law redefines the cycle of vocational training system, the concept of labour market vocational training was extended and continuous training was legalised. A new form of vocational training was introduced and defined as apprenticeship.
New law complies with European Commission amnesty program, which should help (and encourage by possibly granting immunity against fines) firms to notify the Competition Authority about prohibited agreements (concerning competition limitations).
Constitutional Court stated that all who wish to get higher education have the access to do so, not just those who have passed requirements for state funded education.
Strike can be declared with approval of only half of employees of the enterprise or its structural unit (previously was two thirds).
Establishes a bonus for those whose contribution record is longer than 30 years.
Includes in state social insurance pension program personnel from the Investigations service, Prison department and Defence department (Ministries of Internal Affairs and Defence), and the self-employed.
Increase in taxation of agricultural partnerships.
Elimination of mortgage interest deductions for calculating PIT base.
Provides better opportunities for employees to retain their jobs and for a greater number of persons to participate in active labour market policy measures.
The act liberalised the electricity market. Electricity generation, transmission and distribution companies are separated. In addition dates were declared when companies (based on their electricity consumption) should start buy electricity on the free market. Households must also choose independent electricity provider.
Governmental institutions cannot set the price of electricity.
The new law changes higher education institutions finance method, henceforth financing is after the number of enrolled students (financing is tied to the enrolled students, that is).
Study programs will be accredited at least once every six years.
A council of a higher education institutions acts as the main governing body in higher education institutions (strengthening higher education institutions autonomy by allowing them full control over their property).
Adopted amendments that allowed for a shorter period of notice of dismissal and smaller severance pays to the dismissed employees.
This law is aimed to ensure banks financial stability and avoid bankruptcy by introducing following rules: State Guarantees, Redemption of Bank Assets, Modes of Participation of the State in the Capital of a Bank, and Taking over of a Bank’s Shares for Public Needs. These new laws aim at helping bank sector by providing state governance or financial injections.
Provides the government with the power to intervene if a bank is in trouble, although without the possibilities of purchase and assumption of problem banks.
Renders permanent the increase in deposit insurance up to € 100'000—consistent with EU directives— and shortens the compensation period for payments to depositors to a maximum of 20 business days from the day of the insured event.
Loosen restrictions on overtime: it is allowed to work up to 4 hours per day (shift) of overtime, used to be 4 hours per two days (shifts). The total overtime is still limited to 48 hours per week.
Reduction in the maternity allowance replacement rate for new recipients to 90 % for the first year, and 75 % for the second year.
Previous cuts vetoed by president of the republic.
Temporary reduction of old-age pensions in 2010-2011. Pensions were reduced pro rata to their size applying a reduction rate from 2 to 12 %. Reduction is also valid for working pensioners, depending on their earnings: LTL 200 (EUR 58) per month = 2.5 % reduction; LTL 4'200 (EUR 1'217) and more per month = 70 % reduction. The Law stipulated that the reduced pensions will be compensated from 2012.
State social insurance has been extended to cover farmers and their partners, persons receiving income from author’s agreements, and persons receiving income from sports and/or the performing arts.
For micro-enterprises (up to 10 employees, profit up to LTL 500'000) income tax is reduced to 5 %.
The amount of the contributions to the private pension funds was reduced to 3 % in 2009, to 2 % in 2010, to 1,5 % in 2012 and increased again to 2,5 % in 2013.
Health insurance contributions become a separate tax, amounting to 9 % of income (purpose is to make population aware of the costs of health insurance).
Temporary reduction in the rate of social contribution transfers to Pillar II (fully funded) private pension funds from 5.5 to 3 %.
Amendments legalised an opportunity to sign fixed-term employment contracts on a temporary basis (for a maximum period of 2 years) for newly established jobs.
New type of employment contract making labour legislation more flexible: telework. Specific features of a telework contract will be regulated by legislation adopted by the Government and in collective agreements, taking into account the provisions of the Framework Agreement on Telework.
Imposed regulation on the price of medicine.
Overtime is allowed not only in exceptional cases, but also if employee and employer sign an agreement.
The ruling requires that cuts in working pensions be made proportional to those in other pensions and that the pension cuts be compensated when the economy recovers, though the amount and timing of compensation are flexible.
A 5 % income tax rate applies to income from individual activities, for example from the production trade and most services, excluding income from intellectual professional activities and trade income in securities (including income from derivative financial instruments).
Temporary reduction in the rate of social contribution transfers to Pillar II (fully funded) private pension funds from 3 to 2 %.
Specifies the peculiarities of labour relations between temporary workers and temporary employment agencies and defines the rights and obligations of the parties to employment via temporary employment agencies.
If a manager of a firm makes prohibited agreement between competitors or abuses dominant position, he may be banned from running the company from 3 to 5 years and can be given a fine of up to 50'000 litas.
Aims to separate the country’s gas transportation and supply assets in order to limit asset concentration by foreign investors in the sector. In line with EU’s Third Energy Package.
The law established a new unbundling regime and more clearly defined the duties of national regulatory authorities, including the cooperation with the Agency for the Cooperation of Energy Regulators.
In order to encourage parents on child care leaves to sooner return to the labour market, the amendments set two alternatives of payment of allowances: one-year allowance and two-year allowance. In case of the latter, parents would be able to gradually re-enter the labour market during the second year of leave without any reduction of the allowance.
New regulations that reduce the possibility for people to take a loan; debt to collateral ratio no more than 85 %, loan period no more than 40 days, loan principal and monthly income ratio can not exceed 40 %.
Introduces rules for calculating wages for the heads of health-care institutions working under contracts with the health insurance fund. They are composed of a fixed component (average civil service wage and the level of institution), and a variable component (cannot exceed 20 % of the fixed component, depends on the performance of the institution as measured by financial indicators set by the Minister of Health).
The payment of social benefits is stopped when unemployed persons enter into employment.
Increases the statutory retirement age by annually adding four months for women and two months for men to reach the retirement age of 65 for both sexes in 2026.
According to new law the retirement age will be increasing by 4 months for women and 2 months for man per year until it will reach 65 years for both genders by 2026.
A system of targeted training of the unemployed and those notified of pending dismissal: Improves cooperation between state, employers and unemployed people to train a person for a specific job in a particular workplace and to get him or her employed there.
Postal sector liberalisation: The main changes are the abolishment of the distinction between postal and courier service providers (from now on both are postal services), and the abolishment of price controls.
New law complies with new EU regulations, furthermore it also implements a more explicit commercial secret protection rule. No need to notify Competition Council about a merger if aggregate income of economic entities is less than LTL 50 million in previous years (before the limit was set LTL 30 million.). It gives more rights to the Competition Council to conduct investigations in cases where two or more entities creates a new entity - a joint venture.
Regulation limits the credit union growth. It sets a minimum liquidity ratio for the credit unions. In addition it sets a maximum loan amount to a single borrower.
Minimum wage is increased up to 1000 LTL.
The requirement of at least 6 months’ registration with the Labour Exchange (employment agency) prior to applying for social benefits is abolished.
Eligibility for compensation of heating, drinking water and hot water costs is extended to cover tenants.
The contributions to private pension funds increases. 2 % comes from social security tax, 1 % from the salary and 1 % is given as a subsidy from government.
Temporary reduction in the rate of social contribution transfers to Pillar II (fully funded) private pension funds from 2 to 1.5 %.
Only residential properties with a value of over one million litas are taxed (rate = 1 %).
Constitutional court rules that disproportionate wage cuts for only some categories of workers are unconstitutional, and mandates that foregone income should be compensated.
Institutes procedure for writing-off debts and liquidation of assets of indebted natural persons.
New provisions guarantee sectoral trade unions the right to freely establish their structural units and legally operate and conclude collective agreements in various companies.
Strengthens the right to access information by union representatives in order to fulfil the control of employers.
The amendments to the Law on Trade Unions ensure equal rights for members of works councils and union representative bodies. Members of a trade union’s representative body are now allowed to spend 60 paid working hours a year on trade union activities and will be paid their average wage or salary for the days when they carry out union duties.
Stipulates that third-country nationals can also found and be members of trade unions of Lithuanian companies. Amendments to the law also state that anyone over the age of 14 – including students, the unemployed and people who have retired – may join sectoral, local and national trade unions. However, members of a company’s trade union have to be employees of that company, and only workers with contracts have voting rights.
Amendment includes supplementary social benefits in case of employment (unemployed persons who get a job continue to receive benefits for another 6 months) as well as a gradual reduction in social benefits to persons who receive social benefits longer than 36 months.
Lithuanian residents are to decide about their future participation in the pension system and the intensity of their participation. Those who opt for supplementary accumulation with private pension funds will be able to increase a portion of the contribution with their own funds beginning in 2014 and receive a state subsidy.
Fixation of the conditions for the apprenticeship for adults: 1. need to be registered as job seeker for at least 3 months at the PES and 2. have left school for at least 12 months
Introduction of individual re-integration plans for vulnerable groups with General Description. Introduction of individual re-integration plans for vulnerable groups with skill-mapping and individual follow-up.
Fixation of the minimum wage for people aged between 17-18 years at 80% of the minimum wage of adults and for people aged 15-16 at 75% of the minimum wage for adults
Increase of the minimum amount of income tax exemption.
Reduction of tax rate by 2% and the highest by 4%
Persons with residual capacity to work to be redeployed within their company or with another employer, helped by the placement agency
Increase of the exemption of professional revenues and income benefits from 20 to 30% to calculate the level of the benefit to reach the minimum guaranteed income
Tightening the eligibility criteria to invalidity pension; restricting access to disability pension by requiring an additional independent medical assessment
Facilitation of access to training via flexible organisation of working time, the introduction of "time credit" schemes, the development of part-time work
Introduction of a financial subsidy for employers hiring difficult-to-employ persons who benefit from the Minimum Guaranteed Revenue. The State can also reimburse employers to cover personnel fees up to the minimum statutory wage for non qualified adults and for a maximum period of 36 months
Introduction of an activation exemption in the regulation on guaranteed minimum revenue (RMG) in order to allow RMG beneficiaries to participate in full-time studies or vocational training. To benefit from minimum guaranteed revenue, the person must, in addition to a certain number of general conditions, be available for and ready to follow professional integration measures. People who continue full-time studies or vocational training can be exempt from those integration measures while preserving their right to benefit from the RMG. This exemption is related to two conditions: 1) it must rise directly from the assessment of competences; 2) it must improve the chances of professional integration on the labour market. Maintenance, during the same period, of the RMG "supplementary allowance".
Provision by the State of: a) financial subsidies covering the guidance, training, re-adaptation and redeployment costs in favour of the disabled; b) financial support in favour of the employer, in the form of a participation to 40 to 60% of gross salary, including social security contributions; c) the payment of contributions for supplementary pension schemes on behalf of self-employed disabled workers.
Definition of the procedures for: a) the recognition of the status of worker with disabilities; b) the entitlement to support revenue for seriously disabled people; c) the professional guidance and job placement of disabled workers in both regular and sheltered workplace.
Three-year extension (until 31 December 2007) of tax derogation foreseen by Law of 30 July 2002, aiming to encourage the marketing and the acquisition of building-sites and residential buildings. These tax measures are likely to indirectly influence the labour market through a positive impact on the labour demand in the construction sector.
Improvement of existing active labour market measures, so as to adapt them to the evolutions of the labour market. Introduction of the possibility to invite consultants from the private sector and employer organisations to help the PES to select the best candidates for a job.
Reform of existing measures to promote employment of young unemployed aged under 30, which will pass from currently three ('contrat d'auxiliaire temporaire' in the public sector; 'contrat d'auxiliaire temporaire' in the private sector and the 'stage d'insertion' in the private sector') to only two with different operational modalities, aimed at improving their effectiveness.
Amendment to the law on parental leave, aimed at keeping the connection between the parent and working life whilst on parental leave (e.g.; supporting learning during parental leave) and at introducing more flexibility for workers covering parents on parental leave.
Introduction of a system of working time accounts (compte épargne)
Granting a tax allowance of 10% to employers offering a job to an unemployed person
Reduction of social security contributions in case of hiring job seekers
Giving private sector employees/workers (working in Luxembourg for min. 6 month) a right to 80 days training holiday during their professional career. The number of days is limited to 20 days per two years period.
Measures in the field of vocational guidance and training aimed at improving transition to activity for young + organisation of "national centre of continuous vocational training" (CNFPC) + introduction of training bonuses
Extension of wage agreements: assurance companies; building and civil engineering; employees and workers of firms of interim work; joiners; painters; chemist's shops; ceiling and facade workers;
Changes in the "guaranteed minimum income" ("revenu minimum garanti"; RMG) amounts: if monthly incomes are underneath given amounts, a supplement is allocated to reach those amounts of the "guaranteed minimum income" (RMG).
Activation measures have been reinforced, making it compulsory for job-seekers to sign an activation agreement setting out the rights and responsibilities of both ADEM (public employment services) and the unemployed, and provide proof of their efforts to find work.
Activation measures have been reinforced for school drop-outs
Unification of health insurance conditions for white and blue collar workers. Before the reform blue collar workers did not receive their salary during the first 3 months of their illness period, consequently they paid a higher contribution with respect to white collar workers in order to receive a financial benefit. After the reform both white and blue collar workers receive their salary during the first 13 weeks of their illness period (as it was before the reform for white collars only). The contribution related to the financial benefit goes from 2,35% to 0,25% for blue collar workers and from 0,10% to 0,25% for white collar workers.
Decrease in the contribution rate for accident insurance for workers in all sectors but agriculture. The reductions vary between 1,3% and 21%. Notice that the level of the contribution rates are very different (from a minimum of 0,43% to a maximum of 5,92% of the wage).
The duration of unemployment benefit has been limited to the length of previous employment (proportionality principle).
Adaptation of income tax brackets in order to compensate for their non-indexation since 2001-2002; Replacement of the income tax reduction for children by a system of tax credit. The ex ante effect on households' net disposable income will thus amount to about 1.15% of GDP in 2009.
Linear increase of the income brackets by 9%.
Creation of a mutual insurance system among employers, in order to finance the payment of the wage during the first 13 weeks of illness.
Extension of the tax credit for employers hiring unemployed workers from 31 December 2008 to 31 December 2011. Increase in the tax credit from 10% to 15% of the monthly gross wage.
Extension of the partial unemployment regime by lengthening the coverage and duration of the scheme, by increasing the reimbursement of the employers' share of the benefit by the State and by increasing the level of replacement income from 80% to 90% of reference wage for workers following a training.
Regrouping different services. Regrouped and individualising the follow-up of the unemployed. A new unemployment activation project "Indura", which establishes cooperation between the Employment agency and temporary work agencies, has been launched.
Compulsory early stage PES registration for jobseekers.
Agence de developpement de l'Emploi (ADE) replaces the Administration de l'Emploi (ADEM): increased professional guidance of unemployed by synergies and dialogue with private companies; de-localisation of agency branches; new executive committee.
Public-Private initiative aimed to reintegrate into the labour market those who lost their job in the financial sector: personality assessment tests; interview of candidates; plan by national employment agency to increase employability and matching labour market needs.
Supporting older workers to shift to lighter duties as mentor for in-company training (Senior – just another work for experience) and remaining in active workforce.
Freeze of civil servants' salaries for the year 2010. Indexation mechanism is still applicable.
On the basis of an analysis of the wage indexation mechanism, which has to take place every two years, the social minimum wage has been raised by 1.9% as from 1 January 2011. For unqualified workers, the monthly minimum wage is set at 244,16 EUR on index point 100, so for the current index point of 719,84: 1757,56 EUR. For qualified workers, the minimum wage is 20% higher, so it reaches 2.109,07 EUR.
Financial compensation for jobseekers undertaking training programmes. Compensation will apply only if training leads to employment.
Jobseekers registered with National Employment Agency (ADEM) can maintain themselves in employment with a doubling of benefits (from EUR 150 to EUR 300) under 'temporary compensated occupations' (occupations temporaires indemnisées).
Jobseekers over 50 who are judged unfit to integrate the labour market, and therefore no longer eligible to receive unemployment benefits, can switch to guaranteed minimum wage.
In-depth reform of the PES, involving more investment and better training of counsellors, enhanced presence on the territory with opening of regional agencies, setting up of a centralised internet information exchange system, better cooperation with other service providers and more flexibility in the offer to employers and in the follow-up of the unemployed, reinforced role in ensuring a quality training to job seekers. The follow-up of job seekers is modified, with the introduction of a more personalised follow-up, better structured interviews and the definition of cooperation agreements with job seekers.
Wage indexation remains, but it has been temporarily modulated to annual increments of no more than 2.5% in 2012, 2013 and 2014.
First law to regulate all business activity
Organises 24 branch trade union organisations into the Latvian Free Trade Union Organization
The law introduced a general framework for all pensions (retirement, disability); retirement pension age at 60 for men and at 55 for women if length of service is more than 20 years. Pension calculation based on length of service and average wage.
Allows companies to issue shares worth up to 10 % of the authorised capital to employees at a discount, or free of charge. These shares carried full voting rights, but value had to be paid in full on the employee’s departure from the company
Defines a general framework for establishing of SOEs, their operations and reorganisation
First version of the profit tax. Includes a progressive tax rate
First version of the personal income tax law
Persons who pay property tax are individuals and legal entities, including non-residents, that possess or occupy property, except land, situated in Latvia. Tax rate ranges from 0.5 % to 4 %, depending on the total value of taxable property
State Employment Service (SES) provides Temporary Public Works (TPW), organised with the aim of helping unemployed people who want to work, but who, for various reasons, cannot find a suitable permanent job
SES in charge of: 1) Vocational training, retraining and upgrading of qualifications for the unemployed; 2) Temporary Public Works (TPW), organised with the aim of helping unemployed people who want to work, but who, for various reasons, cannot find a suitable permanent job
Implements the standards of liberalisation and protection of foreign investment common in many OECD Member countries. Provides guarantees such as the unrestricted repatriation of profits after due payment of taxes, and exception of customs duty on invested assets
Restrictions remain on public transport, rents and heating, controlled by municipalities
First law regulating competition and monopolies
Legitimizes ongoing process of democratization and decentralization of HE; state budget funding is shifted to full-time studies only and for students finishing studies on a part-time basis; enables the charge of tuition-fees and the opening of private HE institutions.
Finishes state monopoly of education, opening door to privatisation of education. Provides for increased responsibility for education to local and regional authorities
Defines limited liability companies (most popular form of business) as legal entity distinct from the shareholders, capable of being a going concern, take and hold property, to sue and to be sued. They can be transformed into public-stock companies
Law establishes procedures for concluding a collective labour agreement and provides for modes of resolution of disputes. It states that the collective labour agreement shall not limit workers' rights as defined by national legislation. It shall establish, inter alia, the wage payment system, the working conditions and the specific benefit schemes and provide for regulations on occupational safety and health.
Fixes total duration of unemployment benefits to 6 months within a 12-month period; this period can be prolonged for up to 12 months by local governments; Benefit amounts to 90% of minimum wage for those recently unemployed, and 70% for those who have never been employed.
Defines a general framework for conversion of state property through three mechanisms: 1) transferring of rights to local governments; 2) denationalisation of property; 3) privatisation of property
New co-operatives use Soviet leasing legislation to appropriate assets from state owned enterprises
Privatisation of small and medium-sized municipal enterprises. The committee appointed by the local municipality carried out a simplified privatisation procedure through tenders, auctions and direct sale. The most popular method was lease buy-outs, because of the lack of financial resources.
Introduces a framework for privatisation of state owned agricultural enterprises and fishermen's collectives
Introduces a legal framework for privatisation of cooperatively owned apartments
Creates State Employment Service (SES) which provides vocational training, retraining and upgrading of qualifications for the unemployed
Statutes of Central Bank approved; Bank is fully independent, only policy goal is monetary stability
Introduction of interim currency (Latvian ruble). Exchanged at a rate 1:1 against the Russian rouble. Becomes only legal tender in July, and let fluctuate independently of Russian ruble.
Introduction of international accounting standards (IAS)
Lays down general rules for accounting and record keeping, as well as forms of organisation accounting, and the relevant institutions in charge of introducing guidelines and penalties. Includes rules about stock-taking, preparation of statements and accounting management
Introduces regulations on balance preparation, profit and loss calculation, exceptional items, valuation order, and instructions on how to sign and draft enterprises' annual documents. Does not apply to farms, fisheries, or companies whose annual income from business transactions are less than LVL 45 thousand
Introduces a framework for introduction, distribution and use of privatisation vouchers. The law provided a significant advantage to those citizens of Latvia who were Latvian citizens before occupation of 1940 or had ancestors, who were Latvian citizens before 1940.
Law concerning privatisation of medium and larger companies. Government published a list of enterprises which were to be privatised along with a suggested method for privatising each enterprise. Within three months of that publication, any physical or legal entity could submit a privatisation project to the branch ministry concerned for consideration. This project had to include proposals concerning the privatisation method, the distribution of shares among the purchasers, and a business plan for the next three years. The project had to be examined by the branch ministry and approved by the Ministry of Economy.
Defines a general framework for privatisation of state and municipal land in rural areas (in part through returning the property rights on land to the relatives (heirs) of owners during the first republic).
Introduces a progressive tax rate on profit
Increases the profit tax rates. For financial institutions 45%; for state-owned companies 35%; for other companies 25%
Includes regulations for retraining for unemployed
Offers tax relief for foreign companies registered before April 1 1995
Telecommunications operate as a natural monopoly where tariffs are regulated by the Council on telecommunications tariffs
Sets regulatory framework for insurance companies, insurance transactions and state supervision of the insurance sector
Relying on experience from developed countries and on international regulatory requirements of the Basel committee, EU directives and international accounting standards, Bank of Latvia introduced new supervision and regulatory instructions based on minimal charter capital for establishing a commercial bank; capital adequacy, liquidity, concentration of issued loans, quality of loan portfolio, special reserves, open positions in foreign currencies.
Creates State Inspector of Insurance Supervision (SIIS) which exercises supervision over the insurance sector. It reports to the Ministry of Finance
Introduction of permanent currency, the Latvian lat (LVL). Exchanged at a rate 1:200 against the interim Latvian rouble
Requires audit for largest banks' accounts from international auditing firms
Introduces a general regulatory framework for Joint Stock companies
Creates Central Account Fund to supervise and lead healthcare reform efforts
Transforms the centrally planned system to one based in insurance, with a purchase/provider split and services paid on a fee-for-service basis
Polyclinics and hospitals either privatised or transformed into non-profit making state and municipal limited liability companies; dental practices and pharmacies privatised; Physicians encouraged to practice in independent practices
Unemployment allowance amounts to 90% of minimum wage if social contributions were made within the previous 6 months and to 70% if not.
Changes eligibility for unemployment allowance and the duration of unemployment allowance to 6 months within a 1 year period.
New legislation makes it possible for concerned groups of employees to make a new leasing contract.
Establishes similar privatisation procedures to those used for large enterprises, except that the final approval of each privatisation project is given by the Ministry of Agriculture.
State-owned milk collecting and processing enterprises were privatised in two rounds. In the first round, small enterprises were transferred to local co-operative dairy societies free of charge. In the second round, those milk processing enterprises which had not been claimed by dairy societies, were transformed into joint-stock companies, selling 70 % of shares to milk producers, 10 % to employees and 20 % to other physical or legal entities.
In 1992 Cabinet of Ministers decided to organise an international competition for modernisation of telecom infrastructure. As a result of this competition, Tilts Communications JSC, winner of the competition, gained 49% of the shares of the state owned enterprise Lattelecom.
Stipulates that all enterprises are to be transformed into joint-stock companies, or limited liability companies. Between 65-85% of stock to be sold through public tender as non-split block shares
Fecision of the higher council of the republic of Latvia introduced a range of temporal tax deductions for societal organisations, funds, and businesses contributing to either societal organisations or funds (including profit tax, property tax, and personal income tax for 1992-1993)
Decision of the higher council of the republic of Latvia introduced a range of temporal tax deductions for societal organisations, funds, and businesses contributing to either societal organisations or funds (including profit tax, property tax, and personal income tax for 1992-1993)
Determines the taxation of personal income of individuals. Establishes a flat rate of 25%
Cabinet order establishing a council responsible for regulation of prices for energy supplies
BIS's (Bank for International Settlements) capital adequacy ratios introduced
Fixed exchange rate introduced (conventional peg), with a narrow +-1 band introduced over the years. Peg is against IMF's SDR, at a rate 0.8 lats x 1 SDR.
Increases the minimum required equity (charter capital) to 2000Lats (approx. 2900EUR).
Creates 35 institutions called "sickness funds" in charge of financing health at the local level (they correspond with the number of local governments and cities at the time). They receive money directly from state budget.
Introduces restrictions on privatisation of land in rural areas during the land reform: only Latvian citizens, the state and municipalities are eligible.
Latvian Privatisation Agency (LPA) is created. Starts large scale privatisation. Main method is direct sales, which involves different combinations of payment in the form of cash, vouchers, instalments and assumption of debt, as well as guarantees on a certain volume of investment and level of employment
Replaces the earlier version of the law with a more comprehensive one. The law also establishes a privatisation Agency in order to facilitate and speed-up privatisation process. The target for the privatisation agency is to privatise 75% of state and municipal property within three years.
Tax is levied on business entities that have obtained gambling licenses. The annual license due per company is LVL 40 000 or LVL 10 000 for engagement into totalisator gambling services (tax payable for each gambling facility or gambling machine). In addition, it sets lottery tax of 6-8% on revenues from the sale of lottery tickets.
In order to be eligible for benefits, applicants must be effectively seeking a job, reporting once a month to an unemployment office.
Tax benefits for FDI are phased out, but continue to apply to companies entitled to them before April 1 1995
Law establishing a regulatory framework for all business activity in energy sector
Sets high degree of autonomy of universities vis a vis state (content and forms of study, supplementary conditions for admission, direction of research, organisational and administratoive structure); creates Council of Higher Education as a coordinating and quality-assurance organ, with advisory authority.
Capital requirement for banks with the right to accept household deposits set to LVL 2 million, the double of the general requirement (LVL 1 million)
Law assigned a role of securities markets supervisor to a dedicated agency under the ministry of finance
Replaces the law on banks from 1992. New law included a broader range of enforcement powers for supervising the banking system to Bank of Latvia, and introduced stricter requirements for licensing, etc. the law incorporated also a range of requirements applied by the Bank of Latvia previously.
All commercial banks' accounts required to apply international auditing firms
Introduces a definition of public joint stock company; introduces regulations on emission of shares and bonds, etc.
Aim is to strengthen relation between contributions and benefits. Replacement rates vary according to seniority: from 50% for 1 to 5 years of work, 55% for 5-15 years, 60% for 15-25 years, and to 65% for those with more than 25 years; benefits are paid in full for first 3 months, declining to 80% of the initial amount in the 3-6th month and to 60% for the 6-9th months. Overall benefits may not fall below 90% of minimum wage
An individual may receive benefits for 9 months in a 12-month period, and 6 months for a training grant.
Eligibility requires that the individual has made at least 9 social tax payments on the last 12 months (previous: 6 in 12 months);
Provides a means-tested social safety net, local governments being the main responsible for financing the benefits. According to the law, local governments are in charge of four benefits that they can satisfy according to their budgetary means: social assistance benefits for poor families, housing benefits, benefit for care and funeral benefits. Municipalities have the right to implement additional benefits, as well as to define the benefit level and eligibility criteria
Includes a minimum guaranteed pension for those contributing at least 5 years.
Introduces equal retirement age of 60 for both men and women.
New pension system based on notionally defined contributions (variant of PAYG which tries to mimic fully funded pension systems). New system affects only new pensioners (retiring after 1995), leaving current pensioners unaffected. Pension formula ensures that benefits adjust to changes in life expectancy. Pension benefits are taxable.
Cabinet order initiated the process of privatisation of Latvian Gas by transferring it to the privatisation agency
Introduces a legal framework for privatisation of state and municipal residential housing
Company income tax replaces tax on profits. Forms unified system of taxation together with Personal Income Tax Law. Standard rate is 25%, including a number of withholding rates (10-25% to non residents) and tax exemptions (rate of only 20% to charitable activities and institutions, small enterprises, agriculture, etc.)
Replaces law on profit tax. A more comprehensive law compared to the law on profit tax. Removes progressive rates and introduces a flat tax rate of 25%.
Introduces a flat personal income tax of 25%. For income exceeding 60,000LVL/year (approx. 85,000EUR) tax rate 10% (regressive tax)
Replaces the previous law on social tax. Introduces a more comprehensive law. Reduces the rate from 37 to 33% and introduces sharing of the tax burden between the employer and employee.
New pension system includes a 4% cut in social insurance contribution, to be reduced from the employers contribution. Therefore, the current level of 37% (divided 28% employers and 9% employees) will be gradually reduced to reach 33% in 2002 (divided 24% employers, 9% employees)
New version of previous law; taxes natural or legal persons who obtain natural resources, pollute the environment, or sell (self-produced or imported) goods that are dangerous to the environment.
Active measure for social–psychological rehabilitation, which aims to stimulate the initiative of unemployed people, to raise their ability to re-orient and adapt psychologically to a new market situation, to improve their readiness to meet the needs of the labour market, and to promote contact and dialogue between employers and job seekers.
Foreign investors are granted national treatment
Change to a norm-based per-student funding (i.e. voucher system)
Changes the allocation of funding for teachers pay, from municipalities to regional school boards.
Enacts provisions of 4th EU Company Law Directive. Applies to all limited liability companies, except to those operating in the financial sector (banks, insurance companies, pension funds, investment management, etc.)
Introduces a framework for dealing with insolvent companies (also state and municipal). This facilitated to a great extent the pace of privatisation, as it provided a framework for defining a company as insolvent.
Voluntary health insurance covers supplementary services (e.g. faster access) and complementary services (e.g. those not covered by state insurance).
National Authority for pharmaceuticals, it assesses quality, safety and effectiveness of human and veterinary medicines; it also issues market authorization
Introduces a framework for restructuring state and municipal companies into incorporated companies
On the basis of individual Cabinet decrees in each particular case, the selling of state and municipal land for money (instead of privatisation certificates) is allowed.
Introduces deductions on corporate income tax for a range of enterprises operated by non-profits and charity foundations (e.g. disabled unions)
Offers investors considerable tax relief: 80 to 100% on property, land and cit; 0% VAT on services and good supplied in the free zone; VAT, customs and excise duty exemptions for exports and imports, 100% depreciation for all fixed assets, 10 year transfer forward of losses.
Establishes simplified procedures to establish business, VAT exemption on most services as well as other tax privileges in the port of Ventsils
Determines the need to get special licenses if a person or company is involved in certain activities. Entrepreneurial activities subject to licensing fall from 118 to 67, including among other: financial services (legal and financial services, banking and credit, foreign currency transactions), manufacturing (weapons and explosives, medicines and pharmaceuticals, tobacco and spirits, dangerous equipment) and other personal and social services (education, passenger transport, radio and television broadcast, trade in previous metals). Also sets requirement of licenses from relevant professional societies for certain professions such as physicians, teachers, constructors, engineers and lawyers.
Provides further incentives for investors in designated areas considered disadvantaged. Incentives include subsidies, state-guaranteed credit, publicly-financed infrastructure projects and tax relief
Abolition of tax holidays for enterprises with foreign capital participation
Tariffs on agricultural products reduced from 53% to 34% (production-weighted basic tariff) and to 19.5% (avg. basic rate)
Introduces stricter controls aimed at ensuring fair competition and prohibiting misleading advertisements. Compatible with Treaty of Rome, follows EU directives. With the new law Competition Council (replacing Antimonopoly Committee) has more independence and has expanded powers of enforcement. General prohibition of abuse of a dominant position. Prohibits restrictive agreements, etc.
Modifies provisions on customs valuation in accordance with GATT/WTO rules and lowers tariffs on most products. Unweighted tariff avg. for non-agricultural products reduced to 4,5%
Establishes framework for student loans (credits). Loans cover living-expenses for full time students
Creates Securities Market Commission (SMC), independent agency supervised by Ministry of Finance. SMC has the authority to require disclosure of information by any equity market actor, as well as to revoke licenses, to impose fines, and to refer cases to civil courts. SMC is built on the Danish model: chairman proposed by minister of Finance and the Bank of Latvia, and ratified by Parliament.
35 local sickness funds are consolidated into 8 regional funds; the Central Account Fund is transformed into the State Sickness Fund, which holds now the responsibility over the national healthcare budget, and distributes it to the regional funds according to the size and age structure of the population
Sets framework for the regulation of healthcare providers, pharmaceuticals and medical devices. All providers must meet specific requirements with respect to their structure (size, equipment), staffing (number and type of specialists) and the provision of specific services
Provides general framework for social security benefits, replacing law on social tax from 1995. Aim of social insurance is to insure risk of insured individuals' or their dependants' loss of income arising from sickness, disability, maternity, unemployment, old age, loss of working capabilities, as well as from work injuries and occupational diseases.
Voluntary private pension pillar introduced; Contributions are exempted from income tax
Mandatory private pension (fully funded) pillar introduced: From 2003, private pension management allowed.
Establishes that land can be privatised together with the company that lies in it and that is assigned for privatisation.
Introduces a range of changes to the existing law on privatisation; changes allow to pay for privatised objects full amount in currency (LVL); thus opening up and facilitating the pace of privatisation (previously there was a mandatory share to be paid in privatisation vouchers).
Allows transfer of losses between enterprises of the same group
New public work programs targeting long-term unemployed and unemployed youth; sectors cover public works, forestry and social work, and includes in-site training for youth and apprenticeships in association with chamber of crafts
Awards rights to other institutions besides the State Employment Service to provide services in the same field. Provides for the State Employment Service to issue permission to enterprises providing professional training services.
Provides exemption for agreements between specialized producers where those have economic benefits
Law establishing a more comprehensive regulatory framework for the energy sector throughout the cycle: energy production, storage, distribution, use, as well as management and development of energy companies
Specific import tariffs converted to ad valorem tariffs (confectionaries except sugar)
Framework law, regulates education provision in all sectors of education; determines rights and duties of different actors and levels of government. Includes the equal right of all residents to education, irrespective of their social and material status, race, nationality, sex, membership in religious or socio-political organisations, and occupation. This right is guaranteed by the State and local governments (pagasts)
Sets special minimum wage for teachers, at double the level of the general minimum wage
Loans should have a one-year maturity, can be rolled over for ten years, and can amount to 60% of the value of the real estate.
Strengthens legal foundation of Insurance Supervision Inspectorate (ISI) in charge of supervision of insurance companies and pension funds; removes major areas of non-compliance with EU directives
Reorganises State Agency for Medicines (SAM). Now, the agency is financed from its own revenues (e.g. administrative fees collected from pharmaceutical companies)
Council must ensure conciliation in the case of labour disputes. Once every two years it approves a list of mediators
Determines the legal status of employers' organisations as well as their system, rights and duties with respect to trade unions, public and local government institutions. Ensures uniformity of treatment of social partners.
New law aims at regulating the rights and obligations of the parties involved in a strike in accordance with international law (right to strike enshrined in constitution). Includes restrictions on strikes for certain categories of civil servants (police, judges and prosecutors, probation service, and a range of 'necessary services', such as water supplies and waste collection.
Sets guidelines for cooperation between the government, employers' organisations and trade unions in solving the socio-economic issues of the country. Includes representatives of the three social partners and its main functions are to promote cooperation at the sectoral and regional level, making proposals and discussing the government's concept papers, programs, legal acts' drafts, and draft regulations on topics such as: social security , state budget guidelines, economic development, health, education, vocational training, enforcement and implementation of ILO conventions, the Council of Europe and other international agreements.
Defines a share of capital that has to be transferred to the special pension budget in case of every privatisation
Determines the application of mandatory social payments to salaries received by employees. Social tax payments are made to the social insurance budget, entitling the contributor to general sickness, pension, maternity and other social benefits. Employers must withhold social tax on a monthly basis at the rate of 28.09% (0.9% related to work accidents insurance). The total tax payable is 37.09 %, 9% of which must be paid from the employee’s payroll.
New public works program includes in-site training for youth and apprenticeships in association with chamber of crafts
SES reorganised as a state non-profit joint-stock company under the supervision of the Ministry of Welfare
Abolition of licensing for international tourism.
Temporary tariff increase extended for another 2 years
Removal of administrative barriers for FDI, including streamlining procedures for obtaining land property rights and unifying duplicative enterprise registry.
Eliminates pre-school as the first stage of compulsory education
Regulates the activities of persons in public and self-government educational institutions and other persons involved in the process of implementation of general education, specifying their rights and duties.
Student loans made available to both full-time and part-time students, at both public and private institutions. Loans are administered by a special entity, the Study Foundation
Removal of the right of Minister of Finance to delay the execution of a decision by the monetary policy council for ten days if in disagreement; abolishes the possibility to lend directly to the government
Enacts provisions contained in the 7th EU Company Law Directive. Applies to all limited liability companies, except to those operating in the financial sector (banks, insurance companies, pension funds, investment management, etc.)
Introduces a range of measures, such as increasing the minimum number of council members from 3 to 5; removing the requirement for the half of the board to be Latvian citizens who have lived in Latvia for at least 21 years; etc.
Makes management boards mandatory and supervisory boards must be established when there are at least fifty shareholders and for all joint-stock companies in the financial sector. Allows for either a one or two tier board structure.
Unemployment benefits are defined on the basis of tenure and income. Contributions period of 1 to 9 years were required for a replacement rate of 50%, 10-19 years for a replacement rare of 55%, and 20-29 years for a replacement rate of 60%. Unemployment benefits are capped at 5 times the national minimum wage, and were set to gradually decrease: first 3 months 100%, 3rd-6th months 75%, 6th-9th months 50%.
Duration of unemployment benefits were increased from 6 to 9 months.
Changes eligibility criteria for early retirement - for persons reaching 60 years early retirement is allowed, if the length of service is longer than 30 years.
Introduces a mechanism to increase the retirement age from 60-62 by 6 months every year starting with 2000.
Tax deductions of 30% for companies producing high-tech goods and software
Implements national policy of voctr and its regulations. Sets stages of voctr, levels, names of institutions, types of programs and qualification awards. Regulates three levels: basic vocational education, secondary vocational education and the first level of higher professional education (second level higher professional education regulated by Law on Higher Education Institutions). Allows social partners to participate in formulating occupational standards, drawing up programs, and assessing students' skills
Eliminates all tariffs and duties on agricultural produce produced in the EC, with the exemption of pork, some dairy and some meat products
Tariff protections against pork imports lifted; in their place a subsidy is devised
Law establishing a regulatory framework and defining the responsibilities of utilities regulators
Replaces the former five-year programmes with professional bachelor’s and master’s degrees in line with the implementation of the Bologna process
Financial supervisory authority with micro-prudential tools at disposal. Unifies former Credit Institutions Supervision Department, Securities Market Commission, and Insurance Supervision Inspectorate previously working at the Bank of Latvia
Protects minority shareholders including new limits on increases in equity capital, changes in the rights of the general meeting of shareholders and a change in the minimum number of supervisory board members (applies only to Joint Stock Companies)
Introduces regulation of groups of companies on the basis of Law on Groups of Companies
Regulates internal relations of groups of companies
Removes restrictions on minimum number of founders
Regulates relation between parent companies and their dependent companies. Requires disclosure of indirect ownership structures
Replaces the law on Entrepreneurial activity and introduces a more comprehensive regulatory framework
Consolidates several pieces of legislation, incl. Joint Stock Companies Law and Law on Companies with Limited Liability. Brings Latvia into compliance with EU directives. Joint-stock companies required to select supervisory boards; other changes relate to publication of corporate records, filling and notification procedures, and corporate decision-making procedures.
Calculation of benefits is not related to the national minimum wage anymore, but to an average wage, for which social insurance contributions were made.
Cap on the pension of working pensioners to reduce public spending
Regulates second (private, fully funded) pillar. Increases contributions to second pillar from 2% to 10% while reducing contributions to first pillar (NDC pillar) accordingly. Participation made mandatory for those under state pension insurance and under 30 years of age, and voluntary for those aged 30-49.
Amendment defines the national energy company JSC Latvenergo as a company of national significance, which therefore cannot be privatised.
Previous functions handed over to Latvian Development Agency and State Real Estate Agency
Main changes related to mergers control and supervision. Given the conditions of local markets (small size), the criteria for merger announcement had to be lowered in order to avoid a situation when sectors with high ownership concentration emerge due to mergers. One of the two conditions need to be in place for merger announcement to be compulsory: joint turnover of merging companies more than approx. 35mm EUR, or one of the parties of the merger is already in dominant position on the market.
Superregulator for the energy and telecoms sectors
Amendment changes the position of the utilities regulator. While previously it was completely independent from any ministry or Government, this amendment brings the regulator under supervision of the Ministry of Economics.
Introduces some exceptions for state aid in certain sectors, as well as in case of large investment project aimed at regional development, upon approval of the Commission on state aid
Commercial banks are allowed to issue loans with state guarantees. Banks are selected annually on the basis of a public auction based on the total loan and interest rates they offer
Reducing the scope for dismissing employees, concerning in particular employees who are sick for long periods.
Limits temporary contracts to only 2 years; Minimum notice period for economically motivated dismissal= 1 month; Legally required severance= up to 4 months. Any collective agreement signed by employers representing over 60% of employment is binding for all employers and workers in that sector
It introduced a levy on employers - the 'entrepreneurial risk fee'- which is mainly used to finance a guarantee fund for employees’ claims. The monthly fee for 2003 was set at LVL 0.75 (EUR 1.2) per employee working for the enterprise in the month in question. Of the total revenue from the fee, 75% is paid into the guarantee fund for employees’ claims.
Limits temporary contracts to only 2 years; Minimum notice period for economically motivated dismissal= 1 month; Legally required severance= up to 4 months. Any collective agreement signed by employers representing over 60% of employment is binding for all employers and workers in that sector;
Sets rights of association of social partners as well as procedures for collective agreements and to settle disputes regarding rights and interests arising from these collective agreements. Sets two levels for collective bargaining, enterprise and sectoral (the latter is possible when employers subject to the agreement involve 60% of the workforce in the sector)
Cancels the rights for early retirement.
Cancels the regulation on limits to pensions for working pensioners.
Reduces gradually over three years the rate of enterprise income tax from 25 to 15%; also introduces a special tax regime for shipping companies based on tonnage in order to encourage shipping companies to register in Latvia.
Introduces a special regime of personal income tax for employees of the shipping companies. The tax is calculated from double national monthly minimum wage (not taking into account actual wages, which are normally significantly higher). This measure was aimed at attracting shipping companies to Latvia.
Harmonize tax rates, improve monitoring of exemptions, help detect smuggling
Defines continuous vocational training as a special sort of vocational education. The education process in continuous vocational training is organised in 1 to 3 year programs and it is similar to normal vocational training.
Reorganises State Employment Service (SES) into the “State Employment Agency” (SEA), under supervision of the Ministry of Welfare. Other than its headquarters in Riga, the SEA is organised in district (28) and local (34) offices. Four Job Information Centres were established in different regions. These provide an extended range of services compared with those provided in a typical district or local office. These include providing information based on a self-service system, together with access to databases on vacancies. In addition, Professional Career Guidance Centres offer counselling to visitors on occupational choice, professional suitability and on psychological issues related to job seeking, as well as information about educational establishments or the scope of various professions.
Replaces law on “Employment”. State Employment Service (SES) is made responsible for active labour market programmes including vocational training, retraining and upgrading of qualifications, temporary public works, and activities on promotion of competitiveness and activities for disadvantaged groups (the latter replace “Job-seekers` clubs”)
Most favoured nation (MFN) tariff rate reduced from 0,5 to 0, reducing avg. mfn rate to 4,3% and leaving a maximum rate of 55%
Specifies that the pre-primary, primary and secondary education are mandatory and shall be provided free of charge in public and self-governed educational institutions.
Reserve requirements reduced from 6% to 5%, share of cash in vaults that banks may count as reserve is lowered from 40% to 30%
Brings Latvia into full compliance with Basel Core Principles
Creates Office for the Prevention of Laundering of Proceeds from Criminal activity, based in the Chief's Prosecutors Office
Clarifies and broadens protection of the rights of minority shareholders
Eight regional sickness funds centralized in the State Compulsory Health Insurance Agency (SCHIA); it holds all financing, coordination and payment functions, and counts with five territorial branches
Emphasizes the role of mutual consultations of the parties as the main instrument for the resolution of disputes. Sets three pacific methods: conciliation, mediation and arbitration. Introduces for the first time the right to lockout
For those unemployed who have cared for a child aged up to 18 months, those unemployed persons who have retired following compulsory military service, those who have cared for a disabled child up to 16 years of age, as well as those who have regained their working capacity following disability – the amount of unemployment benefit granted is 60% of twice the amount of state social security benefit.
Abolishing existing restrictions on the maximum amount of unemployment benefit (the amount of unemployment benefits could not exceed 250 LVL monthly and it could not be higher than 100 LVL per month during the 4th and 6th months and higher than 50 LVL per month for the 7th – 9th month).
Introduces the Guaranteed Minimum Income (GMI) benefit. Eligible persons are those who live in a household whose per capita income is less than 50% of the minimum income. Local governments have the duty to test the eligibility of applicants, but maintain the right to grant benefits to people with higher income. The Cabinet of ministers sets, however, a floor level each year. Benefits are calculated taking into consideration the floor level and the family per capita income. Benefits have a duration of 3 months, after which a person can apply for another period, up to 9 months. The benefit includes "co-participation" requirements, among which, registration in State Employment Agency
Resulting benefit exceeds poverty level by some definitions and in the case of persons with long contributory periods
Cap on pensions of working pensioners declared unconstitutional
Investment restriction for voluntary 3d pillar funds eliminated: allows investment in foreign assets subject to prudential limits on open positions
Company income tax reduced from 25% to 22%, with further reductions leading to 15% in 2004. Reductions do not apply to companies already benefitting from tax exemptions
Creation of the State Employment Agency by changing the status of the existing State Employment Service, and setting new functions. Support measures for those seeking employment and the administration are funded from the European Social Fund.
Convergence with EU directives; ratification of WTO free trade agreements, including preferential trade regimes
Imposes specific financial reporting requirements on listed companies
Increase in minimum wage over a period of 7 years is agreed, amounting to 50% of average gross wage for 2010
Introduction of a paternity leave and a child-care benefit scheme, paid for by the state and allowing fathers to stay at home with the mother and child for 10 calendar days while receiving 80% of their average income subject to social insurance contributions.
Extending the authority of the competition bureau to conduct searches with a court order. Requirement for announcement of a merger if combined share of both parties to merger exceeds 40% (previously at least one had to be in a dominant position). Asset acquisition is introduced as a way of merger. Merger evaluation process changes: competition council can prohibit a merger by a decision in case a dominant position is being strengthened or created through merger, or if merger is significantly harming competition in any specific market.
Termination of all bilateral preferential trade agreements and adoption of the EU’s common customs tariff and preferential agreements
Teaching in Latvian must start at least at Grade 10 for all state and municipal institutions, and in the first year in the case of vocational training institutions.
Mandatory reserve requirements increased to include bank's foreign short-term liabilities
Minimum statutory capital adequacy ratio reduced from 10% to 8%
Reinforces legal framework against tax evasion, putting limits to re-insurance practices
Requires insurance companies to prepare financial statements in compliance with the Law on Accounting and regulations issued by the Financial and Capital Markets Commission (FCMC)
Requires banks to prepare financial statements in compliance with the Law on Accounting and regulations issued by the Financial and Capital Markets Commission (FCMC)
Increases civil servants salaries and stipulates that salary should reflect length of service
Childbirth benefit (for raising a child up to one year of age) for one of the parents (mother or father) who is employed raised to 70% of their avg. wage on which insurance payments have been made over a 12-month period. Benefit cannot exceed the range EUR 80-EUR 557. For caring for children aged between one and two, benefit raised to EUR 43 for one of the parents. For uninsured people, benefit level set at EUR 71 per month.
Establishes that people for whom employers did not pay social tax in the 1990s be considered insured
Changes the frequency of inflation adjustment: if inflation is smaller than 3%, then once a year; if inflation is higher than 3%, then twice a year; if inflation is higher than 5%, then every quarter.
Amendments to the law on income tax (article 12) increase the minimum income tax threshold to EUR 37 (previously EUR 30) per month, and rebates for dependent persons to EUR 25 per month (previously EUR 15)
Amendment introduces conditions for electricity market liberalisation and access to distribution networks for third parties
Amendment introduces conditions for natural gas market liberalisation and access to distribution networks for third parties
Assigns base funding for state research institutions, including state universities research institutes
Limits on open positions in euros lifted, following the re-pegging of the lat from SDR to euros
Change of exchange rate peg, from SDR to euro
Funding changes to general tax financing from the previous formula (which consisted of a 28.4% earmarked from income tax revenue plus a state subsidy financed from general tax).
Increases wages of health workers in order to prevent emigration
Extends early retirement scheme until 2008.
Persons with an insurance record of at least 30 years will be entitled to request pension benefits two years before the retirement age.
Law introduced a range of changes in privatisation process, including tighter time-lines for evaluation of privatisation proposals in order to speed-up the completion of privatisation
Employers shall pay sickness benefits to employees in the event of temporary work incapacity for a period not exceeding 10 days, instead of 14 days as before
Legislation amended to incorporate Basel II Capital Requirement Directive
The amount of unemployment benefit decreases gradually: (1) for persons with insurance record from 1 to 9 years (total 4 months): first 2 months of unemployment - 100% of the benefit; next 2 months of unemployment - 75% of the benefit; (2) for persons with the insurance record from 10 to 19 years (total 6 months): first 2 months of unemployment - 100% of the benefit; next 2 months of unemployment - 75% of the benefit; last 2 months of unemployment - 50% of the benefit; (3) for persons with the insurance record over 20 years (total 9 months): first 3 months of unemployment - 100% of the benefit; next 3 months of unemployment - 75% of the benefit; last 3 months of unemployment - 50% of the set benefit.
Making the unemployment benefit duration depend on volume and duration of social insurance contribution: for 1-9 years of contributions, the unemployment benefit will be 4 months, 10-20 years – 6 months, over 20 – 9 months
Increasing the insurance period for qualification to unemployment benefit from 9 to 12 months. So unemployed persons are entitled to receive unemployment benefit if the person has been socially insured for no less than 1 year, and for whom unemployment insurance was paid for no less than 12 months out of the 18 months prior to the day of gaining unemployment status
Property tax for business reduced from 1.5% to 1% of the property's value as determined by the land cadastre
Merger announcement is not required if turnover for the previous year for one of the parties of the merger is less than 2.1m EUR
Voluntary notification on agreements between market participants. Market participants are allowed to evaluate the impact of merger themselves. A concept of dominant position in retail is introduced, as well as certain types of abusive behaviour are defined, which are prohibited, and liability is defined.
Amendment changes several aspects of the law making it more suitable for the market with increasing participation of private enterprises and therefore increasing competition, and declining role of the state
Issuing of work permission for immigrant worker will cost EUR 210, instead of EUR 758 before
Sets out framework permitting the government to take over banks if necessary
The following are no longer considered "income" as for the calculation of the GMI: child care benefit, parental benefits for twins or more children born in the same birth, the first LVL 100 of parental leave benefit, the family state benefit and the benefit for disabled children, benefit for disabled persons, funeral allowance, unemployment benefits (including the activation period).
Increases benefits from LVL 50 to LVL 75 per month
Increases benefits from LVL 50 to LVL 75 per month (benefit includes disabled children)
Suspension of unemployment benefits for persons receiving sickness benefits
Broadens the range of persons eligible for premium payments for every additional year of service before 1995 (year when contribution scheme was introduced); increasing the minimum pension eligible for premium from 135 LVL (approx. 200EUR) to 225LVL (approx. 320EUR). This provision aimed at increasing pensions (those on the lower end) taking into account the pace of inflation, which during 2006-2007 was at around 12%.
Broadens the range of persons eligible for premium payments for every additional year of service before 1995 (year when contribution scheme was introduced) to include all retirees; broadens the range of persons to whom inflation adjustment of pensions applies, to include all pensions (previously those above 5 times the amount of state social security benefits were not eligible for inflation adjustment)
Bank partially nationalized after deposit run makes government intervene with liquidity support and recapitalisation
Introduces a special tax regime for all seafarers residents of Latvia where the personal income tax base is 2.5 minimum national wages for officers, and 1.5 minimum wage for all other ranks. Reason - tax competition between different countries in attracting shipping industry.
Merger approval should be acquired from Competition Council for mergers when total turnover of both parties is more than approx. 35mm EUR and if their combined market share exceeds 40%, thus also covering with competition rules those sectors where turnovers are relatively small. Also certain abuse practices for dominant position in retail are defined
Strengthening of regulatory framework for renewable energy including the introduction of a feed-in tariff and a mandatory offtake mechanism which implies guaranteed prices for renewable energy producers
Amendment changes the regulatory structure, taking over responsibilities from local municipalities to regulate local utilities, thus creating a centralised unified regulatory system with unified approach to setting prices on utilities.
Parental leave benefit shall be granted to only one of the parents and only if on parental leave (previously, working parents could also claim benefit); Extends benefit on a temporary basis to working parents whose children were born between July 1st 2009 and May 2nd 2010, but benefit amounts only to half the regular benefit
Suspension of parental leave benefits if parent receives unemployment benefits
Increases FCMC ability to intervene troubled banks; supplemented by FCMC guidelines specifying prompt remedial action for troubled banks before regulatory thresholds are breached
Liquidity risk management and credit risk management regulations revised
FCMC introduces regulations on asset classification and provisioning, as well as capital adequacy ratios following Basel II
Strengthens incentives to restructure corporate debt, including procedures for expedited court approval of restructuring plans under Legal Protection Proceedings
Boards of directors for all State Owned Enterprises were – with a few exceptions – abolished
State Compulsory Health Insurance Agency (SCHIA) is transformed into the Health Payment Centre (HPC), which assumes all-purchasing and pooling functions. At the same time, the Centre for Health Economics (CHE) takes charge of other previous SCHIA functions such as the calculation of tariffs and economic evaluations
From now on poor people have a co-payment of 50% (before it was zero)
Merges local emergency care services (39 working at the municipality level), into one centrally administered institution under the supervision of the Ministry of Health
Health institutions no longer required to comply with requirements set by Medical Treatment Law of 1997. Conformity with standards only based on self-reported principle.
New level is set at LVL 45 for adults and LVL 45 for children under 18 years
Benefit reduced to a flat sum of LVL 8 per child (previously increasing amount per new child up to 4 children per family)
Family benefit paid for each children until the age of 19, but for children born after may 2010, benefit starts only when they reach 1 year of life
Increasing the maximum duration of insured unemployment benefit to 9 months (from previously between 4 and 9 months) regardless of prior contributions (temporary crisis measure). Temporary measure until December 2011.
Reducing the minimum contribution period to unemployment benefits from 12 to 9 months (temporary crisis measure). Temporary measure.
Status of "poor" (i.e. eligible for GMI) expanded to people with debt obligations
Before, the granting of the benefit was up to each local government and depended on their funding availability
10% cut in pensions; 70% for working pensioners
Constitutional court rules against pension cuts; unmakes pension cuts thus leaving pension levels unaltered
Gradual increase from current 62 to 65 years
Introduces a 10% tax on capital gains with broad coverage - sale of shares, funds, and other financial instruments; real estate; dividends; interest on deposits etc. also reduces the tax exempt amount for a range of income sources
Ceiling on social contributions is removed, this is, people are required to pay the social tax on their full job income
Provides jobs for those not receiving unemployment benefits; provides a stipend (LVL 100) that is lower than the minimum wage (LVL 180) to encourage job seeking
Organised by Ministry of Welfare for those not participating in WWS; provides lower stipend (LVL 70 per month)
Streamlines liquidation procedures to speed up the exit of nonviable firms and further refines Legal Protection Proceedings procedures. Sets a single "cash-flow test" for insolvency, in line with international standards
Reduces minimal capital requirements for limited liability companies (from approx. 2900 EUR, to 140 EUR)
Guarantees patient's right to information (diagnosis, examination, treatment), as well as to choose their physician and treatment institution
Introduces a number of changes in several articles of the Law. Amends, inter alia, article 14 (Posting of an Employee) regulating terms and conditions of employees posting abroad and legal regime, rights and duties that regulate the relationship between employer and employee. Amends article 18 (Parties to Collective Agreement) regulating cases when the General Agreement should be applied to all of the industry workers. Amends article 22 (Approval of a Collective Agreement) providing that where a collective agreement is signed between an employer and a trade union representing at least 50% of employees, the general meeting of employees (conference) to approve the collective agreement is no longer needed. Amends and supplements articles 29, 32, 34, 44, 53, 60, 71, 98, 101, 106,107,108, 129,133, 134,140,152,157 of the Law.
As of January 1 2012 cancels premiums for all pensions.
Cancels eligibility for early retirement for those who performed harmful work.
Replaces earlier law regulating disability. Instead of 3 categories of disability it uses 2 categories. Those with loss of work capacity smaller than 50% are henceforth excluded in order to 'stimulate' the return of disabled persons to the labour market by providing other means of support - social, medical, professional rehabilitation.
Freezes inflation adjustment for pensions for the period between 2011 and 2013.
Micro-enterprise tax introduced as part of the government programme to target post-crisis unemployment and encourage entrepreneurship. The tax is for limited liability companies with turnover of less than 100.000 EUR and max 5 employees - a single 9% flat rate on turnover, instead of a range of taxes on profits, labour, etc.
Tax rate increased from 23% to 26%. Broadening of the base to include all capital income, dividends and interests.
3% increase; reverses cut made the previous year
Tax free personal income tax allowance decreased from LVL 90 to LVL 35 per month
The social security contribution rate was increased by 2 percentage points as of January 2011. (The rate of social contribution increased to 35.09%, of which employer should pay 24.09%, and employee – 11%.)
Specifies the status of temporary work agencies (employers of people who become temporarily employed with their assistance), the rights of temporary workers regarding working conditions, information and consultation, and the special rights of a person who is employed with assistance of temporary employment agency
Allows pharmacies to be owned by a company. Previous law established that from 2011 only a pharmacist or a local government could be owners of pharmacies.
Health Payment Centre (HPC) together with Centre for Health Economics (CHE) merged into the National Health System in order to improve administrative efficiency
Contribution to second pillar (mandatory, fully funded) from 8% to 2% of gross salary
Establishes that an individual is ensured for pension provision only if an employer has actually paid social contribution. If the employer has not paid social contribution, individuals may pay it from his/her own resources
Extends eligibility for early retirement until December 31 2013 (2 years earlier), for those with length of service over 30 years; extends eligibility for early retirement until December 31 2013, for those who performed harmful work
Indexation of pensions and other social benefits freezed until 2013
Personal income tax: decrease of the general rate from 26 % to 25 % and increase in non-taxable minimum and allowance for dependants
Sets new framework for obtaining fiscal resources based on accreditation. The Ministry of education commissions an international and independent institution to assess a Higher Education Institution. Those with poor-quality programs are excluded from state budget financing.
Strengthens the legal framework for protection of companies against illegal takeover (raiderism)
Introduces a range of changes related to conflict of interest, requiring the member of the board who at the same time is the largest shareholder to inform all other members of the board not only on the conflict of interest, but also on the details of deal; for deals on less than 15% of assets a board accept is necessary, for deals on more than 15% of assets agreement of all members is necessary. Also introduces a clause that allows shareholders to request individual responsibility from both the board and management.
Reduces range of reimbursed pharmaceutical products that can be chosen by patients to only one per product group (the cheapest)
Introduces 50% reimbursement for all nationally registered prescription medicines for children up to 24 months, and 25% reimbursement for all pregnant women (until 42 days after childbirth)
The unemployment benefit shall be disbursed in the following amount depending on duration of the unemployment: 1) 3 months of unemployment: 100% of the set benefit, 2) from 4-6 months of unemployment: 75% of the set benefit, 3) from 7-9 months of unemployment: 50% of the set benefit.
Duration of unemployment benefit has been increased to nine months from the date of granting the benefit, irrespective of the contribution period.
Gradual increase in contributions to reach 6% in 2016
Increases the minimum length of service (contribution period) necessary for eligibility from 10 to 15 years from 2014 and to 20 years from 2020.
Increases retirement age to 65; also increasing retirement age for those with special conditions.
Introduces a provision that does not allow for receiving pension for the same contribution period from two countries.
Personal income tax lowered gradually :reduced from 25 to 20% by December 31 2015.
Personal income tax exemption for dependants increased from 100EUR to 115 EUR from July 2013.
Job search obligation of all unemployed will be strengthened. A State Employment Agency (SEA) official will examine the client’s unemployment situation and will together with the client agree on the measures that should be taken, such as: regular reports on the job search process, submission of proposals on tackling the problem, etc.
Partially centralized agency taking over the shareholdings of selected state owned enterprises. Agency is in charge of establishing corporate governance guidelines for all state owned enterprises, supervise their implementation, monitoring enterprises' financial objectives and introduce a new system of financial reporting. Reports directly to Prime Minister
Fund created to compensate patients in the case of harm caused by service providers to their life or health, or for non-material damage. Fund is covered with contributions by service providers
Minimum wage increases from EUR 280 to EUR 325 per month
Monthly non-taxable allowance was increased to EUR 75, and the allowance for dependants was increased to EUR 165 per person.
The social security contribution rate was reduced by one percentage point, with effect from January 2014, with both the employers’ and the employees’ contribution reduced by half a percentage point. A cap was also introduced on the amount of income which attracts contributions. This was set at EUR 46 400 for 2014.
Expansion of trade schools and set up of a new industrial training centre
Less rigid controls for investors who cash their interest on foreign investments
Increase in the rate of social benefits of 15.0% (e.g. for 1 person from Eur 6.41 p/w to Eur 7.37 p/w)
First facility to cater for young children
Increase compulsory schooling to 16 years of age (up from 14)
Increase in the rate of social benefits of 26.4%
Financial allowance to persons with disability
Increase in the rate of social benefits of 20.0%
Investors who repatriate their foreign investment are paid an interest rate of 9% on the capital.
The bill not only consolidated previous legislation, but also made new provisions regulating worker-employer relations. It also protects industrial actions especially the right to strike. From then on trade unions were provided immunity against liabilities arising from industrial actions in furtherance of a trade dispute.
Increase in the rate of social benefits of 10.4%
Increase in the rate of social benefits of 32.1%
Increase in the rate of social benefits of 22.9%
A new contributory scheme for the payment of a wage/income related retirement pension was introduced within the ambit of the 'National Insurance Act', accompanied by a pension scheme for widows calculated on their deceased husband's wage/income. These new schemes were supplemented by a reformatted contributions system whereby a wage-related contribution and an income-related contribution were introduced in respect of employed persons and self-employed persons, respectively. Furthermore, a National Minimum Pension was introduced whereby any person claiming a contributory pension would not fall below a certain rate of pension, provided he had a full contribution record to his credit.
Introduction of low tax rates (2%, 5%) for lower income levels (below 2000 MT for a single person).
Establishment of the National Healthcare System: free provision, universal, tax-based.
Increase in the rate of social benefits of 21.3%
Increase in the rate of social benefits of 11.6%
Increase in the rate of social benefits of 12.1%
Increase in the rate of social benefits of 11.1%
The Lm500 (Eur 1,165) limit on foreign investment is removed.
Increase in the number of tax brackets in the upper limit, the main effect being that now the 65% tax rate (the highest level) will be applied to those incomes above 17960 MT (single; 19102 MT for married individuals) instead of 13127 MT/ 14140 MT.
A refund equivalent to 10% of the wages for the first 6 months is given to employers who hire new employees.
Right of every citizen to receive education and instruction without any distinction of age, sex, belief or economic means
A scheme to provide advanced education to workers nominated by their employers and trade unions.
The law provides for the duty of the State to "prepare citizens for work", i.e. sufficient training and skills.
Until December 1986, social security in Malta was administered through three separate laws: the Old Age Pensions Act 1948, The National Assistance Act 1956 and the National Insurance Act of 1956. A more comprehensive approach was adopted in January 1987 when these Acts were consolidated into the Social Security Act 1987 (Cap 318 of the revised laws of Malta). The Act provides for PAYG pensions in respect of invalidity, benefits for injury, disablement, industrial injury and disease, unemployment, widowhood, retirement and maternity, children's allowances, and other benefits
The Act provides for PAYG pensions in respect of invalidity, benefits for injury, disablement, industrial injury and disease, unemployment, widowhood, retirement and maternity, children's allowances, and other benefits
Reduction in the number of tax brackets, eliminating the 2% rate for incomes between 1700 and 2100 MT (single individuals; 2900-3200 MT for married individuals). Now PIT starts at 5% for incomes above 2400 MT (single individuals; 4000 MT for married individuals).
Increase in the rate of social benefits of 10.0%
Provides for a National Employment Authority, for the establishment of an Employment and Training Corporation, for the regulation of employment and training services and for related matters, including registration of job-seekers, referral for employment, notification and filling of vacancies, engagement of Government employees, functions of the Corporation in relation to training, licensing and operation of employment agencies, manpower records, apprenticeship and traineeship, training standards and certification, and penalties for offences.
MCESD is a forum where social partners formally meet and discuss matters related to the economy, social aspects and labour market.
Social partners agreed on a mechanism, which calculates the cost of living adjustment granted to workers who are not covered by collective agreements.
A contributory pension to widows whose spouse did not have enough contributions paid or died prior pension age.
Severe reduction in tax brackets. Now the lower rates are 18% for singles and 10% for married persons respectively applied at 3556 MT & 4776 MT. All rates above 35% have been abolished, bringing in a considerable tax cut for higher incomes (above 13106 MT for singles, 16423 for married individuals).
Families are given a tax credit of Eur 121
Increase in the rate of social benefits of 6.2%
A single person or a widow who is taking care of relatives is eligible for such pension
Families are given a tax credit of Eur 58
Bank interest rates are no longer to be fixed by the government.
Setting up of a regulator for the financial sector
Introduction of a final withholding tax on savings of 15%
Families are given a tax credit of Eur 82
Rates for single and married individual are made equal (not brackets).
25% reduction on social security contributions if a long-term unemployed person is employed
Establishes a National Council for Occupational Qualifications, with members representing, inter alia, employers and trade unions. The Council shall set standards for occupational qualification. Also establishes Occupational Skills Assessment Boards with the function of determining professional competence according to five "levels of competence" as set out in the Regulations.
The government introduced a prescription charge of 50 Malta cents per prescription on free medicines
Development of Malta College for Arts, Science and Technology (MCAST)
Development of the Malta Professional and Vocational Qualifications Awards Council (MPVQAC).
Severe reduction in tax brackets: from 6 to 4, eliminating progressivity to the system and keeping the limits between 15% and 35%. Income below 7000 MT is not taxed (for single individuals; 9300 MT for married individuals).
Setting the principle of non-discrimination of employees on a fixed-term employment contract and providing for employer's duty to inform employees on fixed-term contract of vacancies, access to training opportunities and related matters.
Providing for the establishment and administration of a Guarantee Fund to guarantee payment of employees' outstanding claims for wages against employers who are in state of insolvency.
Dismissal: during probationary period for any reason, after probationary period for good and sufficient cause in case of a contract of employment for indefinite period, and for any reason in case of a fixed-term contract; or mutual agreement
Providing for equal treatment of part-time workers and for an improved quality of part-time work, so as to facilitate the development of part-time work and to contribute to flexible organisation of working time. Dealing with leave entitlements of part-timers, entitlement to participate in vocational training, and unfair dismissal.
In exceptional cases, the employer, in agreement with the employee or union representatives, may provide for different conditions of employment as a temporary measure to avoid redundancies and as long as it is approved by the director responsible for employment and industrial relations. The approval needs to be reviewed every four weeks.
Provides for establishment of Employment Relations Board. Function of Board is to make recommendations to Minister regarding national and sectoral minimum standard conditions of employment
In all sectors, whether they fall under a Wage Council Regulation Order or not, the employer may bank up to 376 hours of the normal annual working hours in each calendar year, per employee. This can be done in order to allow extra hours over and above the normal weekly working hours, to be worked during periods of higher work activity. These extra hours would then be redeemed during periods of lower activity, by having working hours below the normal weekly working hours.
Establishes that in cases of collective redundancies, the employer proposing to declare the redundancies, shall not terminate the employment of such employees before he has notified in writing the employees' representatives about the termination of employment contemplated and has provided the said representatives with an opportunity to consult with the employer
Setting minimum requirements to facilitate the reconciliation of parental and professional life of working parents, including: 1) establishing the right of male and female workers to be granted unpaid parental leave on the grounds of birth, adoption or legal custody of a child for a period of three months until the child has attained the age of eight years; 2) defining the right to return to the same job and the entitlements of employees during parental leave. Regulating entitlements to maternity leave and benefits. Employee on maternity leave shall be entitled to full wage during the first thirteen weeks of such leave, with fourteenth week being unpaid. Also providing for prohibition of exposure to certain working conditions, ante-natal examinations, taking of leave during fixed-term contracts, rights during maternity leave and prohibition of dismissal.
Providing for minimum requirements for the organisation of working time, concerning minimum period of daily rest, weekly rest, annual leave and breaks, maximum weekly working time and certain aspects of night work, shift work and patterns of work
Adding a bracket at the upper limit of 30%, and setting the 35% rate for income above 15724 MT for singles and 23295 MT for married individuals, effectively decreasing rates for incomes between 14000 MT and 15723 MT (19800-23294 for married).
a) Under the Employment Training Placement Scheme, employers recruiting unemployed workers who have been registered for more than one year receive a subsidy of half the value of the national minimum wage for a specified duration; b) Under the Training and Employment Exposure Scheme, unemployed aged 40 and over receive intense training, work exposure and a monthly allowance exceeding the minimum wage for one year; c) Two actions under the ESF Gozo scheme: "Support to Small Businesses", providing for a training consultant to analyse the situation of ten SMEs and resulting in the drawing up of a training plan, and "Foster entrepreneurial skills", providing for the necessary stimulus for those unemployed who wish to set up their own businesses. The participants will undergo training and will be assisted to draw up a business plan. A grant will be provided to successful business plans.
Provision of temporary or permanent support to persons with disabilities who register for work, through job coaching, personal assistance and financial incentives for employers;
Organisational restructuring and capacity building of the Maltese PES (Employment and Training Corporation - ETC); Further optimisation of the ETC's clients database and link of the ETC's vacancy website to the EURES network; Introduction of new active and preventive services and re-design of existing ones. New measures include: compulsory one-day job search seminars and training for job-seekers; enhancement of job vacancy referrals and profiling system. After 4 months young job seekers are referred to a 4-week course; also, a Job Club is created: During the second half of 5th month young job-seekers are placed on active measures, i.e. short competence-based courses or the job experience scheme; Draw up of Personal Action Plans for those identified as needing further assistance; After 3 months adult job-seekers are placed on a 2 week job motivation course and advanced job-search skills with emphasis on multiskilling. Personal action plans drawn up after the course; After 9 months, adult job seekers are referred to short competence based courses or placement on ETPS or TEES; Placement on active measures, including the Job Experience Scheme for young jobseekers the Employment Training Placement Scheme or the Training and Employment Exposure Scheme for adult jobseekers.
Graduate scheme under the ESF Gozo programme, providing unemployed graduates with employment opportunities with Gozitan SMEs. Through this scheme the participants will gain training and employment experience & Job Experience Scheme for young jobseekers, involving a 13-week work placement
Customer Service Training Courses under the ESF Gozo, targeting employed and unemployed people who would like to acquire new skills to improve their job prospects;
Literacy Programme for those seeking employment;
Increases the supply of quality, affordable and accessible childcare facilities at the place of work (capped fee for childcare services), enabling more mothers to remain in the labour market. The project involves the training of child carers and a package of incentives to SMEs to encourage them to start-up and run childcare services at the place of work
In the case of collective redundancies, the employer shall forward to the director of the (central) government department responsible for industrial and employment relations (DIER) a copy of the written notification given to the employees’ representatives regarding the proposal to make redundancies. The public authority should be informed of notification on the same day.  The director of the DIER shall also be given a copy of the written statement giving all relevant information including the reasons for the redundancies, the number of employees being proposed for redundancy, the number of employees normally employed, the criteria proposed for the selection of employees to be made redundant, details regarding any redundancy payments due and the period over which redundancies are to be effected. This must be on the same day that the employees’ representatives are notified.  This applies to the termination of employment by an employer on grounds of redundancy, over a period of 30 days, of:  10 or more employees in establishments normally employing more than 20 employees but fewer than 100; 10% or more of the number of employees in establishments employing 100–300; 30 employees or more in establishments employing 300 or more. The director of the DIER may extend the 30 day period by a second period of 30 days if it appears that such extension may provide further opportunity for the resolution of the reasons for the redundancies, or for the identification of solutions to the benefit of those employees who are being declared redundant.
The Legal Notice on Transfer of Business states that employees have to be informed at least 15 working days before the transfer is carried out or before the employees are directly affected by the transfer as regards their conditions of work and employment, whichever is the earlier.  Consultation is to start seven days after notification of the merger or transfer to the employees.  The Legal Notice on Transfer of Business does not mention justification. Nevertheless, in the case of collective redundancies the employer is obliged to supply the employees’ representatives with a statement in writing giving all relevant information and shall in any event give such employees’ representatives the reasons for the redundancies, the number of employees it intends to make redundant, the number of employees normally employed, the criteria proposed for the selection of the employees to be made redundant, details regarding any redundancy payments due and the period over which redundancies are to be effected.  This Legal Notice applies to those undertakings that are being transferred and that employ more than 20, including all full-time and part-time employees.  This Legal Notice is applicable to any transfer of an undertaking, business, or part of an undertaking or business to another employer as a result of a legal transfer or merger.
Four days reduction in annual vacation leave for all workers (public holidays falling on a Saturday or Sunday in 2005 not being added to vacation leave), aimed at reducing the unit labour cost of production by around 2%.
Restrictions on interest rates were abolished, as the current account was, were liberalised gradually, with virtually all restrictions on capital movements dropped upon EU accession.
Restrictions on interest rates were abolished, and interest rates managed more flexibly as the current account was liberalised gradually, with virtually all restrictions on capital movements dropped upon EU accession.
The independence of the Central Bank of Malta has been increased.
Provides for establishment of European Work Councils to provide information and consult employees of Community-scale undertakings. Inter alia deals with responsibilities of central management, employees' request for information, establishment and functions of special negotiating body, confidential information, and protection of employees' representatives.
Females who return to work after giving birth or mothers who have been out of employment for more than 5 years are given a tax credit equivalent to Eur 2,000
Work initiated on the new Apprenticeship framework and ETC Knowledge Centre inaugurated. Personal and Social Development Teachers and Guidance Teachers were also given training on Gender Sensitive Vocational Guidance and empowerment training courses offered by the ETC to women returners.
Active Youths Scheme so that unemployed youths contribute to the community by working with NGO’s, religious and cultural organisations.
Women being absent from the labour market for more than five years started receiving a tax credit of 1,600 Euros for two consecutive years when they return to work.
A Supported Employment Scheme aimed at assisting the severely disabled unemployed to find gainful employment.
A Redeployment Scheme to assist employers to train previously redundant workers, and to avoid redundancies by providing for a period of retraining in new occupations in another company within the same group of companies.
A Work Start Scheme to improve the employability of new market entrants to eventually integrate into the labour market through a combination of in-house training and work experience.
A Training and Employment Exposure Scheme aimed at long-term unemployed persons who are over 40 years of age with the aim of training them and exposing them to a work environment.
Persons who are under 18 years engaged in a part-time job have a minimum social security payment of Lm 2.84 per week if their weekly wage does not exceed Lm 55.63 per week.
The government extended the applicability of lower tax on part-time work to spouses working only part-time when their spouse is in full-time employment
Training subsidy scheme in further off-the-job vocational education and training for the self-employed and persons employed in enterprises with less than 20 employees.
The scheme 'Enhancing the competitiveness of SMEs and microenterprises through LLL' (ESF/10) to facilitate job retention and re-skilling of employees through training.
Tax credits to support enterprises financing the studies of employees at a post-graduate level with a focus on the application of science, technology and engineering, as well as information and communication technologies (ICT).
Tax deductions in respect to childcare facilities
Provides minimum requirements for the right to information and consultation of employees in undertakings.
Changes in how a pensionable income is calculated. For persons born after 1961, pensionable income shall be calculated on the average of the best 10 years over 40 years. Changes to maximum pensionable income.
Increase in contributions for a full pension
Gradual increase in retirement age, increase in contributions for a full pension and changes in how a pensionable income is calculated.
Gradual increase in retirement age. Retirement age is to go up to 65 by 2026.
Private Sector Placement Scheme: individuals participating in this scheme are employed for a period of three months working a maximum of 30 hours per week with private companies. Government contributes towards 75 % of the national minimum wage.
Employers of disabled persons registered at the Employment and Training Corporation are exempt from social security contributions in the first three years of employment.
Employment Aid Programme to promote access to employment of disadvantaged groups. Employers who employ individuals from these target groups will benefit from a subsidy consisting of half the minimum wage and half the national insurance contributions paid by the employer for a minimum of 26 weeks to a maximum of 52 weeks.
A programme funded by the European Globalisation Adjustment Fund to assist individuals who became redundant after the closure and downsizing of two major textile factories in Malta. The programme provides assistance such as profiling, occupational guidance, training and testing in various occupational areas, financial assistance to start one’s own business, redeployment scheme and a job search allowance.
Employability Programme providing basic skills training, job search assistance to the unemployed in the form of job clubs and courses, work orientation programmes, traineeships, a business start-up scheme, a training subsidy scheme as well as skills assessment.
Training Aid Framework to promote access to training of employed persons to increase and improve their skills and knowledge. The Training Aid Framework will cover training costs of training initiatives initiated by the employer.
Prior to 2007, the EU regulations on employment under fixed-term contracts were not applicable to workers in the public sector. Maltese legislation prevented fixed-term contracted employees in the public sector from enjoying the same rights as employees in the private sector, where once they have been employed for four successive years under a fixed-term contract, their contract reverts to an indefinite one. The “Contracts of Service for a Fixed Term Regulations, 2007”, which came into force on 15 June, 2007, were enacted to amend this situation.
Employees (around 20,000) who are covered by neither a Wage Regulation Order nor by a Collective Agreement are entitled by law to sick, injury, marriage, birth, bereavement and jury leave.
Granting new employment pro-rata benefits to part-time workers working a minimum of eight hours a week, such as paid vacation, sick leave and bonuses
Extending paid maternity leave by 1 week to 14 weeks.
Makes regulation about equal treatment applicable to all persons, also in relation for access to self employment or to occupation.
Unemployed people taking up temporary employment will not lose their ranking order on the unemployment register
Part-time employees working a minimum of eight hours a week started to be entitled to all pro-rata benefits which a comparable full-time employee in the same category is entitled to. This was made possible after the government amended the part-time Employees Regulations (2002) and phased out the previous threshold of 20 hours.
The social security contribution paid by part-time employees for whom such employment is their main job was changed so that, as from January 2007, employees working eight hours or less started paying a maximum of 10% of what they earn from such work instead of the previous statutory minimum that applied to all workers and which eroded significantly into part-time earnings
Introduction of a contribution of 10% social security contributions on earnings from part time work instead of the current flat weekly rate of MTL 5.79%
Pensioners shall be entitled to work and have earnings even exceeding minimum wage without forfeiting any part of their pension
Legal changes to enable persons working in a family business to register as employees of the same business for fiscal purposes. Thus all family members were given the opportunity to enjoy social benefits such as entitlement to a pension. The measure included a tax reduction for the family business.
Reduction of tax brackets, eliminating the 30% limit and therefore taxing that income at 25%.
Youth Employment Programme (YEP), targeting youth who are between 16 and 24 years of age; who have just left school; who are following a course of some sort or are looking for work; who are registered as unemployed; who are employed but would like to improve their skills for a better job and who feel vulnerable and socially excluded.
Work Trial Scheme gives the jobseeker an opportunity to gain concrete work experience. The objectives are two-fold, serving both the requirements of the employer who offers to train the participant and the needs of the unemployed jobseeker. The Employment and Training Corporation grants 50% of the national minimum wage per week for the duration of the scheme to the participant. Placements can be for a maximum of 12 consecutive weeks. The work experience will be based on a 20 hour week (4 hours a day) in all cases.
Employment Aid Programme contributes towards the integration of disadvantaged persons and disabled persons in the labour market. It facilitates access to employment through financial assistance and upgrades the skills of those furthest away from the labour market through work experience. Employers will receive a grant equivalent to 50% of the wage costs in case of disadvantaged persons or 75% for the first and 60% for the subsequent second and third year in the case of persons with disabilities, for a definite time period, depending on the target group.
Centralization and relocalization of registration system. Informatisation of renewal and appointment processes. In addition, new services are provided: 1) Personal Action Plans (PAP)- As from 1st January 2009 all registered unemployed clients will be also introduced to the PAP system. The PAP details the steps necessary to help the job seeker in finding employment. It provides information about the job seeker’s skills, qualifications and past work history. 2) Employability Programme – The Programme started in May 2009 and will be concluded in December 2011. The overall objective of the programme is the reintegration of job seekers and inactive persons into the labour market and assistance to those in employment to secure and advance their position within the labour market.
Two projects led by the Employment Services Division of the Maltese PES: 1) Rapid Reaction service, offered to local companies who have collective redundancies as a consequence of collective layoffs due to restructuring; 2) Collective Job Search Project: A project aimed at providing jobseekers with practical help to find work. The aim of the Employment Services Division is to match jobseekers to suitable vacancies, thus facilitating a rapid reintegration of jobseekers into the labour market.
Additional funds for extending the range and offer of childcare centres.
Contracts of Service for a Fixed Term (L.N. 376 of 2009) which gives the right to employees in the public sector or in the civil service to refer their case to the Industrial Tribunal if their definite employment is terminated after it has lasted for a period in excess of four years
Community working scheme is extended to unemployed people registered for more than 6 months (instead of 5 years as previous threshold). Participation is mandatory and people work for 30 hours a week perceiving an unemployment benefit which reaches 75% of the minimum wage.
Previously pro-rata benefits were only granted in cases where the part-time job was the principle employment. The reform benefits workers whose jobs are spread across different companies.
Self-employed women are offered the possibility to select a pro-rate of 15% of national insurance contributions (against minimum rate of EUR 26.37 per week).
The entitlement to parental leave is extended to those providing foster care. ‘Foster care’ is defined by the Legal Notice as “...a service for a determinate period whereby a child is placed in the continuous care of a foster carer, and through which the child is brought up in a family environment according to his best interests”. These regulations shall apply to all employees, whether full-time or part-time, and whether they are employed on an indefinite or a fixed-term contract
Maternity leave duration is increased from 14 to 16 weeks from 1 January 2012, and to 18 weeks from 1 January 2013. These additional weeks of maternity leave are paid at a fixed rate of €160 a week, financed by the State budget.
Malta added an amendment to its Employment and Industrial Relations Act 2002 (EIRA), empowering the minister responsible for transport to declare specific jobs in land and sea-based transport in Malta as ‘essential services’, effectively removing the right to strike from transport workers. This change to labour law was made without consulting the social partners and is in contrast to the consensual approach that characterised the evolution of the EIRA a decade ago. On 28 October 2011, legal notice 994/11 was published in the Government Gazette.
New tax brackets for parents with children under 23 years of age.
Some sectors liberalised: Hotels, restaurants and wholesale traders in food and drinks exempted from price control.
Implementation of arrangements for investment in high unemployment regions announced in February 1975. Apart from a 15 % grant on fixed investment already in force, Glds. 5 000 will be granted for each additional job outlet provided by the project, subject to an upper limit corresponding to 25 % of total investment expenditure, or Glds. 750 000 per project.
Extension of compulsory education to 10 years; partial compulsion of 2 days until age of 17.
International capital flows are largely repressed.
Clothing enterprises covered by collective labour agreements receive a subsidy of Glds. 1 000 per worker providing that they cut employment by no more than 10 % from the start 1975 level and co-operated on proposed arrangements for restructuring.
Social security benefits for unemployed, invalids and widows increased by 3 %.
Temporary reduction of income tax rates announced in autumn takes effect.
Legislation to improve employment possibilities for long-term (more than 6 months) unemployed and for workers aged 45 or more through public sector employment and subsidy payments to private employers.
Regulates the obligation to announce collective dismissal.
Compulsory 3 month advance notification to employment exchange and trade unions required for the intended dismissal of 20 or more employees.
Reduction in foreseen increases in the statutory minimum wage and some social insurance benefits.
Aggregate credit ceilings are fully repressed.
Exchange controls to be liberalised and simplified, effective September.
Wage negotiations punctuated by strikes, employers agree on automatic price compensation up to January 1978.
Employers' contributions to social security reduced.
Increased subsidies for training school-leavers.
The Government grants Gld. 800 million of further subsidies to shipbuilding and heavy metal industries to contain the reduction of employment.
Extension of 30 % wage cost subsidy for full-time hiring of long-term unemployed.
Banking supervision is still largely repressed.
New employment subsidies are granted: employers to receive a wage-cost subsidy of 100 % in the first half-year and 50 % in the sector per year when employing a person registered or unemployed for at least a year.
Significant changes to the original Wet Ziekenhuisvoorzieningen – given the problems with planned shift of responsibility to lower levels of government (Provinces)
Trade unions wage claims for 1980 range from 1 % to 2 % on top of indexation, and include further transformation of the semi-annual price compensation into flat rate payments. Unions also declare an aim of reducing working hours to 35 per week over a four year period. Central negotiations break down. Revised official projections suggest stagnation of export volumes in 1980 and an increase of the general government deficit to IVi % of national income. A two-months wage freeze is decreed on 10th January.
In accordance with "Bestek 81" and with the budget proposal, a deduction of 0.5 % on average (varying from 0.3 % to 0.7 %) will be made from the semi-annual adjustment of public sector wages to the contractual wage rise in the private sector.
Additional Gld. 70 million made available to the job and education scheme for unemployed school leavers.
An experimental scheme is becoming introduced to fill 3 300 jobs in non-commercial services from those registered as unemployed for more than six months
Provides for equal treatment of men and women in employment and equal pay for work of equal value. Establishes a Commission on equal treatment for men and women in employment. Makes it possible for corporate bodies to put in a claim for violation of the Act (partially modified in 1989).
International capital flows are largely liberalised.
In 1983 the government decided to replace the open-ended hospital reimbursement system with a budgeting system, which in 1984 was expanded to all other in-patient care institutions. The Health Care Prices Act (1982) enabled government to control physicians’ fees and, in a later stage, also their total revenues. Traditionally, medical specialists received a fee for each item of service. Using the threat of substantial fee cuts, government forced them to give up their fee-for-service (FFS) payment system.
Restraining the increase in wages by refraining from an initial pay increase and by restricting cost-of-living adjustments at mid-1980.
A new early retirement scheme will become effective in the Government sector and an experiment in flexible early retirement will be launched in the postal services.
Credit controls and reserve requirements are largely liberalised.
Temporary increase in income tax to finance the once-for-all payment to former members of the Royal Netherlands Indies Army (Gld. 225 million).
Oil products no longer subject to price control.
Holiday bonuses of civil servants reduced.
The number of hospital beds to be reduced by 8 000.
Patients own contribution to health care expenses raised.
A prescription charge for medicines introduced.
Important collective agreement (employers agreed to working time reductions in exchange for wage moderation by the unions) setting the basis for social cooperation during the next two decades
Civil service salaries to be increased by 1 % less than inflation and their imputed social security tax deduction to be increased.
Unions and industry agree to lower working hours.
Abolition of the right to assistance unemployed workers aged 16 and 17 years
Introduction of a right to children's allowances for unemployed persons aged 16 and 17 years.
Unemployment benefits paid to young people restricted.
Early retirement age for public servants lowered to 61.
A further reduction in wage and income tax relief in 1982 for the elderly and for those incapacitated for work; and for the abolition of these forms of relief for wealth tax purposes in 1983
Full interest deductibility for income tax purposes reduced to the sum of interest income received plus Gld. 7 500, above that deductibility limited to 50 %. The limit for deduction of interest on housing loans is to be higher but imputed rent will be indexed.
In 1982, there were Increases in personal income tax rates for 10 brackets; each is increased by 0.75 %, except the lowest one
Government tightness rules for approval of the collective dismissal of employees aged 57 and over.
Family allowances for children aged 16 - 27 made more restrictive.
Benefits are frozen for the year 1984 for unemployed
Benefits are frozen from 1984 for young onwards
Act reducing the benefits under the Unemployment Provisions Act to those aged 23 or under.
The income tax relief for elderly and incapacitated workers to be abolished, but extraordinary health expenditure deductions will be increased and financed by a tax on insurance policies.
The 1983 temporary income tax increase to be continued – higher income tax rates to be raised and the lowest to be lowered. (10 brackets – the lowest remains the same, the next two are reduced by 0.75%, the next 3 are again unchanged, the next 2 are increased by 0.75%, the second highest is increased by 1.75%, the highest is reduced by 0.75%).
Reduction of public service salaries by 3 %. Similar reduction of statutory minimum wage, in a number of social insurance benefits and in some other benefits and pensions, as well as cancellation of usual 1st July adjustment. Family allowances for 1984 remain at level of 1st July 1983.
Grant of financial relief to cover the essential living expenses of persons not receiving benefit from other sources.
Benefits are lowered from 80% to 70% of earned income
Net benefits under the Sickness Benefit Act are maximised at the level of the net wage from employment or the net benefit under the Unemployment Act.
A means test is introduced for recipients of benefits under the General Incapacity for Work Insurance Act.
RWW conditions for work are relaxed: one has to be available for work at least 20 hours a week (under the previous legislation it was full-time), the possibility to work unremunerated is improved
Claimants of 50 years of age or more can claim WWV benefits longer
Benefits are frozen for the year 1986 for young
Benefits are frozen for the year 1986 for unemployed
Introduction of equal benefit rights for men and women and alteration of the benefit period
Separates and privatises parts of the PTT (state company for post, telephony and telegraphy), creating the Postbank instead.
Persons reaching age of 18 can claim financial support for studies
Dutch capital market further liberalised. Bullet loans, floating rate notes, commercial paper and bank issues of certificates of deposit are now allowed.
Credit controls and reserve requirements are largely repressed.
The security markets are greatly developed and largely liberalised.
Organises transition to new health insurance system which now includes a regulated, mandatory insurance component, aimed at specific groups of people who face difficulties buying normal health insurance
New social assistance benefits (IOAW benefits) are introduced.
Abolition of the provision prescribing a compensation for the reduced work
Duration of the benefits has been changed. Basic benefits lasts half a year. The extension, depending on individual work history, lasts between 3 months and 4.5 years. In particular: At least 5 years – 3 months; >10 years – 6 months; >15 years – 1 year; >20 years – 1.5 years; >25 years – 2 years; >30 years – 2.5 years; >35 years – 3.5 years; >40 years – 4.5 years. Workers over 57.5 years of age can receive follow-up benefits for 3.5 years.
Supplements wages until social minimum income is received of those receiving benefits
In order to be eligible to unemployment benefits one must have worked at least 26 weeks during the 52 weeks prior to unemployment (previously 130 days in 12 months).
People in military services and married women become insured in WW
Measures introduced to reduce long-term unemployment. Employers who, between October 1986 and December 1987, conclude an employment contract with a long-term unemployed person will be exempted from payments of employers' social insurance contributions for a period of up to four years.
Amendments for increased investment flexibility for pension funds. In particular, the General Public Service Pension Fund (ABP) will be allowed to invest abroad up to a limit of 5 % of its assets.
Introduction of a general scheme for training subsidies (Kaderregeling scholing). Subsidies for training can amount to up to 100 % of the cost.
Introduction of vocationally-oriented adult courses
Increases tuition fees for 16 and 17 year olds
Increasing employment opportunities for long-term unemployed reducing the minimum length of the labour contract from 2 years to 6 months.
Contains criteria to be taken into account by local employment services offices when reviewing dismissals, in order to prevent racial discrimination.
Eligibility requirements for unemployment benefits are tightened: the worker obliged to accept an appropriate job even outside his geographical region.
Improvement of portability and protection of accumulated pension rights in occupational pensions (to improve labour market mobility)
Subsidies raised under the Bijdrageregeling Vakopleiding Jongeren (BVJ) (aimed at stimulating apprenticeship courses for youngsters)
An additional Gld 250 million is to be spent on training of unemployed and employees
Increases tuition fees for colleges and reduces study bursaries for some groups
Dutch capital market further liberalised. Zero-interest bonds and discount bonds are now allowed.
Creates the private PTT company to continue the state company PTT; government remained main shareholder until 1996.
Shares of KLM (international airline), the Nederlandse Middenstandsbank, Hoogovens (steel), part of DSM (chemicals) and a number of smaller firms have now been disposed of. Earnings from sales over the Government Coalition Agreement period (1987 to 1990) is targeted to reach Gld 2 billion (less than 'A percentage point of 1988 GDP).
Telecom was privatised in 1988, its monopoly in the area of telecommunication infrastructure, including satellite services and mobile communication systems, was maintained, while the supply of peripheral equipment was liberalised.
The Government decided to reduce the corporate tax rate to 35 % from to pay for the employers' social security contributions.
The monopoly of the postal service is now limited to first class mail up to 500 grammes, with some exceptions for fast delivery services.
End to the monopoly on value-added network services of the posts and Telecommunications, which increases competition in telecommunications
Dismissals which result from bankruptcy no longer need authorisation from the public employment office (PES).
The Government has decided to allow free wage negotiations for civil servants starting from 1991. Wages in 1990 should not, however, rise by more than 2 1/2 %.
Nominal freeze of social security benefits and minimum wage continued.
Reduces pension contributions to public sector fund in 1986 and 1987 given good investment performance
The Government offers 26 million shares in the NMB-Postbank, or 28 % of the total shares of this company.
The Dutch government successfully sold one-third of its shares of DSM, a major chemical concern. Another third of the shares is to be sold shortly.
Organises the privatisation of the national guarantee fund for uninsured motor-related accidents
7 % reduction of corporate governance tax from 42 to 35 % (40 % for the first Gld 250 000 profit)
Employers are now eligible to a wage cost reduction of 10 % when hiring an employee at the minimum wage (takes effects on 1st April).
The strict separation of banks and insurance companies was liberalised in 1990; cross-holdings between banks and insurance companies or even merger into a holding company are no longer forbidden.
Contributions to the AOW (old age pensions) and AWW (widows and orphans pensions) schemes are included in the personal income tax system.
The age for voluntary early retirement is lowered from 61 years and older to 60 years and older.
The obligation of the PES to inform the institutions in charge of unemployment benefits of insufficient job search efforts by benefit claimants are introduced by the new PES law of January; sanctions for refusing a suitable job offer increased: refusal now entails a complete and permanent loss of unemployment benefits.
Social security benefits and the minimum wage are raised by 1.27%.
The minimum wage and social security benefits are again linked to wage growth after the nominal freeze decided in 1983, conditionally on two factors: postponed either if private sector growth is too strong or if the dependency ratio (the ratio of full-time equivalent beneficiaries to full-time employed person) exceeds 0.86 (implemented on January 1st, 1992).
Reduces pension contributions to public sector fund in 1988, 1989 and 1990, given good investment performance
The "Oort" revision of the personal income tax system becomes effective. The top marginal tax rate is reduced from 72 to 60 %. The lower rate, which now includes social security contributions, is raised from 14 to 35 %. The number of tax brackets is now three instead of nine. Notably the contributions for the AOW (old age pensions), AWW (widows and orphans pensions), AWBZ (general health care) and AAW (general disablement) schemes are now inside the personal income tax system. Those over 65 are exempted from AOW and AWW; their lower bracket tax rate is 18 % instead of 35 %.
In May 1991 the Government announced a ban on so-called horizontal price arrangements between companies in the same trade, except for price arrangements in franchising. This measure implies, at least in part, a break with the Dutch tradition of tolerating cartels.
Introduces basic formation within secondary education
The banking supervision is less regulated.
Social security benefits and the minimum wage are increased by 1.7%.
Introduction of the bonus-malus scheme for disability benefits, of a wage subsidy for firms hiring (partially) disabled people.
Obliges employer to pay replacement wage for first period of sickness, this with the purpose to incentivise employer action to prevent absenteeism
Improves functioning of the 1958 competition law – focus on horizontal price agreements
Improves worker protection through specifying use of contracts
Collective agreement in preparation of 1994 Central Labour Agreement (CAO), where social partners agreed on both wage restraint and decentralisation of decision-making to lower levels of industry (with only general agreements made on global level)
The social partners agree on a central wage agreement stating that there will be little or no room for nominal wage increases in 1994.
Organises transition insurance scheme (awaiting WAO) for workers with increased risk for unemployment
As part of a disability and sickness reform, enterprises are legally obliged, in case of sickness, to pay the first six weeks of benefits
The Government eases investment rules for the General Government Pension Fund (ABP), allowing it to invest up to 10 % of its funds abroad
The Minister of Economic Affairs agrees to the take-over of Fokker, the Dutch aeroplane manufacturer, by German DASA, the aircraft subsidiary of Mercedes Benz. DASA buys the government's 10.6 million shares and attains a majority stake of 51 %.
Introduces a government programme to stimulate the labour market by encouraging employers to hire low-wage earners and by covering/reducing some social/health insurance costs through public funding. These amendments refer to the following earlier Acts and amendments: Stb.552, 1987, most recently amended in Stb.750, 1993; Stb.391, 1992, and Stb.127, 1989, both recently amended in Stb.465, 1994. (See also: Stb.910, December 21, 1994 concerning the related Health Insurance Act).
Two other decrees will prohibit market sharing agreements (broadly defined), and collusive tendering (for all sectors, including the building and construction sector).
The legal opening hours for shops are extended from 6:00 pm to 6:30 pm.
The so-called MDW project aims to strengthen product market competition and the quality of legislation through a comprehensive reassessment of existing regulations and a reduction of the administrative burden. The project has two components. First, new legislation proposals have to be accompanied by an analysis of the expected impact on enterprises and the environment. Second, every year the government selects a number of areas for reassessing existing regulations. The early achievements of this project included the Shop Hours Act, which resulted in a major liberalisation of shopping hours.
Prohibited price fixing officially, marking something of a revolution in Netherlands competition policy.
Market division and collusive tendering were banned
General law forbidding any form of discrimination on basis of religion, belief, political conviction, race, gender, nationality, sexual preference, civil state.
Compels employers to strive for proportional representation of migrant workers in their undertakings. Accordingly, employers must inquire how labour policy hinders labour participation of migrant workers, take the necessary measures for its promotion, and make a yearly report. Provides for the obligation to cooperate with the Works Council.
The new wage agreement in the banking sector introduces a 36 hour working week.
Obligation for enterprises to continue wage payment during the first weeks of sickness introduced.
It modifies the amount shared between the employer and the employee of the premium paid to the General Unemployment Fund, lowering the part of the premium to be paid by the employer, thus altering the proportional sharing between employers and employees. Purpose is to lower expenses and promote employment.
Provides one-shot benefits to some categories of civil servants
Introduction of the legal right to transfer pension rights. Inclusion of part-time workers in pension schemes.
Civil servants may obtain a reduction of their hours of work when they reach the age of 59 and consequently may receive an allowance for loss of wage. Establishes conditions under which this allowance can be granted. Only applies to claims to part-time voluntary early retirement made before 1 April 1992.
The Minister of Social Affairs approves 57 subsidised job programmes in the private sector targeted at the long term unemployed resulting in the creation of 20 000 jobs in 1996.
Wide-ranging wage subsidy programme for the long-term unemployed are introduced.
Abolishes the bonus-malus system initiated within the AAW (which had the purpose to provide financial incentives for employers to minimise the number of workers unfit for work), yet only to replace these incentives in other laws (WAO)
The Government agrees on a new Competition Act to be submitted to Parliament. It is based on European competition rules and forbids restrictive agreements and practices and abuses of a dominant position by one or more parties. Planned mergers, with a combined turnover of more than Gld 250 million, with at least two of the merging parties having a turnover of Gld 30 million in the Netherlands, will have to be notified to the competition authority.
The Government decides to shorten dismissal procedures. According to the new rules, an employer can dismiss his employee at the same time or even before asking permission from the director of the Public Employment Service.
A new collective wage agreement for state civil servants is concluded, introducing a 36 hour working week from 1997.
The bonus-malus in the disability scheme is abolished. The bonus of the scheme is replaced by subsidies for enterprises that employ disabled people.
Reduces pension contributions to public sector fund in 1991 and 1992, given good investment performance
Privatises the pension fund for civil servants
Personal income tax reduction - the lowest tax rate was reduced by 5.5 % to 7.5 %
Organises nation-wide labour market placement agency in order to better mediate supply-demand
Penalties for violating the rules on unemployment benefits are made mandatory and no longer applied discretionally by the administration.
Significant liberalisation of shop opening hours (shop opening hours were increased from 55 to 96 per week).
A new shopping hours law comes into force, allowing shops to open from 6 a.m. to 10 p.m. from Monday to Saturday, with Sunday trading permitted 12 times a year.
Brings additional set of goods under existing law
Increases access to supplementary bursary
Agreement on new approach to flexible employment (agency workers, on-call workers, etc.)
Improving the protection of the rights of employers with different working times, in particular part-time employees, by requiring equal treatment with full time workers
Obliges employees to continue paying 70% of wages for first 52 weeks of sickness – incentivising them to reduce absenteeism
Sickness insurance is almost fully privatised, employers pay premiums based on past incidence of sickness in their firm.
The public sickness benefit scheme is abolished and employers have to continue to pay wages for their sick employees for up to a year
Obligation for enterprises to continue wage payment during sickness is extended to one year.
Eligibility to Unemployment Benefits after voluntary quits is removed.
The second instalment of the flotation of KPN (Post and Telecommunications) raises more than Gld 6 billion. The government share in KPN has been reduced to 45 %. Part of the proceeds will be used to finance the construction of the Betuwe railway and the high speed railway.
The Government announces the sale of 20 % of the shares of the chemical concern DSM to banks and institutional investors. The sale is expected to raise Gld 1.1 billion. The government share in DSM will be reduced to 11 %.
Financial incentives (earnings-disregards) offered for people deciding to return to work
PES and unemployment benefit administration started to co-operate more closely to ensure better surveillance of job search, refusal of a suitable job entails a complete and permanent loss of benefits.
Extends capacities of local governments to assist job-seekers, especially through subsidised work
Regulates protected workplaces for disabled people, sustaining labour market participation and promoting potential re-integration in labour market; ensures only disabled persons can benefit from subsidised social work provision
Two new national telephone operators were allowed to enter the market.
Improving functioning of markets by removing restrictions to competition; strengthens the previous, rather weak 1958 law considerably; installs the Dutch competition authority (NMa)
Installed the monitoring authority for telecom
Imposes rules regarding verification of companies, in line with the EC Regulation on competition
By law, the court hearing has to begin within 4 weeks. An employee must be immediately informed of the reasons for the s.d. ("summary dismissal" for an urgent reason) in writing. No official authorisation is required for a s.d. However, employees retain the right to contest a s.d. in the courts.
Under government pressure, social partners agreed to the following: controlling costs, introducing mobility-enhancing measures, reducing breadwinner bias, increasing coverage
Introduction of an income test for survivors benefits (with some disregards for work earnings).
The so called "transitional SPAK" was introduced to cushion the increase in the tax burden of employers who start paying a worker between 115% and 130% of the legal minimum wage, by allowing employers to claim half of the SPAK for a maximum of two years.
Reduction of non-wage labour costs through subsidies to employers in the form of a permanent relief for firms hiring low-wage workers and temporary tax reductions for firms hiring long-term unemployed. Creation of subsidised jobs for long-term unemployed mostly in public sector.
The Budget law includes an increase in social security contributions.
The government reduces its share in KLM to 25 % by selling its assets back to the company.
Integration plans are designed for the long-term unemployed and unemployed young people up to the age of 23 to find the appropriate mix of education, training, work experience, social activation and financial incentives, young people are offered subsidised employment after 12 months.
Supports labour-disabled to find work – for example by facilitating and even mandating employers to employ disabled persons
The new Competition Act – which declares both abuses of dominant positions and restrictive agreements and practices illegal, and includes a system of preventive merger control – has come into force at the beginning of 1998. It is implemented and enforced by the Director-General of the Dutch Competition Agency who is subordinate to the Minister of Economic Affairs but exercises the powers assigned to him by the Act in his own name. According to the Competition Act the Competition Agency will become completely autonomous after three years. The Act represents a major change as, in principle, it covers all sectors of the economy.
Privatises electricity market – states that all users should be free in choice of provider and everyone should be free to produce electricity
The new Competition law comes into force, including a system of preventive merger control. It is implemented and enforced by the Netherlands Competition Authority (NMa). The PEMBA law comes into force, introducing premium differentiation in the disability scheme (based on experience rating) and the possibility of opting out.
Agreements between employees and temporary employment agencies will now be considered as employment contracts with prospects for permanent employment. In other words, the legal status of these workers will improve in proportion to the length of time they work for a particular agency. In view of the special character of these temporary employment relationships, exceptions to the normal regulations governing a contract of employment will be made for the first 26 weeks of the agreement (flexible termination of the employment relationship and the non-continued payment of wages). After that initial period, employees will have a right to training and to continued payment if – through no fault of their own – no work is available.
Improves rights of temporary agency workers
Aims at preventing illegal labour and exploitation of workers by regulating labour market intermediaries (e.g. employment agencies)
Liberalisation of labour market access for temporary employment agencies by repealing the permit system for temporary employment agencies.
Companies can use temporary employment contracts more than they could in the past, since the new law lifts the maximum term for this type of temporary employment (currently six months).
The employees have the right of holding a permanent contract after 3 consecutive contracts with the same agency (with the exception of the first 26 weeks of work)
A new law, SAMEN, comes into force to promote the participation of people from ethnic minorities in the labour market. Many provisions of the new law have been borrowed from a 1996 agreement between the employers’ and employees’ organisations
Replaces the old Wtz of 1986 and changes several elements – this in order to take account of the increase in individuals with right to mandatory participation in basic insurance system (and corresponding rising costs)
Provides new means to curtail care provision when there is insufficient financial coverage
UB prohibited in cases of voluntary unemployment.
A more cost-effective social security system and wage moderation supported by tax relief.
1% personal income tax reduction to 36 %
The Gas Act opens the gas market to competition by giving medium-size users the right to choose their supplier from 2002 onwards
The Dutch electricity market is opened to competition. No licence is required for the production of electricity and large energy users are free to choose among suppliers. Electricity contracts are traded at the Amsterdam Power Exchange.
Introduces the possibility to adjust tuition fees for full time studies to inflation
Procedures for dismissal on economic, technical and organisational grounds are shortened and simplified. Nevertheless, the Employment Offices (PES) will continue to carry out preventive checks with regard to applications for dismissal. Once a dismissal permit has been granted, the employer can give a notice of termination. However, if the worker does object to the dismissal, the procedure remains rather long and inflexible.
New rules governing dismissals come into force. To unilaterally terminate an open-end contract it is no longer necessary to obtain prior authorisation from an administrative body. The employer may fill a request at the subdistrict court to terminate an employment contract, on the basis of "compelling grounds" or "changed circumstances".
Once a dismissal permit has been applied for, the termination of the contract can no longer be obstructed by employee illness. Prohibition to dismiss workers who fall ill after the start of the dismissal procedure is abolished.
The law on Flexibility and Security comes into force, changing the rules concerning the renewing of fixed term contracts. The law also slightly changes dismissal procedures by lifting the prohibition to dismiss employees who fall ill after the start of the dismissal procedure
More latitude is created for extending fixed-term contracts. Employers are allowed to sign a series of temporary contracts with an employee.
The repeated use of fixed-term contracts has been restricted. A maximum of 2 renewals in 3 years is allowed. In the event of a series of three extended fixed-term contracts (interrupted by a period of less than three months), prior notification of termination of the contract is required. If the total duration of the fixed-term contracts exceeds three years, then the contract is converted into a contract for an indefinite period.
The legal maximum probationary period (that is, the two-month period during which the employer and the employee are both free to terminate the contract) will not be extended, but will instead be restricted for fixed-term contracts.
The new law shortens and simplifies notice. At least one month's notice must be given, and the maximum term of notice will be four months (currently six months). The new basic notice periods will be as follows:  - 1-5 years of service = one month notice; - 5-10 years = two months;  - 10-15 years = three months;  - 15 years or more = four months (maximum).
Regulations on "job-on-call" also govern written agreements between employers and employees that state that no wages will be paid if no work is available. The period that employers can still claim "no work, no pay" will be reduced to six months. This can only be extended through a collective agreement.
The Minister of Health lowers reimbursement limits for pharmaceuticals
The Minister of Health announces that over-the-counter drugs are no longer reimbursed, with the exception of those related to chronic cases
On-call workers (that is, those who have no secure weekly working hours or those who work when their employer calls them) may claim a minimum of three hours' pay each time they are called in to work, regardless of whether three hours are actually worked or not.
Older workers, who become disabled or unemployed after having accepted a lower paying job, could still receive a benefit related to their previous higher salary
Organises the privatisation of the public broadcasting institution
Ensuring a better system of registering early school-leavers so that individual counselling can be provided.
ID-Jobs Programme for long-term unemployed comes into force.
Regulates transport and delivery of gas, offering bigger role to market
Increases flexibility of providing study finance and support to students
Making the switch between part- and full-time easier for employees by giving employees the right to reduce or increase their working hours, with employers able to deny employee requests only on the grounds of specific conflicting business interests.
Introduction of a bonus for long-term unemployed leaving benefits.
Labour Tax Credit increased from EUR 880 to EUR 920 at 100 % of the minimum wage level. It makes working financially more attractive and encourages people who earn less than minimum wage to work more.
Decreases fiscal limitations to starting enterprises
This law organises income taxation for natural persons (replaces 1964 Income Tax law); intended to reduce the tax burden and to shift it from direct to indirect taxation.
Improvement of the effectiveness and efficiency in the implementation of measures surrounding work and income. Monitoring tools were upgraded or implemented in all bodies delivering reintegration services.
Organises the privatisation of the public employment agency aimed at difficult-to-place individuals
Minister of Social Affairs has reached agreements with local government on the "Agenda for the Future". They should led people on benefits to a more rapid employment or social activation.
Increases financial allowance for people with low income and schoolchildren
New leave regulations allow two days of paid paternity leave
New leave regulations allow four weeks leave for couples who adopt a child
New leave regulations allow for the right to adjust working hours if personal circumstances require it
New leave regulations allow two days of paid leave per year for urgent personal reasons, along with 10 days of paid leave a year to care for family members.
Aims at drastically reducing unemployment insurance; this making employers responsible for averting absenteeism and re-integrating sick workers, obliging employees to cooperate, installing financial sanctions for failing to do so
Decreased corporate income taxes to attract international investment
Income Tax Act 2001 comes into force. The new legislation reduces the tax burden on labour to promote employment providing financial incentives for employees. In order to encourage even more people to come off benefits, a tax free bonus (EUR 1815) can be paid to people who stop claiming social assistance or who switch from a job subsided to a non-subsided job.
The highest rate for income in Box 1 has fallen from 60 to 52 %, the lowest rate from 34 to 32 %. Income in Box 2, which was already subject to a special rate, will be taxed at an unchanged flat rate of 25 %. A rate of 30 % will be applied to an imputed 4 % yield on financial and real assets, which produce income in Box 3.
The allowance for individuals with income from current employment has been replaced by a tax credit. (Whereas the allowance resulted in a higher benefit for individuals with a high marginal tax rate, the tax credit is a fixed amount (above the statutory minimum wage level) and is not phased out as earnings rise. The aim of the tax credit is to increase incentives for people to look for work by lowering the replacement rate).
Introducing competitive tenders for the placement of around 100 people sorted by target group, sector and region with payment partly depending on placement success
At the beginning of this year, the Passenger Transport law introduced six-year concessions (franchises) for private companies to operate public transport by bus. However, the auctions will take place only in 2006.
OPTA published guidelines as to the maximum reasonable charges mobile network operators would be allowed to set and obliged all mobile operators to lower their terminating tariffs to cost-oriented levels.
Introduction of budget tied to students within regular education and improving processes – all with purpose to improve participation of handicapped children in regular education
Introduces BA-MA structure in higher education
Implementation of an EU Directive decreased the maximum duration of contracts with temporary work agencies from 3.5 to 3 years.
Requires similar rights for workers with fixed contracts as compared to contracts with unspecified duration
The EU Directive (1999/70/EC) on fixed-term work is implemented on the basis of a joint statement signed by social partners organisations in January 2001. As a result employees on fixed-term contracts have been given additional rights. Equal treatment with workers on open-ended employment contract is more clearly defined, while the Act now explicitly sets out the responsibility of employers to offer vacancies for open-ended positions internally to employees on fixed-term contracts.
Employees regained the right to refuse working on Sundays. In 1996 the Working Time Act removed the previous general ban on Sunday working, which had prompted criticism in the lower house of parliament, both on religious grounds and because Sunday working is considered undesirable by many employees.
Ensuring that sick employees return to work as soon as possible, by setting out minimum standards for the reintegration activities of employers, employees and occupational health and safety services. These minimum standards make it clearer for employers and employees which concrete steps they have to take. At the same time, the act makes it easier for the UWV to determine whether enough effort is going into reintegration.
Changes in occupational pension scheme agreements: increasing premiums and shift to average salary benefit formulae
Allowing mother and daughter company to become fiscally attractive single fiscal entity
Reintroduction of the obligation for unemployed people over 57,5 years of age to apply for a job.
Replaces several of the earlier social insurance laws (Abw, WIW, WFA), shifting the focus to workfare principles and reintegration (for example by giving local governments more freedom and incentives to prevent fraud)
Prohibits discrimination between workers based on handicap or chronic disease
Prohibits age based discrimination between workers
After long period of heavy struggles between social partners (mainly on pension issues), a social agreement was achieved in October 2013
Increases financial incentives and hence the responsibility for employers to prevent absenteeism
The system will be modified to encourage employment. Benefits under the Unemployment Benefit Act (WW) will be shortened to one year.
The follow-up benefit for former recipients of unemployment insurance benefits has been abolished as of August 2003. When the duration of the earnings-related benefits was expired, workers were entitled to a follow-up benefit for 2 years at 70 % of the minimum wage.
The employer's obligation to continue paying wages for a sick employee is extended from one to two years.
The follow-up benefit without means-testing is scrapped, reducing the maximum duration of total unemployment benefits from 7½ years to 5 years.
30 to 29 % (applicable on first EUR 22 689 of taxable income)
36 to 30 % (applicable on first NLG 50 000 of taxable income)
Job search requirements for older unemployed have been reinstated
Modernisation of the Sheltered Work Act (WSW), which provides for subsidised sheltered jobs for disabled people in companies offering specifically this kind of work.
Ten regional railways services have been decentralised and another 16 soon will be. Provinces have to tender these services. So far, six services have been tendered. Legislation covering railways, which enters into force in 2004, requires that all concessions must be tendered except that for the national railway network. Many bus services have also been tendered.
Formally acknowledges the independence of the competition authority; while the Ministry remains responsible for competition policy, it now has less competences in some individual cases
Small and medium-sized electricity users will have choice of supplier from 1 July 2004. The authorities plan to increase interconnection capacity subject to satisfactory co-operation with networks in neighbouring countries.
Makes competence requirements for teachers explicit; obliges institutions to enable their teachers to reach and sustain these requirements.
The deduction from unemployment benefits of dismissal compensations awarded to employees on termination of their employment contract has been subsequently repealed by the social agreement of 5 November 2004.
Introduction of life-cycle leave arrangements, allowing employees to use part of their gross annual wage to fund long-term leave. This money can be used for various purposes, such as care duties, training or retiring earlier.
Fundamental overhaul of existing chapter on legal entities, restoring the position of shareholders, this by Implementing the 40 recommendations by Committee Peters
Introduces Corporate Governance Code. Companies need to explain in Annual Report how this Code has been implemented, or need to explain why it is not implemented.
The Diagnosis Treatment Combinations system (DTC, which is broader than DRG because it includes related specialist outpatient services) has recently been introduced to foster standard procedures.
Government's decision to freeze the statutory minimum wage (WML) and social benefits at gross level in the public sector for 2004 and 2005, in accordance with the so-called "zero line" for collectively agreed wage increases agreed upon by Government and social partners in the 2003 Autumn Agreement and in line with the wage moderation line contained in the Social Agreement of November 2004.
Collective agreement to promote reintegration of temporary disabled workers and limit their replacement pay
Stricter criteria for still feasible jobs/functions have taken effect for sickness benefits. The stock of beneficiaries is being re-examined.
Reform of the Occupational Disability Insurance Act (WAO): full and partial occupational disability will be governed by two different legal regimes; in the second scheme the emphasis will be put on the resumption of work coupled with supplementary wages. Disabled people will be re-examined on the basis of stricter criteria, potentially leading to loss of disability benefits (older than 55 are exempted). Work reintegration scheme for people who lose their benefits.
The Gatekeeper Act came into force, stipulating stronger mutual reintegration obligations during the sickness benefit (SB) period. UWV may prolong the SB period if efforts have been insufficient
From the 1st of August 2004 self-employed persons are referred to private forms of insurance or to their own reserves to cover the risk of occupational disability, maternity and leave for adoption or child care.
Abolition of the early retirement schemes benefits. The preferential fiscal treatment, from which early retirement schemes benefitted, is abolished.
The agreement to phase out existing early-retirement PAYG schemes (VUT) by 2022 still exists but legislation has been delayed
Introduction of two tax incentives concerning retirement pensions.
The general earned-income tax credit and the working-spouse credit are being raised and all supplemental subsidy schemes put under central regulation.
Informal in-family healthcare workers and voluntary workers claiming UB can be exempted from job application duty (under certain conditions).
If required UWV (whose responsibilities include reintegration activities for UB and Disability benefit-recipients) can offer clients (since October '05) 'small bits of help' whereas before complete programmes had to be offered
Introduction of the possibility to extend the reintegration-services of the PES to employees who are threatened by layoff. Services will mainly focus on reintegration for those who are not considered directly employable elsewhere.
From 1/1/05 onwards reintegration packages for WB (welfare benefit) recipients can be supplied by market as well as non-market reintegration agencies. Before only market agencies were allowed.
Individual coaches were introduced (mid '05) by UWV to offer clients more tailor made programmes
Reorganises work disability system with new focus on reintegration and activation; distinguishes between partial and full disability
Gives schools more flexibility regarding organising timing of schooling; this as example of other laws in 2006 aimed at deregulation and decentralisation, giving schools more independence in terms of financial and organisational decisions
Abolishes fees for 16 and 17 year olds; as well as the subsidised compensation for poor families
Discontinuing of the mandatory principle of 'last in first out' when making employees redundant. The leading principle becomes the 'age reflection principle', according to which redundancies will be spread out more evenly among the different age categories in a company
Provides rules to facilitate the transition to market based health care system – with focus on shifting from centrally guided to decentralised provision
Introduced a mandate for every citizen to buy a basic package of health-care benefits from a private insurer. Individuals can choose between insurers on an a annual basis (open enrolment) and insurers can selectively contract or integrate with health care providers. Income-related subsidies aim to make health insurance affordable for every one, while a risk equalisation scheme compensates insurers for enrolees with predictably high medical expenses in order to guarantee a level playing field and prevent risk selection.
Drastically changes the financing system for hospitals – since 1988 hospitals were financed by a budgeting arrangement, yet this was replaced by a Case Mix approach with financing based on 'cost per item' (objective was increasing cost efficiency)
Provides income tested reimbursement for buying health insurance to prevent situations where the share of income directed to health insurance is too high
The duration of the benefits is in accordance with the rules of the Unemployment Insurance Act (see 'Benefits'). When this duration expires, a WGA claimant is entitled to a follow-up benefit. This benefit is lower if the WGA claimant does not work, which gives an incentive to remain in the labour market. Partially disabled workers who incur less than 35% drop in wages are not entitled to WGA benefits. From 2007 onwards, the WGA will be partly privatised. In particular, employers will have the opportunity to opt out of the public system and switch to private insurance companies.
Determination of the duration of the unemployment benefit on the basis of actual employment history, with one month's benefit for each year worked (after the third month of unemployment). This criterion will apply gradually.
Increase in the first 2 months of unemployment benefit levels: unemployed will receive benefits at 75% of the last-earned wage for the first two months and then 70% for any following months (it used to be 70% for the whole duration).
Cut in unemployment benefit (UB) maximum duration from 5 years to 38 months.
In order to receive UB, employees no longer have to legally fight the decision of the employer to make him/her redundant – whereas previously employees had to.
Trial employment while maintaining entitlement to unemployment benefits. Workers who have been unemployed for at least six months, can start working on a trial basis for three months without losing their benefit entitlement.
Introduction of more stringent employment-history requirements: in order to be eligible for short-term 3 months benefits, UB (unemployment benefits)-claimants must have worked for 26 weeks over the last 36 weeks (against 26 weeks out of the last 39 before). To claim benefits longer than 3 months, claimants must have worked for at least 4 years out of the last 5.
Decreases corporate tax rates; Abolishes taxation of capital; Improves succession planning
Tightening of the reintegration obligations imposed on UB-recipients – during the first 3 months of benefit.
Strengthening the incentives to take up work by introducing DB replacement rates that are dependent on the hypothetical earnings capacity of the benefit recipient. Upon entering the WGA scheme, those who have worked during 26 out of the last 36 weeks receive a replacement income (the loongerelateerde uitkering) that covers 70% of the difference between the current and the last wage (up to a ceiling).
Simplification of basic formation within secondary education (see 1992 law); gives schools more freedom in determining programme
Trade union rather than the Public Employment Service judges the economic conditions for collective dismissal.
A Financial Markets Office has been set up, creating a single point of contact for financial institutions wanting to operate in the Netherlands and should lead to easier access to the Dutch markets. On 1st January 2007 the Act on financial supervision entered into force. This act unites the former sector-oriented laws on supervision of financial markets. It will enable foreign financial institutions to find out more easily which regulatory requirements are applicable within the Netherlands.
Organises independent public supervision over accountants
Contains policies to better protect companies and shareholders, for example via improving transparency through unified information-provision duties
WB (Welfare benefits)-recipients doing voluntary work as a part of a reintegration scheme, are allowed to receive €1500 for this annually (€750 previously) without it having consequences for their WB.
Stricter definition of disability will be introduced, only the permanently disabled can gain access to a full pension and the minimum loss in earning capacity to qualify for partial disability benefits will be raised from 15 % to 35 %.
The introduction of a “no-risk policy” whereby the UWV (uitvoeringsinstituut werknemersverzekeringen) covers sickness payments for employers who keep a (partially) disabled employee at work in case this person becomes sick again within five years.
Tax incentives for early retirement schemes will be terminated
In December 2005, the State disposed the special share in KPN; in November 2006 it disposed the special share in TNT.
Parliament agreed to sell a minority of government shares
Granting municipalities a bonus of EUR 3,000 if they find a regular job for someone who currently holds a sheltered job (WSW Wet Sociale Werkvoorziening). The municipalities can pass the bonus to the employer who employs the (partially) disabled employee or if necessary to the employee him/herself.
Measures to (re)integrate into the labour market 200,000 people who are far removed from it: training, education, apprenticeships, wage subsidies and/or working while retaining benefits. Wage subsidies will be used, from 2008, to help the long-term unemployed back to work. The subsidy will be a maximum of 50% of the statutory minimum wage.
Creating subsidised employment opportunities for people on long-term benefits who have little prospects of finding work
Merger between the CWI (responsible for the reintegration of unemployed people during the first six months) and the UWV (responsible after that period of six months, unless someone gets social assistance from the municipal authorities), based on earlier local experiments. The merger/integration is accompanied by a budget cut of EUR 200 million before 2012, the equivalent of approximately 1,500 jobs.
In addition, some 10,000 subsidised ‘bridging positions’ will be created in cases where disability claimants lose their benefits as a result of their claims being re-examined.
Developing plans to reduce the number of young people on a disability benefit. The plans will assess the talents and capacities of (partially) disabled young people to be active in the labour market and the development of their abilities while still at (a special) school. For young people who have a kind of disability at the age of 18 that really prevents them from participating in the labour.
Additional measures to improve the labour market position of older workers in the labour market. The action plan 45+ contains the goal to find jobs for 30,000 additional 45-plus workers within a period of two years.
Benefits for young people under 27 years of age will be scrapped by the government and replaced by an apprenticeship/work obligation. At the same time, the social partners will contribute towards creating more apprenticeship positions.
The new Financial Assessment Framework (FAF) in place since early 2007, which defines solvency requirements in a stochastic fair-value framework, compelling pension funds to improve their risk management tools to better control their short-term solvency position and to ensure that the (long-term) benefit promises can be met with adequate certainty.
In a growing number of collective labour agreements, social partners have made agreements about overtime wage premiums. In certain collective agreements overtime has been more narrowly defined. In addition, several collective agreements have diminished or abolished wage premiums for weekend hours.
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: A maximum of 12 hours a shift.
Gives single parents who work part-time with young children the right for social support
The obligation of older workers to apply for a job was reintroduced
Establishment of 30 new mobility centres in regions facing higher numbers of mass redundancies as cooperative effort between social partners, educational institutions and job centres.
Employees who earn a gross income of more than €75,000 a year will see their dismissal compensation subject to a maximum limit of one year’s salary. Thus, it will become cheaper for employers to dismiss employees earning a gross annual income of more than €75,000.
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: A maximum of 60 hours a week.
Abolition of unemployment benefit premiums payable by employees.
Provides income supplements to assist covering additional costs due to chronical disease or handicap
The criteria for becoming entitled to the disability insurance scheme were sharpened
Fiscal rules for occupational pensions were changed to increase the statutory retirement ages in these schemes to 65.
Aims to improve the paid employment prospects for young disabled persons, assisting their labour market participation
All workers who are unemployed for a year or more are now obliged to accept any job offer.
Grant for retraining employees who are threatened with redundancy. In order to encourage employers to take on employees from other branches of industry, grants are available for retraining employees. The ‘new’ employer may be eligible for a grant of 50% of the retraining costs, up to a maximum of 2,500 euros.
To facilitate work-to-work-transitions, local cooperation was established between sectoral or regional employers and the UWV, amongst others in Branch of industry service points. Within these service points, the local employers are in charge of the services that are provided: their needs are the determining factor while the UWV is responsible for the implementation.
Besides providing unemployment benefit, the UWV can also reimburse the costs of training. The maximum period for which a reimbursement is made is 3 months, in order to target the training as much as possible towards a particular job. This rule will become more flexible if there is a prospect of a real vacancy at the end of the training, or if the training is for a profession that is characterised by a shortage of labour.
Programme € 16 million; provision of apprenticeship places
The new participants in Wajong are entitled to job support rather than passive income support. Moreover, participants in the programme will be assessed upon entry and again at the age of 27.
Leerwerkloketten (learning and working service desks) improve the transition from education to the labour market. In 2009, learning and working service desks will be created at the 30 regionally based employment centres, which are linked to the mobility centres. They will also receive structured funding.
Making Corporate Governance Code up to date (Companies need to explain in Annual Report how this Code has been implemented, or need to explain why it is not implemented).
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: no more than 55 hours a week on average over a four-week period.
From 1 October 2009 onwards, under the Investment in Youth Act young people no longer receive social security benefits, but municipalities must either offer them work, training or both (for which they may receive financial support). In addition, municipalities will receive a lump sum of EUR 2 billion for stimulating people to participate in integration, work or school. This is basically the bundling of the three existing budgets in these areas intended to allow a more effective use of resources.
The working tax credit is increased and partly phased-out from 220% of the minimum wage onward.
Over-65 workers who get sick will now receive only six weeks full wages. Moreover, social security premiums have been reduced for employers for keeping older workers (62 years and older) and for hiring workers of 50 years and older.
The age of disability benefit recipients subject to retesting has been lowered from 50 to 45. Permanently disabled have the opportunity to resume work again, via loan subsidies.
Workers continuing to work after their 62nd birthday will receive a so-called work continuation bonus of up to EUR 4 591. After their 65th birthday they can opt for receiving part of their state pension or to suspend their state pension for up to 5 years and in return receive a higher pension afterwards.
Employers who keep employees older than 62 years will receive an annual EUR 2 750 reduction in social security contributions (for three years). This reduction will be EUR 6 500 from 2013 onwards.
Employers hiring benefit recipients older than 50 years will receive a EUR 6 500 discount on social security contributions (for three years).
New focus of Public Employment Service (UWV) on guiding unemployed who suffer from a long-term illness back to work, stressing that they should accept lower level jobs.
Grant of 2500 EUR to employers and employers' associations that facilitate the timely transition of a redundant employee to a new employer or to self-employment, in order to prevent dismissal. Employers have to provide at least half of the costs for creating such transition.
Under the law Stimulating Labour Participation’ (STAP) employers receive a subsidy (maximum 50% of the minimum wage) when employing long-term unemployed. Moreover, people with a disability who have problems finding a job are able to get work experience through internships.
Extension of duration of fixed-term employment contract for youth (up to 27) up to 4 consecutive fixed-term contracts, instead of 3. Moreover, for young people, only if consecutive fixed-term contracts exceed 48 months, they will be converted into an open-ended contract.
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: For every 16-week period, no more than 48 hours a week on average. In addition, night shifts may not be longer than 10 hours a shift.
The legal pension age will increase to 66 in 2020 and is thereafter linked to life-expectancy. The age for future accrual of pension rights in the second pillar will be raised to 67 in 2014 and will be made dependent on the average life expectancy from thereon.
Several new measures were taken to lower the marginal effective tax burden for some income groups: 1. Income-based combination tax credit (IACK) 2. Income dependent tax credit (EITC) Special tax credit for workers with non-working partners is being phased out.
An income-dependent combination tax credit (IACK) was introduced to encourage the lower-earning partner to extend hours worked. Non-working and non-benefit receiving people are encouraged to take up work through a new income-dependent tax credit (IAK). From 2009 workers with non-working spouses are gradually losing the current tax credit pursuant to which the so-called general tax credit can be transferred.
Local public transit fares have become a regional government responsibility. The subsidies they receive for public transport will become part of their generic funding stream. The new concession of Dutch Railways (NS) provide for further differentiation of tariffs based on time of travel. User fees for the railway infrastructure have increased.
The main cities (Amsterdam, Rotterdam and The Hague) are now required to put their municipal/regional public transit systems up for public tendering.
Provides rules for behaviour of governments in the market, aiming to protect competition; Improves competition relationships between public and private organisations
Allows formal organisation according to one-tier principle (Board with both Executive and non-Executive Board Members)
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: Over a period of 16 weeks, the working week of an employee who regularly works night shifts may not, on average, exceed 40 hours.
The age for future accrual of pension rights in the second pillar will be raised to 67 in 2014 and will be made dependent on the average life expectancy from thereof.
The tax deductions are replaced by direct (income-related) subsidies. These subsidies decrease with parental income.
The double tax credits for people receiving social assistance will be reduced to avoid discouraging work.
The only general exemption in job search requirements for social assistance benefit recipients is applicable to lone parents with children below the age 5, with an maximum exemption duration of 6 years.
Implements EU Regulations regarding public procurement
Increases competences of central bank to allow swifter intervention when banks risk bankruptcy
Applies to private limited liability companies: Provides more freedom to shareholders; abolishes minimum capital; etc.
Replacing the budgeting system in the regulated hospital segment (segment A) with an output-based payment system with regulated prices, either in the form of maximum or fixed prices. Maximum prices will be set for hospital services for which effective competition is not feasible, such as complex treatments concentrated in a few hospitals (i.e. areas with high entry barriers). Fixed prices will be set for services for which sufficient capacity has to be permanently on standby, but for which demand is irregular and unpredictable (e.g. emergency rooms, trauma centres, burn centres).
If medical specialists produce more services than allowed by the budget, then the hospital will have to reimburse the additional payments to the Health Insurance Fund.
At the individual hospital level, allocation models for the remuneration of medical specialists have to be developed. The largest share of the budget (75% to 85%) will have to be allocated to remuneration of specialists’ regular activities, and a smaller variable part (15% to 25%) to the remuneration of practice costs, extra activities and for the hospital management to reward good performance.
Ex post compensations for health insurers will be fully phased out by 2015.
A new system of product classification (DOT) has been introduced, reducing the number of hospital products (DBCs) from about 30 000 to about 4 400, which should be more transparent and manageable.
A new legal “macro budget instrument” should guarantee that total annual hospital expenditure does not exceed a government-set limit.
During a transition period (2012-14) a macro budget for medical specialist services (initially set at about EUR 2 billion and increasing by 2½ % per year thereafter) is derived from the general macro budget for health care expenditures covered by public insurance (BKZ). Based on a normative allocation model, the Health Authority (NZa) calculates a budget for medical specialty care for each individual hospital.
Expansion of the “market-based” hospital segment (segment B) from 35% to about 70% of hospital revenue.
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: Employees are not permitted to work more than 36 night shifts over a 16-week period.
Initiates the Authority for Consumer and Market, aimed at improving efficiency of market supervision as well as reducing regulatory pressure
Providing for less restrictive practices in relation to the length of the working day and scope of the working week, as follows: Separate rules for overtime have been abolished.
Introduction of a freeze on profit margins in retail trade, and extension of the existing requirement for advance reporting of increases in producers' prices.
The freeze on unit profits in retail trade replaced by a fixed relative margin, equivalent to profit margins prevailing in February 1974
Changes proposed in the law of 1965 on regulation of money and credit, particularly in order to bring the unregulated market under tighter control.
Since the adoption of the 1969 Hospital Act, each of Norway’s 19 counties has assumed the responsibility for the planning and operating of the local hospital sector, as well as other specialised medical services. Since 1974, the 19 counties have been grouped into five so-called health regions, headed by regional health committees which co-ordinate hospital planning on the basis of consensus between county representatives.
Kr. 1 112 million granted for the first settlement year of which some 60 % represent compensation for cost increases. Kr. 820 million will be provided by increased price subventions and the remaining part by higher consumer prices.
Kr. 300 million plus compensation for cost increases granted for the second year of the agreement.
Special hourly increments for branches with wages below the average for total manufacturing: Kr. 0.60
Special hourly increments for branches with wages below the average for total manufacturing: Kr. 0.30
A special wage guarantee for metal and engineering industries, entailing that no worker is to earn less than 87 % of the national average in his craft or trade
Semi-automatic indexation on the basis of the September 1975 index.
Automatic indexation by Kr. 18 million for each percentage point rise in the consumer price index between March and November 1974
The share of 1973 income taxes (corporate firms and self-employed) falling due in 1974 further increased from 75 to 87.5 pet cent
The share of 1973 income taxes falling due in 1974 (i.e. those of corporate firms and self employed) to be increased from 50 to 75 %.
5 percentage points lower rate on first income brackets
Exemptions for municipal taxation to be raised by 20 %
Deduction from taxable income for special bank deposits and/or life insurance premiums previously up to Kr. 1250/2500 (depending on family status), lowered to Kr. 490/980 and made deductible from taxes paid
Progression intervals to be increased, allowing for a 5.3 % reduction in marginal tax rates for incomes between Ki. 50 000 and Kr. 90 000
0.4 percentage points increase in tax rates on wealth
The 80 % ceiling on total taxes as share of total taxable income to be reintroduced with effect for 1974 taxation, but modified to a corresponding 85 % level
Retroactive removal of tax ceiling (previously: total amount of all direct taxes was not to exceed 80 % of taxable income)
Exemptions for Central Government taxation to be raised from Kr. 18 000 and Kr. 27 000 to Kr. 20 000 and Kr. 30 000, depending on family status
The upper income limit for Social Security contribution (corresponding to some Kr. 130 000 in 1974) to be removed
The rate 'of employers' contribution to Social Security (the wage tax) to be differentiated with respect to geographical location, ranging from 14-17 %, but with an unchanged average rate
Specific labour market measures introduced in late 1975 on average absorbed almost 10 000 workers from October 1975 to June 1976
A price freeze is enforced from September 1, 1975 to the end of the year and costs caused by the index settlement are not allowed to be shifted into prices.
Price rises in the agricultural sector are offset by subsidies until June 1, 1976
30 % of the compensation is given in the form of pay increases stipulated as an absolute amount
Maximum duration 40 weeks per calendar year.
Withholding taxes are reduced by 1 percentage point in the period November 1, 1975-May 1, 1976
Child allowances are increased by 13 % as from November 1, 1975
Reduction in real property taxation and changes in the rules for tax-free bank saving, affecting taxable income in 1975.
From affecting 14 000 workers in the first quarter of 1976, the scale of labour market measures was reduced to 8 000 workers in the second quarter.
Farm incomes to be raised, with first year increases amounting to Kr. 1.8 billion (equal to some 50 % of factor incomes in agriculture in 1975).
Full compensation for the general reduction in the working week from 42.5 to 40 hours, effective from 1st April (The wage contracts cover a two-year period, but are, in the absence of an indexation clause, to be renegotiated after the first contract year).
Transfers to pensioners increased to produce a 5-7 % increase in real disposable income
Inheritance and gift taxes reduced and simplified
A new children's allowance (Kr. 200 per child, deductible in tax payments) is introduced and traditional children's allowances raised by Kr. 100
Higher tax exemptions given to households with children
Taxable income brackets adjusted upward by Kr. 4 000-5 000, depending on family status
Workers can be dismissed for warranted reasons such as curtailed operations or rationalisations but may not if the employer has other suitable work to offer. For rationalisations, the needs of the enterprise are weighed against those of the inconvenience to the employee – with the practical result that some rationalisations are deemed unwarranted and dismissals disallowed.
A worker who contests the reasons given for his dismissal has the right to keep his job until such time as the courts decide his case. The court may require the employee to leave if it finds it unreasonable that employment should continue – where factors such as the size of the firm and the nature of the dispute are used to determine "reasonableness"
Fixed-term contracts are illegal under the provisions of the right to remain in position legislation as they allow a firm to let a contract lapse effectively dismissing a worker without cause. The only exception to this is where there exists a well defined job of fixed duration, such as traineeships, short-term replacement contracts or work related to active labour market measures.
A government Bill on democratisation of commercial banks approved by the Parliament. The new law will take effect as from 1st January 1978, and calls for eight-fifteenths of a bank's committee of representatives to be appointed by popularly-elected bodies (the Parliament or county councils), four-fifteenths to be elected by and among shareholders, and three-fifteenths by and among the bank's employees. Bank shareholders are entitled to have their shares redeemed by the State.
Income support to fisheries amounting to Kr. 250 million.
Farm incomes to be raised by Kr. 1.2 billion (equal to almost 25 % of factor income in agriculture)
Restrictions on hours worked (max 40 hours a week) and overtime pay.
Basic pensions increased by Kr. 300 per person and supplementary pension payments raised 6 %.
Transfers to pensioners increased to produce a 6-7 % increase in real disposable income
Tax deductions for fees to labour union (subjects to a maximum of Kr. 1400 per year) and to employers' organisations (subject to a maximum of 0.3 % of the total wage bill)
An upward adjustment of taxable income brackets
Higher exemption for households with children
A reduction in direct taxes due to a higher minimum exemption
Reduction of the investment tax from 13 to 9 % (limited to manufacturing firms)
A temporary tax cut equal to 1 % of personal incomes up to a maximum of Kr. 160 000
Introduction of a general price and incomes freeze to remain in force until the end of 1979. The price freeze, fixing prices at their 12th September level, is in the main formulated along the same lines as the regulations introduced in June, but extended to more sectors, inter alia, banks and public services, and also made more restrictive, cancelling all previous general exemptions. The provisions prohibit all forms of wage increases after 12th September.
The krone devalued 8 % within the European Currency Arrangement. The discount rate increased from 6 % to 7 %. Introduction of a temporary price freeze, fixing prices at their pre-devaluation level.
Tightening of the price freeze introduced in February.
Agreement to raise farm incomes by Kr. 990 million (equal to 15 % of agricultural factor income in 1977). Of the total increase 55 % will be financed by price increases and the balance over the budget.
Introduction of a temporary wage subsidy of 1 Krone per hour worked for most enterprises.
Reduction of employers' expenses on sick leave schemes
Introduction of new sickness benefit system. Under the new provisions, absence of less than three days can be taken without presentation of a medical certificate.
Increase in pensions, estimated to give a 3 to 4 % real rise in the lowest pensions.
At the same time the contribution to the pension fund is raised by 0.8 %, corresponding to a revenue gain of almost the same size as the rise in pension transfers
Increase of Kr. 300 in the tax-free allowance for children
Decision to reduce investment tax to 5 %.
An upward adjustment of taxable income brackets by Kr. 500 to Kr. 1 000
The tax-free children's allowance increased by Kr. 300
The price and income freeze was terminated as from 1st January, but strict price controls were maintained.
The Government presented a proposal for legislation to regulate developments in wages and incomes from January 1980 to April 1982 covering wages and incomes not being negotiated through country-wide unions and federations.
Parliament approved to abolish the special tax on business fixed investment in machinery and equipment (previously at 5 %) as of September 1.
Upward adjustment of income brackets for municipal taxes
Children's allowances increased by Kr. 400 per year (effective as of 1st October)
Enterprises allowed to increase prices as from 1st May to cover the wage increases implied by the central wage settlement between the two major labour market organisations. The tight general price regulations were maintained.
International capital flows are partially liberalised (from partially repressed)
Interest rate controls somewhat liberalised. Accordin to the IMF Financial Dataset interest rate controls went from fully to partially repressed.
Securities markets are partially liberalised (from partially repressed)
Since 1980, the block grants from the central government to the county council for hospital financing have been fixed annually according to a set of criteria such as per capita income in the county, the age composition of its population and its population density (previously funding levels were set according to historical cost of the hospitals).
Establishment of a minimum-wage guarantee scheme, by which the average wage in any single firm shall not be below 85 % of average wages in industry.
Average wage drift shall not exceed 3 % in the course of 1980. If this limit is exceeded a wage drift ceiling shall be introduced for the second year of the agreement.
Wage adjustments for the second year of the agreement shall be negotiated prior to the expiration of the first year.
Increased tax-deductibility for trade-union membership fees
A reduction of the income tax in 1980 by 1 percentage point from 1st July.
Increased children's allowances with effect from 1st May
Introduction of stimulatory measures to combat unemployment in the construction sector, especially in the northern part of Norway.
Price-freeze from 3rd August till end-year.
The extraordinary price control measures, effective since September 1978, were abolished
Semi-automatic index clause taking effect when the consumer price index exceeds 126.5 as from15th September, 1981.
An average wage increase of 10.5 % from 1980 to 1981 (including 2 percentage points to compensate for lower growth in public sector wages than in the private sector in recent years)
Proposal of Kr. 500 increase in basic pensions as of 1st October.
Reductions in personal income taxes by Kr.2 125 million on an accrual basis, implying that the real increase in personal taxation proposed in the original budget proposals will be avoided
Reductions of personal taxes for 1981 were proposed: - 0.5 % for the first Kr. 100 000. - 0.3 % for the next Kr. 50 000.
The hourly wage subsidy granted to specific branches (textile, clothing, canned fish, glass, ceramics) was increased by 1 krone to Kr. 3.55 as from 1st October, 1982 through 1983, and expanded to include the wood articles and furniture producing industry
Earmarked funds for special labour market measures increased from Kr.400 million to Kr.500 million for 1983, of which Kr.322 million will be released for the first half 1983
A moderate tightening of the minimum wage guarantee scheme.
A general pay increase in the private sector, amounting to Kr.2 per hour as of 1st April, 1982.
Local agreements (wage drift) to be linked to enterprise-specific features such as productivity growth and competitiveness.
The investment tax was reduced as from 1st November, 1982.
Business taxes have been reduced both directly and through new depreciation rules introduced in 1982
All 8 income tax brackets reduced by 2 percentage points (to 4, 9, 15, 21, 26, 31, 36, 41, respectively) and all brackets are adjusted upwards. (These are central government PIT rates).
Presentation of Government measures to counter unemployment. Appropriations to special labour market measures increased by Kr 300 million for 1983.
The revised national budget for 1983 presented to Parliament. Special labour market appropriations increased by another Kr 330 million for 1983.
Credit ceilings are liberalised from fully to partially repressed
Agreement in the wage negotiations reached. The main elements were the following: i) An average wage increase of 7.7 % in the private sector; ii) An average wage increase of 7.5 % in the public sector.
Basic pensions were raised by Kr 800 as from 1st May.
All 8 income tax brackets reduced by 0.5 percentage points (to 3.5, 8.5, 14.5, 20.5, 25.5, 30.5, 35.5, 40.5 , respectively) and all brackets are adjusted upwards. (These are central government PIT rates).
A general pay increase amounting to Kr 0.70 per hour as from 1st April 1984.
For most of the public sector no agreement was reached, resulting in a strike for some employees. The strike was ended by government intervention after one week.
An amendment to the Work Environment Act in 1984 made standard working time subject to negotiations between unions and employers' federations
Maximum duration 80 weeks with a minimum of 26 weeks between spells.
Tax cuts for enterprises – the new depreciation rules introduced in 1982 have been replaced by an even more generous system
Labour market measures are significantly scaled down and directed mostly towards reducing the mismatch between the skills demanded and supplied
Reserve requirements are partially liberalised (from partially repressed)
Interest rate controls are fully liberalised
Full liberalisation, that is, foreign banks are allowed the entry with the same conditions as domestic ones (and there is no discrimination in the ownership by foreign residents), the entry of domestic insitutions is allowed, branching is allowed with no or minimal restrictions and banks are allowes to engage in a wide range of activities.
A small step towards privatisation will be taken by selling government shares to the public
During the 1982-86 period, subsidisation of primary sectors and industry was reduced by one-fifth in real terms
Working time per week were reduced from 40 to 37.5 hours with full compensation taking effect from 1st January 1987; this is estimated to add about 5 % to the hourly wage in manufacturing and 2 to 2.5 % for the total economy.
Income brackets reduced from 8 to 7 with the abolition of the highest marginal tax rate of 40 %. The now highest tax bracket is reduced with 1 percentage point to 34 % (these are central government PIT rates).
Social security contributions were raised substantially. The tax base is broader than for central government income taxes and no deductions are allowed.
The road transport of goods was liberalised and, as a result, there are no longer entry barriers
The Norwegian Post and Telecommunication Authority (PT) is established
Subsidies to shipbuilding, fisheries, and state-owned companies are set to decline
Full liberalisation of international capital flows
The wage agreement between the traditional blue collar labour organisation (LO) and the employers' federation (NAF) resulted in a zero central wage settlement.
Further reduction in subsidisation of primary sectors and industry thanks to the moderate income settlements for farmers
Wage settlements in the public sector were concluded with no central wage increases in 1987; the agreement is to be reviewed in January 1988 in the light of wage developments in the private sector during 1987.
The tax base of individuals was broadened, the top marginal tax rate against which tax deductions were allowed was gradually reduced and an income-surtax at a rate of 8.5 % against which no interest deductions were allowed was introduced in 1988.
The number of places on special labour-market schemes has been increased considerably. Labour-market measures involve vocational training and work experience in both public and private educational establishments, thus leading to a better qualified workforce. They are principally targeted at youths in the age group 16-19, and should reduce the high incidence of unemployment among young people.
Liberalisation of the market for telecommunications terminal equipment.
Laid down rules for mergers. An important feature of current competition laws is that anti-competitive practices are not prohibited per se, but only if they are found to be against the public interest. Apart from horizontal price agreements and vertical price-fixing both of which are explicitly prohibited, cartel agreements are allowed unless they are judged to harm the public interest. Similarly, mergers are permitted if the resulting benefit of scale economies is expected to outweigh the disadvantages of reduced competition.
Banking sector supervision is partially liberalised, that is largely regulated
All local wage negotiations suspended during the first year of the agreement
The Income Regulation Act was passed by Parliament. The LO/NAF agreement served as a model for permissible wage increases for all workers until March 1989. Over the same period, dividend payments were limited to 12 % of the equity stock, or the highest dividend ratio in the last three years. The Act had special provisions for wages of teachers and nurses.
Special additional increase for groups with low incomes and for workers with particularly low wage increases in 1987
The Government issued a decree, freezing wages and dividend payments while an income regulation law was being prepared.
Voluntary retirement at 66 as from 1989, and at 65 as from 1990.
The restructuring of government-incorporated companies continued in 1988, with the aim of making them more responsive to competitive pressures.
An expansion of special labour market schemes so as to accommodate an additional 15 000 to 20 000 places for persons out of work
The authorities concluded settlements with most unions in the central government sector. The agreement was for a fixed increase of Kr. 7150 per year for all state employees and small additions for some groups
A wage settlement was concluded in the wholesale and retail sector. The agreement was modelled on the LO/NHO settlement.
A new Income Regulation Act was passed by Parliament. The agreements, which had been concluded between the social partners, served as a model for permissible wage increases for all workers until March 1990.
Special additional increase of Kr. 1 per hour for some export-oriented industries
A reduction in employers' contribution to social security by 0.5 percentage points, and a reduction in the investment tax rate of 1 percentage point.
In the face of persistently high and rising unemployment the Government has further increased the number of people covered by its various labour-market schemes to an historically high level of over 2 % of the labour force. The build-up has been a result of both increased training and employment subsidisation.
A new Energy Law, providing an encompassing reform of the electricity market, passed Parliament in June 1990. The Law, which will be effective from 1st January 1991, prepares the ground for a division of production and distribution of electricity. While free competition will be encouraged between producers, the transmission and distribution network system – in substance "natural" monopolies – will be directly regulated with no discrimination of producers being permitted. "Customers at all levels were allowed to choose their supplier, enterprises owning the national grid or distribution grids had to allow third-party access, with transmission tariffs regulated by the Norwegian Water Resources and Energy Directorate (NVE)."
A new law aimed at curtailing the recourse by employers to temporary lay-offs became effective in October 1990
The LO-NHO settlement concluded in March was rejected by LO's members and new negotiations were opened in June. In July a new agreement was reached between LO and NHO with only marginal changes from the original settlement.
An agreement was reached between the traditional blue-collar labour organisation (LO) and the employers' federation (NHO) on a rise of NKr 3.5 to 4 per hour for below average wages and NKr 2 to 2.5 for higher wages. On average the settlement amounted to an annual increase in hourly wages of about 4 %. New negotiations were, however, to be opened if the current rise in consumer prices exceeded 4.2 % by November 1990.
Settlement between the Government and public employees on a rise in line with LO and NHO.
Calculation of eligibility period based on continuous time not calendar year.
An income settlement is reached between the traditional blue-collar labour organisation (LO) and the employers' federation (NHO). A general rise of between NKr 1 to 1.75 per hour is agreed for 1991.
Ineligibility period reduced to 13 weeks.
New applicants may be required to have diagnosis verified by a physician chosen by system administrators. A requirement that a claimant's work reduction must be predominantly caused by a medical condition.
Prior to the reform, corporate income was taxed at a flat rate of over 50 %. From 1992 capital income of individuals and corporations is taxed at a uniform flat rate of 28 %.
Individuals are first taxed jointly at the corporate income tax rate of 28 %. The taxable income computed for this purpose is the ordinary income, which is personal income net of deductions. Next, personal income, which is not eligible to deductions is subject to a progressive surtax at a rate of 9.5 or 13 % above a certain threshold. In addition there is a social security contribution on labour, self-employed labour and pension income of 7.8, 10.7 and 3 %, respectively. Accordingly, the top marginal rate amounts to 49.3 % (prior 57.8) for a salaried worker, 52.2 % (prior 62.7) for a self-employed worker and 44.5 % for a pensioner.
The gross income surtax introduced in 1988 is increase by 1 percentage point to 9.5 %.
Active labour market measures are strengthened
From 1 January 1993, electricity companies are required to deliver separate accounts for their production operations, subject to competition, and for local transmission and distribution of electricity, where strong economies of scale prevail. "The reform of the electricity market will be complemented by a partial move in the taxation of electricity from the present charge levied on end-users to a production charge as from the beginning of 1993."
Centralised income policies should aim at lowering unit costs by 10 % compared to trading partners.
Agreement between the largest trade union (LO) and the employers' Federation (NHO) for a wage increase of around NKr 0.5 to 1.25 per hour. On average the settlement implies an annual increase in hourly wages of about 3 %.
The Government and public employees agree at no increase in average hourly wages for 1992.
A reduction in transfers to households as a result of tighter conditions for sickness benefits
Ineligibility period waived if no ALMP or educational programmes offered.
A reduction in transfers to households as a result of tighter conditions for disability pensions
Increased sanctions for those who refuse suitable employment. Every time an individual refuses a suitable job his access to benefits can be temporarily suspended (8 weeks after the first refusal and 12 weeks after the second), after three refusals within a period of 12 months benefits can be suspended for six months. Previously benefits could be suspended for a maximum of 12 weeks.
Provides the Norwegian authorities with a clear mandate to supervise business practices and to act against anti-competitive activities if necessary. In particular, the authorities can act against public enterprises who financially support subsidiaries that are in competition with private suppliers. While they cannot impose administrative fines or other sanctions, the competition authorities are charged with examining whether there are cases for prosecution or caution, and pass on their deliberations to the competent authority.
The market for fixed-line telephone services was liberalised somewhat
The mobile phone market was liberalised and two operators, among which the incumbent, entered the market.
Direct price controls being completely abandoned from the legislation
The agreement entails an increase in hourly wages of NKr 1 for workers not concerned by local negotiations and NKr 0.5 are for workers who may benefit from additional increases through local negotiations. Excluding the effect of local settlements, this amounts to a general wage increase of 1.5 to 2 %.
Its aim is to bolster international competitiveness through lower wage growth in Norway than in its major trading partners. Both the unions and the employers’ organisation have consistently emphasised the contingency of their co-operation with the government on the continuation of the long-standing tradition of a stable exchange rate policy vis-à-vis Norway’s major trading partners. The government, therefore, agreed to gear monetary policy to keep the exchange rate stable and to use fiscal policy to smooth domestic demand. The stable exchange rate policy, in turn, was deemed to prompt unions in the exposed sector to internalise profit considerations into their wage demands.
Tightened access to benefits for the partially unemployed, who now must experience a 40 % reduction in weekly hours to qualify and whose benefit duration is the same as for a fully unemployed worker. (Prior to April 1993, a 20 % fall in weekly hours qualified a worker for benefits and maximum duration of benefits varied inversely with the degree of unemployment.)
From 1993, certain cases of previously granted pensions are being re-examined, in particular with regard to younger persons, with the aim of securing re-entry into the labour market.
The Parliament adopts tax reliefs for persons located in the northern regions of Finnmark and Nor-Troms, amounting – for an average income person – to NKr 7 000 to 8 000 per year.
The 2nd bracket of the surtax on personal income not subject to deductions is increased by 0.7 percentage points to 13.7 %.
A wage agreement is reached between LO and NHO, as the government commits to provide to private pension schemes NKr 50 million for the lowering of the minimum retirement age.
The strong growth in employment recorded since the second half of 1993 prompted the authorities to reduce the number of participants in ALMP from 58 000 in 1994 to 45 000 by the second half of 1995, while also improving the effectiveness of these programmes through a better targeting on young and long-term unemployed and on specific segments in the labour market where bottlenecks are likely to emerge with the current recovery
Moreover, subject to collaboration with equivalent public institutions, private job-intermediation agencies are now permitted, with a view to improving the matching of supply and demand
PT was strengthened to regulate the incumbent and to decide on the terms of third-party access to its infrastructure. It regulates the voice telephone pricing of the incumbent by a price cap model.
Administrative reforms are also being implemented in the road transportation agency, entailing a split between its regulatory and production activities.
The 1995 National Budget introduced a number of new measures to further enhance competition in the electricity sector. First, with effect from 1 January 1995, cost barriers of switching from one supplier to another have been reduced through a ban on forced installation of new metering equipment – which proved particularly constraining for small users of electricity. In addition, an experiment is being carried out with a secondary market for electricity-delivery contracts.
From 1997, also foreign airlines will be given access to the domestic market.
In conjunction with the implementation of the GATT-agreements, the import and distribution monopoly in the grain market – operated through the state-owned enterprise Statkorn – will be abolished in 1995
1 April 1994, both public and private domestic airlines have access to all domestic routes.
Some modest further reduction in agricultural subsidies is envisaged, consistent with the new GATT agreement
Bonus grants for students completing more than the standard number of terms per year
Through mergers between 98 regional and vocational institutions 26 state colleges are formed, offering programmes running from one to three years, although at some institutions longer courses and graduate programmes of four to six years have also been introduced. "In addition, the administrative structure in both the university and non-university sector has been consolidated, with the university or college board empowered with authority regarding budgeting, financial reporting, quality control, legal affairs, staff recruitment, strategic choices and co-ordination of activities with other higher education institutions (‘‘Network Norway’’)."
Under the new system, pupils, after leaving the compulsory school system, are enrolled in one of the thirteen new ‘‘foundation courses’’ (prior to the reform there were more than 100). Subsequently they enter an advanced course ‘‘Level I’’ which provides a further specialisation. Pupils choosing a general option enter Advanced course ‘‘Level II’’ to prepare them for higher education, while those choosing a vocational option will usually spend another one or two years as an apprentice.
To help contain public health expenditure, parallel imports of drugs have been allowed and the state's wholesale monopoly in the drugs distribution has been abolished. Moreover, retail prices of prescribed drugs are henceforth determined by actual costs of purchase and distribution rather than through a fixed mark-up on wholesale prices, reducing the incentive for pharmacies to sell expensive brands
This year's wage negotiations take place on a union by union basis without guidance from a central settlement.
An agreement in the engineering industry entails an hourly wage increase of NKr 1 with effect from April.
Parliament decides to convert the public corporation Norwegian Telecom into a state-owned limited company. On 1 November 1994, the public telecommunication enterprise was transformed into a state-owned stock company Telenor, providing its management with more discretion in framing and implementing new business strategies. The new company, though providing various services in competition with private suppliers, will maintain its monopoly on network management.
In 1994 the top rate for wealth taxes was raised from 1.3 to 1.5 % for net wealth exceeding NKr 530 000 for singles and NKr 570 000 for married couples.
Programmes implemented by the local authorities result in formal qualifications. The role of such formal adult education is likely to increase with the implementation of ‘‘Reform 94’’, which offers adults the possibility to complete their basic qualifications.
Upper-secondary and associated apprenticeship training has become a statutory right for all students in the 16-19 years age group, with the counties carrying responsibility for seeking contracts with enterprises to supply the required number of apprenticeship places. Enterprises receive state grants to cover the cost of instruction, which is roughly the equivalent of the cost of in-school education. Apprentices receive a salary according to a progressive scale to reflect the accumulation of skills, amounting on average to 50 % of the entry wage of a fully qualified worker.
The government decides to abolish the State import monopoly for wine and spirits, although it would maintain the retail monopoly of these products.
Banking sector supervision is fully liberalised, that is highly regulated
The Parliament endorses the privatisation of the railway company Ofotbanen, with the Norwegian and Swedish State Railways each participating in 24.5 % of the share capital of the company, renamed Malmtrafikk AS.
Since 1995, shareholders who work less than 300 hours annually in their business are not considered to be active owners and hence all their income is treated as capital income. The split model contains income thresholds above which personal income is taxed as capital income. In 1995 separate ceilings for liberal professions and other occupations were introduced. At the same time, a second ceiling for other occupations was introduced.
Post Office's reserved services were limited to closed, addressed domestic letters weighing up to 350 grams and an upper price limit of five times the basic tax for a domestic letter of 20 grams, around 50 % of its business
Creation of the world’s first international electricity spot and forward exchange market with Sweden at the start of 1996.
A breakdown of wage negotiations is followed by a strike in the hotel and restaurant industry.
The earlier practice of reducing the benefit rate by 10 % after 93 weeks of unemployment has been discontinued, affecting about 25 000 people.
The maximum legal duration of unemployment benefits is to be shortened from 3.7 to 3 years for persons previously earning more than NKr 82 000, and to 1.5 years for those earning between NKr 51 250 and NKr 82 000. After the benefit period has expired, it will be necessary to re-qualify for unemployment benefits through regular employment.
Access to unemployment benefits will be tightened, with the lowest yearly income level insured against unemployment to be raised from NKr 30 750 to 51 250, affecting possibly 12 000 – mostly young – unemployed benefit recipients. The first cohort of beneficiaries concerned will be affected only as of January of the year 2000.
The parliament approves the conversion of the Post Office and the Norwegian State Railways from public corporations to state-owned companies.
Airlines based in other EEA countries have legal rights of access to the Norwegian market since 1 April 1997. However, the effective access of foreign carriers has been limited due to insufficient airport capacity during peak hours.
The Water Resources and Energy Administration, on 1 January 1997, adopted new regulation on the operation and use of the electricity grid, allowing network companies who increase their rate of return through productivity increases to keep the additional profits, but only up to a certain limit, defined in terms of the general level of interest rates.
As of 1 January 1997, better information is being provided to households. (Only large customers seemed to benefit from the presence of lower cost suppliers)
Similarly, while fixed-term contracts and other forms of temporary employment are mostly prohibited, exemptions have been granted for certain types of office workers, in particular those in the oil industry, and fixed term contracts are allowed for special groups, such as athletes, researchers and writers.
The grant system introduced in 1980 has been modified with 30 % of the central government grants to the counties henceforth based on the actual number of patients treated, their diagnosed medical conditions and a national standardised cost per treatment. (Diagnostic Related Groups DRG – approach.)
A new wage agreement is concluded for central and local government employees. The agreement includes an annual pay increase of NKr 2 500 for all employees, while selected groups receive an additional NKr 900.
State employees will have local negotiations concerning an additional NKr 1 billion, while local government employees have an additional NKr 380 million to negotiate.
Local negotiations will be conducted on the basis of the various wage agreements so that any increases are based on each company’s financial situation.
All employees receive an hourly wage increase of 80 øre, and up to one krone extra is granted for some collective agreements.
Access to the municipal Social Assistance benefits SA benefits – which ‘‘top-up’’ national social security benefits or earnings to ensure a minimum acceptable level of income – is being tightened. In some municipalities, medical doctors are being used on an experimental basis to screen hard-to-place SA recipients for their medical fitness to work.
For young (under 25) SA benefit recipients, moreover, a requirement has been introduced that they participate in four days of ‘‘workfare’’ and one day of training per week, at a reduced benefit level.
The current agreement stipulates that pension for early retirement is expanded to include those aged 63 from 1 October 1997 and 62 from 1 March 1998 (private sector)
The early retirement system is expanded to include persons aged 63 from 1 October 1997 and persons aged 62 from 1 March 1998, similar to the scheme for private sector workers.
Originally, consumers had to pay a hefty fee to switch supplier (NOK 4 000) but this fee was abolished in 1998 while switching by small consumers became possible due to the introduction of load profiling (use of average consumption pattern to determine individual consumption in between metered measurements).
Telecom market fully liberalised. The state monopoly embodied in the telecommunications company Telenor was abolished by 1 January 1998, permitting market access for both domestic and foreign competitors.
The Act stipulates maximum opening hours for outlets in the retail trade, and is applicable to the whole country. According to the new provisions, shops may not be open after 21.00 during weekdays, and after 18.00 on Saturdays, and they have to be closed on Sundays. The provisions of the Act, however, are applicable only to outlets over a certain size, which includes shops with more than 100 square metres of floor space and petrol stations with over 150 square metres of floor space. Furthermore, the legislation means that the regulation of opening hours is no longer the responsibility of the individual municipalities. (Small shops are allowed to be open as they see fit).
45 % (from 30) of the central government grants to the counties henceforth based on the actual number of patients treated, their diagnosed medical conditions and a national standardised cost per treatment.
In order to make it ‘‘economically feasible’’ for single parents to enter working life, the TA benefit level will be raised by around NKr 10 000 per year
As from 1999, the government’s Family Cash Benefit scheme will be extended to cover children between one and three years of age (instead of one and two years). The grant, which will be automatically paid to all families with children who do not use the publicly funded child care system, is intended to make it financially feasible for parents to care for their small children at home after the maternity leave has expired.
Reduction of the maximum benefit period for Social Assistance income support for single parents from ten to three years, and to five years for single parents enrolled in education. If the single parent fails to find employment after the allowance expires, he or she will move to the means-tested Social Assistance (SA) programme.
In 1998 the (flat-rate) minimum pension, affecting workers who have built up low earnings-related entitlements more than proportionally was raised
Privatisations in banking sector, but major banks are stilled state owned, and the percentage of public bank assets is between 25-50 %
For liberal professions the 300 hours rule was abolished in 1998 (introduced in 1995 stated that shareholders who work less than 300 hours annually in their business are not considered to be active owners and hence all their income is treated as capital income)
In 1998 the ceiling for liberal professions was entirely abolished while for other occupations the first ceiling was lowered, and the second ceiling increased. (The split model contains income thresholds above which personal income is taxed as capital income. In 1995 different thresholds for liberal and other occupations were introduced).
Competition between the incumbent and other providers was stepped up by the introduction of carrier pre-selection (transmission of calls without having to dial the selected provider prefix) and operator portability (allowing telephone users to keep their old phone number if they switch to a new provider).
Five year ban on establishing shopping centres outside cities and densely populated areas (expired in February 2004, without renewal)
In 1999, the government proposed to Parliament to strengthen the position of the Norwegian Competition Authority (NCA) by giving it the authority to prohibit mergers and acquisitions (M&As) pending the NCA’s analysis of the competition consequences
Complete liberalisation of temporary work agencies but only a limited liberalisation of hiring-in rules. Hiring-in from temporary work agencies will only be allowed if approved by elected union representatives or in the limited cases the law allows for temporary contracts.
The Act on Patient Rights introduced free choice of all public hospitals by the patients. This right has been progressively extended to include services from the private sector.
In 2000 a new bracket in the surtax, applied to personal (labour and pension) income of NOK 762 700 and above, has been introduced. The rate is 19.5 %, which raises the top marginal rate for personal income by 6 (= 19.5 – 13.5) percentage points.
There are deductions for interest expenses, a standard personal allowance (NOK 26 300 in 1999 for a single earner), a standard deduction of 21 % for wage and pension income up to a ceiling of NOK 34 900 in 1999 and standard family allowances. As of January 2000 employees may opt for a special allowance of NOK 30 600 if that were more favourable to them than the standard deduction (which in 2000 was raised from 21 to 22 % with a ceiling of NOK 36 600).
The first 9.5 % bracket of the national surtax is abolished, and the second is lowered with 0.2 percentage points to 13.5 % (for ordinary income – not subject to deductions – above NKr 269 100 per year in 1999).
In 1999, Parliament enacted legislation that gives all employees an individual right to up to three years study leave if they meet certain criteria. (e.g. Completion of upper secondary education)
The funding arrangements for GPs in private practice will change as of 1 January 2000, with the National Insurance Scheme reimbursement of fees for service to GPs becoming conditional on the GP having signed a contract with the municipality.
The LO and the NHO reach a new two-year wage agreement, with a stronger wage increase and a more rapid introduction of the fifth week of holidays. The adjusted wage deal is approved by LO members.
Almost two-thirds of the members of the Norwegian Confederation of Trade Unions (LO) vote against the wage settlement for 2000-02 agreed by the LO and the Confederation of Norwegian Business and Industry (NHO). The LO starts strikes.
Partial privatisation of Telenor (Telenor sells shares corresponding to 21 % of its capital to private investors)
The 11 % tax on dividends received by Norwegian personal taxpayers – with a basic deduction of NOK 10 000 – is intended to enhance the distributional profile of the tax system
Number portability is introduced for mobile telephony.
New Act on Pharmacies enters into force aimed at increasing competition.
Sets three objectives: a reduction in sickness absence by at least 20 % by 2005, a greater share of disabled persons in employment and an increase in the effective retirement age. It aims to achieve these goals via voluntary company-level agreements between the employers and the National Insurance authority.
Employees engaged in a company-level agreement will be allowed “extended self reporting”. They will be able to take off up to eight days consecutively without a doctor’s certificate, instead of the normal three days, for up to 24 days per year.
Reducing employers’ social security contributions for workers aged 62 years or older by 4 percentage points
The social partners agree on wage settlements for 2002 that will lead to a wage rise of somewhat more than 5 %.
The gross replacement rate was effectively lowered for persons receiving benefits beyond eight weeks.
The 2003 budget reduced from three years to two the maximum period during which an unemployed person can receive unemployment benefits.
The waiting period before a newly unemployed person can draw benefits was increased from three to five days.
Eligibility requirements were tightened as the minimum previously earned income was raised by 20 % and now amounts to around NOK 85 000, i.e. around 28 % of the average production worker annual gross earnings.
Eligibility restrictions were introduced for part-time workers as the minimum loss of working time to be considered for benefits was raised from 40 to 50 %.
The temporary 11 % dividend tax introduced in January 2001 is abolished. The consumption tax on electricity is reduced.
There are now no limitations on the opening hours of retail outlets on ordinary weekdays (including Saturday). The general ban on trading on Sundays and religious holidays remains in place, but the provisions on this issue have been moved to the Act relating to Holidays and Holiday Tranquillity (Lov om helligdager og helligdagsfred). Thus outlets will have to stay closed on Sundays and religious holidays, and have restricted opening hours on public holidays. Previous exemptions to this general ban are continued – i.e. outlets of a certain size may open on Sundays and religious and public holidays.
The weekly and four-weekly restrictions on overtime work have been abolished, and overtime work is calculated over a four-month average period, which could be extended up to one year with the agreement of the trade unions. Moreover, the number of overtime hours beyond 200 can now be agreed individually between the company and the worker.
From 2003, annual and overall ceilings of NOK 50 000 and 100 000 (around EUR 6 000 and 12 000), respectively, were introduced for benefits covering educational fees.
The government reduced to one year the maximum period (from two) before a vocational rehabilitation scheme is offered to a worker on sick leave.
A maximum period of three years for benefits related to education was introduced and individuals below 26 years of age are no longer eligible for benefits to pursue education under the vocational rehabilitation scheme
The period after vocational rehabilitation during which a worker could continue to receive benefits was halved from 12 to 6 months.
The 2004 budget reduced to one year the maximum benefit period for unemployed individuals whose previously earned income is below a certain threshold.
Starting from July 2004, Aetat (the Norwegian PES) will be the sole authority assessing eligibility for vocational rehabilitation.
Recently, the benefits for those receiving disability pensions actually increased since beneficiaries were exempted from cost-sharing on many pharmaceuticals and other health-care articles from the beginning of 2003
On the other hand, starting from 2004, a new scheme of temporary disability pensions has been introduced. The temporary disability pension will be granted for a renewable period from one to four years whenever the future work capacity of beneficiaries is uncertain; permanent disability pension will only be granted when the individual has no work capacity.
Pursued further partial privatisation in 2004 and 2005, in the telecommunication sector, the oil industry and full privatisation in some other industries: – Telenor ASA (sell-off from state interest from 62.5% to 54%). – Statoil ASA (sell-off to state from 81.8% state interest to 70.9%). – Grødegaard AS (catering), remaining state interest sold (formerly 52%).
Dividends and capital tax between companies are tax exempt from 2004 on
Basic allowances for wage income will also be increased, ensuring reduced marginal tax rates for workers who don’t pay surtax.
A dividends and capital gains tax of 28% on individuals will take effect from 2006, and returns on their financial assets corresponding to a risk free rate will be tax exempt – the so-called shareholder model. Together with the lower marginal taxation of labour income, this will allow abolition of the “split model” by 2006 (i.e. the current splitting of taxable income into labour and capital income in the case of proprietorships, partnerships, and “active owners” of small business).
The wealth tax is to be eased in the course of 2006 and halved by 2007, with a view to its full abolition
In 2005, the surtax on labour income will be reduced by 1.5 percentage points in bracket 1 (from NOK 381 000) and by 4 percentage points in bracket 2 (from NOK 800 000), lowering the maximum marginal tax rate including employer’s social security contributions from 64.7 to 61.5%.
Competition allowed in state purchases of passenger rail transport services. The first contested contract (Gjøvikbanen) was assigned in May 2005, requiring operation to start up in June 2006.
Employees that have gone to court with their dismissals, will as a rule have a right to stay in employment during the duration of legal proceedings, also in those cases where the employer have won in a lower court and the ruling is challenged in an appellate court. The object of the Act, thus, is to provide protection for employees. References to the needs of companies and the general society – which were included in June 2005 – are taken out.
The government called for a harmonisation of the legal framework for state sector employees and employees in other sectors. However, many of the special provisions pertaining to senior civil servants (who are few in number) are retained. The revised AML‘s provisions on temporary employment and dismissals have thus now been made applicable to most state sector employees.
Reversal back to the original provisions regulating under which conditions a company may use temporary employees. (Thus, the original changes made in 2005 allowing the employer to use temporary employment over a period of one year without further justification, will thus not be implemented. Nor will there be a general access for the social partners to enter into agreements on other (and less stringent) rules than stipulated in the legal framework.) The new regulations establishing a ceiling on how long an employee may be employed temporarily (4 years) are upheld.
Relaxes the rules regulating temporary/fixed-term employment. A worker may, according to the new regulations, be employed on a temporary basis for up to six months (without justifications needed). This period may, if necessary, be extended by another six months. Moreover, the employer may use temporary employment in cases where 'the employee is only needed for a specific task or assignment'.
The changes by the former government reversed. Back to permissive regulation.
Parliament also voted in favour of giving preference to part-time employees to increase their working time if such are available in the company. This presupposes that the employee is qualified for the work and that such extension of working time does not cause significant inconvenience to the company.
The Act now stipulates the issues on which the employer has to inform employee representatives, the companies covered by the rules and the way in which the information should be given. It also lays down rules on how sensitive information is to be handled. It is further emphasised, however, that the social partners themselves may agree on how this duty to inform and consult may be put into practice.
The government is now reversing the rules back to their original form prior to the changes made in 2003: 1. greater restrictions on the use of overtime (a maximum of 200 as opposed 400 hours per year), 2. more detailed provisions on the number of overtime hours to be allowed per day, week and during a four-weekly period. 3. In enterprises covered by collective agreements trade union representatives and management may agree on overtime that exceeds the law. 4. Annualisation rules is also tightened.
The new legislation limits the scope of exceptions to working time and overtime regulations, and keeps the present definition of night work (work between 21.00 and 06.00).
Special unemployment benefit that exists for state sector employees, where employees keep their state sector employment status even though their jobs no longer exist, has been abolished
The changes by the former government reversed.
In May 2005, Parliament reached an agreement on “principles of a reform” in three areas: the introduction of a life expectancy adjustment ratio, benefits based on lifelong earnings, and pension benefits indexed on an average of prices and wages after retirement. The Parliament agreement also provided guidelines concerning other critical measures introduced in the December 2004 White Paper.
In January 2006 mandatory occupational pensions, supplementing the National Insurance pension, were extended to all firms.
The Public Employment Services and the National Insurance Services have been merged since 1 July 2006 and cooperation of this new organisation with the municipal social welfare service was enhanced, in order to improve the collaboration between agencies administering different benefits and placement services.
Lowering the threshold for the top income tax rate
Wealth tax raised (overturning the planned phasing out by the previous government), revaluing properties
Increasing allowances for lower incomes.
The maximum unemployment benefit period for temporary laid-off workers has been reduced from 34 to 30 weeks.
The period in which persons on vocational rehabilitation (many of whom are formerly unemployed) are entitled to vocational rehabilitation benefits after completing rehabilitation, has been reduced from six to three months.
The special benefit for persons who have exceeded the maximum employment period has been abolished.
An additional low-wage increase of NOK 1.00 an hour for employees in industries where the average wage is below 90% of the average wage of ordinary manufacturing industry workers
General hourly pay increase of NOK 1.00 for all employees
The social partners also agreed that general pay increases awarded at the national level may be postponed or ignored at company level in situations where company finances are poor, although only on the basis of agreement between the company and the trade union representatives in the enterprise.
As an anti-crisis measure, maximum unemployment benefit period for temporary laid-off workers was increased to 52 weeks from 1 February 2009. To be re-evaluated in the Revised Budget for 2010.
The means testing of pensions against income is abolished for pensioners aged 68 from 1 January 2009, and for those aged 69 as from 1 January 2010.
Pension benefits are to be based on lifetime earnings (indexed on average earnings) with a contribution rate of 18.1% up to a ceiling of NOK 517 455, and calculated on the basis of life expectancy at the time of retirement. The accrual rate has been calculated as to correspond to a replacement rate from 67 years of 1.35% per year in employment, assuming life expectancy in 2010, giving a replacement rate of 54% for constant income during 40 years.
Following intensive pressure from the trade unions, the present arrangements were largely maintained, linking pension amounts to the length of employment.
The current AFP-benefit is transformed into a lifelong supplement to the new old age pension in the NIS, based on the same principles as the new NIS scheme, i.e. adjusted for life-expectancy, actuarially neutral at the margin, indexed on wage until retirement and on wage minus 0.75% after retirement
The retirement age is flexible from 62 years old onwards, based on actuarial neutrality at the margin.
Since 2010, there is joint and several liability related to minimum wages in sectors with mandatory extended wage contracts.
Provides for earlier and closer monitoring of sick leave, with provision for sanctions against the employee, employer and doctor for failure to follow up.
A special regulation, that enabled unemployed persons from age 62 to receive unemployment benefits until age 67, was abolished from 2011, with certain temporary transitional arrangements.
Freeze on prices of wide range of basic goods (food, clothing and footwear) pending introduction of Maximum Retail Price (MRP) scheme.
Minimum pay rates increased by $ 18 to $ 45 per week for adult males and by $ 14.50 to $ 34 for females.
General Wage Order of 8.5 % and pay freeze to 30 June 1974.
Extension of special depreciation allowance to March 1975.
Increase in basic social security benefits
Social security benefits increased by 5.1 %.
Profit and price controls extended to financial institutions.
Announcement of general increase in wages and salaries of 4 % (on the first $ NZ 75 of gross weekly earnings only) to replace the January cost-of-living order to apply from January 15th, 1975.
9 % General Wage Order and permission given to negotiate up to an extra 21/2 % with employers.
Female wages increased to 85 % of male rates as step in introduction of equal pay.
4 % salary increase granted to State servants.
Social Security benefits increased by 3 %.
10.5 % increase in Social Security benefits
All social security benefits to be increased by the full percentage increase in the cost of living during the second half of 1974.
Tax exemption for insurance and superannuation increased.
Dairy Board Amendment Bill providing for guaranteed price system throughout the industry introduced.
Permanent stabilisation scheme for meat industry providing for minimum prices to farmers announced. Government funding of $ 35 million provided, with any further requirements to be met by Reserve Bank credit at 1 % interest.
Basic pay rates raised by 11 cent per hour (absorbing, however, the previous January wage order) with provision for further 2 1/4 % increase in total remuneration freely negotiable between employers and employees (applicable July 9). Tax scales adjusted, reducing taxes on incomes below $ 20 thousand. Saving banks' maximum interest rates are increased.
Salary increase approved for State servants: 4.1 % up to salaries of $ 6200 ; $ 260 per year for salaries from $ 6200 to $ 10000; and 2.25 % for higher salaries.
Increases in social security benefits: Social security benefits increased by $ 2.00 per week for single person (to $ 30.75) and by $ 3.35 per week for married couple (to $ 51.25).
Social security benefits increased by $ 2.00 per week for single person (to $ 30.75) and by $ 3.35 per week for married couple (to $ 51.25).
Tax scales adjusted, reducing taxes on incomes below $ 20 thousand.
Expansion of fiscal incentives (tax deductions and cash grants) for non-traditional exports.
Announcement of a general wage increase of 9 cents per hour or $ 3.60 per week.
One-year freeze on wage and salary agreements.
Wage order of 7 %, subject to maximum of $7 per week (applicable 25th June), estimated to increase the wage-bill by 5 1/2 %.
Increase in social security benefits of 9.1 %, in line with the increase in the CPI in the first half of 1976.
Announcement that National Superannuation for a married couple would commence at 70 % of the average ordinary-time wage from 9th February 1977, and be raised to 80 % in August 1978. Rates to be adjusted six-monthly in line with wage movements. A single beneficiary would receive 60 % of the married rate.
Introduction of a tax rebate of $ 6 per week where a principal income earner with at least one child under 5 years earns less than $ 100 per week, reduced proportionately up to $ 140 per week.
Increased public works expenditure of $ 16 million.
Free collective wage bargaining re-introduced with ending of wage freeze under the Wage Adjustment Regulations. Agreements reached to be subject, however, to twelve-month rule and to be registered with the Arbitration Court.
Announcement of extension of the freeze on wages, professional charges, directors' fees and dividends for a further three months (until 14th August 1977).
Income-tested social welfare benefits not subjected to taxation increased from 27th July to give full compensation for price increases.
Announcement of increases of 6 % in social security benefit rates, backdated to 12 January. This was in line with the increase in the CPI in the second half of 1976.
At a cost of $ 25 million, a special supplementary family benefit of $ 25 per child to be paid in late November.
The young family tax rebate raised to $ 9 per week and single-family rebate of $ 4 per week introduced.
To help boost corporate cash flows, a temporary tax relief scheme estimated at $ 75 million announced: companies permitted to deduct 5 % of stock values at beginning of 1977/78 financial year from taxable income in 1978/79 financial years.
An across-the-board cut in income tax of 5 % as from 1st February, 1978.
$ 55 million are provided for a variety of job-creation programmes.
First settlement of the 1978/79 wage bargaining round grants 11.5 % increase to general drivers.
In settlement of freezing workers' wage claims, the Government to pay wage subsidy of $ 3 million.
New tax rates introduced giving income taxation reductions of up to $ 382 per year on taxable incomes in the range of $ 3'000 to $ 22'000 per year.
Single family tax rebate raised from $ 208 to $ 260 per year.
National superannuation payments to be linked to after-tax rather than pre-tax average wages; family benefit increased from $ 3 to $ 6 per week; child supplements for beneficiaries increased to $ 4 per week.
Tax payable on income between $ 4'500 to $ 10'000 p.a. reduced from 38 % to 35 %; from $ 10'000 to $ 11'000 p.a.. Tax payable reduced from 48 % to 35 %; concessions on family and spouse rebates.
Reductions in personal income taxes announced, to take effect from 1st April 1980: the upper limit of the 14 1/2, % income tax band raised from $ 4'500 to $ 4'900 and the upper limit of the 35 % step from $ 11'000 to $ 11'500. The cost to revenue in the 1980/81 fiscal year expected to be $ 150 million.
Increases in National Superannuation and Social Security payments announced. The increases lift payments to a married couple under the national superannuation scheme to $ 112.52 per week, while payments under social security increased to $ 81.28 per week for a married couple.
Short-term employment promotion through increased expenditure on forestry planting and other areas.
Public sector job creation to be further encouraged by increased allowances, community employment initiatives funding and accelerated public works.
Youth unemployment to be relieved by various work training and work experience schemes.
Improvement in training and employment measures including expansion of retraining assistance.
Parliament passed a bill providing for Saturday shopping.
A general wage increase of 4 % from 1st August
Increased benefits for social security and unemployment beneficiaries announced. The 9 % increase in basic rates covered the rise in the consumer price index in the last six months of 1979.
The upper limits of the three income tax scales were raised by between 9 and 12 %, to take effect from 1st February 1981. These changes imply an income tax cut of 5.5 % on average and are estimated to be equivalent to a 3 % wage rise.
A new job-subsidy scheme for firms employing unemployed school leavers announced by the Government. The scheme, known as the First Job Programme, would involve a subsidy of $ 30 a week for a year and would operate from 9th March to 30th September.
The Arbitration Court granted a 5 % cost-of-living increase to operate from 11th June.
Taxation: starting points for abatement of low income and young family rebates raised.
The Government imposed a twelve-month wage, price and rent freeze accompanied by a freeze on interest rates, dividend rates, directors' fees and professional charges.
The freeze on wages, which applied from midnight on 22nd June, imposed a total freeze on remuneration rates with the exception of yet-to-be negotiated wage rates for some of the major projects and for settlements carried over from the 1981/82 wage round.
Corporatisation of state rail, air and bus services
Rationalisation of family circumstance rebates and the introduction of a rebate of up to S312 a year for principal income recipients earning up to $ 14'600 a year.
New personal income tax scales to take effect from 1st October, representing a major reduction in income tax liability and making a marginal tax rate of 31 cents in the dollar or less apply to approximately 90 % of all tax payers.
A limited programme of labour-intensive Government funded activities to provide 3'000 to 4'000 jobs at a cost of $ 52 million.
A price surveillance scheme will replace the wage and price freeze from 29th February 1984. The main provisions are: A restriction to no more than two price increases in the year following the end of the freeze, applying to suppliers of goods and services; manufacturers and service industries with annual turnovers in excess of $ 10 million and $ 3 million respectively are required to give twenty days' notice of price increases to the Ministry of Trade and Industry, which has discretion in accepting these.
Major changes to industrial relations were initiated with the passing of the Industrial Law Reform Bill. The main effect of the legislation is to make unions voluntary organisations by removing the unqualified preference clause in union rules.
Increase in the family rebate, particularly for low income families, funded by an increase in the standard marginal tax rate from 31 to 31.5 cents per dollar. The temporary tax surcharge on high income earners was retained.
The Commerce Amendment Act is modified in order to shorten procedures and to put more emphasis on the control of monopolies. All takeover proposals will first go to the Commerce Commission, formerly the body to which the examiner of commercial practices could send cases for public enquiry. And the size of holdings allowed in target companies before the Commission must be notified, is reduced to 20 % for both private and public companies, from 50 and 25 % respectively.
End of all state regulated monopoly rights (except letter post, air traffic control and milk distribution)
Financial institutions would be free, under the general surveillance of the Reserve Bank, to borrow overseas to fund their day-to-day operations, with the exception of those which were licensed to deal in overseas exchange and were subject to specific currency exposure limits. While the consent of the Commission would still be required, it would in most cases be automatic.
Foreign-owned companies operating in New Zealand would generally have unrestricted access to the New Zealand capital market
All controls on interest rates introduced during the past year were immediately revoked.
Removal of controls on outward investment and borrowing
Deregulation of foreign exchange trading
New criteria are set for the Arbitration Court which will allow wage relativities to change.
It abolished compulsory arbitration in 1984.
More market-based bargaining under Industrial Relations Act Amendment 1984 (compulsory unionism reinstituted).
Greater encouragement will be given for composite wage-bargaining at the level of the enterprise or industry.
The freeze on existing payments will be lifted from 9th November.
A flat $ 8 a week increase in wages is proposed for all adult workers from 1st April. The wage freeze regulations are extended for an indefinite period and will continue till replaced by a longer-term wage-fixing system.
The immediate priority of social policy was put on ensuring adequate living standards for those on low incomes. A family care package was introduced.
Corporatisation/sale of airports and Airways Corporation
Reduction of the tax rate from 48 to 33 % for resident companies and from 53 to 38 % for non-resident companies (later aligned at 33 %).
Removal of most tax expenditures by abolishing a wide range of business investment incentives, including export incentives and investment allowances.
Introduction of withholding taxes on interest and dividends
Introduction of an imputation scheme for corporate dividends to eliminate double taxation of company income distributed to shareholders.
Removal of tax preferences for income earned and distributed from pension schemes, placing such saving on an equal footing with other forms of saving.
Announcement of job-training and employment-policy measures intended to replace several existing government-funded schemes.
Removal of quantity restrictions and other entry barriers to banking
Very liberal regime for portfolio investment and repatriation of profits
Removal of ownership restrictions on financial institutions
Removal of separate requirements for trustee banks, building societies, finance houses and stock brokers.
The New Zealand Futures Exchange begins operating.
End of formal financial controls (reserve ratio requirements, sector lending priorities)
Limits on foreign ownership in New Zealand financial institutions, advertising agencies and fish processing were abolished. Foreign ownership had previously been limited to 70 % in financial institutions, 40 % in advertising agencies and 49 % in land-based fish processing.
Benefit increases to compensate for real disposable income effects of GST introduction.
Marginal increase in the company tax and the fringe benefits tax rate
New simplified income tax scale, incorporating significantly lower marginal and average income tax rates (also to apply from October 1986).
The tax reform would lower average income tax rates and adjust marginal rates, and come into force with the Goods and Service Tax in April 1986.
Termination of price controls and replacement by price surveillance powers under the Commerce Act 1986.
Removal of quantity licensing on almost all industries, and end of quality regulation on most.
Increases in Social Welfare payments to low-income families.
Corporatisation and restructuring of electricity generation and transmission
The State-Owned Enterprises (SOE) Act 1986 established a framework for the operation of government-owned businesses and provided for the corporatisation of nine departments into SOEs.
Superannuation funds, life offices and related organisations will be subject to taxation.
Restructuring to isolate natural monopoly elements of State-owned Enterprises. Full or partial privatisation of Air New Zealand, Bank of New Zealand, Petroleum Corporation, Tourist Hotel Corporation, Shipping Corporation, Rural Bank, Government Life, Forestry Corporation, Post Office Bank, Telecom Corporation and others.
The State-Owned Enterprises Act allows for the establishment of nine new stale corporations: the Government Property Services; the Airways Corporation; Forestcorp; Landcorp; New Zealand Post; Post Office Bank; Electricorp; Telecom and Coalcorp.
Assignment of proceeds of sale of state-owned enterprise assets to repay public debt.
Full or partial privatisation of Air New Zealand, Bank of New Zealand, Petroleum Corporation, Shipping Corporation, Tourist Hotel Corporation, Rural Bank, Government Life, Forestry Corporation, Post Office Savings Bank, Radio New Zealand, Telecom Corporation and others.
Corporatisation of 24 state-owned enterprises (in transport, finance, tourism, forestry, broadcasting, utilities and service industries).
The Government announced a job subsidy scheme of NZ$ 325 a week to employers hiring people unemployed more than nine months for community work.
Free hospital care and some assistance in meeting the costs of primary health care.
A "special benefit" when individual circumstances result in an unavoidable gap between income and outgoings.
New Zealand Post: has been transformed from an unprofitable Government Department into a cost-conscious, decentralised public corporation offering a wider range of customer oriented services.
The Government announced that DFC New Zealand had been sold to National Provident and international investment bank Salomon Brothers at a price of $111 million. National Provident takes an 80 % share, and Salomon Brothers 20 %.
The Government announced that the Government Stores Board would become a State-Owned Enterprise.
A programme of asset sales amounting to $ 2'000 million contributing towards a targeted $ 2'000 million reduction in foreign debt this year.
Sale of Crown gas exploitation and distribution interests
Flattening and lowering of personal income tax rate, with top rate standardised to corporate tax levels, and aimed to minimise poverty traps.
A decrease in the top tax rate, from 48 cents in the dollar to 33 cents for income above $ 30'875.
In addition, a rebate for some taxpayers resulting in marginal tax rates of 15 % up to $ 9'500, 28 % between $ 9'500 to $ 30'875 and 33 % thereof.
Termination of restrictions on shop trading hours
Tightening of requirements, postponement of age of eligibility and reduction of benefits for government-funded pensions.
Extension of age for government funded old age pension scheme
Reduction of benefits for government funded old age pension scheme
Tightening of requirements, extension of age, and reduction of benefits for government funded old age pension scheme Separation of funding from provision
An increase in the company tax rate, from 28 % to 33 %, from 1st April 1989.
The specific benefit reforms introduced a marked reduction in the Unemployment Benefit.
Entitlement to the Unemployment Benefit was also removed for 16 and 17-year olds, being replaced by a Youth Benefit for those unable to obtain parental support.
Tightening of requirements and reduction of levels of unemployment benefits and other government social transfers.
Benefit tightening of benefit eligibility criteria
Introduction of a Youth Benefit (16-17 years old for those unable to obtain parental support).
An increase in the stand-down period - the wait period before benefit entitlement commences - for those voluntarily unemployed from 6 to 26 weeks.
Guaranteed Retirement Income rates were frozen for one year.
The freezing of benefits for two years (until April 1993) was opposed to the past inflation indexation.
Increasing the surcharge (the abatement rate facing beneficiaries) from 20 to 25 %.
Lowering of the abatement thresholds and raising the eligibility from 60 to 65-years of age progressively between 1992 and 2001.
The sale of the State Insurance Office to Norwich Insurance for $ 735 million was announced.
The sale of the Tourist Hotel Corporation of New Zealand to Southern Pacific Hotel Corporation Limited for the sum of $74 million was announced.
The removal of the restrictions on ownership of ports
Tendering of local authority bus services and liberalisation of licensing requirements.
The Employment Contracts Act takes effect, changing labour market relations from blanket national award coverage to a commercial contracting basis.
The Employment Contracts Act's preserves a statutory minimum code of employment rights, relating to dispute resolutions procedures, personal grievances, a minimum wage, holidays, sick leave and occupational safety and health.
Radical reform via Employment Contracts Act 1991 (voluntary unionism, contestable unions, deregulation of employer-employee bargaining).
Facilitation of the access for all New Zealanders to health care.
Widening of the choice of hospitals and health care services for consumers
Restraining of the growth of expenditure
Introduction of income-related health user charges from 1 February 1992.
The Act radically altered industrial relations by introducing a decentralised wage-bargaining structure based on employment contracts similar to contracts in other areas of activity. At the same time, the authorities adopted grievance and dispute-settlement procedures (through the Employment Court and Tribunal), preserved a statutory minimum code of employment rights relating to a minimum wage (see above), as well as to holidays, sick leave and occupational health and safety.
The Employment Contracts Act's main objective is to promote an efficient labour market by providing employers and employees the freedom to choose with whom, and within what structures, they associate. It makes the nature and structure of employment contracts a matter for the parties themselves to determine.
The Employment Contracts Act also makes union membership voluntary with employee representation now contestable and bargaining structures negotiable.
Replacement of the Government Retirement Income scheme with a new National Superannuation scheme, with higher abatement rates, freeze on rates for a second year, and a progressive increase in the age of eligibility from 60 to 65, over ten years.
Increased expenditure on employment programmes
Quasi corporatisation and fee paying for tertiary education institutions
Development of private funding arrangements for health provisions
Separation of funding from provision of state health services, establishment of Crown Health Enterprises and private sector deregulation.
The Government announced in 1992 that the Regional Health Authorities will also be taking over sole responsibility for purchasing disability support services. These services are currently purchased by three agencies (Area Health Boards, the Department of Health, and the Department of Social Welfare). The responsibilities to Regional Health Authorities will be phased in, commencing on 1 July 1993.
The second level of the new system involves the establishment of "Crown Health Enterprises" - formed from the existing public hospitals - which will contract their services to the Regional Health Authorities. The Crown Health Enterprises will be managed on an enterprise basis and be expected to return a dividend to government. These dividends are to be spent on health services.
The Government announces that it has accepted a conditional offer from the National Australia Bank for the Crown's 57.3 % shareholding of the Bank of New Zealand. The offer of $ 1 .48 billion for the Bank means that the Government will receive around $ 850 million for its shareholding.
Targeted increases in Family Support and new initiatives funded by Social Welfare and Education to provide extra support for families at risk.
Completion of the sale of the government's 57 % shareholding of the BNZ to National Australia Bank for NZS 849 million.
The New Zealand Government sold its 100 % shareholding in New Zealand Rail Limited to Wisconsin Central Transportation Corporation, Berkshire Partners III LP., and Fay, Richwhile and Company Limited on 20 July 1993 for NZ$ 328.2 million.
Corporatisation, privatisation and deregulation of gas and electricity distribution.
In September 1993, the core business of the government’s Railways department was sold to a consortium of New Zealand and overseas interests. In 2000 there was a significant restructuring of the business which included the outsourcing of core business functions, such as track and rolling stock maintenance. In 2003, the government concluded an accord with Toll Holding for access rights and investments on the network and it bought the infrastructure in 2004.
The government sold its entire stake of 104.5 million ordinary division shares and 26.1 million forest division shares in Fletcher Challenge Limited. The sale was to a number of institutional investors in the world markets. The sale price was NZS 418 million.
Funding was increased for the education and training systems.
Funding was increased for the health system.
Social security and welfare, health and education spending all continued to increase in response to policy decisions, demographic changes and indexations of benefits.
In the 1997/98 year, new spending of NZ$ 546 million, primarily for education.
Reducing demand for claims, through refocusing the scheme away from minor to more serious injuries, and raising employer involvement in injury prevention and rehabilitation.
In the 1997/98 year, new spending of NZ$ 546 million, primarily for health
Increase in family assistance and work incentives given changes to benefit abatement rates and introduction of an independent family tax credit.
Tightening the supply of claims, through efficient management and reduction of long-term claimants by implementing the work capacity tests and reviewing both entitlements and duration; introduce more experience rating to create incentives for injury prevention and rehabilitation; and disentitle certain behaviour (for example, drunk drivers and other serious criminal offenders) from some ACC benefits.
Sale of government’s 49.9 % shareholding in the Maori Development Corporation Limited. The sale price was NZ$ 20.93 million (25 June 1996).
liberalising air transport to help reduce the disadvantages of New Zealand’s geographical isolation.
Raising the quality of education through increased funding.
Adult minimum wage increased to NZ$ 7 (1 March).
Superannuation surcharge to be removed from 1 April 1998.
Creation of a one-stop shop for employment services under the new Department of Work and Income.
The Employment Service has been progressively implementing an Individualised Employment Assistance (IEA) case-management approach which will assist in better targeting employment resources on the basis of risk of long-term unemployed or benefit dependency. A Needs Based Assistance Assessment tool has been developed which focuses on identifying an individual’s employability, capacity to find work within the opportunities offered in their local labour market, and willingness to take up such work opportunities. The IEA programme will be operational in April 1998.
Extending the coverage of active labour market policies such as Youth Action (for those aged 16-20) and Job Action (for those job seekers registered as unemployed for two or more years).
A move to fully demand-driven funding for tertiary students. An extra NZ$ 250 million over three years to implement changes to the resourcing of tertiary education in order to remove the cap on the number of tertiary students entitled to a government subsidy to help pay for cost of tuition and to expand public funding to students at private tertiary providers, commencing 1999.
Reducing the increase in tertiary tuition funding announced in the Budget from NZ$ 250 million to NZ$ 155 million.
Funding for tertiary education to become demand driven with public funding following student choice.
Introduction of the Accident Insurance Bill (17 September). The bill would allow commercial insurance companies to compete against the Accident Compensation Corporation (ACC) to manage claims and underwrite insurance, within certain parameters.
Introducing competition between Accident Compensation Corporation (ACC) and commercial insurers in the delivery of the Employers’ Account and insurance for the self-employed starting in July 1999.
Creation of a Health Fund Authority to replace the four Regional Health Authorities; hospitals to function in a not-for-profit manner
Community wage replaced the existing unemployment, training and sickness benefit.
Unemployment (and sickness) Benefit to become a ‘‘Community Wage’’ in October 1998, as well as the launch of integrated employment and income support service.
An increase in a range of income support measures (such as Family Support and Guaranteed Minimum Family Income), the introduction of an Independent Family Tax Credit, and the lowering of abatement rates for beneficiaries of a number of welfare programmes (such as the Domestic Purpose, Widows’ and Invalids’ Benefits).
Commence trial work capacity tests for invalid and sickness beneficiaries from November 1998.
Privatisation of Auckland International and Wellington International Airport
Tax cuts introduced (1 July): Effective personal tax rate on income between NZ$ 9'500 and NZ$ 34'200 reduced from 24 to 21 %, and the rate on income between NZ$ 34'200 and NZ$ 38'000 reduced from 33 to 21 %.
The Accident Compensation Corporation splits into three new businesses. Employers can find private insurance or are signed up to At Work Insurance, the state-owned company, from 1 July 1999.
Increases in expenditure on education and health, with particular emphasis on Maori and other disadvantaged groups. Research and development expenditure is boosted.
Competition in electricity generation; Electricity Corporation split; Splitting of ECNZ into three separate, competing state-owned enterprises (from April 1999).
A new tax credit for low and middle income families with babies is introduced.
Elimination of bulk funding. This is a move away from market based mechanisms.
Student loan programme Generosity has been increased.
All parties must bargain in good faith. This has two main principles: that neither party can deceive or mislead the other; and that unions and employers meet together to consider respective proposals. It does not imply that a collective agreement must be signed. A Code of Conduct is in process of being drawn up.
Multi-employer bargains allowed and strikes in support of them are permitted.
Only certified unions can negotiate collective agreements. Employees can negotiate collectively without a union, but the agreement will be considered an individual agreement. By default all new employees are considered to be part of a firm’s collective agreement for the first 30 days of employment. After that, they must choose to remain party to the agreement or negotiate an individual contract. Collective agreements must contain a coverage clause that details the type of work to which the agreement applies.
The minimum wage was increased for both adults and youths. The government has decided in principle to lower the adult threshold to 18 from 20 and to increase the wage paid to youths undergoing firm-based training.
Strikes and lockouts can only occur 40 days after the end of a collective agreement. Strikes can take place, however, at any time with respect to health and safety issues. Strikes are lawful in support of multi-employer agreements. Workers not affected by the strike cannot be compelled to perform the work of striking employees (although they can do so voluntarily). Replacement workers cannot be hired, except under special circumstances.
As of November 2000, the work capacity assessment for applicants and beneficiaries with a sickness, disability or injury ends. From 1 January 2001, the income thresholds for the disability allowance will also be increased.
The government has halted the privatisation process.
The Government announces the deregulation of the apple and pear industry.
Third, the government has stabilised tertiary education tuition fees for the 2001 academic year at their 2000 level, costing an additional NZ$ 110 million over four financial years. Similar to the increased generosity of the student loan programme, this broadly targeted measure would seem to do little to improve access of individuals who face the greatest barriers.
The work test has now been imposed on the unemployed aged 55-60. The government has clarified that the unemployed are to be available and looking for work and has streamlined the sanctions process.
The government is strengthening case management by increasing the number of case managers and concentrating on groups who are more likely to respond.
Entitlement to 12 weeks parental leave, paid from general taxation, will take effect from 1 July 2002.
The minimum wage was increased in March 2002 in line with average wage growth over the previous year. The youth minimum wage has been raised from 70 to 80 % of the adult minimum wage, and the adult age threshold has been lowered to 18 from 20.
Clarifying job-search requirements for certain beneficiaries and signalling that recipients of the Unemployment Benefit must be available for and seeking work.
The government announces the establishment of an integrated work programme to develop family-friendly and other policies promoting work-life balance.
Changes to work-safety legislation (the Occupational Health and Safety Act) take effect. The changes include explicitly recognising stress and fatigue as hazards, increasing maximum fines, and banning employers from insuring against fines.
The adult minimum wage is increased by 6.25 %.
The work test is abolished for sole parents receiving the Domestic Purposes or Widows Benefits. Instead, they will be required to work with their case manager to develop and implement a Personal Development and Employment Plan which sets out how they will prepare to return to work when family circumstances allow.
May 2004: A NZD 56.9 million package in Budget 2004 for 15 to 19 year-olds includes the introduction of a new youth transitions service, personalised career planning for secondary school students and an expansion of the Gateway and Modern Apprenticeships programmes.
It was announced that NZD 111.3 million would be spent nationally over four years to fund 460 extra full-time secondary teacher equivalents. Bonded scholarships were announced to meet shortages of secondary teachers in specific domains. New scholarships are also being offered to attract more, qualified early childhood teachers.
The Budget 2004 includes a package for free early childhood education. New funding of NZD 365 million over the next four years in early childhood education means that from mid-2007, three and four year-old children will be entitled to 20 hours free attendance per week at a community-based early childhood education centre. The budget also recognises the pressures on tertiary students with a NZD 110 million package. Parental income thresholds are significantly increased, meaning more than 40'000 students can now either receive full or partial allowances.
It sets some regulatory provisions for dismissals and increases compliance costs associated with dismissals.
It includes a test for deciding whether an employer’s action, including dismissal of an employee, is justified. Employers already have to make sure that their reasons for an action or dismissal are fair and reasonable. However, the test makes clear that these matters must be assessed on an objective basis.
It also tends to limit the use of fixed-term contracts, by requiring genuine reasons based on reasonable grounds to employ a worker under such a contract. The employer must advise the employee at the beginning of the contract when and how the contract will end.
It requires all fixed-term employment arrangements to be in writing.
December 2004: New paid parental leave laws now apply under the Parental Leave and Employment Protection Amendment Act 2004. The period of paid parental leave rises from 12 to 13 weeks and will rise again to 14 weeks from 1 December 2005. Women who have worked for the same employer for the previous six months for at least 10 hours per week are now able to access paid parental leave.
New paid parental leave laws now apply under the Parental Leave and Employment Protection Amendment Act 2004. The period of paid parental leave rises from 12 to 13 weeks and will rise again to 14 weeks from 1 December 2005. Women who have worked for the same employer for the previous six months for at least 10 hours per week are now able to access paid parental leave.
It makes all union members eligible for “employment relations education” leave, not just those members covered by a collective agreement. The aim of these courses is to increase skills and knowledge of employment matters, to improve relationships in the workplace and enable all parties to deal with each other in good faith.
December 2004: The government introduced changes to the Holidays Act to stop double payments of penal rates and to prevent employees who call in sick on public holidays from being paid time-and-a-half on top of penal rates. The changes also allow employers to request medical certificates after one day if they suspect a worker is not genuinely sick.
It provides employment protection for employees if their jobs are affected by the sale or transfer of their employer’s business or if their work is contracted out. "Vulnerable workers" (in sectors such as food catering or laundry) have been given additional rights, including the right to transfer to the new employer on existing terms and conditions of employment in cases where a business is sold. Employment agreements for other employees must contain a provision that describes what steps the employer will take to protect employees in restructuring situations.
The Employment Relations Amendment Bill (No. 2) strengthens the key objectives of the Employment Relations Act 2000 to promote good faith, collective bargaining and effective resolution of disputes. It introduces a bargaining fee to be paid by non-union workers to benefit from the terms and conditions of a collective agreement.
May 2004: The “Working for Families” package, voted in the 2004 Budget, includes family support which increases by NZD 25 a week for the first child and NZD 15 a week for each additional child and maximum rates for the Accommodation Supplement, which increase in a number of areas to reflect the growing cost of housing. This package came into force in April 2005.
New Zealand’s rail network came back in public ownership. Having paid NZD 1 for the track, the government started rolling out an investment programme worth NZD 200 million over four years, upgrading the track and replacing worn-out parts of the network.
The venture capital tax reforms removed tax barriers to NZ companies attracting private equity and venture capital from institutional investors in specific countries. The government has also announced it will exempt non-residents who invest in the Venture Investment Fund from tax on the profits when they later sell their shares.
Initiatives costing NZD 27 million will get more long-term unemployed into work and help more sickness and invalid’s beneficiaries get jobs. Initiatives include enhanced wage subsidies for employers taking on people who have been unemployed longer than three years, home visits and increased availability of training.
Cabinet agreed to the Working New Zealand package of reforms, including: new employment services; employment and training assistance; enhancing expectations; and enhanced services for Maori beneficiaries and young unemployment beneficiaries.
Funding for sub-degree level tertiary education has been capped. The funding system from 2008 will tie provider funding to negotiated plans, assessed against national strategy and priorities. Student loans and allowances are no longer available for courses that do not qualify for government funding. Quality assurance and funding checks on courses with poor completion rates and/or dubious relevance have been tightened.
Free 20 hours per week of ECE for 3-4 year olds in teacher-led services will be implemented from July 2007. Funding rates are tailored to services’ costs, and were set using data on actual costs of provision. ECE participation continues to increase. Take-up of Childcare Assistance (subsidies for childcare and out-of school hours care) has expanded. The Government is developing a five-year Action Plan for Out-of-School Services.
The minimum wage increased from NZD 9 to NZD 9.50 per hour.
Family Support rates were increased and the child component of core benefits was eliminated.
Seasonal workers who apply for unemployment benefit will be able to choose an income assessment period of 26 or 52 weeks for the assessment of the initial stand-down. Currently they have to have it assessed only over the last six months of work.
A 6.7 % tax discount was opened to many self-employed people and partnerships in their first year of business.
From July 2007 the exemption on specified superannuation contribution withholding tax (SSCWT) will be extended to employer contributions to KiwiSaver and qualifying employer registered superannuation schemes. Employer contributions are exempt from SSCWT, subject to a cap.
The government is legislating to reduce the top personal income tax rate to 37 %, with a view to harmonising it with the company and trust tax rates at 30 % in the medium term.
From July 2007 the exemption on specified superannuation contribution withholding tax (SSCWT) will be extended to employer contributions to KiwiSaver and qualifying employer registered superannuation schemes. Employer contributions are, exempt from SSCWT, subject to a cap.
As at October 2008, 93% of those enrolled in eligible services were receiving free early childhood education. Subsidies for income-tested childcare, available for both early childhood and out-of-school care, were increased in 2008.
Personal tax rate changes introduced on 1 October 2008 lowered EMTRs on some single-income households and second-income earners by 2.5 percentage points. Further personal tax rate changes on 1 April 2009 and 2010 will lower EMTRs further.
Availability and use of published DHB and PHO performance measures is increasing, and analysis of productivity is improving. Multiple projects are underway to spread productivity-improving practices. A new accountability framework monitors DHB performance against best practice indicators. There has been progress in the use of benchmarking and productivity analysis tools/processes that involve both managers and clinicians. These are showing results as DHBs move to meet their planned targets, and link them to savings plans.
New multi-party contracting/alliance approaches to primary care are being developed with involvement of private practices, PHOs and DHBs. This includes developing new integrated family health centres and new funding approaches with more local budget holding and decision making. To date this includes only marginal primary care funding, with “first contact” subsidies to GPs unchanged.
The Social Security (New Work Tests, Incentives, and Obligations) Amendment Act 2010 increases the amount beneficiaries can earn before abatement, while repeat applicants for one-off hardship assistance receive financial advice. Activation policies now require Unemployment Beneficiaries to reapply for their benefit after 12 months, and Sickness Beneficiaries’ eligibility to be reviewed, with graduated sanctions applied when obligations are not met. Part-time work tests have been introduced for Domestic Purposes Beneficiaries with a youngest child over 6 and will be introduced from May 2011 for Sickness Beneficiaries who are able to work part time. The government has established the Welfare Working Group to consider how to reduce long-term benefit dependency. The Group published its recommendations, which the Government is now considering, in February 2011.
The government will sell minority shares in four energy companies and Air New Zealand.
DHBs are responsible for determining hospital funding, and can use DRGs in setting funding levels. DRG case weights are used to inform pricing where DHBs purchase services from one another, and where the Accident Compensation and Rehabilitation Corporation (ACC) purchases services from public hospitals. DHBs (but not individual hospitals) are benchmarked as part of their reporting against national health targets. There is also a focus on reducing duplication of audit and contracting requirements across NGOs.
Capital Investment Committee has been established to assess major capital proposals. The National Health Committee (NHC) was appointed in 2011 to use evidence to prioritise new and existing health interventions, focusing on cost effectiveness and sustainability. The NHC has started a programme to identify areas of high expenditure and/or rapid growth and to prioritise new investments.
The government is introducing changes designed to strengthen and improve performance in primary care, including a better performance management framework, increased performance funding for PHOs and practices and increased access to flexible funding.
The Employment Relations Act 2000 was amended to extend trial period provisions (for up to 90 days) from firms with fewer than 20 employees to all firms on 1 April 2011.
From 2012, up to 5% of government funding for tertiary education institutions will be performance linked. A performance element has been introduced to the student loans scheme, requiring students to pass at least 50 % of courses to continue to access it. The Industry Training Fund has been reviewed to ensure funded programmes are of high quality. This year, under-used funding from industry training was reallocated to fund extra places in universities in 2011-12 where excess demand exists. The government stopped funding short regulatory compliance courses and reduced funding for adult and community education with low literacy, numeracy or employment focus.
Article 19 (of the 1981 Law on State-Owned Enterprises) mainly involves the sale of assets or parts of an enterprise rather than sales of the whole operation. However, it requires a very lengthy and complicated process (see OECD Economic Surveys Poland 1992 p. 106).
Introduction of possibility to establish a private firm with foreign entity (foreign entity could reach even 100% share of company value, and it was exempt from tax burden for at least three years)
Return to before the II world war regulations on commercial law regulating corporate governance
Introduction of possibility to establish a private firm by Polish citizens
Unemployed status and eligibility to receive benefit conditional on accepting offers from labour office (one rejection possible)
Employment offices were reorganised and given new tasks, providing unemployment benefits, facilitating job search, and providing start-up loans and re-training.
Restoration of Work Fund – it is obligatory for employers to contribute in it. It is the Fund from which most almps are financed (trainings, retraining, loans etc.)
Abolished export tariffs, introduced uniform import tariff, abolished quantitative restrictions
Prices covering about 90 % of commodities were liberalised in January 1990
Gave equal status to all property, eliminated subsidies, and abolished almost all interest-rate preferences
Designed to cause bankruptcy of plants that were energy- or investment-intensive
On 29 December 1989, the Polish Constitution was amended to eliminate the socialist property classifications and to treat all types of property equally.
A dismissal of more than 10 % of the workforce of a plant should follow special procedure (or at least 100 persons in enterprises with more than 1000 employees). The trade union and the local labour office must be given written notice at least 45 days before individual termination notices are given. The reasons for the planned dismissals and the number of employees concerned should be stated. No later than 30 days after notification has been rendered, the employer and the union should enter into a written agreement.
Abolition of universal and special employment protection in the event of liquidation or bankruptcy of the employer
Dismissed employees are entitled to a severance payment from the employer (one monthly pay for less than 10 years of service, two for 10 to 20 years, three for 20 or more years) and an equalisation bonus from the Labour Fund payable for six months when the salary in the new job is less than that in the old one, with a maximum equal to the average budgetary wage.
Cancellation of punishment for people who do not work; official legitimacy for unemployment
Foreign entities can contribute in share capital in firms established in Poland only in Polish currency
Liberated banks from externally imposed priorities and allowed foreign banks to operate
Gave equal status to all property, eliminated subsidies, and abolished almost all interest-rate preferences. Abolition of preferential loans conditions for national companies and linking credit interest rate with inflation.
Extension of banking activities: deposits, loans and credits
Allowed free sale and purchase of currencies by physical persons and required legal persons to sell their currencies to the state and permitted them to buy foreign currency for the purposes of import.
Creation of a two-tier banking system. (With the passing of the Act on Narodowy Bank Polski of 31 January 1989, and the Banking Act of 31 January 1989 (Dziennik Ustaw No. 4/89 items 21 and 22)).
The minimum benefit was 95 % of the minimum wage, but for individual redundancies, the benefit was generally 70 % of the individual's previous wage for the first three months of unemployment, 50 % for the next six months, and 40 % thereafter with unlimited duration.
Anyone without a job becane entitled to benefits
Unemployment benefits were provided by a newly created Labour Fund financed from central budget transfers and a 2 % payroll tax paid by the employer.
The basis for allocation of property rights of land to various state entities was established in 1989 by an amendment to the Civil Code.
Introduction of unified corporate income tax on a 40% rate
Income tax for legal persons was made non-discriminatory, at a flat rate of 40 %. (Prior to that the rate had been 65 % for the state sector and 85 % for the private sector. However, given the system of subsidies, charges etc. it was not strictly correct to talk about a tax system for state firms).
Punishes wage pressures in excess of guidelines
Prohibition of monopolistic practises and introduction of catalogue of banned action
Established an independent Antimonopoly Office for investigation and enforcement of competition law (either in response to complaints filed by individuals and firms, or on the Office's own initiative) and gave it wide formal powers with respect to both industrial structure and anti-competitive behaviour. Moreover, it established the possibility of appeal to a special antimonopoly branch of the Warsaw district court.
Reduced subsidies from 31 to 14 % of state expenditures in 1990
The 1990 Communications Act governs the postal service, which is defined as a universal service, an obligation on Polish Post.
Higher education institutions can impose charges except for full time students (for whom the studies should be free, and the costs are covered by the public budget).
Possibility to create private higher education institution; independence of higher education institution from public institutions
Central government devolved ownership, financial, and management authority to local (mainly for primary care) and regional governments.
Reduction of the minimum benefit level [from 100% of averaged remuneration to 95%]; reduction of the benefit level for young unemployed (graduates) [from 100% of averaged remuneration to 95%]
Eligibility was made subject to the requirement that the recipient had worked for at least 180 days in the previous year and that no suitable job could be found. Exceptions comprised mass layoffs and school leavers.
The farmers’ pension scheme covers farm owners and their families. About 95 % of its expenditure is financed through the State budget, although some contributions are paid into it as well. Eligibility for benefits is based on the farmers’ individual contribution records. The scheme is administered by the Agricultural Social Insurance Fund.
Transformation of Polish national telecommunication company into joint-stock company
Law on privatisation was passed. It defines two main path of privatisation. Under Article 37 sale of assets; contribution of assets and liabilities to a joint venture with a domestic or foreign partner; sale of assets and liabilities to a new firm established by management and workers (buy-out), which usually involves a transitional leasing arrangement. Privatisation by the "capital" path involves several distinct methods: the flotation of the enterprise by public share offering, buy-out, and direct sale to, for example, a foreign investor. In all cases, the essence of the programme has been, up until now, that it is voluntary: management and employees' councils apply to the founding organ to be privatised (see OECD Economic Surveys Poland 1992 pp 106-107).
Amendments to the Land Use and Expropriation Act which gave these entities the right to sell land outright, rather than being limited to granting only rights of usufruct. Under the legislation, state enterprises could become owners of the land and buildings they previously administered. However, as of early 1992, the enabling regulations for the provision of titles to these enterprises had not been enacted.
A series of exemptions From May 1990 to January 1991; newly created firms (mainly private firms in the trade and service sector) received relief from corporate and sales tax for one to three years. In 1990 and 1991 new firms in the construction materials sector were granted ten years enterprise tax relief; in medical equipment production five years and; in construction services three years.
Introduction of new permanent positions in PES: job counsellor and agent
Creation of Rehabilitation Fund of Disabled; introduction of activation works for disabled (covering costs of own activity, refunding costs of salaries and preparation of a workplace for employer)
Extends the provisions of the Act on Prices to fees with the nature of prices; adapts the definition of dominant position to most of the regulations in effect in Western countries; recognises as anti-competitive the practice of fixing delivery conditions by entities associating competitors; AMO may prohibit merger, transformation or establishment of an economic entity if it would maintain dominant market position.
Increasing the market share, for which a company is considered as having dominant position (form 30% to 40%); introduction of obligation to prove that monopolistic practice is essential to the business and does not distort competition on the company side.
Under the terms of the Association Agreement with the EC, Poland has five years to adopt EC regulations. Particularly important in this respect will be the rules governing state aid which have still to be discussed with the EC in the Association Council. Issues will include subsidised loans, forgiveness of taxation arrears and debt write-offs.
Non-public school can finance their activity from fees
Compulsory education until the age of 18
Teachers can decide on their own about their lessons programme (they had to include so-called core curriculum); the rest of the programme is in their decision
Fully liberalised. (That is, entry of new domestic banks is allowed, restrictions on branching are eased, and banks are allowed to become universal banks).
Security markets from fully repressed to partially liberalised. The Warsaw stock exchange opened in 1991 April.
Return of regulations on limited partnership company
Act on Health Care Institution abolishing state monopoly in the health care sector: health care institutions could be set up and financed by a wide range of entities.
It abolished the constraints of the 1982 Act on Trade Unions and allows for unionisation of almost all state employees (excluding military personnel) and farmers. However, it only allowed for national trade union confederations. It also specifies the rules of forming trade unions, the scope of the plant trade union activities, etc.
Works in conjunction with, and supplements the 1991 Law on Trade Unions. It stipulates that the union has the right to strike within 14 days of the announcement of dispute if (1) there is no collective bargaining agreement in force so that a collective dispute can be legally recognised; (2) the union does not consent to extend this time period should the mediator require additional time for analysis; (3) the negotiation and mediation are concluded without resolution; (4) a majority of the employees vote to strike. Furthermore, employees have a free choice in participating in the strike or taking up work during the strike.
Level of the benefit amount fixed as a percentage of average income [first 3 months – 70% ; next 6 months – 50%; after 9 months – 40% ].
Extended time of receiving benefit for pregnant women [until the end of period of receiving maternity benefit]
Introducing benefits for agricultural workers
Establishes the legal framework for privatisation.
The effective law on foreign direct investment came into force
Law allowing and framing trade of agricultural property owned by state
In the course of 1991 the exemptions in corporate taxation have been rationalised: tax relief for newly created firms was abolished; investment relief was restricted to the agricultural and food processing sectors and; the statutory exemption for joint ventures with foreign partners was revoked.
Introduction of local taxes on real estate, vehicles, pets, etc. – which will contribute to the local government budget
Possibility to joint tax returns for marriages
The highest penalty tax on excess wages was set at 500 % in 1991.
The PIT came into force in January 1992, replacing a 20 % tax on gross payrolls, previously levied on enterprises, and four other taxes which had been paid by individuals. In replacing these taxes revenue neutrality was sought. In addition, all wages and salaries were increased in order to maintain their after-tax value. Dividends and capital gains are subject to the pit. The tax schedule is progressive: there are three brackets (20, 30, 40 %). Married couples are in principle taxed individually.
Possibility for single parents to account taxes as doubled amount taxed on half of total income
Compensatory payments for up to six months to employees who took up new employment with a lower remuneration have now been abolished.
The new law attempts to fill the existing legal gap, giving the President of the National Bank of Poland relatively wide powers in supervisory matters most changes are in line with EC regulations.
In September 1992 permissible wage increases were directly specified by the Council of Ministers. Up until then, the enterprise wage norm was explicitly linked to consumer price inflation via an indexation coefficient which varied between 0.6 and 0.7 throughout 1992.
Since March 1992 unemployment benefits are set at 36 % of the average wage in the economy in the previous quarter for a period of 12 months: they are flat-rate and not income-related.
Introduction of possibility to extend by the Council of Ministers duration of the period unemployment benefits collection in regions most threatened by unemployment and difficult economic situation
Enterprises contribute a standard 43 % of the wage bill, but from the beginning of 1992 this has been increased to 45 % in response to growing pension expenditures; employees do not contribute. (Plus 3 % for the Labour Fund, and 0.18 % for the Employee Benefits Guarantee Fund, which compensates unpaid workers in closing companies).
Under the new rules the value of the pension is related to the average wage in the economy in the previous quarter according to an individual coefficient. The value of the coefficient depends on the number of working years and the relation between personal earnings and the average wage in the economy in three selected years from the last twelve years before retirement – every pensioner can apply to change her/his accounting period (starting from 1993 this period will be increased each year by adding one year up to 10 years selected sequentially from the last 20 working years). The maximum pension can be equal to 250 % of the average wage in the economy which is the basis for calculating the pensions level and the minimum 35 %.
The parliament established indexation three times a year, but only if during the preceding four months the average wage in the economy increased by 10 %.
Revenue from dividends taxable at a rate of 20 % but also creates provisions for some tax offset. The basic corporate tax rate remains 40 %.
The highest penalty tax on excess wages was reduced from 500 % in 1991 to 400 % in 1992.
Credit ceilings are somewhat liberalised.
Includes the main national employers’ and employees’ organisations and representatives of the government
Enterprises which expected that the ratio of gross profits to wages would improve in 1993 in comparison with 1992 could apply to the local tax chamber for an agreement on permissible wage increases. Under this arrangement, companies could increase average wages by 20 % without incurring excess wages tax and another 25 % proportionate to improvements in profitability, with the penalty tax rate being 100 %.
15 National Investment Funds were set up which are the main owners of the enterprises included in the programme. Each NIF holds shares in every company, with one NIF owning a strategic stake of 33 % and all the others holding a total of 27 %. The companies were allocated across NIFs in a lottery. Of the 60 % of shares going to the NIFs, 51 percentage points are converted into share certificates and the rest serves as a performance-related remuneration for the NIF managers. As a general rule, 15 % of the shares is reserved for the employees. The rest, in most cases 25 % of the shares remains with the State Treasury. All 27.4 million adult Polish citizens are entitled to one so-called universal share certificate, which in due course is to be exchangeable into NIF shares (on current plans, one of each NIF). The distribution of the certificates started on 22 November 1995, and is to last 12 months.
The government reached agreement with unions in early 1993 on the Pact on State-Owned Enterprises. The Pact required that an enterprise's future transformation be decided within a period of 3 month (later increased to 6), but with the particular route chosen by the employees. In return they would receive 15 % of voting shares free of charge, representation on the supervisory board (third of the members were to be elected by the workforce), and a relaxation of wage controls. If management and employees of large enterprises failed to choose a privatisation method, the enterprise would be commercialised compulsorily.
The rates were increased to 21, 33 and 45 % respectively.
The highest penalty tax on excess wages was reduced from 400 % in 1992 to 300 % in 1993.
Official rules on organisation of job clubs (places where unemployed could meet and get to know how to get a job), intervention work, public works and trainings
Possibility to provide active employment services via private institutions on the basis of official authorisation
Establishment of Banks Guarantee Fund as a deposits guarantor for physical and law persons and supporter for banks with insolvency problems
Extension of the framework of collective bargaining and addition of regulations on multi-employer collective bargaining
In January 1995, a new system of collective bargaining came into force, applying to enterprises employing at least 50 people. A consensual approach based on social partnership thereby replaced tax-based income policies. Each year, the national Tripartite Commission for Socio-Economic Affairs (including government, union and enterprise management representatives) is to set quarterly target maxima for wage increases chargeable to costs, based on projections for GDP, inflation and maximum wage increases provided by the government. For SOEs, the sanction for exceeding the targeted maximum, when performance has deteriorated, is a cut in the profit-related bonus of the managing director or even his dismissal. The wage norm included almost all benefits, in an attempt to prevent the pervasive circumvention that characterised the earlier experience with the popiwek (excess wage tax). Benefits not covered by this norm were subjected to other restrictions and thus in principle also under control.
A new system on wage formation in SOEs was introduced between August and December 1994. The controls were made more flexible allowing more room for bargaining between the social partners. Under the new system in force, enterprises must choose between four options. Three of them are only available for those economic units which are not in arrears on either taxes or social security contributions, or which had settled any arrears by the end of June 1994. See details at: OECD Economic Surveys Poland 1994 pp 64-66.
Maximum duration of benefit collection fixed at 12 months
This benefit is paid to households with a per capita income lower than the minimum pension (or 150 % thereof for single persons households), housing expenditures exceeding a certain fraction of income, and dwelling space not significantly exceeding 35 square meters for the first member plus 5 square meters per additional member.
Increase in the minimum pension from 35 to 39 % of the average wage
All coal miners are included among the groups entitled to early retirement
Special retirement schemes for police officers and other civil uniformed services
Establishment of The Pension Department of The Ministry of Internal Affairs and Administration that handles pensions for civil servants
The taxation of individual entrepreneurs was streamlined as they were offered the option of a lump sum tax on certain types of incomes and a low, flat rate for others, which significantly reduced the burden of red tape and tax evasion incentives
Final liquidation of tax on oversized wage payments (so-called "popiwek") at SOEs.
If for certain occupations income is less than Zl 1 .2 billion per annum, tax is calculated as a flat rate only on income. The statutory maximum is 9 % but three rates have been determined depending on the profession: 7.5, 5.0 and 2.5 %. Literary, artistic, advertising and scientific professions continue to be taxed at the 20 % flat rate on net income.
The school-leavers stipend is conditioned on enrolment in one of various active labour market policy schemes.
The refusal of a suitable job, training, subsidised job or public work offer entails benefit ineligibility.
Polish Post had a complete monopoly of services before 1995. Some competition was allowed after this in courier services.
Extension of the catalogue of entities under competition law, monopolistic practise examples; extension of regulations on mergers
Establishes the Antimonopoly Office with wide responsibilities and authority over monopolistic practices, business restructuring, antimonopoly procedures. Its decision can be appealed to the Antimonopoly Court. The Office has 8 regional branches and several departments. Its president, vice-president and director general are appointed by the prime minister.
First move towards effective banking sector supervision.
Law on Large Cities and Public Services Zones delegates authority formerly held by the central administration and their provincial governors to municipalities over primary care providers (out-patient clinics, some hospitals).
Amount of benefit determine in the Act of Law, fixed for all unemployed; reduction of the amount [from 46% of averaged remuneration to 260 PLN]
The link of the level of the benefit with the average wage was severed and the allowance was indexed, quarterly, on the CPI.
Under certain circumstances, more lenient provisions apply. E.g. an unemployed with a dependent child up to 15 years old and an unemployed spouse who does not receive any unemployment benefit can receive benefits for a period of 18 months.
Under certain circumstances, more lenient provisions apply. E.g. lone parents can receive benefits indefinitely.
Under certain circumstances, more lenient provisions apply. E.g. workers dismissed in group layoffs are entitled to 75 % of previous earnings.
Unemployment benefits can be collected 7 days after registration in a local labour office (90 days in the event of a voluntary quit).
School-leavers no longer receive unemployment benefits but a stipend, which is typically smaller in value.
Temporary change in the indexation rule: switch from a wage to a consumer price benchmark.
A 1995 law provides for the re-organisation of the national railway company (PCP), separating the management of the infrastructure from the running of trains, and unbundling freight and passenger traffic.
Western producers bought 65 % of the shares in four plants (ZPT Cracow and WWT Poznan tobacco companies, and Augustow and Radom cigarette plants), in which the Treasury retains a golden share until 2005.
In September 1995 an extra 101 firms are added to the mass privatisation programme, and on November 22 the distribution of investment certificates starts.
Defines the principles for the grouping and merging of banks whose capital, directly or indirectly, belongs to State Treasury, and, in such cases, puts a limit on the application of the provisions of the antimonopoly act on merger control.
Makes Polish regulations in the matter more in line with those of the European Union thanks to a significant reduction in the differences of treatment of business entities with foreign capital and sector limitations in purchasing or acquiring shares in companies operating in areas subject to licensing
The President of the Office for Competition and Consumer Protection replaced the Antimonopoly Office in its function of the competition authority, and acts through the Office; - the consumer protection prerogatives have been transferred to the Office; - the catalogue of monopolistic practices has been expanded by the item: "creating adverse conditions for consumer claims”; - State Supervision of Commerce (PIH) has been subordinated to the President of the Office for Competition and Consumer Protection; and - the President of the Office for Competition and Consumer Protection has been authorised to file claims of unfair competition at courts-of-law.
Allowing dismissal of especially protected employees (pregnant, elderly) in the case of bankruptcy or liquidation
Imposing on the employer an obligation to provide cause of dismissal in the case of permanent contract dismissal notification
Extension of regulations banning dismissal of pregnant women on trial contacts longer than one month
Mandatory transformation of a third fix-termed employment contract into an indefinite one. (That is, a fixed-term contract can only be renewed twice before it is automatically transformed into an indefinite one).
Shortening length of work experience connected to notice periods (e.g. before after 10 years – 3 months; now after 3 years – 3 months)
All employees under notice of termination of employment – through both dismissal and resignation – receive paid days off work to seek a job, two working days under a one-month notice period, three working days under a three-month notice period.
Lengthening the probation period from 2 weeks to 3 months.
Employees have a right to paid annual leave of 18 days after having worked at least 1 year, 20 days after 6 years, and 26 days after 10 years. (Increases the length of annual leave only for those who having worked at least 1 year by 4 days).
Employees receive 35 days of paid sick leave, paid by the employer.
An employee is automatically transferred to a new employer after the merger or take over.
Introduction of regulations banning differentiation in rights (wages e.g.) connected with performing the same job, especially between men and women
Reducing the threshold for the obligation to create a working code from 50 to 5 employees.
The exchange rate system was unified. Banks were allowed to borrow from abroad freely, and tight controls on other capital inflows were liberalised. Capital outflows were allowed to flow freely with minimal approval restrictions.
Introduction of law on banks consolidation, special bank groups etc.
First registration of independent unit operating according to the provision of Poland’s commercial law allowing private facilities to have contracts with the government
For commercialisation, the consent of enterprise insiders is not required any more. Abolition of the workers’ council as a management body, depriving it of the ability to block privatisation.
Collective agreements (and other 'external' regulations) cannot be less favourable for workers than those established in the Labour Code and other normative acts.
Introduction of minimum wage requirement in the Labour Code
If employees work at least six hours in a 24-hour period, they have the right to a 15-minute break, counted as working time.
First two hours of overtime work remunerated at a premium of 150% on top of normal pay. Each subsequent hour on weekdays, as well as all overtime at nights and on Sundays and holidays, remunerated with a premium of 200%.
Decreasing weekly working time from 42 to 40 hours.
Unpaid interruptions in daily working time not permitted (except for transportation).
Level of the benefit dependent on work experience.
Benefits are now paid for 6 to 18 months (6 months in regions where the unemployment rate stands below the national average, 12 months where it exceeds the national average and 18 months where it is more than twice as high and provided the unemployed has an eligibility period of at least 20 years).
Maternity leave classified as a part of a period of employment necessary to be eligible to receive benefit
Eligibility only for those who were employed for 365 days during 1.5 year before registration; only working periods with at least minimum wage are counted
A new option is commercialisation without subsequent privatisation, applicable in particular to enterprises requiring restructuring. In this case, commercialisation is to be decided by the government as a collective entity rather than by the Ministry of Privatisation. For SOEs in poor financial shape, the Law introduces the option of commercialisation through debt-equity swaps.
The Law also allows new waves of privatisation vouchers (distinct from the current mass privatisation programme).
The Law continues to provide for the commercialisation of large SOEs selected for subsequent privatisation.
The Law further stipulates that employees of enterprises undergoing privatisation are to be given up to 15 % of the shares free of charge, as compared to their right under the 1990 Law to buy 20 % of the stock at half price.
The Law foresees that the privatisation of ‘‘strategic’’ enterprises (to be identified in an ordinance of the Council of Ministers) will also be subjected to the approval of the government as a whole.
The regional offices of the Ministry of Privatisation have been put in charge of liquidations, with a view to expedite procedures.
At least 5 % of the shares of commercialised firms are to be set aside for use in the context of social security reform. (e.g. the envisaged pension reform, restitution, and compensation for the incomplete income indexation between 1991 and 1993 which was ruled unconstitutional)
The corporate income tax rate is being reduced by 2 percentage points each year, from 40 % in 1996 to 32 % in 2000. In parallel, allowances for investment outlays are being reduced.
Personal income tax rates were cut from 21, 33 and 45 % in 1996 to 20, 32 and 44 % in 1997 (deductibility of certain items curtailed).
Fuel prices were liberalised in 1997 although the Council of Ministers retained the reserve power to set maximum prices to “counteract unfavourable social and economic phenomena”. The sector is subject to the competition law.
It separates and clarifies the powers and duties of the entities involved in policy, regulation and management decisions, providing for the creation of an independent regulatory agency, which has started to operate.
A significant move towards effective and independent supervision. Extensive regulations on organisations, establishment, rights and obligations of bank system in Poland.
Extensive regulations on organisations, duties and obligations of National Bank of Poland
Introduction of regulations on creation and organisation of mortgage banks and emission and trading of mortgage bonds.
Creation of decentralised system of 16 health insurance institutions on voievodship level and one for uniformed services
Public health facilities transferred under supervision and management of local governments
The insurance premium is set at 7.5 % of taxable income, deductible from personal income tax. Prior to 1999, health care services were funded by social security contributions, which covered all forms of social insurance without a clear demarcation. The organisational structure consists of 16 regional health funds (covering at least one million insured each) corresponding to the new administrative division into 16 voivodships plus an additional branch fund which operates nationwide. The branch fund was created to cover employees of the Defence, Interior, Justice and Railways sectors. These are non-profit organisations financed directly by insurance premiums collected by the social insurance office (ZUS) and the farmers’ social insurance office (KRUS), a share of an equalisation fund, and any subsidies from the MH for specific programmes (see Figures 23 and 24). As of January 1999, residents of each region are automatically members of one sickness fund. There is no opt-out mechanism, but from January 2000 patients will be free to change funds including the branch fund. Competition between service providers is encouraged with each fund negotiating contracts with public and private hospitals, clinics, laboratories, doctors or other medical professionals following a bidding procedure.
Introduction of "family doctor" system – which is assigning a specific GP to every individual, the GP is entitled to first diagnosis and to referral patient to specialist
Obligation to register trade union in National Court Register
The basis on which social contributions are levied was broadened in mid-1997 to encompass most types of bonuses and payments in kind alongside the wage stricto sensu.
In order to be eligible for benefit, an employee had to have reached 58 or 63 years of age (for women and men, respectively) and to have worked 35 or 40 years (for women and men, respectively), though in the event of redundancies resulting from their employer's circumstances (most usually bankruptcy), these requirements were less strict.
Disability pensions can only be authorised by a doctor and, since 1997, are awarded on the basis of an individual’s physical incapacity to work.
Special retirement schemes for judges and public prosecutors
The Polish pension reform established as of 1999 a new defined contribution multi-pillar system. The private tier covers pension savings for retirement only. Insured persons contribute to any one of a number of competing private pension funds. Their activities are regulated by the 1997 law on the organisation and operation of pension funds and modifying decrees issued subsequently. The pension funds are ‘open’, which means that an insured person can choose a fund from among all those operating on the market. These funds are managed separately by a pension fund society, which is a joint-stock company.
The pre-retirement benefit, was set at 90% of the pension, as determined by the appropriate regional authority.
The level of this benefit amounted to 120% of unemployment benefit rising to 160% for residents of areas afflicted by especially high structural unemployment whose employment ceased on account of their employers' circumstances.
In October 1997, a public offering was held of 70 % of the shares of another sizeable bank, Powszechny Bank Kredytowy (Warsaw), following the cancellation of an earlier tender. This was the third largest 1997 deal. The State retained 5 % as a reserve for restitution and 10 % on account of pension system reform.
The sale of Bank Handlowy raised Zl 1.6 billion (equivalent to 0.4 % of 1997 GDP and 25 % of the privatisation receipts channelled to the state budget in 1997).
Sale of 15 % the stock of Orbis, Poland’s largest tourist agency and hotel chain, in late 1997. The State, however, retained 70 % of the shares.
The first foreign investor to penetrate the Polish power industry was Électricité de France (EDF), which in the autumn of 1997 bought 55 % of the stock of the Elektrocieplownia Krakow combined heat-and-power plant, one of the largest among the 11 such generators in Poland.
Alongside Bank Handlowy, the other very large privatisation in 1997 was that of the giant copper and silver producer KGHM Polska Miedz, which raised Zl 1.3 billion. The State retained 52 % of the stock.
The law of 25 June 1997, regarding the application of the proceeds from privatisation of a portion of state treasury assets to purposes related to reforming the social insurance system. Specified that the costs of reform implementation (in particular the transfer of a portion of the contribution to the prefunded tier) would be financed by the state budget from the proceeds of privatisation.)
PIT rates cut from 20, 32 and 44 % in 1997 and to 19, 30 and 40 % in 1998.
All tax system structure and procedures listed in one act.
Under this scheme, high school graduates register voluntarily at local employment offices to receive professional counselling and orientation services, vocational training, and subsidised or non-subsidised jobs. Its objective is to provide tools and encouragement to graduates in their job search efforts.
Introduction of rules under which companies have to inform Antitrust Office on intention to merge
In January 1998, the prices for heat energy were liberalised and a schedule for the liberalisation of electricity prices began on January 1999.
Creation of the position of local consumer spokesman who is eligible to represent consumer in a dispute in Antitrust Office, but also is responsible to inform and advise in the protection of consumer rights
The new Act includes provisions on new school structures, the reallocation of management responsibilities to regional and local authorities, the redistribution of financial resources, and the decentralisation of education management. (The reformed structure of the education system will include a 6-year primary school and a 3-year gymnasium or junior high school. New third level schools of either 3 years for specialised lyceum or 2 years vocational lyceum will be established as of September 2002. Compulsory education starts at the age of 7 and continuing until 18 years of age).
The new Banking Act requires that banks maintain a capital base representing no less than 8 % of risk-weighted assets and off balance sheet commitments.
Brought Poland’s supervision regime into line with EU and international standards. The newly created Commission for Banking Supervision (CBS) is responsible for supervising banks and their branches, licensing new banks, issuing prudential regulation, and imposing sanctions.
Abolition of possibility to choose health insurance institutions, everyone are registered in that corresponding with place of residence
Initial steps to develop new patient-level information systems, new standardised cost accounting system for hospitals and clinics.
From 1998 early retirement provisions have been significantly restricted (with the termination of this option for workers dismissed by public enterprises and longer seniority requirements). Early retirement is only left as an option for those born between 1 January 1949 and 1 January 1969, and will be completely phased out in 2006 (later postponed to 2007).
Inclusion of uniformed services to the general scheme
Provides rules for the assessment and payment of pensions (for both the old and new old-age pension systems as well as for disability and survivor pensions). Defines the old-age pension formula. The new pension system, covers all persons born in or after 1949. The new pension system is comprised of the following three pillars: • The first pillar is a mandatory, pay-as-you-go, defined-contribution pension system. It is administered by the Social Insurance Institution (Zakład Ubezpieczen´ Społecznych, or ZUS). Two-thirds of contributions (or 12.2 % of the assessment base) are transferred into this scheme. • The second pillar is a mandatory, funded, defined-contribution pension system. It is administered by private pension fund companies managing the Open Pension Funds. One third of contributions (7.3% of the assessment base) are transferred into this scheme. • The third pillar consists of various voluntary funded pensions run by private institutions. Public support is provided through individual retirement accounts and Occupational Pension Programmes. Under the new pension system, the same total contribution rate is applied as it was under the old system. In the new system, however, the contributions are divided between the first and second pillars.
Covers the structure of social insurance including a definition of insured persons, the establishment of a wage to which the contribution rate is applied, the rights and obligations of the Social Security Institution (ZUS), and the financing and management of the Social Insurance Fund (FUS). Specifies that a Demographic Reserve Fund (FRD) be established to help meet increased benefit obligations when the retired population begins to grow. The FRD will be financed from surpluses in the PAYG old-age pension system, supplemented during the years 2002-2008 by one % of contributions paid for old-age insurance.
15 % of the commercial bank Pekao via initial public offering
In addition, the direct privatisation of 156 enterprises was made either through contribution to a company or leveraged leasing buy-outs. Finally, 74 state enterprises were liquidated.
Initial public offering of 15 % of Telekomunikacja Polska, the giant Polish telecommunication monopoly (about Zl 3.5 billion, or 0.6 % of GDP)
Sale of 80 % of the stock of Polfa Poznan, the second largest pharmaceutical enterprise, to a British firm. The Treasury retained a golden share.
The privatisation of a chain of department stores, Domy Towarowe Centrum, which includes 31 retail outlets in various localities, was recently completed, after three and a half years of proceedings. A consortium led by Bank Handlowy purchased 80 % of the enterprise’s shares.
The Polish government adopted a new privatisation programme. The authorities aim at privatising 70 % of state owned assets by 2001.
The corporate income tax rate is 34 % in 1999
Extension of the definition of corporate tax payer and tax base (corporate income)
The public administration reform will affect the network of employment offices. By 2000, there will be 16 main offices at the regional level and 322 at the poviat (country) level, with the remaining network of offices becoming subsidiary units. These offices will be financed by the central government, but spending decisions will be made by local authorities, in accordance with the Revised Act on Employment and Unemployment.
Replaces the Economic Activity Act and the Law on Companies with Foreign participation, has been approved by the Parliament in November 1999. The new legislation sets up the legal framework for entrepreneurial activities in Poland and, in particular, restricts the scope for state interventions in the life of small businesses. The Act introduces new definitions for permits and licences as well as transparent rules for their issuance and withdrawal. The number of sectors where a licence would be required is reduced from 28 under current legislation to 8. The remaining sectors would only be subject to permits which are automatically granted if some basic requirements are fulfilled.
Introduction of external exams at the end of each level of primary education
Creation of central institution responsible for the course and the content of final exams (Central Examination)
Reform of schools system – shorter period of time in primary school (6 years); introduction of new level of school – "gimnazja" (three years); and middle school (3 years – general; 4 – vocational).
Extension of maternity leave from 16/18 weeks to 26 weeks
Since 1999, the authorities have restricted access to the system by tightening eligibility conditions for new disability pensions – medical assessment is performed by doctors employed by the social security system.
Duration of benefits is no longer indefinite
Sale of stakes in PZU Insurance (Zl 3 billion)
Sale of stakes in Bank Zachodni (Zl 2.3 billion)
Sale of stakes in LOT Polish airline (Zl 140 million)
Sale of stakes in Patnow-Adamow-Konin power station (Zl 0.4 billion)
Initial public offering of stakes at PKN Orlen (processing and distribution of petroleum products)
Sale of stakes in Pekao Bank (Zl 4.2 billion)
It aims at lowering the tax rate, and broadening the tax base at the same time. The income tax rate will be reduced from 34 % in 1999 in steps to 22 % in 2004. Simultaneously, investment incentives are eliminated in order to broaden the income tax base.
Introducing regulations on mergers and acquisitions of companies in Poland
Strengthened Office of Competition and Consumer Protection’s formal independence (the OCCP President is now protected from discretionary dismissal), and gave it extensive investigative powers, as well as conforming the substance of Polish competition law with EU law. Financial penalties for breaking antitrust law
Granting state aid under supervision of Antitrust Office
Extension of the definition of comparative advertising as an unfair competition activity
Framework of economic activity in Poland: rights and obligations of different types of companies
Level of unemployment benefit will be indexed every six months
“Vertically separating” three railway activities, into track infrastructures, passenger and freight services
Initial public offering of stakes at PKN Orlen (processing and distribution of petroleum products). The privatisation of PKN Orlen raised more than Zl 3.3 billion.
Block sale of stakes to Swedish Vattenfall of Elektrocieplownie Warszawskie, a heat and power supply plant raise more than Zl 959 million.
Block sale of 25 % of stakes of Polaniec Power Station raises Zl 350 million.
Block sale of 95 % of stakes of Slaska Spolka Cukrowa to Saint Louise Sucre raises Zl 250 million.
Block sale of 35 % of stakes at the Polish telecom incumbent TPSA. The privatisation of TPSA raised more than ZL 21.7 billion (together with the stakes sold in 1998).
Block sale of stakes of Powszechny Bank Kredytowy (Warsaw).
Introduction of accreditation system and establishment of Polish Accreditation Commission
The Act specifies the minimum number of members required in order for a trade union or employers’ organisation to be deemed representative, and thus eligible for participation in the Commission. Moreover, the Act lays down the procedures for tripartite dialogue at various levels. The re-establishment of the Tripartite Commission resulted for the most part from a change in policy by trade unions. Unanimity was repealed.
Trade unions have rights to give opinion on the assumptions and drafts of laws connected to trade unions activities
Obligation for employer to inform union on change of the owner/employer
Shortening normal working time per week to 40 hours (and 5 days)
Block sale of another 12.5 % of stakes at the Polish telecom incumbent TPSA, raising more than Zl 4 billion.
47.6 % of Elektrocieplownia "Zielona Gora” S.A.w Zielonej G’orze (Zl 45.3 million)
Two stage block sale, amounting to 25 % of the stakes of Elektrownia Rybnik S.A. in March and September 2001, raising more than Zl 690 million.
45 % of Electrocieplownia Bialistok S.A. (Zl 181.5 million)
Lowers the marginal tax rate from dividends and personal income from companies were reduced to 19 % in 2004.  – Abolishes tax exemptions on education expenditure in private schools, private pensions, and alimonies starting in 2001. – Eliminates existing tax exemptions on investments in new rental properties, with grandfathering until 2003. – Makes capital gains on traded shares and bonds subject to 5 % personal income tax starting in 2003.
It is aimed at improving the school-to-work transition by providing targeted advice and concrete financial incentives for both job seekers and employers. These include low interest loans equal to as much as 20 times the average monthly wage to enterprises creating new work places and maintaining them for at least 24 months.
In May 2002, the Council of Ministers further accelerated the liberalisation pace and the reduction of the Polish Post market share by opening up postal services for domestic and cross-border mail of up to 350 grammes from January 2003.
Introduction of regulations on collective protection of consumer rights
The concept of collective redundancy has now been defined as a reduction of employment comprising: at least 10 employees, where the total employment at the given entity does not exceed 100 people; at least 10% of the employees, where the total employment at the given entity is at least 100 people but does not exceed 300; or at least 30 employees, where the total employment at the given entity amounts to 300 people or more.
Employers are no longer obliged to provide days off where employee resigns (days off still apply to dismissed workers).
Employment of workers on fixed-term contracts is possible without any time limits until Poland’s accession to the EU. The previous provisions have been suspended. (After 2004 the previous provisions apply, see 1996 New Labour Code).
During the justified absence of an employee – e.g. sick leave and maternity leave – it is possible to appoint another person in their place, on the basis of a 'substitution agreement'.
Amount of the severance benefit tied to length of service with the specific employer rather than to the length of the employee’s entire working career. (1 month's remuneration for 0-2 years of work, 2 months' for > 2 and < 8 years, and 3 months' for > 8 years).
The duty to pay out severance benefits will be incumbent only on business entities employing at least 20 people.
Employees receive 33 days of paid sick leave, paid by the employer. If the sick leave lasts up to six days, the first day is not paid, unless the employees concerned use their holidays (in which case they receive remuneration). Four days' holiday per year may be used for this reason. If the sick leave lasts more than seven days, all days are paid.
Prohibition of replacement of employment contracts with civil law agreements
Extension of the group of people protected against dismissal in connection with their position in trade union
Liberalisation of foreign exchange transactions with EU countries, countries of EEA, and Organisation for Economic Cooperation and Development
Employers in an extremely difficult financial situation can, by agreement with company trade union organisations, suspend the application of a collective agreement (or other external regulations) up to three years.
Under the new legislation, the minimum wage, previously set by the Minister of Labour and Social Policy, is now to be determined by way of negotiations within the Tripartite Commission on the basis of proposals put forth by the government. Should the Tripartite Commission fail to reach a consensus, the minimum wage is to be set by the cabinet by way of a resolution. Adjustment of the minimum wage will take place with reference to the forecast annual average prices index announced by the Polish Official Statistics, either once or twice a year (when the price index increases by 5%, or by 5% and above, respectively).
Depending on the type of job, the employer may introduce interrupted daily working time, with a break of up to five hours which is not calculated as working time.
It is possible to introduce a one-hour daily break, not counted as working time.
Each hour of overtime work on weekdays, as well as Sundays and holidays if these are normal working days, are remunerated at a premium of 50% on top of normal pay. Overtime at nights, and on Sundays and holidays which are normally free, are remunerated with a premium of 100%.
The minimum membership for a union organisation operating within an entity required for entitlement to special employment protection was increased to 10 people
Limits the group of protected union officials to a certain number, to be identified by the board of the union organisation operating in the given employing entity. Their number may not exceed the number of the employing entity’s managers, or it must be proportional to the overall employment at the entity. This protection applies only to members of a 'representative' union organisation (in case of non-representative trade unions only 1 activist benefits from protection).
PHS (a company created in 2002 by the merger of four large loss-making steel mills) was sold for 1.8 billion zloty, mainly in the form of the discounted purchase of existing debts.
Liquidation of Privatisation Agency; establishment of rules on financing specific sectors from privatisation profits (e.g. science, public aid, programmes on creating work places, etc.)
Redefinition of privatisation process (extension)
After a successful completion of a course the authorities may subsidise the employment of the participant for at least 18 months. During the first 12 months of employment, the poviat (county) refunds to the employer part of the participant’s remuneration, at a maximum rate of: 80% of the unemployment allowance plus a social insurance contribution for the first three months; 60% of the unemployment allowance plus a social insurance contribution for the next three months; and 40% of the unemployment allowance plus a social insurance contribution for the next six months. This subsidy will be financed by the Labour Fund, based on the principles regulating such matters in the legislation on employment and unemployment prevention.
Aimed at providing support and employment to up to the country's large number of people faced with social exclusion. The legislation sets up social integration centres to provide assistance and integration programmes.
New definition of collective dismissal – applies only to companies above 20 employees; expand the list of reasons of dismissal
1) Reduction of the period during which redundancies are deemed to be collective from 3 months to 30 days; 2) Introduction of an obligation to inform and consult employee representations (where there are no trade unions) on the intention to make collective redundancies; and 3) Introduction of an entitlement for all redundant employees to receive severance payments.
Extension of pre-retirement protection period (from 2 to 4 years) from dismissal
Definition of temporary agency work and of the conditions for its use. The combined amount of time worked with a single user company by a temporary agency worker over a 36-month period may not exceed 12 months. Amendments to employment law in this area have proceeded on a gradual basis: amendments to the Labour Code promulgated in 2002 defined the general principles governing the operation of temporary wok agencies and introduced the concept of 'substitution employment contract' (a form of employment for a limited period of time whereby a temporary employee may be hired during the absence of a regular employee). In February 2003 temporary work agencies were given exclusive rights concerning the retaining of employees to provide labour for the benefit of a third party and a series of detailed provisions concerning their operation were set (amendment to legislative Act on employment and counteraction of unemployment).
The provision before 2002 are reinstated (the third consecutive fixed-term contract automatically becomes indefinite). It does not apply to fixed-term contracts to substitute for an employee absent on leave, for ad hoc/seasonal workers, or for purposes of cyclical work.
150 hours of overtime per year permitted subject to a premium payment of 50% for overtime hours, or 100% for work on Sundays, holidays, and days off
Entitlement as follows: 1) 20 days with under five years of work; 2) 23 days after five years of work; and 3) 26 days after 10 years of work. Time spent in learning/education is not taken into account in calculating the length of employment for purposes of defining the leave entitlement.
Specific provisions governing use of leave introduced – for instance employees benefiting from such leave may engage in gainful employment or in study provided that the attendant duties do not preclude personal care of their child.
Direct and indirect discrimination both defined and prohibited in all their forms. Employers are obligated to counteract discrimination in employment.
Maximum number of hours per day in accounting period set (48 h)
The National Health Fund (NFZ) was created in 2003 through the merger of the Sickness Funds.
Confirmation of previous provisions. Employees are entitled to 11 hours of uninterrupted rest in each 24-hour period
Transfer of family benefits system for unemployed to communities
Introduction of a Social Pension (Renta Socjalna) for adults aged 18 and over whose invalidity began before the age of 18 (25 years in case of full time students). The Social Pension corresponds to a fixed benefit of PLN 472.57 (€ 116) per month. Benefits are subject to taxation.
Entrepreneurs in non-agricultural sectors can choose if they want to pay tax based on physical person taxation system (3 levels) or flat tax rate (19%) on income from this activity.
Introduction of a new instrument, the 'social contracts', to improve cooperation between employment services and social assistance services and to ensure that the unemployed taking advantage of the social assistance net collaborate in job seeking. Under the social contracts, active job seeking becomes an obligation for the unemployed. Labour offices provide social assistance centres with information on those unemployed persons who have refused employment and may thus become ineligible for social assistance.
The requirements to be met by beneficiaries have been made stricter and a 6-month period has been introduced during which the worker has to look for a job and to accept any suitable job offer; during this period an unemployed person is entitled to unemployment benefit. The average amount of the allowance has also been reduced.
Introduction of an obligation for poviat labour offices (PES) to provide unemployed persons under 25 and above 55 year of age with a proposal of employment, apprenticeship or employment within the framework of subsidised or public works within a period of 6 months from the day of registration. The same applies to long-term unemployed, within 6 months from the day of forfeiture of unemployment benefits.
Where an employee is sent on training leave of at least 22 days’ duration, an unemployed person assigned by the labour office can be recruited temporarily to fill the absent worker's job (on the basis of a 'contract for substitution'), and the cost of training and remunerating this unemployed person may be partly reimbursed from the Labour Fund.
The new Act introduces several concepts previously unknown in Polish law. It defines employment service entities, public as well as private (e.g. PES at the county and regional level), and basic types of labour market services (e.g. labour market placement, career counselling, etc.)
The Act also provides for 'monitored redundancy programmes', which are mandatory for employers employing at least 100 people and contemplating collective redundancies. Under such a programme, the employer collaborates with the labour office to provide the redundant employees with support in the area of training, career counselling and employment intermediation, and to assist them with active job-hunting.
The new Act provides a legal basis for the establishment by employers of self-financed training funds, expenditure from which can qualify for partial reimbursement from the public authorities.
Regulations of public procurement and supervising process of auction decisions and financing
The act introduces the concept of training leave.
Defining health services unfunded from national public fund (so-called "negative basket of benefits")
Abolition of the rule of connecting patient with the place of residence; everyone can choose own doctor or health care facility
Introduction of new type of agreement between partners in Tripartite Commission to realise goals of the Commission on the national level
Extension of the date until which Tripartite Commission parties have to set their prognosis on next year wages and adding requirement on minimum level wage prognosis
Level of unemployment benefit will be indexed every year
The maximum period over which they can be paid out has been reduced; while, nominally, such benefits can still be collected over a basic period of six months, this limit applies only to areas where the unemployment rate is not more than 125% of the national average (up from 100% previously).
Possibility for an unemployed person who takes up a job paying less than the minimum monthly wage to continue drawing a portion of his or her unemployment benefit.
Significant privatisation in the banking sector
Introduction of the possibility for the unemployed, who obtain social aid allowance but have lost their right to an unemployment allowance, to work 10 hours a week at PLN 6 (€1.5) per hour, to carry out a work in the public interest. The refusal to perform this work may result in the local authorities negative response to provide further support to these persons, who will be deprived of the unemployed status for 90 days.
Regulations on organisation and procedures of supervising of equity market
Extensive regulation of rules and conditions on taking and pursuing business of trading in securities and other financial instruments
New regulations on determining the relation of domination and dependence between two companies
It will increase by forecast inflation plus two-thirds of the GDP growth rate, until it reaches half of the national average wage.
Introduction of the possibility for people under 25 to benefit from labour schemes until the date of their 25th birthday. Previously, a person was excluded from any labour scheme from January in the calendar year of their 25th birthday.
Introduction of special retirement scheme for miners
Addition of a way to privatise by acceptance of the offer in response to the call
Establishment of Polish Financial Supervision Authority
The establishment of works councils is mandatory for all enterprises with at least 50 employees. It contains provisions for the rights.
Introduction of tax deduction connected with having children
Abolishment of the second 30 % bracket, lowering of the highest one with 8 percentage points from 40 to 32 % while keeping the same threshold, and reduction of the first bracket from 19 to 18 %.
Developing new incentives to increase vocational attractiveness for disabled people, including a reimbursement of 60% of wages and obligatory social insurance fees of a disabled employee during the first year of employment; availability of resources for business start-up or agricultural activity for a disabled person and of co-finance for equipment needed for a job for a disabled person
Alignment with the EU law considering cooperation of antitrust offices in EU countries
Change of the rules concerning obligation of notification before concentration (extension on cases of companies trading internationally)
Prohibition of work by workers employed on labour contract in retail outlets in selected public holidays
Abolition of possibility to initiate antitrust proceedings at the request (only ex officio proceedings)
Extension of the catalogue of activities punished with fines; decreased maximum fine
Exclusion of a ban of anti-competition agreements if they: a) contribute to improving production; b) provide the user appropriate benefits; c) do not impose restrictions on entrepreneurs; d) do not help to eliminate competition.
Protection against the dismissal of people who want to work part-time
Lowering the pension fee down to 1.5% for employees' contribution and 4.5% for employers' contribution (see also employers' SSC).
Contributions for disability pensions were reduced by 3 percentage points
Granting the right to early retirement to men who have reached 60 years and have at least 35 years of contributions. They now have pension rights that are consistent with those of women.
Law on vertical consolidation of four biggest electricity groups
The ceiling of funds granted to an unemployed person for a start-up raised from 5 times to 6 times of the average wage.
Permanent increase in reimbursement payment (the amount of which is 6 times of the average wage) for costs of equipment for firms hiring unemployed.
Reorganisation of public employment services – extraction of new part called employment activation centre
Extension and introduction of new grants for active unemployed (who are studying, during training, etc.)
Providing special support for unemployed 50+ (e.g. higher training benefit for 50+, exemption from contributions to Labour Fund)
Introduction of new almp programmes: special and pilot projects, training for adults, individual programmes for unemployed
Extending access to training for almost all unemployed (e.g. those during notice period, etc.)
When establishing training fund the employer can receive reimbursement of up to 50% of cost of the training (of all employees or of employer) and up to the amount of average wage. The percentage of reimbursement was increased up to 80% in case of the training of people aged 45 or over. However, reimbursement cannot exceed 300% of average wage.
Introduction of the requirement of external expert report in the case of merger or acquisition of joint-stock company
Employees entitled to childcare leave – another type of parental leave, which follows maternity leave – who have opted to continue working reduced hours, will enjoy extended protection from redundancy. Employers cannot terminate the employment contracts of such employees during the entire period in which they are using that option, provided that its length does not exceed 12 months.
From 1 January 2010 onwards, fathers of children aged under one year will be eligible for optional paternal leave. Employees on such leave will be entitled to receive maternal benefits and will be immune from redundancy. The length of the leave will increase gradually from one week in 2010 and 2011 to two weeks in 2012.
From 1 January 2010, employees of either sex will be entitled to additional optional maternity leave, if the father is on partial maternity leave when the mother gives up her leave after 14 weeks or if the father is not on partial maternity leave but applies for optional leave indicating the moment at which the mother is going to return to work. The length of the optional leave will increase gradually between 2010 and 2014 to reach a total of six weeks in cases where one child is born and eight weeks in the case of two or more children being born at a time.
The duration of maternity leave is determined by the number of children born at a time, ranging from 20 weeks when one child is born to 37 weeks in the case of five or more children born at a time. Fathers of new born children are entitled to partially exercise maternity leave provided that the following two conditions apply: the mother has used eight weeks of maternity leave and she is unable to provide care for a new born child due to medical reasons.
Under the amended Labour Code, definitions of problems such as ‘indirect discrimination’ and its manifestations, ‘sexual harassment’, and also the list of breaches of equal treatment were reformulated to become less ambiguous.
Extension of the catalogue of financial instruments, especially derivatives, and taking under protection all of the investors using instruments on the list
Improving procedures connected with "short selling"
Change of regulations regarding resolutions to increase share capital (presence of shareholders, form, etc.)
New regulations on shareholders rights connected with convening and participating on general meetings
Decreasing minimal capital requirement for joint-stock company and limited liability company
Determines the mode and data of dividends payment in joint-stock companies and limited liability companies
Introduction of two levels of benefit (independent from work experience): higher for the first 3 months [717 PLN], lower for the rest of the benefit period [563 PLN] - [504 PLN in 2004]
Increasing unemployment rates for regions in difficult economic situation (to 150%)
Reduction of maximum benefit period to 12 months
Extension of the period for which a person is ineligible for unemployment benefits in the case of refusal to accept job offer [from 90 days to 120 if it is first refusal; 180 – second; 270 – third and following]
Temporary (36 months) exemption from the contributions to the Labour Fund and the Guaranteed Employee Benefits Fund in case of employees returning to work after maternity or parental leave.
Contributions for disability pensions were reduced by 4 percentage points
Early-retirement schemes for specific groups are replaced in the new pension system by less generous “bridging pensions”; these give rights to early retirement, but in a limited number of specific occupations with difficult working conditions, and cannot be combined with employment (contrary to the previous system).
Establishment of a rule of transparency of privatisation process
Temporary (maximum 6 months) reduction in working time with proportional reduction in remuneration (without the requirement of so-called notice of termination amending the contract of employment); the working time of an employee may not be shorter than a half of full-time equivalent. The employers are eligible to receive partial compensation for working time reduction, up to 70% of unemployment benefit, depending on the rate of working time reduction, or as partial coverage of salaries for the period of economic stoppage, up to the amount of 100% of the benefit, taking into account the employee's working time. The employer also receives funds to cover employee social insurance contributions, payable by the employer (until 2011).
A new instrument – vocational training for adults – allows the unemployed to gain new professional skills, confirmed by a professional title certificate, journeyman certificate or training institution certificate. Participants in training are entitled to a scholarship of the amount of 120% of previously applicable benefit (PLN 717). Full scholarship, i.e. PLN 860.40 is granted for participating in at least 150 hours of training a month. Possibility to finance (in the form of reimbursement) all or part of the costs of travel to training and the costs of care for a child (not older than 7 years) while participating in training refunded for a period of up to 6 months.
School starting age decreased to 6 years
New regulations have also been introduced regarding fixed-term employment contracts, which are now allowed to last for a period of up to 24 months.
A law entered into force in August 2009 defining a basket of guaranteed medical services financed from public funds.
Provides for the flexibilisation of working time combined with public subsidies for enterprises suffering from ‘temporary financial difficulties’. The reference period for calculating working time has been increased from four to twelve months, and a 24-hour work cycle of flexible working hours has been introduced. Moreover, companies have the possibility to reduce the contractual working time by up to 50% over a period of up to six months.
Rising the monthly benefit level by nearly 30 % (from 551,80 PLN to 717 PLN). Additionally, the benefit will be degressive: after three months the amount of the benefit will fall by around 21% (to 563 PLN).
Possibility to transfer 1% of personal income tax for public benefit organisation or charity.
The amended Personal Income Tax Act allows for tax exemptions on allowances paid by trade unions and on company benefits in the form of vouchers for goods or services.
Creation of new forms of childcare for children aged up to 3 institutional nurseries and childcare centres will care for children from 20 weeks to 3 years to allow more parents and carers to participate in the labour market
Employees have a right to consolidated training leave, dependent upon the type of exam that the employee will undertake to confirm his vocational qualifications. Only the persons who improve their qualifications under employers' initiative or consent will be entitled to leave for training. Employers are entitled but not obliged to offer employees who improve their vocational qualifications additional benefits. The employee is entitled to free time (the entire working day or part of it) which is necessary to come to classes and to attend them. The employee maintains the right to remuneration. Moreover, in certain cases employee is entitled to vocational leave. For example, in case of a Matura exam, the employee is entitled to a leave of 6 days. In case of a graduating study, the employee is entitled to a leave of twenty-one days in the last study year. The employer may grant an employee who improves his qualifications additional benefits. Employer and employee conclude a written contract specifying the mutual rights and obligations of the parties. There is no need to conclude a written contract, if the employer does not intend to require the employee to remain in employment after the completion of the process of improvement of vocational qualifications.
The working day for people with disabilities in employment was extended to eight hours (previously seven). However, if a disabled person with a severe or moderate degree of disability submits a certified document that allows usage of short-time work, the employee cannot work more than 7 hours a day and 35 hours per week.
Increase in sickness benefits for employees who are 50+ from 70% to 80% from 15 to 33 days of incapacity for work
Liberalisation of procedures of mergers and acquisitions
Level of financing higher education institution depends on an assessment by Polish Accreditation Commission
Liquidation of several types of secondary schools: profiled secondary schools, supplementary general secondary schools and supplementary technical schools
Introduction of full autonomy in creating new fields of studies and arranging own curriculum for higher education institutions
Change of the procedure and requirements for granting professorship title
Maternity leave was extended by two weeks (optional part of the leave extended up to four weeks in the case of a single child, or up to six weeks in the case of multiple birth). Paternity leave was extended by up to two weeks and became available also to adoptive fathers on the same conditions as for natural ones. In such case it may be requested within 12 months from the date of adoption (but only until the adoptee is seven years old or up to 10 years of age in case of a child for whom schooling is postponed).
Transfer of financial responsibility for hospital financial losses on local governments
Health care facilities can be transformed into companies
Introduction of a system of medicines reimbursement
Increase of pension contributions by 2 percentage points on the side of employers. The act provides that the fee will increase from the present 6 to 8 %; the employee will pay 1.5 % of gross salary (as was being paid until now), and the employer will pay 6.5 % of gross salary. According to the estimates of government the additional revenues to the Social Insurance Fund due to higher pension contributions will amount to about 7 billion zł (around 1.55 billion EURO) per year. It is planned that the Act will come into force on 1st February 2012.
Contributions flowing to the second pillar (to Open Pension Funds, OFEs) were reduced from 7.3 to 2.3 %. It should increase again to 3.5 % in 2017.
Activation and Integration Programme of the Unemployed. Those who will participate in this programme will be obligated to work around 10 hours per week by the socially useful works. Another 10 hours will be spend on integration activities. After two months the counsellor who co-operated with those groups of unemployed, makes decision if unemployed is ready to come back to labour market or needs further help.
Higher family benefit level and income limit, also to offset erosion since last adjustment in 2004
From 1 January 2013 the right to limited support for the birth of a child (single payment birth grant, so- called “becikowe”), depends on the income criterion, which is 1,922 PLN per month per person in the family. A single payment in the amount of 1000 PLN for a child shall be granted on the occasion of the birth of a living child if the family income per person does not exceed the amount of 1922 PLN. The allowance shall be granted if a woman had been placed under medical care from the 10th week of pregnancy at the latest. In the case of birth of more than one child at one birth, the grant shall be granted for each child.
The reform assumes that: the functionaries of uniformed services will be able to retire at the minimum age of 55 and after 25 years of service (previously they could retire after 15 years’ service and there was no minimum age threshold); in line with trade union proposals, new regulations will only apply to new recruits from 2013; those already in service will be able to choose between the old system (retirement after 15 years) and the new system (retirement after 25 years of service); the basic pension at the age of 55 will be 60% of the average salary from any 10 successive years of an individual’s service selected by the eligible employees themselves (the pension was previously 40% of final salary after a minimum 15 years of service).
A partial pension, 50% of the full pension, will be available for women from the age of 62 if they have paid social security contributions for at least 35 years, and for men from the age of 65 if they have paid contributions for at least 40 years.
The retirement age will be gradually raised to 67 for both men and women. From 1 January 2013 the retirement age will increase by three months every year. The retirement age of 67 for men will be reached in 2020 and for women in 2040.
In case of limited joint-stock patrnerships one of the partnership companies transfer to group of CIT payers. Law was supposed to prevent from transfering part of the business activities to limited joint-stock partnership firms with more flexible tax paying criteria.
Removal of limitations in access to jobs connected with job counselling
Equalisation of the amount of support in the form of financing the remuneration of disabled employees, hired on the open and protected labour market
Introducing a telework grant in the amount of up to 6 times the gross minimum salary, for the purposes of creating a job for an unemployed parent raising at least one child aged 6 or under, or an unemployed person who has discontinued his or her employment or other form of paid work due to the need to provide care to a dependent person. Also providing for a possibility of taking advantage of an activation benefit. The benefit will be paid to the employer for 12 (in the amount of 1/2 of the minimum salary) or 18 months (in the amount of 1/3 of the minimum salary) for creating a job for an unemployed parent re-entering the labour market following a break related to childcare or an unemployed person providing care to a dependent.
1) Employment subsidy for temporary stop of operations, 2) income support for shorter working time, 3) payment of social security contributions payable by the employer's workers. Assistance will be state aid granted on the basis of the de minimis rule. Payment of benefits would occur for no longer than 6 months in the 12 months from the date of signing the contract for the payment of benefits. Benefits will be paid up to 100% of the unemployment benefit (currently it is the amount of 823,60 PLN plus payment of social security contributions payable by the employer's workers).
Employers who hire an unemployed over 50 years old, will be able to apply for a wage subsidy granted from the Labour Found. The duration of payment is 12 months for the unemployed aged 50+, and 24 months if the unemployed is 60+. The wage subsidy cannot exceed 50% of minimum wage. Once the subsidy is finished, the employers will have to continue the employment contract with this person for at least half of the period on which they get financial support.
Improving the quality and efficiency of services provided by employment agencies as well as new instruments addressed to the most vulnerable groups on the labour market, including young people aged 30 or less, individuals aged 50+ as well as individuals returning to the labour market following a break in employment due to childcare, involving the support of job creation and training.
Amendments to the act on care for children up to 3 years of age, facilitating the creation of childcare facilities
Creation of National Training Fund (NTF), that will co-finance the training cost for employees. In the first two years of functioning, the NTF will support the up-skilling of employees aged 45+. The directions of support and spending plan will be made with the cooperation with the labour market board (which includes social partners).
To protect enterprises facing ‘temporary economic difficulties’ that could be overcome using public funds from the Guaranteed Employee Benefit Fund. In particular, the funds would be allocated for: subsidies to cover partial wages for staff temporarily laid off; compensation for pay lost due reduced working hours; subsidies to help employers to pay mandatory social security contributions for their staff. Any employer applying for aid must: prove their sales have dropped by at least 15% over six consecutive months within the 12 months immediately before their request for aid; be up to date with all taxes, social security contributions and other public dues; prove they are not at risk of bankruptcy; if they want aid for more than six months, present a viability study for the improvement of the financial standing of the enterprise over the following 12 months.
In June 2013 a new kind of leave was introduced i.e. parental leave. The aim of this reform was to enable care of the child by both parents during its first year of life. The leave, which becomes available upon the birth of a child, consists of a 20-week maternity leave, 6-week additional leave and 26-week parental leave. The parent who decides to take advantage of a six-month leave shall receive a maternity allowance in the amount equivalent to 100% of his or her remuneration. Where the given employee decides subsequently to extend the leave by a further six-month period, the available allowance shall amount to 60% of his or her remuneration. On the other hand, where a parent decides at the outset to take a 12-month leave, he or she shall receive an allowance in the amount of 80% of his or her remuneration for the entire duration of the leave. The new solutions introduced by the amended act allow parents to share their parental leave – following 14 weeks of maternity leave, the father of the child may take advantage of the remainder thereof; parental leave may also be combined with part-time work.
As a result of screening of the professions regulations many restrictions were found to be unjustified. Thus, the government decided to implement the large scale deregulation programme concerning some 250 professions accounting for 6% of the labour force (more than 1 million people) that would be conducted in three tranches. The first tranche comprised 51 professions such as advocates, legal counsellors, bailiffs, notaries, land surveyors, real estate agents, managers and valuers, physical protection and technical protection workers, detectives, driving instructors, taxi drivers, tour leaders and guides, vocational counsellors and placement officers, librarians. The act provides for such facilitations in the access to professions as simplification of entry examinations, extending eligibility for given legal professions, shortening the duration of the compulsory apprenticeship or even abolishment of all the entry requirements in case of certain professions. Part of regulations came into force on 23rd August 2013, and the remaining ones on 1st January 2014.
Programme “Apartment for the young” offers financing the part or the whole of own contribution of borrower, who is taking a mortgage loan for buying a new flat (up to 75-85sqm) or house (up to 100-110sqm). The amount of the subsidy depends on the family situation: up to 10% of the new dwelling “price” (the value is based on the special indicator established locally in all regions/ voivodships) for childless people and 15% for one-person households or families with children. If the beneficiary has a third (or more) child in the 5 years following the purchase of the flat, the state budget will pay another 5%.
On 10 May, the amendment to the Law of 12 December 1997 on supplementary annual remuneration for employees in the state budget sector (Journal of Laws 1997, No. 160, pos. 1080 with further amendments) was enacted. Under the new law the periods of maternity leave, additional maternity leave and paternity leave (pol. urlop ojcowski) will be taken into account to determine the right to the 13th salary in institutions financed by the state budget. Besides, the law also applies to the right to the 13th salary in 2012.
1) Article 129 LC provides the basic reference period of 4 months, and introduces the possibility to establish reference periods of up to 12 months. 2) According to Article 150 LC, longer reference periods should be negotiated by collective labour agreements or another collective agreement (i.e. ad hoc agreements on working time). 3) Article 140(1) LC states that the working time schedule can provide for varying start times of work. This regulation may not breach the right to daily and weekly rest periods.
The State budget pays contributions to the old age and disability insurance for people who resign from business activity/ performance of a contract for mandate – up to 60% of the average salary, for not more than 3 years (no longer than until the child is 5 years old) or 6 years (no longer than until the child is 18 years of age in the case of a disabled child), provided that the activity has been conducted for at least 6 months directly prior to the period of care. In case of persons who were not insured so far, or whose insurance periods directly prior to the period of care were shorter than 6 months, the State budget will pay only the contributions to the old age insurance – up to 75% of the minimum salary for not more than 3 years (no longer than until the child is 5 years old) or 6 years (no longer than until the child is 18 years of age in the case of a disabled child).
Open pension funds will have to transfer 51.5% of their assets at the end of January 2014 to the Social Insurance Institution (ZUS); open pension funds will have to transfer to ZUS all of their government bonds, and they have been forbidden to invest in government bonds in the future; between 1 April 2014 to 31 July 2014, everybody who has money in open pension funds will have to decide whether to stay in it or to transfer all of their contributions to ZUS; all those wishing to remain in an open pension fund will have to declare this in writing to ZUS, otherwise their assets will be automatically transferred to ZUS; open pension funds are banned from advertising until the end of July; a minimum level of investment in shares for open pension funds will be introduced, at least 75% until the end of 2014, 55% until the end of 2015, 35% in 2016 and 15% in 2017; contributions that remain in open pension funds will be gradually transferred to ZUS, beginning ten years before retirement; several tax incentives will be offered to those who decide to save in individual pension accounts (the third pillar of the system).
Collective lay-offs are considerably limited.
Abolishing the system that required a previous public authorisation for allocating investment, leaving freedom to invest in every sector except those few considered as strategic.
Introduction of a minimum wage (Esc. 3300) as well as a wage ceiling of Esc. 7500.
A law enacted in November 1974 allows the state to take over the running of an enterprise by appointing managers whenever the enterprise's operations are in danger or when its employees are likely to find themselves out of work.
The import tariff in certain goods rises from 20 to 30 %.
Individual dismissal without sufficient cause is forbidden.
Introducing unemployment insurance of 66 % of the last salary or 50 % of the minimum wage.
Unemployment benefit may be received during 180 days.
Massive nationalisation: Oil companies, railways, the National Shipping Company, the Portuguese Maritime Transport Company and the Portuguese Air Transport Company. Further nationalisation of enterprises in the tobacco, cement and cellulose industries (20 firms in all). Nationalisation of the petro-chemical and brewing industries. Setenave and Viana do Castelo shipyards are nationalised. CUF Manufacturing (Compania Uniao Fabril) is nationalised.
The State Holdings Institute is established. The purpose of this body is to supervise, guide and co-ordinate the state's interventions in the management and running of private firms in which the public sector has a holding, so that this intervention will be consistent with the government's planning and its general and sectoral policies.
Nationalisation of all insurance companies except for those with a large share of foreign-held capital, foreign companies and mutual insurance companies.
Nationalization of several banking institutions.
The tourist allocation is reduced to 7'000 escudos per year and person.
For the first time the system of price controls is affecting all companies with an annual turnover over Esc. 5 million. Six price categories are defined: maximum prices, controlled prices, declared prices, contractual prices, prices subject to a fixed profit margin and free prices.
Collective lay-offs are permitted now when keeping the size of workforce can threat the survival of the company, given that the firm is in a difficult economic situation.
Repeal of all previous regulations concerning state intervention in private enterprise and publication of new regulations severely limiting the scope of intervention and determining courses of action (e.g. nationalisation, bankruptcy, restitution to previous owners, etc.), to be taken at the end of a state intervention.
General principles established governing public enterprises (excluding banks and quasi-banks, insurance companies and semi-public enterprises). Public enterprises are given corporate status and are endowed with administrative and financial autonomy together with independent control of their assets. Their activity is subject to private law and is carried out in accordance with the management processes and techniques proper to private enterprises. The status of their personnel is, in principle, the same as in private enterprises. But there is an organic link between these public enterprises and the state: it is the government which appoints the top management and guides the enterprises' activities in accordance with national economic planning goals. The state also has the power to terminate the activities of public enterprises.
Corporate tax becomes progressive instead of flat.
Introduction of import quotas to products equivalents to 6 % of total imports.
Definition of a "basket" of 16 essential products whose prices were frozen until the end of 1977, following a previous 20 % rise.
Introduction of a system of ex-post price checks for other products excluded from the basket of 16 essential goods.
The agricultural credit system was revised considerably with the establishment of a specialised institute (IFADAP).
Banks face restrictions when financing import consumer goods.
Social security contributions are raised from 23.5 % to 26.5 %.
The boundaries of the nationalised sector were defined by a law which put mining and cement, transport and telecommunications, banking and insurance into the exclusive domain of public enterprises.
In the case of enterprises where the government intervened to prevent bankruptcy, those deemed viable are due to be returned to the private sector and might receive special financial assistance from the banks, while the others are to be liquidated.
Introduction of a surtax on main direct taxes.
The national tourist allocation was raised to Esc. 20'000 from Esc. 7'000.
The import tariff lowered to 20 % first and then to 10 %.
Reduction of the amount of essential goods with controlled prices, and raising the price of the remaining goods by 17 %.
Equalization (through lowering) of the retirement age for agricultural workers to the general scheme.
In the agricultural sector, in 1978 land improperly expropriated according to the Act of 1977 was restored to former owners (about 100 000 hectares out of a total nationalised and expropriated area of 1.2 million hectares).
The system of price controls is altered to enable tax increases to be passed on automatically.
The government raised the minimum turnover above which goods are subject to fixed price.
National Health Service is created (SNS). It introduces universal and comprehensive free health care. Subsystems covering specific professional categories (around 25 % of the population) are sustained.
Professional tax scales were raised by 50 %.
The weight of food products in the frozen shopping basked is reduced from 12 to 6 %, relaxing the price control system.
Rise in the turnover threshold for firms subject to price control.
Eliminating subsidies to some export-focused sectors
Longer time frame for permitting rise of prices (from 60 to 90 days). A company subject to control can only increase prices after that time frame.
Additional food products are submitted to price controls.
With the revision of the Constitution of 30th September 1982 the opening up of sectors previously nationalised to private enterprises has become possible (cement, fertilizers, breweries and also banking and insurance).
Forbidding and prosecuting oligopoly and collusion.
Aim to supress individual practices that hamper competition, e.g. settlement of minimum prices.
Reintroduction of government subsides for milk producers.
Special situations on which a firm can terminate an individual contract due to its financial status are introduced.
Partial liberalisation of the banking system, allowing more competition in the financial sector.
Introduction of an unemployment benefit to agricultural workers.
Special supplementary tax on earned income
Import tax is reduced to 10 % and in some cases to 0 %.
Reduction of the number of goods subject to price control.
Control of the cereal market with price levels and import tariffs.
Introduction of competition regulation, including the creation of a Competition Board.
Introduction of a forum for tripartite agreement (Conselho Permanente de Concertação Social) integrated by the four industry confederations, the second largest union (UGT) and the government. Incorporation of the biggest (communist) union CGT to the tripartite table.
Slight opening in the international financial flow
Non-contributory economic assistance for unemployed people between 18 and 25 who have been working for a year.
A fund is set up in order to ensure that all workers receive their last four months' wages in case of firm insolvency.
Contributory and non-contributory schemes are separated.
Financing of the training programmes may be public or private, establishing a cooperative scheme including also trade unions.
Introduction of a tripartite body in charge of overseeing the developments of the training systems.
Social Insurance exemptions are offered to employers who hire young employees with open-ended contracts.
Establishment and development of the right of education through public channels and institutions.
A decree on wage arrears, allowing workers to choose either the termination of their entitlement or suspension of the contract (suspension also provides them with unemployment benefit, but for a reduced period).
Creation of a security market open to foreign investment.
Explicitly establishes that no public entity dedicated to health care has profit as a goal.
Simplification of the tax incentive system for industrial companies.
Tax incentives for firms creating employment in regions with high unemployment levels.
Employment policy measures to be implemented in case of sectorial restructuring.
Facilitating labour mobility: incentives to unemployed workers who have to (or are willing to) move from high-unemployment areas to highly dynamic ones in search for a permanent job.
Reduction of lay-off compensation payable by employers.
Reduction of the amount of subsidized credits directed to specific sectors.
The controls on the interest rate of several types of loans are lifted.
Signature of a concentration agreement on pay issues, introducing for the first time the notion of "expected inflation" to set wages.
General pension increase: contributory by 23 %, non-contributory by 14.7 %.
The controls on the interest rate of all types of loans are lifted.
The need for profitability and company-like management is introduced for the first time. Consequently, hospital structure is modified.
Breakdown of the existing tripartite agreement.
Minimum period to receive benefits is shortened.
Small shareholders and company employees will be given priority regarding at least 20 % of the new shares. No institution may purchase more than 10 % of the shares issued. The amount of shares bought by foreign groups or institutions may not exceed one third of the amount of the issue.
Higher incentives for creating permanent jobs targeting long-term unemployment.
Partial liberalisation of the telecommunications market. The provision of basic telecommunications services remains in the power of the state, but complementary services may be offered by private firms.
The requirement of administrative sanctions for collective dismissals was abolished.
Facilitation of lay-off, leaving out restrictions and reducing the bureaucratic process.
The power of judicial appraisal for assessment of blame was reduced.
Reasons for dismissals due to the "failure to adapt" of the employee are introduced.
Reasons for dismissing employees due to economic situations are broadened.
Fixed-term contracts are more tightly regulated through a limitation on renovations (two) and time (three years, after this period the contract had to become permanent).
Increasing rights of part-time employees, making them equal to those of full-time employees.
Partial reintroduction of interest rate controls.
Constitutional revision: the right to health care is now "tendentially" free, instead of just free.
Weekly working hours were reduced from 48 to 45.
The compensation period for older workers receives an exemption.
Criteria for receiving unemployment benefits are tightened through a constitutional reform which enlarges the period required to qualify for social security benefits and redundancy pay.
Early retirement age drops from 62 to 60.
Constitutional amendment to allow full privatisation. Begins the 1st Full privatisation Process.
Restructuration of the public sector, dividing the existing Correios e Telecomunicaçôes de Portugal (CTT/PT) into five separately operating companies.
Broadening of the tax base, particularly as regards the income of the self-employed and unicorporated enterprises.
Separate flat rate tax for capital income, known as "taxa liberatoria".
Reduction of personal income brackets, five brackets for the personal income tax as well as the gap between minimum and maximun rates to 24 eercentage points.
Active policies for disabled workers including training and personalized guidance as well as positive incentives for the potential employer.
Increase in several price controls for food products
Several credit ceilings in different economic sectors are lifted.
Reintroduction of controls in the international capital flows
Introduction of a more independent and capable banking supervision system
Private companies may manage certain health institutions. The health provision may come from either public or private entities.
AES broad tripartite social pact ( government, employers and UGT) introducing for the first time issues related to in-job security and health in the workplace.
An average increase of 17 % for disability pensions
privatisation sale. Diario de Noticias (news, complete). $56M.
privatisation sale. Tranquilidade (insurance, first tranche). 49%. Esc. 258M.
privatisation sale. Banco Totta and Azores (first tranche). 49%. Esc. 286M.
privatisation sale. Centralcer (food, complete). Esc. 346B.
privatisation sale. Banco Totta and Azores (second tranche). 31%. Esc. 224B.
privatisation sale. SFP (investment banking, complete). $62M.
privatisation sale. Banco Portugues Atlantico (first tranche). 33%. Esc. 498B.
Personal income tax brackets were increased.
Dismissals for unsuitability of the employee to the firm are allowed.
Government increases social-security benefits for dependent children (29 %), marriage (87.5 %) and birth (15 %),
privatisation sale. Banco Espiritu Santo (first tranche). 40%. Esc. 609B.
Explicit preference for union representatives to maintain working conditions in case of termination of employment contracts.
New facilities for individual dismissals
Broad deregulation of international capital flows.
Final lifting of all the controls on interest rates for loans.
Increase of the regulatory power of the banking supervisor
SNS introduces first co-payments: urgency care, general practitioners and specialized practitioners.
Tightened criteria for disability pensions
privatisation sale. Banco Fonsecu Burnay (complete). Esc. 361B.
privatisation sale. Banco Espiritu Santo (second tranche). 60%. Esc. 890B.
privatisation sale. Petrogal (first tranche). 25%. Esc 408B.
privatisation sale. Credito Predial Prugues (banking, complete). Esc. 408B.
privatisation sale. Imperio (insurance, complete). Esc. 255B.
privatisation sale. Banco Portugues Atlantico (second tranche). 17.6%. Esc. 506B.
Non-acceptance of job offers organized for the benefit of the community (as approved by the Institute of Employment) for those who receive unemployment benefit will cause the cessation of the subsidy.
Grants and economic support for businesses providing employment to unemployed people.
Requirements for new retail outlet licenses are lowered.
New and more flexible tariff structure for electricity users.
Price controls on most industrial goods are lifted.
Reduction of 0.75 percentage points in the contribution rate paid by the employees.
Reduction in the accrual rate from 2.2 to 2 %.
Increase of the required contribution period for all pensions.
Increase of the computation basis for calculating pension, from 10 to 15 years of contribution.
Female retirement age increased from 62 to 65 by 1999.
privatisation sale. Uniao de Bancos Portugueses partial). 61.1%. Esc. 244B.
privatisation sale. Banco Portugues Atlantico (third tranche). 17.5%. Esc. 324B.
Grants and economic support for businesses providing lifelong learning training.
Allowances for those among unemployed who participate in community tasks.
Exemptions of contributions up to 36 months for those companies employing first job-seekers.
Defining economic dependence independent from market power. Abuses of economic dependence are better controlled.
Separation of public and independent electrical systems.
Wider definitions for collusion and oligopolistic practices.
The state-owned monopoly of electricity of Portugal can only hold its position for 15 years more.
Strengthening the existing rules for merger procedures. If the merge is over 30 % of the domestic market for that good or service or has a turn-over bigger than Esc. 30 billion it will be reviewed.
Self employed persons' contributions are raised to 23%-28%.
Equalisation of social security contributions of public servants to the rest of employees (increase).
Self employed persons' contributions are raised to 25.4 % - 32 %.
Self employed see their scheme fundamentally changed. A two-pillar system is introduced. The first is compulsory and relates to invalidity, old age, death and maternity. The second is voluntary and refers to sickness and occupational diseases.
Restructuration of the Electricidade de Portugal ends with 19 different companies.
privatisation sale. Banco Portugues Atlantico (fourth tranche). 7.5%. Esc.154B.
privatisation sale. SECIL (Cement, partial). 51%. Esc. 312B.
privatisation sale. CIMPOR (Cement, partial). 20%. Esc. 396B.
privatisation sale. BPSM (banking, partial). 80%. Esc. 373B.
privatisation sale. CMP (Cement, partial). 80%. Esc. 318B.
Widening of the brackets all across the board.
Introduction of pre-primary school facilities.
privatisation sale. Portucel Industrial (paper, partial). Esc. 36B.
privatisation sale. Portugal Telecom (first tranche). Esc. 143B.
privatisation sale. Petrogal (second tranche). 20%. Esc 40B.
privatisation sale. Banco Portugues Atlantico (fifth tranche). 24.4%. Esc. 75B.
New publicly funded training facilities for job-school leavers.
Establishing an institute entirely dedicated to evaluate training programmes.
Improve public employment services and monitoring of ALMP.
Tougher requirements for the employer to justify an individual lay-off: make explicit and detail the specific reasons.
Facilitation of extension of fixed-term contracts under special circumstances considered by the government, i.e. to foster employment growth
Strengthening the punishment against companies embarking in illegal work-related activities (false self-employed, underage).
Provision for revoking the termination of a contract by the employee on the second business day following the termination date.
In the public sector, fixed-term contracts may be extended 2 times beyond legal limit under special circumstances defined by the government.
Incentives for using temporary work agencies
The SNS may use concessionary contracts with private firms to cover services that were previously publicly supplied.
Broad tripartite social pact on pay issues, including elements related to in-job conditions.
Weekly working hours were reduced from 44 to 40 .
More flexible organization of working time.
A guaranteed minimum income to person available to work. that depends on familiar and personal characteristics and accounts for a specific percentage of the minimum wage (37 % for single without children). They have the obligation to accept job offers or getting training.
privatisation sale. Portugal Telecom (second tranche). Esc. 45B.
privatisation sale. Tabaqueira (tobacco, first tranche). 65%. Esc. 33B.
Exemptions in contributions for first-time workers up to 12 months.
Reduction of contributions for workers whose salary is equal or below the minimum wage.
Improvement of the public employment service capacity to diffuse job offers.
Specific training and guidance programs for long-term unemployed people
All restrictions on sabotage were lifted.
Self employed will have to wait for 60 days instead of 30 in order to get their sickness cash benefits, whose duration is lowered from three to one year.
Exemptions in contributions for low-income self employed.
privatisation sale. Portugal Telecom (third tranche). Esc. 45B.
privatisation sale. BRISA (road transport, first tranche). 35%.
Specific training and guidance programmes for young workers.
Individualised programmes for the medium and long-term unemployed
The unemployment benefit period is being enlarged.
A higher attach of the years of contribution and pension entitlements (actuarial system).
More support for developing supplementary pension schemes.
Increased flexibility in retirement age including early retirement.
privatisation sale. BRISA (road transport, second tranche). 31%.
The suspension of dismissals is now a faster process, legally speaking.
Trade unions may provide legal coverage to workers in dismissal cases.
Stricter regulation for temporary work agencies, forbidding specifically its use for works that are particularly risky or hazardous.
Severance pay is reduced all across the board.
Increase in the capacity of the banking supervisor
Trade union freedom is guaranteed in the public administration.
privatisation sale. Portugal Telecom (fourth tranche). 13%. EUR 948M.
privatisation sale. Fapajal (paper production, complete). 99%. EUR 4.1M.
privatisation sale. BRISA (road transport, third tranche). 19%. EUR 498M.
privatisation sale. Carbolis (industrial gas, complete). EUR 3M.
privatisation sale. Soporcel (paper production, partial). 10%. EUR 55M.
privatisation sale. Papel do Prado (paper production, complete). 95%. EUR 31M.
privatisation sale. Tabaqueira (tobacco, second tranche). 25%. EUR 70M.
Competition in intercity and international calls in the telecom sector begins.
State retirement pension level will no longer be calculated as a function of the best five of the last years of a recipient's contribution history. Instead, the whole of a person's contribution history will be taken into account and the resulting average will reflect the work income earned throughout the whole career, revalued to current levels.
Unemployed may receive a retirement pension from 55 years old if their contributions to the social security account for at least 20 years.
The date on which retirement begins is no longer set at 65 years of age. Pension entitlement will now be based on the criterion of 40 years of contributions.
privatisation sale. Dragapor (construction, complete). EUR 3M.
privatisation sale. Tabaqueira (tobacco, third tranche). 10%. EUR 28M.
privatisation sale. EDP (electricity, fourth tranche). 19%. EUR 1799M.
privatisation sale. GALP (energy, second tranche). 15%. EUR 434M.
privatisation sale. Portugal Telecom (fifth phase). 9%. EUR 961M.
Self employers and microbusiness below Esc. 30 million per year (or services supplied below 20 M) are now subject to a simplified system based on lower coefficients fixed by law. Corporate Tax Income of 20 %, including a floor equivalent to 50 % of the yearly national minimum wage. Each person can choose whether to use this simplified system or the general rule.
Simplified personal income tax regime for independent workers and business activities with low income
Changes in the Income Tax favouring dependent workers and low-to-medium income families.
General tax is lowered to 25 %: since 2009, two general tax rates are applied at a Central Government Level. A general tax rate of 12,5 % will be applied for the first € 12'500 of taxable income and a 25 % tax rate will be applied for the remaining amount of taxable income, when the total taxable income exceeds € 12'500.
Fixed-term contracts are limited to three years. After that period it becomes automatically an open-ended contract.
The new calculation formula allows employees to invest a part of their contribution above a certain ceiling in private schemes.
privatisation sale. BRISA (road transport, fourth tranche). 5%. EUR 137M.
privatisation sale. CIMPOR (cement, fourth tranche). 10%. EUR 410M.
School dropouts are eligible for employment now under conditions (for the hiring companies) of providing adequate training (official credentials, vocational specialization, sufficient time).
The minimum guaranteed income conveys stronger activation requirements for the beneficiaries.
Unemployed people only have one option to refuse an offer for a suitable job (equal qualifications of the previous occupation) before being sanctioned.
Partial deregulation of the public universities' fees.
Right of the employers to oppose reinsertion of workers in dismissal .
More room for fixed-term contracts in collective agreements
Fixed-term contracts may take up to six years.
Firms have an enlarged capacity to fight against absenteeism.
Employer will have capacity to relocate workers among regions under certain conditions.
The so-called 'taxas moderadoras' are introduced, with additional co-payments.
Providing hospitals with entrepreneurial-like status (outcome-oriented). Ergo they manage their own deficits.
Changes in the collective bargaining procedure to enhance the responsiveness of wage settings to productivity and skill differentials across sectors.
Additional benefits for those with children and low income.
Partial unemployment benefit is increased from the difference between 1.25*UB/wage to 1.35.
Increase in unemployment benefits in order to receive at least the national minimum wage level. The max level is set at three times this same quantity.
Change in eligibility conditions: from 540 days in 24 months to 270 days in 12 months.
The minimum guaranteed income for large families is being increased.
Penalization of Early Retirement for civil servants.
Unlike before, now it is possible to retire earlier (at the age of 58) without pension reduction if the person is on long-term unemployment.
Subsidies to employees and firms per hour devoted to training.
Minimum annual hours of certified training to all workers: 35.
Introduction of quotas for large companies, at least 2 % of their employees should form part of the disabled collective.
Signing and enacting MIBEL, the Iberian Pact for liberalising the Electric market between Spain and Portugal.
Gasoline and fuel oil prices have been liberalised.
Protection for young people is reduced, particularly facilitating work during studies.
Establishing the equality between the minimum wage for domestic services and for other activities.
A minor admitted to a job without having completed compulsory school or without a professional qualification shall attend either an education module, or a training cycle or coupled education and training cycles providing together the lacking educational attainments. Such training cycles must last at least 1000 hours and be developed in phases lasting between 200 and 300 hours every quarter. Both the employer and the minor have the right to be compensated respectively for the cost of training and the loss of remuneration.
Obligation on the employer to ensure vocational training to workers under fixed-term contracts whenever the duration of the initial contract exceeds six months.
Specific training including programmes for disabled people.
Rise in the wage reference to determine the minimum contributions to social security of a self employed from 1 to 1.5 referred to the minimum wage.
Contribution years that are needed to receive a pension increased from 36 to 40.
Suspension of some of the early retirement schemes. Early retirement using PAYG system for private sector workers is not possible any more.
Derogation of early retirement schemes (retirement at age of 55 with two decades of contribution or 58 if long term unemployed).
Derogation of the public servant pension system and making it convergent to the general system.
Retirement age of public servants from 60 to 65.
Eliminating tax deductions on healthcare, primary mortgage and pensions.
The taxation of pension income has been increased and it is planned that it will eventually reach that of wages.
Limiting the deductibility of capital losses on the income taxes.
A new tax bracket for the personal income tax has been created. Annual incomes above over 60'000 euros face a 42 % marginal tax rate (40 % before this bracket was created).
Increase in the supply of vocational training for young dropouts, young students in risk of dropping the school and unemployed adults.
Stricter rules to ensure activation, such as defining more specifically what is a suitable job.
Job creation incentives for companies which hire younger and older workers, as well as long-term unemployed persons, under a full-time and open-ended employment contract. The financial support to hire young workers and those who are long-term unemployed will be up to 12 times the national minimum wage, while a more substantial incentive is planned for companies that hire workers aged over 55 years.
Offering financial support which does not have to be reimbursed to companies employing up to 50 workers, whenever the employers hire workers who were previously on fixed-term employment contracts on a permanent basis. The amount of support for each fixed-term employment contract converted into an open-ended contract will be up to four times the amount of the statutory minimum wage or up to six times, in the case of disabled workers.
Introduction of the National Network For Integrated and Continuous Care, focused on dependent and chronically ill population. Includes PPPs on the care provision.
Price reduction on agreements with PPPs (the private providers).
Reduction of controlled pharmaceutical prices (6 % less).
liberalisation of a larger amount of retail pharmaceuticals prices, removing price ceilings.
Closure of several delivery rooms and primary care emergency units, leaving room for more efficiency and for the private sector.
The unemployment benefit cannot be higher than the last net wage. The daily income of the unemployment benefit will be based now on 65 % of the person's gross monthly wage.
Minimum guaranteed income (recently called social inclusion income) considers now only the income of the last month instead of the income of the last year.
Suspension of the surplus benefit for unemployed people with children and low income level.
Eligibility for unemployment benefits changes from 270 days in the last 12 months to 470 days in the last 24 months.
Changing the calculation system for the pension amount: contemplating only a proportional formula that weights the lifetime career and the earnings from the best 10 years out of the last 15. This format was already a possibility but from now it will be the only option for those retired before 2001. For those retired after 2001, lifetime contributions will be the way to calculate.
Early retirement is possible from the age of 62.
Enhanced financial penalty for early retirement plus fiscal incentives to extend working life.
privatisation sale. GALP (energy, third tranche). 24%. EUR 1.1B.
Increasing the coefficient of taxation for self-employed.
The freedom to provide services clauses is included in sector specific regulations.
Introduction of third party access to the transmission grid.
Tacit approval, nation-wide validity and unlimited duration for any kind of authorisation to provide a service.
Cable network separates from the matrix as a different communications and broadcasting company.
Setting stricter operating conditions and licensing of temporary work agencies, in particular reinforcing their obligations in respect of the workers’ rights to wages, insurance and social security. The new legislation also affects enterprises that hire temporary workers. The new rules are intended to enforce the duties and responsibilities of temporary work agencies, to increase the rights and guarantees of the workers and to improve the control and supervision of temporary work.
Temporary contracts may be extended up to 24 additional months instead of 12.
liberalisation of the ownership of pharmacies, allowing entry based solely on technical requirements.
The co-payment in medicines is changed from using as a base the branded price to using as a base the generic price for calculating its percentage determining the import.
Reduction of controlled pharmaceutical prices (7 % less).
Introducing co-payment for hospital admission
Maximums for the amount of workers who are susceptible of receiving unemployment benefit in collective dismissals are established. A 25 % in the case of companies of less than 250 workers, and a 20 % (with a maximum of 80) for companies of more than 250 employees.
The period of contribution to the social security fund is introduced as a criterion to calculate the length of the right to receive allowance. This tightens the average requirements, as those unemployed younger than 30 and having worked for less than two years only receive nine months of UB. Above two years of working one year is guaranteed. At the top, those unemployed people above 45 may receive two years if they have worked for less than six years and up to 900 days above that threshold. In both cases only a month is added for every extra five years.
Eligibility for unemployment benefits switched from 470 days in the last 24 months to 450 days in the same period.
Exemptions to what is and is not voluntary unemployment are introduced in order to regulate who has the right to the unemployment benefit. If the contract expires due to the employee's decision or due to employer's decision based on a sufficient cause, the worker will not have the right to the UB.
Introduction of a sustainability factor on the pension calculation, based on the lifetime individual contributions, "derived from the relationship between the average life expectancy observed in a defined reference year and the average life expectancy observed one year before the due date of the pension" (EC, 2008).
CGA subsystem equivalent to general system.
Implementation of the Public Capitalisation Scheme, allowing to channel additional contribution of the beneficiaries to the fund.
Introducing a flexible system of retirement where it is possible to choose between the following two options: to delay the receipt of retirement benefits past full retirement age (65 years of age) with special incentives; or to begin receiving early retirement benefits at the age of 55 years, on the condition of having 30 years of contributions, with greater benefit reduction as compared to previous legislation; previously, a benefit reduction of 4.5 % applied for each 12 months of early retirement, while this has now been increased to 6 %. The rule guaranteeing that the worker is entitled to a reduction of one year in the age of retirement for each three years of contributions exceeding 30 years has been maintained.
privatisation sale. A gradual increase in the proportion of market open to consumer choice and firms eligible to operate in the gas market
Defining the strategic objectives as well as practical measures, introducing new tools and redesigning the institutional framework of vocational training. Practical measures include the following: 1) creation of a National Catalogue of Qualifications, including occupational profiles and training guidelines; 2) creation of an Individual Competences Notebook registering all the competences acquired over the life course; 3) reform of the system of national certification through establishing a National System of Qualifications and a system regulating access to occupations; 4) creation of the "vocational training cheque", a public tool for the direct funding of individual training needs, aimed at ensuring the right to individual vocational training; 5) rendering effective the individual right to annual minimum hours of vocational training; 6) upgrading management skills, providing training adapted to their particular needs; 7) promoting training on social dialogue, in order to strengthen collective bargaining.
Support to the creation of 1600 new companies (and around 3000 new jobs) by unemployed persons through the subsidised EUR 100 million credit line.
Payment of recruitment aid to the employer totalling EUR 2000, plus exemption for 2 years from payment of Social Security contributions for the recruitment of young people on an unlimited term contract. Net employment creation compulsory for at least 3 years. Measures aimed at facilitating the transition to working life, by: (a) increasing the number of young people supported through professional placements to 37'000; (b) providing financial support to companies that contract young people aged under 35 years seeking first employment, encompassing around 20'000 young people.
Easeing of conditions for individual dismissals
Probationary period is doubled from three to six months.
Clinical activity is excluded from PPPs.
Greater flexibility in working time schemes at company level or by collective agreement
Nationalization of BPN due to financial crisis
Development of INOV Programmes, designed to support young people to access employment through professional training placements for young higher education graduates: a) development of INOV Jovem (professional training placements in SME's) and INOV Contacto (professional training placements in companies abroad); b) creation of INOV ART (professional training placements in art organisations/ institutions abroad) and of INOV Vasco da Gama (professional training placements for international qualification of young entrepreneurs and managers; c) creation of INOV Mundus (professional training placements in organisations/institutions in the field of development cooperation)
Creation of more than 12'000 professional training placements for young people, especially young higher education graduates in areas of low employability.
Creation of the new Qualification-Employment professional placement programme intended for unemployed persons to improve their qualifications, irrespective of their age, to benefit 10'000 unemployed. Plus broadening the supply of double certification courses (e.g. EFA and CET) to include unemployed persons in specific regions especially affected by unemployment (in order to cover 5000 unemployed).
Changes in the legal framework of Education and Training for Adults ("Cursos EFA" and modular training in the context of the Initiative "New Opportunities"), that: a) make legal and regulatory adjustments to the courses and to modular training, incorporating the two forms of training in the same legal instrument; b) clarify the difference between the process of qualification for basic education and the one for secondary education; c) define, for the first time, all matters regarding the organization of modular training, in particular aspects such as access conditions, management and operation of training, evaluation and certification.
Support access and/or return to work through the payment of 2000 € to the employer as a support for hiring long-term unemployed with permanent and full-time contracts. This payment is increased by a two-year exemption from payment of social security contributions.
Reduction by 50 % on the employers’ SSC for the conversion of contracts into unlimited and full-time contracts, upon keeping net employment creation for 3 years.
50 % reduction of the employer’s SSC for the recruitment on fixed-term contracts of unemployed persons aged 55 or over, unemployed for more than 6 months, or recipients of social integration income or invalidity pension, ex-drug addicts and ex-detainees. Fulfilling certain conditions as regards the maintenance of the net creation of employment is compulsory.
In order to give incentives for transforming independent workers into permanent workers in the company, where they provide services, the employer SSCs are reduced by 50 % during 3 years within the 6 months after the entry into force of this reform.
Support access and/or return to work through the payment of 2000 € to the employer as a support for hiring youth with permanent and full-time contracts. This payment is increased by a two-year exemption from payment of social security contributions.
Support access and/or return to work through the payment of 2000 € to the employer as a support for hiring unemployed aged 55 years and plus with permanent and full-time contracts. This payment is increased by a two-year exemption from payment of social security contributions.
Short-time working schemes (STW) in the automotive, textiles, clothing, tourism, furniture and trade sectors addressed to protect these sectors from massive dismissals.
Support to the integration of unemployed and recipients of social insertion income in non-profit institutions, through Contract Employment-Insertion and Contract Employment-Insertion+, for 1 year maximum. Through this contract, the unemployed is assigned an additional grant of 20 % of the monthly payment of unemployment benefit plus food allowance and transport. Target groups: People with impairments and disabilities, LTU, unemployed aged over 55 years, former inmate or person serving a sentence in an open exterior regime facing a judicial measure or other non-custodial.
Reduction by 3 percentage points of employer’s social security contributions (SSC) for hiring workers aged 45 years or more in small and medium enterprises, depending on keeping the employment level in 2009.
Support access and/or return to work through the payment of 2000 € to the employer as a support for hiring recipient of invalidity pension with permanent and full-time contracts. This payment is increased by a two-year exemption from payment of social security contributions.
Exemption of employer’s SSC for 36 months for the recruitment on open-ended contracts of young people searching for first job, long-term unemployed or long-term unemployed aged 55 or over, recipients of social integration income or invalidity pension, ex-drug addicts, and ex-detainees; in alternative, financial aid of € 2000 plus exemption of SSC for 24 months on the condition of maintaining job creation for 3 years.
Exemption from SSC for 36 months, for the recruitment on unlimited contracts of young persons aged maximum 35 or payment of € 2000 plus exemption of contribution rate for a period of 24 months, depending on net employment creation for 3 years.
Support access and/or return to work through the payment of 2000 € to the employer as a support for hiring beneficiary of social insertion income, former drug addict and ex-prisoner, with permanent and full-time contracts. This payment is increased by a two-year exemption from payment of social security contributions.
Creation of structures to provide support to the unemployed for the development of their pathway towards integration or reintegration into the labour market, in close cooperation with employment centres.
Expansion of job search assistance offered by local actors.
Creation of a programme to promote the entry of unemployed aged 35 years older and plus, that have recently improved their skills, into new jobs and activities demanding more skills and qualifications.
Easing financing conditions to enhance self employment among those who receive unemployment benefits.
Deregulation of energy tariffs for industrial consumers.
Programme to Support Entrepreneurship and Self-Employment: support of the creation of small companies, for profit, irrespective of their legal form, which lead to creating jobs and help boosting of local economies and support for self-employment for beneficiaries of unemployment benefits. Modalities of support: guaranteed loans and interest rate subsidy; technical support to the creation and consolidation of projects; payment by one time of total amount of unemployment benefits; additional support referred to in paragraph under the form of repayable grant.
Reduction of the notice period for the collective redundancy.
Reduction of the time frame for workers to launch an unfair dismissal claim from 365 to 60 days.
Easier dismissal in the public sector (closer to the private sector regulation) on grounds of "failure to adapt to the firm requirements".
Changes in the dismissal procedure favouring the employer: procedural errors are not relevant for claiming an unfair dismissal from the employee, the witnesses proposed by the employee can be denied by the employer.
A short-term job cannot take the place of another previous short-term job or service provided by a self-employed person.
1) The number of days granted to workers to care for family members is increased from 45 to 60 days a year: 30 days to care for children younger than 12 years and 15 days in order to provide assistance to older family members. In addition, workers are entitled to have 15 days to give assistance to other relatives, such as partners, parents and siblings. 2) Workers are also permitted to work part time until their children are 12 years old – previously, the age limit for children in this regard was 10 years of age. 3) The father’s-only parental leave is increased from 5 working days to 10. The father is also allowed to have at most three days of leave to go to pre-natal appointments.
1) The initial parental leave: gives the right to 120 days paid at 100 % or 150 days paid at 80 % when the leave is not shared between the parents or only for a period inferior to 30 days; gives the right to 150 days paid at 100 % or 180 days at 83 % when the leave is enjoyed at least for 30 days only by one of the parents. 2) The complementary parental leave pays at 25 %, through a social pension, for three months to each parent if it is asked immediately after the initial parental leave. All rights above are applied for adoption cases.
Abolishing co-payment for hospital admission.
Create the possibility for the unions to give hiring powers to the workers’ collective representation structures within firms with more than 500 workers
Revision of Article 4 of the 2003 Labour Code, according to which collective agreements cannot set less favourable conditions than those defined by minimum legal provisions, but only in relation to specific ‘core’ domains of employment relations. The expiry of collective agreements, which include a clause providing for their successive renewal such that they only expire when replaced by another agreement, takes place six and a half years after the last published full text. The required arbitration is a tool that can be activated by employees or by employer organisations if no new collective agreement is concluded within two months of the previous agreement’s expiry. A new agreement must be activated in the subsequent twelve months. On the other hand, the revised LC maintains the principle of expiry of collective agreements on the grounds of employer or trade union refusal to sign new agreements.
The required unemployment spells for someone being considered a long term unemployed is reduced to 9 months: These are conceded as weel to those who have been concluded, during this period, fixed-term contracts for less than 6 months, whose combined length does not exceed 12 months
In case of a quick return to the labour market (6 months or less), the unemployed will maintain full relevance of all previous contributively periods in future modulation of the duration of eventual unemployment allowances.
The social security contribution for independent workers is decreased by 7.4 percentage points to 24.6 %
Companies that use services from independent workers will start paying part of this workers social securities contributions. The contribution will be five percentage points and the worker will pay the rest of the contribution. The exception of paying social security contributions by the independent workers when they accumulate income from dependent and independent work in the same company is abolished.
Reductions during 2009 and 2010 in contributions made by the employer.
Additional social contribution on firms purchasing services from self-employed workers.
The 35 annual mandatory hours of training that the employer has to assure to his/her employees can be given in a more flexible way: 1) if in one year training does not exceed the 35 hours he can use the excess hours in a period of two years 2) the training of one year can be assured in the next two years in case the employer has a training plan for the following period.
Employment-Qualification Programme (PQE): Measure to take advantage of periods of reduced or suspension of activity in companies to improve the employees qualifications, ensure levels of employment and contributing, through training, to adapt to the challenges of the international context.
Reinforced sanctions for unemployed not accepting adequate job offers.
Increasing up to 50'000 the number of persons to be covered by employment-inclusion contracts (contratos de emprego-inserção), intended for subsidised unemployed people who are engaged in occupational programmes, and increasing up to 12,000 the number of people covered by the employment-inclusion contracts + (contratos de emprego-inserção +). The latter are intended for unemployed beneficiaries of social inclusion income (rendimento social de inserção) who are engaged in activities considered socially useful.
Promoting the use of open-ended employment contracts for hiring people aged under 35 years who are seeking their first job or who are unemployed and registered in the employment centres for more than six months. This will be done by providing direct support of € 2500 as a one-off payment and exempting the employers from payment of the associated social security contributions for 24 months. Alternatively, the employers may forego the one-off payment and be exempted from the social security payments for 36 months.
Payment of 2500 € to employers hiring young people who concluded a Professional Traineeship with permanent full-time contracts. This payment is topped up with two years of exemption from social security contributions. In situations of part-time hiring, the support is reduced proportional to the reduction of the period of normal working hours.
Payment of 2500 € to employers hiring long term unemployed aged 40 years old and plus with permanent and full-time contracts. This payment is increased by 2 years of exemption form payment of social security contributions. In case of fixed-term contracts, it is only assigned a reduction of 50 % from social security contributions in charge of the employer during the 1st year contract, and of 65 % during the following years.
Unemployed registered in job centres (PES), who hold less than an upper secondary diploma, who are not attending training within the National Qualifications System, and whose profile of employability proves inadequate to job offers available, should be undertaken by the national network of centres new opportunities, in order to undertake a process of recognition, validation and certification of skills or further education and training.
Net replacement rates are capped at 75 % of the reference. The maximum benefit amount remains at three times the social support index, which is stable in 2009 - 2010 - 2011: EUR 419,22.0
Extension of benefit for self-employed to 80 % of their previous income from a single entity.
In order to facilitate the transition from unemployment to work, the possibility to combine partial unemployment benefits with labour income of a part-time job or of temporary independent work is extended. In any case, the combination is only possible for working activities generating a very low income.
10 % rise in the benefit for lone parents.
The guaranteed monthly minimum wage (RMMG) was raised at 475 €, an annual increase of of € 25, i.e. of 5,6 % for 2010. At the same time, government committed to offer compensatory measures as an incentive for businesses, including a reduction of the single social tax (taxa social única) on the minimum wage by one percentage point, the equivalent of € 4.75 per worker. This means that the Portuguese state will cover 15% of the increase of the cost of the minimum wage in 2010. Furthermore, this commitment includes an extended deadline for companies for the payment of social security debts from 60 to 120 months.
Six months extension of the entitlement to unemployment benefits
Reduction of the minimum contributory period from 15 to 12 months.
A new tax bracket at 45.88 % is created, other rates are also increased (each within 1 percentage point, for the 1st, 2nd and 3rd bracket; and 1.5 percentage points for the forth onwards).
Creating a professional internship programme for young people who attend professional and technological courses or who have a secondary school education or equivalent qualification level.
Setting up a programme to support the recruitment of young people who have already completed an internship programme, particularly in technological areas, and encouraging contacts between schools and employers.
Offering re-qualification opportunities for 5'000 young persons with a university degree in sectors of low employability to facilitate their adequate integration into the labour market.
Reduction of the (high) termination rates in the benefit of small operators.
Stronger capacity for the Competition Authority to review merges and suspect activities.
Increase in the regulation capacity of the supervisor, broadening its powers and the extension to conduct companies' internal checks.
Increase in co-payments all across the board.
The social pact of March 2011 favoured the decentralization of collective bargaining. It defined the possibility of company level negotiations (with union shop stewards or Workers Committees) of the conditions set up by sector collective agreements regarding the following issues: workers functional and geographical mobility and the organization and management of working time. In addition trade unions could delegate on other trade unions or on company workers’ representatives the power to negotiate at the company level, in the case of companies with 250 employees or more. The social pact alos defined the reduction of severance pay and the creation of a fund to finance it.
Lowering the ceiling of unemployment benefit by one sixth.
The unemployment benefit will decrease a 10 % after six months.
The minimum duration of employment benefit is shortened from 270 days to 120 days.
A maximum of six months of accumulation of unemployment benefits and wages is permitted.
A smaller and means-tested benefit is paid when unemployment entitlement ends (Subsídio social de desemprego).
Two-year suspension of extra (13th and 14th) pension payments.
privatisation sale. EDP (electricity, fifth tranche). 25%.
privatisation sale. Banco Portugués de Negócios (complete).
privatisation sale. GALP (energy, fourth tranche). 8%.
Limits to interest deductibility for corporate income tax.
Increase (surcharge) in personal income tax equivalent to around one half of monthly salary.
Reduction of the number of brackets in personal income tax from eight to five, increasing the average effective tax of every bracket by 2.9 percentage points.
Short-term unemployed (less than a year) must accept a job offer which gross wage equals 110% of the unemployment benefit. Long-term unemployed (more than a year) people must accept it if the wage equals the benefit.
Wage subsidy for firms that hire and train unemployed enrolled in employment centres for 6 months or more
High employability training modules on a part-time basis to allow the unemployed to keep actively searching for a job
Unemployed people will have access to training no later than 45 days after their new situation.
Lower protection for regular workers: the grounds for justified dismissals are enlarged, extension of the concepts of unsuitability and extinction of work positions.
Reduction of severance pay from 30 to 20 days of tenure for regular workers, with a 12-month ceiling instead of a 3-year one, no more than 240 times the minimum wage.
Abolishment of two civilian and two religious public holidays.
Abolishment of the right of workers with good attendance to get an extra three days annual leave on top of the statutory 22 days.
Strengthening the regulation of debt restructuring and bankruptcy processes, opening the possibility to non-judicial agreements in all cases.
Introduction of "banks of hours" for individual workers in order to make working time more flexible, including a reduction in working time and employment suspension during economic crises.
The maximum monthly benefit is reduced from 3 times to 2.5 times the social support index (i.e. almost twice times the minimum wage).
The maximum duration of the unemployment benefit is linked to age now (in brackets) and reduced on average.
Those enrolled in active labour training during unemployment and who receive an offer below the UB can keep a 50 % of it during the first twelve months.
Securing the private administration of present and future bailed-out banks
Abolishing all reduced corporate income tax rates.
Introducing a surcharge on the income of the top tax bracket.
Equalizing personal income tax deductions applied to pensions and labour income.
Suppression of mortgage deductions: eliminating the deductibility of mortgage principal; eliminating interest income deductibility for new mortgages; phasing out the deductibility of mortgage interest payments for owner-occupied housing and of rents.
Capping the maximum deductible tax allowances according to tax bracket for most of the income brackets except the lowest ones.
Limiting the deductions of losses in previous years to 75 % of the taxpayer's taxable profit.
Capping and cutting substantially (by two thirds overall) tax allowances for health expenditure.
Authorising establishment of small businesses and carrying out economic activities on a free initiative basis.
The prices of all final goods have been liberalised with the exception of 40 basic consumer goods, whose prices were left unchanged. Prices for 77 basic raw materials used in industry were not liberalised. The prices for 57 of these were raised in line with devaluation (for the energy industry the increase was greater). The remaining 20 remained fixed at pre-devaluation levels.
The annex of the order enlarges the jobs that are considered hazardous.
Reduces working time from 48 hours per week to 40 hours
The National Bank of Romania (NBR) spinned-off all its commercial activities to the newly formed Romanian Commercial Bank (RCB) and limited itself to the functions of a central bank.
Specifies that the regies autonommes can keep only 30% of their income in foreign currencies and that this level will rise to 50% from 1st of February 1991.
The law, instituted the general rules for creating and running different types of commercial companies, and granting non-discriminatory entry rights to all entrepreneurs and equal treatment for all entities, private or state-owned. In case of the joint stock companies and the limited liability companies, the shareholders’ liability is limited to the amount they had invested, i.e. the subscribed share capital.
Establishes maternal leave up to 112 days prior to birth and up to 1 year after.
Establishes the maternal allowance at 65% of the individual monthly wage.
Relaxes rules for early retirement: workers with at least 10 years of social security contributions can retire early. The decree resulted in an estimated 400 000 new early retirees.
Reorganises state-owned enterprises as commercial companies and Régies autonomes (RAs) respectively (the latter are "strategic enterprises" to remain in state ownership)
Later to become the National Agency for Privatisation
Specifically required foreign investments not to affect national security and defence interests and not to harm public order, public health and ethics
Defines unfair competition as: a) the use of a company, a logo, or special designations for packaging that are likely to cause confusion; b) production in any way, importing, exporting, storing, selling or offering for sale of goods bearing false indications
Prohibits employing the employee of a competitor, entering into contracts on discount terms with the intention of adversely affecting competition, or selling a product which attempts to pass itself off as the product of a competitor.
Reduces mandatory education from 10 to 8 years.
Banks are created as limited liability or joint stock companies and can freely compete for business within the framework of universal banking. Mentions that banks have to save 20% of their gross profit until the savings equal the capital of the bank. Afterwards the bank is obliged to save 10% until the savings are double the value of capital.
Defines the statute of insurance companies. Restricts the entry of insurance companies only to those companies that are associated with Romanian operators. Introduces minimum capital requirements.
Among other prerogatives, the central bank law gave the National Bank of Romania (NBR) the authority to license and supervise commercial banks. The law also limited the amount of loans the NBR may extend to the state. Members of the board of directors are appointed by Parliament for a 8 years term that can be renewed.
Provides inter alia framework for collective bargaining
Sets the maximum duration of a collective labour agreements to 1 year. Mentions that the agreement applies to both unionised and non-unionised workers.
15 individuals are necessary to form a union, only two unions in the same sector or profession to form a federation, and two federations can found a confederation. Affiliation with a confederation is necessary for a union to benefit from the National Collective Labour Contract.
States that strike actions are decided by half plus one of union members in a company. Also states that strikes can be used only when other measures have failed.
Unemployment benefits are calculated as a percentage of wage received in the previous month.
Separates the social security budget from the national budget.
Legislation adopted on the privatisation of commercial companies.
The Privatisation Law also provided the framework for the distribution of ‘‘national wealth’’ to the population. Accordingly, ownership certificates equivalent to 30 % of the capital of the 6 300 state-owned commercial companies listed for privatisation were distributed freely to all Romanian citizens over 18 years of age. The shares of capital privatised through this scheme were entrusted to five Private Ownership Funds (POFs), set up on a regional criterion basis for small enterprises, and on a sectorial basis for medium and large companies.
The State Ownership Fund (SOF) was put in charge of state ownership, subordinated to the Parliament.
Creates the legal framework for private ownership in the agricultural sector
Introduces a progressive corporate income tax.
Sets a progressive taxation system of up to 45% of monthly wages.
This instrument was introduced in March 1992. Against forex deposits, banks can hold their reserves either in lei or in hard currency.
Amends Law 31/1990. The law requires that in the case of state owned enterprises, the interests of the state to be represented in the Board of the enterprise by two representatives of the Ministry of Finance.
Changes the financing structure of the healthcare system by creating a separate healthcare fund.
Sets minimum paid holidays at 18 working days a year.
Introduces a supplementary unemployment benefit amounting 40% of the minimum gross wage for a maximum period of 18 months.
The law extended pension rights to agricultural workers or workers who worked in the agricultural sector in state farms. Full pension rights are granted for a contribution period of at least 10 years and an age of 62 for men and 57 for women.
Law regulating the functioning of the State Ownership Fund (SOF). The board of directors of SOF is composed of 16 members (5 appointed by the President of Romania, 3 by the Senate, 3 by the Chamber of Deputies and 5 by the Government).
Establishes a 2% social security contribution rate for healthcare.
The law sets a minimum pay threshold equal to the minimum wage.
This law contains special provisions for “public companies” (“open companies” in Romanian legal parlance), which are in general more constraining than the standards imposed by law 31/1990. Law 52/1994 governs not only corporate shares but also bonds and all securities issued by the government or local authorities. Also establishes The National Securities Commission.
In the last quarter of 1994, based on a Government Decision (no.370/1994), eight pilot districts (covering four million people) of Romania’s 40 districts introduced changes in the provision and payment of GP services. The system changed from the fixed allocation of patients to GPs according to residence to one with universal free choice of GP. Payment moved from fixed salary (set according to professional rank and seniority) to a combination of age-adjusted capitation (approximately 60% of total payment), fee for service (related mainly to prevention, mother and child care, early detection and follow up of major chronic diseases) and bonuses related to difficult conditions of practice and professional rank (approximately 40% of total). Contracts with GPs were held by District Health Directorates, terminating GPs’ status as hospital employees. Terms of service introduced new requirements for 24-hour availability for emergencies. The contracts specified primary care services to be covered (which continued to be free at the point of delivery), and patients were allowed to choose their family doctor. Family doctors were expected to enrol between 1500 and 2500 patients each.
Changes rules for the calculation of unemployment benefits. Reduces the benefit to 40% of the average wage after 6 months for those who contributed to the unemployment fund for less than 5 years and to 50% of the of the average wage after 6 months for those who contributed to the unemployment fund for more than 5 years.
Mentions that "individuals who are ahead the required contribution period can demand early retirement with up to 5 years in advance of the statutory retirement age".
Amongst others it introduces state help for MEBOs (50% reduction on corporate income tax).
Recipients who are able to work must periodically show that they are registered as job seekers by the local offices of the National Agency for Employment and Vocational Training, except if they care for children under 7 years, are full-time students under 26 years or have the possibility to retire on request.
Many municipalities organise public works programmes, in which the recipients may be required to participate as a condition for receiving benefits.
Loan taken from the World Bank for ALMPs focused on training and job counselling of unemployed workers as a result of the mass privatisation programme.
Introduces competition for textbooks used in the primary education; Introduces a new curricula for both primary and secondary education.
Establishes different types of insurance. Requires that Romanian persons conclude insurance contracts with companies established in Romania.
The law creates a National Securities Commission (NSC) tasked with granting/revoking securities exchanges licences, establishing rules for securities agents etc.
Special rules concerning corporate governance during liquidation and bankruptcy procedures
Tax-based incomes policy for state-owned enterprises, with a payroll tax triggered by wage increases above certain limits, was abandoned in 1995
A means-tested cash assistance to the poor was established. The benefits are calculated to cover the difference between actual household incomes and a specified income limit, based on family size. The implicit marginal tax on incomes near this limit can exceed 100% because the state pays employee contributions to the health insurance fund on behalf of the benefit recipients.
The benefits are not taxed and there is no legal limit to their duration.
However, the programme does not constitute a “guaranteed income”: municipal authorities (mayors) have no obligation to support eligible families unless they consider that sufficient funds are available – which may depend on how much priority they give to this programme relative to other municipal expenditures.
Measures to accelerate restructuring of Régies Autonomes and state-owned companies, to strengthen financial discipline and to improve settlements in the economy
Opened the possibility for certain groups (former employees, managers) to buy shares in non-listed companies, in exchange of their vouchers. The law introduced new, non-transferable coupons to be distributed to the population. Also the capital stake to be distributed in each company was increased form 30 to 60%.
Extends taxation base to temporary workers and other forms of employment.
Introduces legislation against monopolistic behaviour and regulates state monopolies. Amongst the sectors that are state monopolies: alcohol production and import, cigarette production and import
Liberalises competition in the postal services sector. Allows entry in the sector of companies other than the Romanian Post. Transforms the Romanian post from a regie autonomme into a joint stock company that can be privatised.
It created the Competition Council, an independent governmental entity and the Competition Office, which is responsible to the government. The Council is the pre-eminent agency but has a much smaller staff than the Office.
Specifies that: collective bargaining agreements are negotiated every 12 months and that the negotiation period cannot last longer than 60 days. Also makes the provisions of the collective bargaining agreements applicable to all workers in the plant.
The law permits only one collective agreement in each enterprise. This single agreement has legal force for all workers regardless of union membership.
Employers with 21 or more workers must initiate collective bargaining annually
In the enterprise, a trade union can negotiate if it represents 50% of the workers or belongs to an association which has been found representative at national level. To fulfil the latter criterion, an association on either side must have members in at least half of the counties (judets) including Bucharest and in at least 25% of all economic sectors (as listed officially). A worker association at national level must also represent 5% of all employees, while an employer association must represent 10% of employment.
The Ministry of Labour and Social Protection (MOLSP) and its regional branches supervise the bargaining process and check the agreements reached, taking reference in a regulatory framework designed to promote consistency and transparency throughout the collective bargaining system. The government also acts as a signatory party to annual collective agreements for the whole economy.
In each enterprise, the annual agreement determines an enterprise-specific minimum wage, which must not be lower than the minimum wage fixed by law or higher-level collective agreements, and a list of qualification coefficients which must not be lower than certain minimum coefficients laid down in central agreements.
Registration as unemployed is compulsory and must be renewed monthly by a personal visit to an employment office.
The National Agency for Employment and Vocational Training (NAEVT) administers a hiring subsidy for unemployed graduates of secondary and higher education, amounting in most cases to 70% of the initial salary. The subsidy period was extended from 9 to 12 months in 1997.
Youths aged 15 or more who have recently completed secondary or higher education (vocational integration allowance).
Contains key FDI incentives (favourable tax and customs treatment, lower profit taxes for large investors, the benefits increasing with the value of the investment)
The government passed an emergency ordinance in February, amending the 1996 Competition Law: this ordinance stipulates exactly which prices are to remain under control and presents a simple, transparent mechanism for adjusting these prices. The most important controlled prices are those of electric and thermal energy; rail, river and city transport; postal and telephone services; water and sewerage; and certain medicines. Following their adjustment to international levels, these prices have now been indexed (100 %) to movements either in the CPI or the exchange rate.
From mid-1997, most workers dismissed by state-owned enterprises are eligible to receive severance benefits for six, nine or twelve months depending on the length of service, plus three additional months if the local labour market situation is difficult
Offered more generous provisions for miners than for other employees of SOEs and régime autonomes
In July 1997, required reserves for lei deposits were increased to 10 % from 7.5 %. Required reserves are remunerated 15 % for lei, and 1.5 % for hard currency reserves.
Provides for clearer legal protection and commitment to National Treatment of foreign direct investment, it also stipulates that non-residents can make portfolio investments into Romania.
The NBR announces that it will no longer compute the reference rate for the leu as a further measure to liberalise the foreign exchange market.
Modifies Law 31/1990 by adapting it to EU law. Introduces new capital requirements. Defines two merger methods (by absorption and consolidation).
The status of health professionals was changed from state employees to independent practitioners that run their activity based on contracts with the national or county insurance house
Decentralises healthcare by creating local autonomous social security insurance institutions that administer local hospitals and collect healthcare contributions.
The law creates the Economic and Social Council, the national institution responsible for tripartite bargaining. The Council has 27 members, 9 from each partner.
During 1997, the government applies a quarterly indexation of wages in the public administration (the ‘‘budget sector’’), corresponding to 75 % of the increase in consumer prices. This procedure, applied after consultation of trade unions, also serves as a recommendation for other employers.
Secondary-education graduates: 18% of the average after-tax wage in the economy. University graduates: 20% of the average after-tax wage in the economy.
Benefit levels were increased during 1997, especially for those with more than nine months of unemployment.
50 to 60% of the applicant’s average wage in the last three months, depending on the length of the work history. But the benefit cannot be lower than 20% or higher than 55% of the average wage in the economy
The average wage was substituted for the legal minimum wage as a point of reference for benefit calculation
40 to 50% of the applicant’s average after-tax income in the last 12 months, depending on the duration of previous contribution payments
9 months with full benefits (27 month with support allowance)
Duration of maternity leave was raised from one to two years (85% of the wage), and either parents may stay at home, provided that the mother is insured
Special compensation for seasonal unemployment in the construction sector, with benefits paid for up to three months in the winter
The remaining 18 months, both unemployment benefits and the vocational integration allowance are reduced to 60% of its initial amount and called support allowance
6 month of employment in the last year (eligibility criteria established).
Contributed for one year (eligibility criteria established).
Expands the SOF's authority to include all the commercial companies resulting from the reorganisation of the regies autonommes.
In August, 1997, the government announced that the Romanian Development Bank would be privatised in early 1998, to be followed (also in 1998) by the Agricultural Bank and Post Bank.
The new Land Law is promulgated. According to the new law, former land owners who owned more than 10 hectares of arable land have the right to claim the restitution of the whole property, up to 50 hectares.
The Prime Minister announces a Cabinet reshuffle including the creation of a new Ministry of Privatisation.
Financing based mainly on general taxation was replaced with a system based on mandatory insurance premiums paid by the employee (6.5%) and the employer (7.0%) as a fixed percentage of income. In addition, pensioners, people receiving social assistance, the unemployed, conscripted soldiers, and people in custody or under arrest are covered.
The agency can also pay favourable loans towards job creation in enterprises with up to 200 employees in industry and in tourism and other services – except trade – on condition that at least 50% of the hired workers are unemployed. These loans involve an interest subsidy, but must be repaid within three years. Some 2600 new jobs were concerned in 1998, with an average loan corresponding to between one and two years’ wages. (OECD 2000: 95)
The Law establishes The National Agency for Employment and Vocational Training (ANOFM). The Agency is the main body responsible for designing and implementing employment programmes.
Requires banks to require guarantees before offering credits.
Abolished the provision that at least one of the managers of the bank should be a Romanian citizen.
Caps the unemployment benefit at 55% of the average wage.
Services rendered and work perform by individuals, and any activity conducted outside of the unit where the individual is a paid employee (that is, self-employed): progressive rates according to income brackets from 5% to 60% changed to 10% to 40%
Tax on income from activities conducted on a free-enterprise basis (+ copyright): Down from a progressive scale of 17% to 43% (with a max. of 38% of taxable yearly income) to 15% to 35%
Tax on income from any kind of rentals: down from a progressive rates according to income brackets from 6% to 45% reduced to a single rate of 15% on taxable yearly income
On wages: Progressive rates according to income brackets ranging from 21% to 45% (changed from 5% to 60%).
Financing is ensured via the Unemployment Fund, which the NAEVT manages on the basis of employer and employee contributions (respectively, 5% and 1% of the wages) as well as grants from the general treasury.
Mandatory health insurance implemented. The mandatory health insurance scheme covers the whole population. Some categories are exempt from insurance contributions: unemployed, persons doing military service or in penitentiaries, persons on sickness or maternity leave, persons entitled to social security benefits, children under 18 years, persons aged 18-26 years enrolled in any form of education, family members of an insured person, persons persecuted by the communist regime or declared heroes in 1989 Revolution and war veterans.
The NAEVT should begin job counselling in enterprises concerned by mass redundancies before the workers lose their jobs
Defines the conditions under which a company can receive state aid (for small and medium enterprises, for creating jobs, for regional development, for big investment projects etc.). The conditions for state aid provide for equal treatment of domestic and foreign investors.
Introduces institutional evaluation of schools and high schools; begins the decentralisation of the educational system by moving schools into the responsibility of local authorities; changes the baccalaureate by adding 3 more disciplines to the exam (total number increases to 7)
Compensation in case of collective dismissals shall be borne by the employer.
Replaces emergency ordinance 9/1997, Measures include compensation for dismissals depending on seniority 6 months' net average wages for workers with 5 years seniority, 9 for those with seniority between 5 and 15, 12 for those with more than 15.
The law presumes that individual contracts are open-ended, but fixed terms are allowed for temporary work; in practice, fixed-term contracts are always allowed if the parties agree to them in writing.
Discrimination is forbidden not only on grounds of sex, nationality, race, religion and political opinions, but also trade union membership (or lack of it).
Consolidates the labour inspectorate and instructs it to register individual contracts, including both those signed according to the Labour Code and civil-law contracts in which workers undertake to perform specific tasks. It periodically checks the legality of the contracts and the payment of social security contributions.
As a rule, an individual labour contract must specify an occupation and job duties, and the worker cannot be forced to perform other tasks. Relatively few other restrictions apply, such as the minimum wage, occupational health and safety regulations and some special provisions for youths under 18 and women.
Liberalising of capital account restrictions. Capital transactions on international trade loans with repayment periods exceeding one year are no longer subject to approval by the Romanian National Bank.
Establishes a National Office for the Prevention and Control of Money Laundering.
Establishes special provisions regarding corporate governance in state-owned companies (SOEs). Requires SOEs to organise selection of new managers.
Creates a new statute for hospitals. Through this law, hospitals become autonomous institutions that sell their services to the local social insurance institutions (Casa de Asigurari de Sanatate - Healthcare Insurance House); hospitals can obtain financing only through the services they perform; the law also creates a "market of healthcare services" on which hospitals compete for contracts.
Amongst others, the law sets the conditions when a labour dispute can be started. These include cases when the employer does not want to sign a collective labour agreement; when the employer does not accept workers' demands or when the employer does not start the annual negotiations on wages and working conditions.
Wage-cost limit on all SOEs and régie autonomes that were unprofitable up to the end of 1998. The firms concerned could not increase their nominal wages unless they implemented substantial job cuts.
Cost-of-living adjustments introduced in 1997 were interrupted (with the result that average real wages fell by approximately 18% from December 1998 to October 1999).
The standard working time is 40 hours, as a rule a 5-day week, with a legal maximum of 48 hours per week.
The minimum annual leave is 18 calendar days.
The National Adult Training Board (Consiliul National pentru Formarea Profesionala a Adultilor, CNFPA) is a tripartite institution providing support for adult training and contributing to the elaboration of strategies and policies in the field. It consists of five members appointed by the Prime Minister, five members appointed by common agreement of the nationally representative employers’ organisations, and five appointed by common agreement of the nationally representative trade union confederations. In order to fulfil its missions, CNFPA is assisted by a technical secretariat staff, coordinated by a general director appointed by the president of CNFPA.
Child birth entitles the mother to 112 days of maternity leave with the right to return afterwards
The control of the State Ownership Fund over the privatisation process was “broken”. That law brought in the notion of “involved public institution”, representing the seller of the state shares, the State Ownership Fund, the economic ministries or the institutions of the local public administration. It was then when there was regulated the privatisation by way of territorial branches which, in this respect, acquired attributions.
The fiscal base was enlarged by taxing incomes from dividends and those obtained by transferring the ownership right on movable values.
The programme included both passive (social assistance) and active measures. Amongst the active measures: professional training and counselling and support and training for starting small and medium enterprises.
Introduces a Commission for the Supervision of Insurance Companies. Removes the restrictions concerning the entry of foreign companies on the Romanian market.
Establishes rules for the functioning of mortgage companies. Correlates the provisions applicable to non-banking financial institutions and those applicable to credit institutions and the general provisions applicable to commercial companies.
A new claim and answer procedure for publicly traded companies was introduced, whereby shareholders holding individually or collectively 10% of the share capital may file a claim with the directors and/or censors regarding any particular issue, operation or transaction. Within fifteen business days, the directors and/or auditors must review the operation in question and issue a report. If unsatisfied by the report, the filling shareholders have the right, at their own expense, to have one or more experts appointed by the court to review the operation in cause and prepare a report. Once this report is delivered to the directors/auditors, they must analyse it and propose appropriate corrective measures.
Changes the calculation of the maternity allowance to include the individual wage of the last 6 months and caps base for the calculation of the allowance at maximum 3 times average gross wage.
Introduces a point system for the calculation of pensions. The number of points that each pensioner accumulates depends on the contribution period and contribution size.
Increases contribution period to 30 years for women and 35 years for men on a gradual basis until 2014
Introduces automatic indexation to wages.
Gradually increases the retirement age to 60 for women and to 65 for men
Decreases the corporate income tax to 25%.
Yearly taxation standard comprising progressive rates according to brackets of taxable yearly income, ranging from 18% to 40%.
Requires that individuals who are capable of working have to do public work for maximum 72 hours per month in order to receive social assistance benefits.
Defines the right to a guaranteed minimum income as a form of social security, based on the principle of social solidarity; establishes the amount of the monthly means-tested income per family depending on the number of family members; and sets the method of calculation for the benefit as the difference between the guaranteed minimum income threshold stipulated by law and the monthly income of a single working member or the respective family.
Steel producer Sidex (27 000 employees, the largest SOE outside the energy sector) was privatised.
6 companies with more than 1000 employees were privatised, compared with the programme target of 12.
National employment strategy for 2002-2003. National plan on investment in training and retraining programmes, programmes for the unemployed and assistance for job seekers. Includes plans to promote active ageing through measures aimed at promoting part-time work.
Measures include the creation of a National Commission for Equal Opportunities.
Also allows co-payment for some services.
In 2002, the law was modified in such way that the NHIF became coordinated by the Ministry of Public Health; the NHIF’s president was nominated by the Prime Minister with the agreement of the Minister of Public Health and he became a member of the government as Secretary of State. In this way, the degree of autonomy stipulated by the initial bill was reduced further.
The government implemented a minimum wage increase of 43%.
Unique level of unemployment indemnity was established at 50 % in the case of graduates unable to secure employment
Unemployment benefit becomes a fixed amount (independent of previous wage level)
Unique level of unemployment indemnity was established for unemployed persons at 75 % of the country’s gross minimum wage
Shifts the calculation of unemployment benefits form the last 3 wages to the average gross wage.
Decreases the maximum period of receiving unemployment benefits to maximum 12 months
Establishes "The National Committee for Promoting Employment" (transposing the EU Directive 97/16/CE). Amongst others, the Committee is responsible for syncing national legislation with EU laws.
Through Law 333/2002, the Parliament approved amendments to Law 19/2002 on the continuation of the reform and consolidation of the public pension pillar, establishing transparent and financially viable indexation rules.
Romania successfully privatised 16 out of 20 SOEs (e.g. Tractorul, Alprom, Romvag) carried forward from the Private Sector Adjustment Loan (PSAL I) period under PSAL II. The remaining four were under liquidation.
The core condition for the second tranche release was the privatisation of two large SOEs in the aluminium industry, ALRO and ALPROM. These were included in the case-by-case privatisation category that began under PSAL I. ALRO was sold on April 30, 2002 to a consortium that included Conef, Marco Acquisition and Marco International, and ALPROM was sold to the same consortium on December 19, 2002.
The law shortens the minimum duration of changing the structure of commercial companies in which the state is a majority shareholder, and restricts minority shareholder’s rights to oppose changes. The law introduces a “special administration” for companies that are in the process of privatisation. The law sanctions the sale of unattractive companies for a symbolic price (1 Euro), when the investor commits to a given volume of investments or to a certain number of job creations.
Establishes post-privatisation rules. Buyers in privatisation contracts and/or their legal representatives are under the obligation to inform AVAS on the fulfilment of each and any of their contractual obligations, by presenting a report within maximum 30 days as of the obligation maturity date. The fulfilment of the investments obligations is ascertained through a certificate issued by the company’s internal auditors or by a specialised audit firm. Depending on the actual circumstances, AVAS may negotiate and conclude addenda to the share sale purchase contract, in order to agree with the purchaser on a rescheduling of the assumed obligations, extension of the deadlines for the investment obligation completion, amendment of their structure etc.
Sets new contribution rates (7% of employees’ gross wage from employers).
Employees under the age of 25 years whose employer has not provided them with any form of vocational training over two consecutive years are entitled to paid leave for training purposes of up to 10 working days. The Labour Code also regulates special types of vocational training contracts initiated by the employer, which are for professional qualification, professional adaptation and apprenticeship at the workplace.
CNFPA's competencies were very much enlarged, and the law specifies 13 responsibilities, compared with only three under the old regulations. According to the new law, CNFPA has an advisory role, but also coordinates and controls at national level activities such as: the authorisation of training providers through its authorisation committees set up at the county level; the elaboration of occupational standards; and the evaluation and certification of occupational competencies achieved by the participants in vocational training programmes. In fulfilling CNFPA's mission, a key element is the creation of authorisation committees at the county level, which are to be shaped in a tripartite manner to include representatives of trade unions, employers’ organisations and local administration.
Modifies the State Aid Law so that the Competition Council has to be notified of state aid. The Competition Council administrates the implementation of the acquis in the field of state aid.
Extends the responsibilities of the Competition Council. The responsibilities of the institution now include: state aid inventorying, monitoring and reporting activity, the working out of annual reports on state aids granted in Romania. Merges the Competition Office with the Competition Council.
Extends mandatory education from 8 to 10 years.
Collective redundancies may be made only after previous consultations with trade unions or employees’ representatives. The employer is required to give notice of the workforce reduction at least 45 days in advance and employees may propose measures to avoid or reduce the redundancies, within a period of 20 days after notification.
Regulating temporary agency work and employment on fixed-term contracts
Special types of employment contract are regulated by the new Labour Code, including temporary agency work, part-time employment, employment on fixed-term contracts and home-based work, while employment performed under a 'civil contract' (as a way of avoiding social security contributions) has been abolished.
As a measure to fight illegal work, the Labour Code forbids employment on probation for a period of more than six months. This kind of employment can be renewed only once and no more than three consecutive probationary employment contracts can be used for the same job.
Employees are entitled to a minimum of 20 days' annual paid leave, in addition to the seven days of statutory holiday.
The new standard form of employment contract allows for individual contracts to include special clauses, such as non-competition clauses (obliging employees to refrain from carrying out competing activities against the employer), 'mobility clauses' (entitling employees to extra benefits in respect of employment requiring them to move from one place to another) and confidentiality clauses (whereby parties agree not to disclose information acquired during the course of employment)
In the event of temporary cessations of a company's activity, employees are entitled to pay of at least 75% of their basic wage.
Organises hospitals by similar principles with those of private companies: they are administered by a manager (CEO) with management experience, working on a 4 year contract, the CEO is responsible to a board.
Patients have the right to be informed of the available health services, the health care providers’ qualifications and the regulations regarding the functioning of the medical units; patients should be also informed of their health status in a polite, non-technical manner. Patients have the right to health care, including palliative care; the services should be provided by accredited personnel or medical units, as close as possible to the patient’s environment. Rationing of scarce resources should be done on medical criteria. When pregnancy puts the woman’s life in danger, the woman’s right to life prevails.
Granted unionisation rights not only to employees, but also to civil servants, the self-employed, independent contractors, farmers, and apprentices.
The normal working week is set at 40 hours and weekly working time should not exceed 48 hours on average. Overtime can be remunerated by time off or a pay supplement, which cannot be below 75% of basic pay.
Employees’ information and consultation rights have been greatly increased. Thus, trade unions or elected employees’ representatives are to be consulted whenever work quotas are to be established or modified and employers should periodically inform their employees about the company’s economic and financial position.
As already laid down by collective agreement, the Labour Code stipulates that in all companies with more than 50 employees, a workplace health and safety committee must be established. Employers are obliged to ensure the access of employees to specialised medical care.
The CES examines the economic and social situation of the country and make recommendations to the government and parliament in six key economic and social policies. Six permanent commissions are constituted. The CES is authorised to issue opinions on draft programmes and strategies not embodied in laws, prior to their adoption. It is mandatory to request advisory opinion of CES. The president of the CES is appointed by parliament for a term of four years, on a proposal from the plenary session of the CES, adopted by a majority of three-quarters of all members. A novelty is that each of the three parties fills the position of president and vice-president in rotation.
An emergency ordinance, approved in March, provided resources for mitigating the social impact of the restructuring of 22 large companies.
Government decision: 25% sold to EBRD and IFC (International Finance Corporation) + 2 shares, and 8 % to BCR employees.
The social security contribution levy payable by employers for 2004 was reduced by 2.5 percentage points, and the standard contribution is thus 22% of pay (down from 24.5%). Also, from January 2004 the contribution to the unemployment fund payable by the employer has been reduced from 3.5% of pay to 3%.
The value added tax (VAT) has been set at two levels – a standard rate of 19% and a reduced rate of 9% to be applied only to a few items (medicines, books and newspapers, and tourist accommodation). VAT exemptions are also stipulated, mainly relating to health, education and social protection services.
Introduces a new measure in article 73 that stipulates that individuals who receive employment benefits and find a job during the period of which they receive the benefits, are entitled to receive 30 % of their employment benefit for the remaining period of which they were initially entitled to receive it.
Harmonisation of competition law with EU legislation. State-owned enterprises are now treated the same way as other companies.
Organises the higher education according to the Bologna system (introduced a system of three ‘cycles’ (undergraduate 3-4 years, Master 2-3 years, PhD 3 years).
Establishes capital requirements for securities companies.
Strengthens state supervision of securities market. Harmonises Romanian legislation with EU directives on capital markets.
Provides the conditions and procedures for setting up a regulated market, including provisions with respect to market operators. Thus, a market operator must be a joint stock company with a minimum share capital of EUR 5 million in RON equivalent. None of the shareholders of this company can directly or indirectly have more than 5% of the total voting rights. Both the market operators and the regulated market must be authorised by the ASF. Classifies collective investment undertakings in two main categories: (i) Undertakings for collective investments in transferable securities (“UCITS”) and (ii) Other types of collective investment undertakings.
States that the value of a pension point cannot be smaller than 30% or higher than 50% of the gross average wage.
Introduces optional occupational pensions. However bans participation in occupational pension funds of employers with tax debts.
The private pension fund is based on individual accounts, conceived as shares of individual social security contributions, which are collected and invested in the interests of participants. This particular contribution is compulsory for employees of up to 35 years of age and voluntary for all other workers under the age of 45 years. 2% contribution rate.
The largest oil company, PETROM, was sold to OMV-Austria.
APAPS Privatisations and Liquidations: In total 54 SOEs were privatised; two SOEs are under privatisation; for one enterprise a stake of shares was ceded to SIF Transylvania, a private investment fund; and four SOEs are under voluntary/judicial liquidation. In addition, APAPS sold 51 large enterprises, far surpassing the target of 10 SOEs; 215 small and medium enterprises with a majority state-owned stake compared with the target of 300 enterprises; and 451 enterprises with state-owned residual shares compared with the target of 100 enterprises. The specific benefits for the Government from the privatisations included: (i) sale revenues amounting about EUR 985 million; (ii) the sale-purchase agreements provide the obligations of the investors for technological investments of about EUR 580 million; (iii) environmental investments of about EUR 170 million; and (iv) working capital of about EUR 160 million.
Banat and Dobrogea sold to ENEL (Italy).
The privatisation process was launched with Cabinet approval in April 2004.
Creates the Authority for State Assets Recovery (”AVAS”). AVAS has as main responsibilities in the field of privatisation: (i) the implementation of the Government’s strategy regarding the privatisation process finalisation in the commercial companies in its portfolio; (ii) exercising the state`s rights as shareholder in companies in its portfolio; (iii) overseeing implementation of the privatisation agreements (the so-called “post privatisation control powers”).
Setting the flat tax rate of 16%, being exempted the investment income, gambling and real estate transfer.
Employers that hire school leavers on open-ended employment contracts are exempt for a period of 12 months from the payment of the unemployment insurance contribution for these employees (a new provision). Moreover, they receive an amount equal to the national minimum gross wage in force for each school leaver hired, on condition that they are retained for a minimum of two years. Further, employers that hire unemployed people and retain them for at least six months receive a discount on the 2.5% contribution due to the unemployment fund.
Employers hiring school leavers over the age of 16 for a period of more than 12 months may receive an indemnity equal to the national minimum gross wage in force at the date of employment.
PES has to offer training programmes aimed at keeping young people in employment.
Establishes different professional counselling programmes and training programmes.
It is mandatory for employers to inform public employment services of collective redundancies (the previous law used the term 'restructuring of activity and change in the number and structure of personnel'), at least 30 calendar days before redundancy decisions are issued.
Mentions that young workers should not be allowed to stay on unemployment for more than 6 months
The new regulations also stipulate free-of-charge access of unemployed people to certain training courses, plus free transport or covering of travel expenses for unemployed people attending training courses.
The new provisions oblige employers to finance and ensure the participation of all employees in training and development programmes, at least once every two years in the case of companies with a minimum of 21 employees and once every three years in the case of companies with fewer than 21 employees. Companies with over 20 employees must draw up and apply annual trainings and development programmes, which are annexed to the company collective agreement (in the former Labour Code this provision was mandatory for all companies regardless of the number of employees). Another novelty is the fact that both the employer and employee may take the initiative in terms of training and development programmes.
Introduces performance criteria for schools. Creates the Romanian Agency for the Promotion of Quality in the Higher Education System.
In defining collective redundancies, the minimum number of redundant employees increases from five to 10 in the case of employers with 20 to 100 employees. An employer is no longer compelled to present a programme of social security and training and development measures before resorting to collective redundancies.
The employer may not fill vacancies resulting from redundancies for a period of nine months (compared with the 12 months stipulated in the former Labour Code).
Gives more powers to the employers to fire workers on disciplinary grounds.
The new regulations extend the maximum duration of a fixed-term employment contract from 18 to 24 months. There can be no more than three successive fixed-term employment contracts within this period, after which the employer must fill the vacancy with an indefinite-duration employment contract. In other words, the content of the contract may be modified three times in the course of 24 months, compared with a single contract with an 18-month validity stipulated by the previous Code.
After the trial period has ended, both the employer and the employee may terminate the individual employment contract by giving written notice.
Further liberalisation of capital account restrictions. Payments, receipts, transfers and any other similar operations between residents are realised only in the national currency (leu), except those provided in Annex. Categories of residents that may perform foreign currency operations.
In 2005 the initial intended autonomy of the board was re-established by a government ordinance, which eventually became law; this took the NHIF out of Ministry of Public Health coordination. However, elections were still not achieved.
Transposes the EU Directive 94/45/CE on the creation of EU Works Councils. Limits the introduction of EU works councils to those plants that have at least 1000 employees, operate in at least two EU countries and have in each of them at least 150 employees.
To improve the flexibility of the legal length of working time and make it easier to resort to overtime, the reference period for calculating the maximum number of working hours per week (48 hours) – beyond which limit overtime is officially acknowledged – has been extended from three weeks to one month and in the case of certain sectors may even reach 12 months. Over this limit, an employer may request overtime hours from employees only by invoking absolute necessity or emergency situations.
Trade unions or employee representatives may now propose measures to be taken by employers in order to avoid redundancies or to reduce the number of redundant employees within a shorter period of time from the date of notification receipt (from 20 down to 15 days) and the employer must respond within five days (compared with 10 days, as previously stipulated). The local employment inspectorate may order a delay of no more than 10 days (compared with the 15 days as previously stipulated) of the date of issuing the decision.
Written notification of redundancy decisions to trade unions is shortened from 45 to 30 days.
Introduces a flat maternity benefit amounting to 800 Romanian Lei.
The monthly unemployment benefit now amounts to 75% of the national minimum gross wage in force at the date of entitlement (previously the phrase 'in force' was not included), for people with a contribution history of at least one year. Under the previous regulations, regardless of the period of contribution, unemployed people were granted a monthly, fixed, tax-free amount equal to 75% of the national minimum gross wage. According to the new regulations, the amount of the unemployment benefit differs depending on the length of contribution, by adding certain percentages to the national monthly average gross wage earned over the past 12 months (referring to the monthly income stipulated in the unemployment insurance contract): 3% in the case of a period of a contribution history of at least three years; 5% for five years’ contributions; 7% for 10 years’ contributions; and 10% for a contribution period of 20 or more years.
Unemployed people who start full-time employment before the expiry date of the unemployment benefit period may receive 30% of the monthly indemnity for the remainder of their initially set unemployment benefit period.
The unemployment benefit ceases when the recipient earns from authorised activities a monthly income higher than the national minimum gross wage (and not at the moment of starting a new job, as stipulated in the previous law).
Unemployment benefits are now granted for differentiated lengths of time depending on the period of contribution: for six months if the unemployed person has paid unemployment dues for at least one year (compared with a mandatory five-year contribution period previously); and for nine months for people who have paid unemployment contributions for at least five years (compared with the five to 10 years stipulated in previous regulations).
School leavers entitled to unemployment benefits who start work before the expiry date of the unemployment benefit period will continue to receive the indemnity for the remainder of the initially set unemployment benefit period on condition that they remain employed for a minimum of 12 months from the date of employment.
The law creates the Commission for the Surveillance of Private Pension System. The Commission became functional before the second pillar was actually active and was responsible for improving the legislation regulating the private pensions.
Moldova and Oltenia sold to E. On (Germany) and CEZ (Czech Republic), respectively.
The contribution of employers to the unemployment insurance fund is now set at 2.5% of the mandatory 'gross wage fund' for insured employees (down from the 5% stipulated by previous regulations), while individual insured people now pay a monthly contribution of 3.5% of the monthly income declared in the unemployment insurance contract (compared with the 6% stipulated by previous regulations).
The law specifies that an apprenticeship cannot last longer than 3 years.
Measures include training and job counselling for disabled persons.
Changes procedures on state aid. Beginning with the accession date, the Competition Council has no longer the competence to review, authorise or prohibit, monitor, or order the recovery of any State aid previously or subsequently granted. The European Commission has exclusive jurisdiction to deal with State aid matters throughout the European Union.
The new agreement also stipulates that employers planning collective redundancies are obliged to consult with the trade union or employee representatives in advance, in order to reach an understanding; the proportion of time in advance for this consultation will depend on the number of employees in the company.
Collective dismissals are allowed provided that previous discussions were held with the trade union of the employees’ representatives in order to reach an agreement, in accordance with the law, at least on the following: the actions and means to avoid collective dismissals or the diminution in the number of workers to be dismissed; the mitigation of dismissal consequences by social measures for, among others, supporting the dismissed employees to undergo retraining or professional re-conversion.
Prohibition of employees' dismissal based on criteria such as gender, race, sexual orientation, race, or exercise legal strikes, trade union membership, medical condition, maternity leave, etc…
A unique aspect of the new collective agreement is the compulsory investigation of employees involved in disciplinary cases prior to the application of any kind of sanction, as well as in the case of dismissals on grounds of professional incompetence. Employers are required to set up a commission to this effect, which must include a non-voting trade union representative.
1) Eliminating the restriction of working time to a minimum of two hours per day and 10 hours per week as a condition for concluding the labour contract; 2) Defining a part-time employee as a person whose average weekly working time is less than that of a full-time employee.
The severance pay granted on termination of an individual employment contract, for reasons through no fault of the employee, is to be increased to one monthly wage, compared with 50% of the monthly wage as stipulated in the previous agreement
The indemnity granted to employees who have officially reached retirement age will now be equal to at least two basic monthly wages before retirement, compared with just one monthly wage as stipulated in the previous agreement; in the event of the death of an employee, the indemnity granted to the family is to be increased from one to at least two monthly average wages at company level; holiday bonuses are to be calculated on the basis of an average of three previous monthly wages, compared with just one previous monthly wage as provided for under the former collective agreement.
Allows entry of foreign financial institutions, others than the credit institutions operating in other EU member states, only when these institutions are part of a financial group are 90% controlled by a credit institution.
Explicitly prohibits institutions, other than banks, to gather deposits from individuals.
Establishes rules for the supervision of financial conglomerates. States that financial conglomerates will be supervised by an assigned coordinator.
Reallocation of budgets within the health care system along with specific measures to increase utilisation of primary, ambulatory and home care services, such as better payment for family doctors and for specialists working in ambulatory clinics, in order to encourage an increase in their activity; and development of special home care programmes for the elderly and patients from isolated areas, in order to prevent their admittance to hospitals.
Financial sustainability by increasing the financial autonomy of the NHIF, increasing financial control and building managerial capacity at local level.
The Health Reform Law (95/2006) offers the legislative framework for private insurance companies, which are permitted to offer two types of voluntary health insurance: supplementary and complementary.
Enhancing the solidarity principle by extending the contribution payment to certain categories previously exempted (e.g. pensioners and Romanians temporarily working abroad), because in 2005 approximately 5 million people were paying for 22 million beneficiaries of the health insurance system
According to Title VII of the Hospitals of the Health Reform Law (95/2006), hospitals are organised on the basis of geographical criteria into: • regional hospitals: assuring services for the most severe cases that cannot be solved at district or local level, in defined catchment areas; • district hospitals: located in the district’s biggest town, having a complex structure providing almost all medical and surgical specialties and an emergency care unit ensuring services for the problems that cannot be solved at local level within the district.
The Health Reform Law (95/2006) established that the Ministry of Public Health and the NHIH are responsible for establishing quality criteria for care provided to insured persons. All health care providers who have signed contracts with health insurance funds must adhere to these criteria.
Requires employers to inform employees on financial situation of the company, the structure of the labour force, and any decision that may lead to significant changes in work organisation.
The law regulates the protection of employees in case of transfer of the company to other employer. The law requires the new employer to respect the conditions of the collective labour agreement valid when the transfer took place.
The government has increased the number of CES members from 27 to 45 representatives. In the former council structure, trade unions, employer organisations and the government had nine members each; the new provisions oblige these partners to appoint 15 members each to the council. A plenary session now requires the presence of 24 members, with each side to be represented by at least eight representatives. In the new context, the government announced its intention to renounce some of its seats in the CES, which are to be gradually reappointed to members of civil society organisations.
The national minimum gross wage for 2007 has been set at RON 440 (approximately €130 as at 26 February 2007), compared with RON 370 (about €110) as established in the previous addendum.
Minimum pay differentials related to the minimum wage are to be increased on the basis of employees’ educational background: the pay differential of employees who are secondary school graduates is to be increased from 1.1 to 1.2; of post secondary school graduates from 1.15 to 1.25; of short-term higher education graduates from 1.4 to 1.5; and of long-term higher education graduates from 1.5 to 2.
Adequate overtime pay, based on an increment of 100% of the basic wage, is to be provided for regardless of the number of additional working hours. According to the previous agreement, the increment was granted only for a maximum of 120 additional hours a year. This particular amendment was proposed by the employers.
In every company with at least 50 employees, it is now obligatory to set up a ‘health and safety at work committee’, made up of an equal number of employee or trade union representatives and employer representatives; the employer and employees must make a joint effort to transpose management standards in an effort to control stress at work; they must also establish a set of measures aimed at boosting employees’ motivation; it is compulsory to include in collective agreements the practice of regularly informing employees with respect to any changes occurring, or soon to be made, in terms of working conditions; from now on, cases of work relations’ malpractice must be investigated, and health and safety committees must implement punitive measures accordingly.
Financial support for contribution of non-union member employees is increased from 0.3% to 0.6% of the monthly wage
Extends the list of hazardous working conditions and mentions that workers with 25 years of contributions will be paid a full pension benefit.
The law updates the legislation on occupational pensions. Diversifies the financial instruments in which savings can be invested. State bonds investments are limited to 70% of capital. First contributions to the third pillar (optional ) were collected in May 2007.
For each pupil or student employed during their scholar holidays, the employers receive 50% of the national minimum gross wage. The maximum period for granting this financial incentive to employers is 60 working days for 1 year.
The provisions of the new ordinance apply to workers whose individual employment contracts are concluded at least 24 months before the date of the planned collective redundancy.
Redundant workers are entitled to the following protection measures: a month’s wage equivalent to the national average net wage as it stands in January of the redundancy year; unemployment benefit according to the legislation in force; a monthly compensation income, calculated as the difference between the amount of unemployment benefit and the individual average net wage in the three months prior to redundancy, which must not exceed the national average net wage.
If workers who become unemployed as a result of collective redundancies find employment in the course of the period when they are entitled to the above mentioned protection measures, they may continue to receive up to half of the compensation income; however, in the case of retirement, the payment ceases altogether.
This income is granted for a period of 20-24 months, depending on employees’ length of service in the job: 20 months for up to 15 years of service, 22 months for 15–25 years of service, and 24 months for over 25 years of service. After the expiry of the unemployment benefit period, the compensation income is granted in full with no deductions.
Extends mandatory contributions to all employed under age 35. Introduces a gradual increase in the contribution rate from an initial 2 % to 6 %.
Reducing the employee's contribution for unemployment by 0.5 percentage points as of January 2008. For the non-employed persons insured based on an insurance contract for unemployment, the contribution was diminished with 1.75 percentage points as of January 2008 and will be further diminished by 0.5 percentage points as of December 2008.
1) Reducing employer's contribution to social insurance by 1.5 percentage points as of December 2008; 2) reducing employer's contribution for unemployment by 1 percentage point beginning with January 2008 and further diminishing it by 0.5 percentage points as of December 2008.
Reducing the employee's contribution for health insurance by 1 percentage point beginning with July 2008
The scheme involves employment subsidies up to 200 000 euros for companies that hire registered unemployed.
Establishes a state subsidy for deposits (maximum 25 % of the value of the deposit and maximum 250 euro annually).
The agreement, which is a first in the country’s industrial relations, provides for the minimum wage to rise from 31% of the national average wage at present to 50% in 2014.
Severing the current link between the national minimum wage and the level of a number of social security benefits, allowances and contributions. A new inflation-linked ‘reference indicator’ would be used instead. The objective is to reduce the effect of the planned minimum wage increases [as set out by the tripartite agreement on minimum wages 2008-2014] on public expenditure.
The reductions were short lived as the new government in 2009 January returned to the old higher levels.
Employment subsidies for 12 months, providing half of the wages for new employees among certain vulnerable groups: those unemployed for more than six months, single earners, persons over the age of 50. Employers hiring those unemployed for more than two years or disabled will get a subsidy of 75% of the salary for 24 months. The employer can also ask for reimbursement of expenses necessary to adapt work areas and providing necessary equipment while employing the disabled.
Temporary unemployment is made possible. Temporary measure but in 2010 February extended into 2010.
Gives more powers to the National Bank to supervise non-bank financial institutions; improves protection for consumers.
The new law provides that, by the end of 2009, the management of public institutions and public authorities must reduce personnel expenses by a monthly average of 15.5% through any of the following means: assignment of compulsory unpaid leave of up to 10 business days to each member of personnel; reduction of working hours; a combination of the former two or by any other means producing a similar effect.
The law provides for a period of transition until 2015 and guarantees that no public employee may be paid below their December 2009 salary. The principles of the unitary pay system from public funds are, in essence, the following: the ratio between the national minimum wage and the maximum salary in the public sector shall be 1:15 rather than the existing 1:70, according to the trade unions, or even the 1:29 acknowledged by the government; pay rises shall be based on macroeconomic and social indicators; the base salary shall include the generally applicable fringe benefits and shall account for the main share of wage earnings; the transition from the current pay grids to the new pay grid shall be done in such a way as to avoid any reduction in the present gross salary; the transition to the new pay system shall be made by differentiated salary increases over the next five years, with a zero increment for high salaries and an accelerated increase for low wages.
Initially it was expected that 33,000 public jobs would be lost, but finally some of these were saved through increased flexibility in working times in schools
Abolishing fringe benefits like meal coupons, holiday tickets and gift vouchers for public employees, and reducing the number of publicly funded jobs in primary and secondary schools
Introduces minimum guaranteed pension. The amount of the minimum guaranteed pension is 350 RON.
Retirees earning salaries paid from public funds may enjoy both a salary and pension, provided that the latter is below the national average gross salary – that is, RON 1, 680 (about €405 as at 22 January 2010) – which is used as the basis for calculating the social security budget for 2010.
Increased financial support to employers offering trainings. For general training (e.g. becoming a painter) a subsidy of 60% of the cost will be granted for large enterprises, 70% for medium-sized enterprises, 80% for small enterprises. For specific training (e.g. using a specific product), the subsidy will be 25% of the cost for large enterprises, 35% for medium and 45% for small businesses.
Within the broader reform of social assistance and the objective of merging different programmes into a single social benefit based on income-testing, the administration of GMI is moved from municipalities to National Agency for Social Benefits, with funding from the State budget. Job-search requirements are established for continued receipt of benefits. Also, contributions are made from the State budget to grant Health insurance to persons in families receiving social aid.
Restricts eligibility criteria for obtaining unemployment benefits. Also makes participation in training and retraining programmes mandatory for recipients of unemployment benefits.
Employers who employ registered unemployed for at least 3 months and who keep them in work for at least 12 months are exempted from paying social security contribution rates for 6 months.
Increases sanctions for anticompetitive behaviour. Introduces a new clause for lower fines in instances when a company recognises its anticompetitive behaviour.
Offers guidelines for the implementation of Competition Law. All economic concentrations taking place on the territory of Romania are subject to the control and authorisation of the Competition Council, as well as those taking place outside this territory, but having effects on the Romanian market, provided they meet the thresholds laid down in the Competition Law. Consequently, the international transactions (made without the involvement of Romanian entities) are also subject to the authorisation of the Competition Council, if the involved parties achieve a certain turnover in Romania.
During the child-rearing leave or during the time when the parent receives the insertion incentive, the employer shall not dismiss the parent employee. As an exception, dismissal shall be allowed for reasons that are related to judicial reorganisation of bankruptcy of the employer, under terms and conditions stipulated by laws. Failure to comply with these interdictions to dismiss shall be considered offences and shall be punished with fines from 1.000 lei to 2.500 lei.
A 15% reduction in unemployment benefits, severance pay payable under collective dismissals schemes and on child benefit (until 31 December 2010).
The government then issued Act 118/29 June 2010, with effect from 2 July 2010. This sets out: a 25% reduction of the gross salaries of public workers, including fringe benefits and bonuses; a 25% reduction on other entitlements due to teachers, and to defence, law enforcement and national security personnel, as well as on the monthly food allowances, subsidies for rent and other benefits granted to scientists and artists; abolition of holiday tickets, compensations and allowances for retirement, or decommissioning from active military service. All these provisions shall apply until 31 December 2010.
Reintroduces the wage related maternity leave – 75% of average net income of last 12 months – not lower than 600 lei and not higher than 3400 lei. If the parent returns to work after a year, the parental allowance will be paid for another year and be 500 lei.
This new scheme merges and replaces 2 former schemes: "Complementary Family Allowance", and "Single Parent Allowance". The new allowance is based on means-testing and is paid to families with children if the monthly net family income (divided by the number of family members) is lower than a certain threshold. The level of the benefit is more generous, but stricter means-testing implies better targeting of the poorest (first 3 income deciles).
The minimum eligibility condition of 12 full months of contribution during the 24 months preceding the application for benefit has been tightened, calling now for a minimum of 12 months in between two successive applications and thus removing the possibility to repeat claims in the span of 24 months through the cumulative use of contribution periods used by the same beneficiary for an earlier benefit claim.
Cuts pensions by 15 % (measure declared unconstitutional later).
The law provides that, by 2020, the value of a pension point should be updated annually by 100% of the inflation rate, and by 50% of the real growth of the gross average salary of the preceding year.
To qualify for an age-limit pension, the full length of social security contribution required by the new legislation will be increased gradually from 28 years in January 2011 to 35 years by January 2030 for women and from 33 years in January 2011 to 35 years by January 2015 for men. The minimum length of social insurance contribution will be extended gradually from 13 years in January 2011 to 15 years by 2015, for both men and women.
The new legislation toughens the eligibility criteria for early retirement, by raising the penalty rate to 0.75% for each month of anticipation. Anticipation may not exceed 60 months (5 years) in advance of the standard age, and the maximum penalty will be 45%, from 30% previously. Early retirees are not allowed to cumulate anticipated pension and salary earnings.
It is planned that, during the period 2021-2030, the indexation should cover 100% of the inflation rate, and 45% of the real growth of the national gross average salary. After 2030, the adjustment will be made only to cover 100% the inflation rate.
The retirement age for the personnel in the national defence, public order, and national security sectors will be gradually increased from 55 years in 2011 to 60 years by 2030, for both men and women.
The Government plans the gradual increase of the retirement age up to 60 years by the year 2015, and up to 65 years by the year 2030 for women, and the gradual increase of the retirement age up to 65 years by the year 2015 for men.
Recalculation of pensions regulated by special laws (military, police, and national security officials) and integration of these schemes into the public pension system.
A 16% tax has been levied on meal tickets, nursery and holiday vouchers, and on severance pay to those made redundant under collective redundancy schemes. For 2010 no such vouchers are accorded to public employees, so the new tax rule is only applicable to private sector employees. Over two million Romanian employees currently enjoy the right to have meal vouchers, nursery vouchers and holiday vouchers.
All non-salaried revenues from professional activities are taxed at 16%. These revenues also have deductions (at a rate of about 16.5%) made for individual social security contributions to pension, health and unemployment funds. The basis for calculating this is the aggregate amount of five gross average national salaries. The taxation base will result from the gross revenues, minus 20% as deductible expenses. (Prior to these new regulations, the copyright tax was 10%, the deductible share was 40%, and copyright holders did not pay social security contributions).
The income tax rate for all non-salaried revenues – affecting freelancers, e.g. journalists – increases from 10% to 16%. The tax base will be counted from the gross revenues, minus 20% as deductible expenses (including e.g. the freshly introduced social security contributions). Previously the deductible share was 40%.
Social security contribution introduced for freelancers, such as journalists, at a rate of about 16.5%.
The government will undertake to pay the social insurance contributions due by employers and employees for a maximum period of three months. The measure will be granted provided that the employees are paid 75% of their basic salary, which shall be exempt from income tax.
Early 2011 the government removed the distance limit of "50 km from the domicile of the unemployed person" which entitled the beneficiary of unemployment benefit to a justified refusal of an employment offer. An individual can be now stripped of her unemployment benefit if she refuses an employment offer even further than 50 km from their domicile. However, an incentive is provided, with the unemployed accepting jobs outside their locality being entitled to a bonus. Still, even at its highest, when the beneficiary accepts a change in domicile, it only amounts to RON 3500 (around EUR 799), i.e. not even double the national average gross salary.
Measures include: conditioning of social assistance benefit on tax payments (eligibility is conditioned on the payment of taxes to the local authority), fiscal facilities for companies who employ individuals on social assistance, introducing a maximum on the social assistance benefits.
Decreases sanctions for anticompetitive behaviour. Undertakings having a market share in excess of 40% are now presumed dominant. Prior to Law 149/2011, the economic concentrations cleared by the Council pursuant to its merger control regulation required the payment of a merger clearance fee amounting to 0.04% of the total turnover of the undertakings concerned during the previous financial year, that amount was capped to EUR 100,000. Law 149/2011 lowered the ceiling to only EUR 25,000 but introduced a minimum threshold of EUR 10,000 for the merger clearance fee.
The ban on employers hiring new people for the positions previously held by the dismissed staff is reduced from 9 months to 45 days following the collective dismissal.
Setting work performance as the first criterion for the selection of staff to be made redundant (opposed to seniority, social criteria).
Maximum duration of fixed-term contracts increased from 24 to 36 months.
Removal of restrictions on the use of temporary agency work, in line with the EU Directive 2008/104/EC.
The set of objective reasons allowing for the use of fixed-term contracts is expanded, making it easier to hire workers with fixed-term contracts
The probationary period for permanent contracts was extended, from 30 to 90 days for workers and from 90 to 120 days for management staff.
All labour contracts must be in written form.
Introduction of a criminal liability for undeclared work, along with a string of other sanctions. The new rules increased the fines for employers five-fold to between RON 10,000 and RON 20,000 (about €2,350 to €4,700 as of 10 August 2011) for each person that has been illegally hired. The illegally hired people also became liable, for fines of RON 500 to RON 1,000 (€117 to €235). If an employer hires more than five persons illegally, he is liable for a jail sentence of one to two years. The courts may also exclude the company from public procurement, order the repayment of public subsidies, or even close the business.
A law to improve the corporate governance of SOEs was approved in November 2011. The law reinforces OECD good corporate governance principles for SOEs, strengthens rights of minority shareholders, establishes a clearer distinction between the role of line ministries and management, requires the government to hire professional board members for SOEs, and ensures adequate audit and reporting. In addition, two divisions have been established in the Ministry of Public Finance to monitor the financial and restructuring performance of central government SOEs.
Changes selection procedures for managers of SOEs. Introduces strict selection criteria based on competencies that can be proven in open competition (previously managers could be simply appointed).
Under the previous law, 15 people working in the same economic branch or profession, albeit in different companies, were required to set up a trade union. Now, it takes 15 employees in the same company to establish a trade union.
The minimum membership ratio of 7% of all employees in the sector continues to apply
While previous agreements governing an economic branch were applicable to all workers, the new legislation stipulates that collective agreements bargained and entered into at sector level will apply only to companies that are members of employer organisations that are signatories to the agreement.
From now on, if a trade union is to be representative and allowed to negotiate a single-employer collective agreement, then at least half plus one of the company’s workers have to be affiliated to it (compared to one third under the old law).
The new Code prescribes that salary rights for the public sector are established by law, and therefore cannot be subject to bargaining nor be altered by collective labour contracts.
At company level, the employer was and continues to have the right to be representative.
It can only be enforced at sector level if more than 50% of all employees in the sector work for companies that are members of the signatory employer organisations. If not, the agreement can still be registered but will be effective only at a group of units level.
The new legislation no longer provides a compulsory agenda for negotiations, or the frequency with which the parties should meet for renegotiation; it only sets out the minimum (12 months) and maximum (24 months) duration of a collective agreement (previously: at least 12 months, but as a rule national unique collective agreements was made for a period of four years, annual renegotiation of the minimal wage was possible).
The new legislation has abolished the national unique collective agreement as a reference point for collective bargaining at all levels. Collective agreements, which could previously be negotiated for each branch of the national economy (there are 32 branches listed in an appendix to the national unique collective agreement), have been replaced by sectorial collective agreements.
Employer organisations are recognised as representative at sector level only if they account for at least 10% of all employees in that sector, not including workers in the public sector (previously, the condition was the same, but it included employees in the public sector)
The new framework law establishes the general principles and rules governing the provision of social assistance benefits and social services. The levels of social benefits are set in relation to the "social reference indicator" (SRI) by applying the social insertion index (SII). SRI is an amount expressed in lei. SII is determined in relation to the family type and to the effect of the social benefit.
The new rules provide that the employer is obliged to conduct an evaluation of the apprentice’s theoretical and practical training at an evaluation centre. The duration of the apprenticeship contract must be a minimum of 12, 24 or 36 months, depending on the qualification for which the apprentice is training. The new regulations also contain a new model for the apprenticeship contract, including clearly defined mutual obligations of the parties.
Regulated electricity and gas prices for non-households. They will be fully liberalised by January 2014 and January 2015, respectively.
Regulated electricity and gas prices for households will be liberalised by January 2018 and January 2019, respectively
As of 12 July 2012 parties and/or the interested party must prove that they took part in the briefing about the advantages of mediation, the implementation and termination of individual labour contracts (before turning to courts).
Creates the National Authority for Financial Supervision. Besides being responsible for the supervision of banks and non-bank financial institutions, the Authority has supervisory responsibilities in private pension funds.
Restoring salaries of public employees, both civilian and military, to their levels previous to their 25% reduction in mid 2010, as part of the harsh austerity measures promoted by the Romanian government at that time.
Increasing the amount of the benefit granted for parents taking the child care leave up to two years after child birth (applied also for adoptions or in case of entrusting of a new born child) from 75% of the average for the last 12 months of work prior to birth, to 85% of the average
Financing apprenticeship activity: employers can receive funds from the unemployment insurance budget on a monthly basis if they hire apprentices. Employers who take advantage of this scheme may not end the labour relationship with the apprentice throughout the validity of the apprenticeship agreement concluded. The labour inspectorates shall monitor the apprenticeships and their implementation.
Employers who create new employment opportunities for registered unemployed individuals aged 45 years and over and for those who have 5 years till early or statutory retirement age receive monthly, for a period of 12 months, for each employee in these categories, an amount equal to the Reference Social Indicator (set at RON 500). Employers receiving the incentive have the obligation to maintain labour relations with the persons employed for at least 18 months.
Registered unemployed persons have access to services of assessment and recognition of competences obtained via non-formal or informal channels, free of charge. Through this measure the registered unemployed persons (including the long-term unemployed) may obtain a certificate of qualification recognised at national level and thus increasing their employment perspectives.
Minor day labourers shall work for no longer than 6 hours per day and 30 hours per week, and may not perform any night work. Minors between 15 and 16 years of age may perform certain activities as day labourers, but only with parental approval and only work that corresponds to his/her physical state, skills and knowledge, and only if his/her personal development is thereby not jeopardised in any way (as is the case of minor employees).
Revising the minimum guaranteed income (MGI) and amending Law 277/2013 on family allowance. This is foreseen to increase the number of MGI beneficiaries by 30% and the number of family allowance beneficiaries by 45%.
Introducing social protection measures for employees laid-off as a result of collective dismissals in companies with a public equity majority or subordinated to local public administration. The employees dismissed as a result of collective dismissals in such companies shall be entitled to the following rights: unemployment benefit; monthly compensatory income, which is basically the difference between the employee’s former salary and the unemployment benefit; additional payments provided to economic operators derived from their revenue-and-expenditure budgets. The employees dismissed as a result of collective dismissals in private companies are only entitled to compensatory payments in amounts stipulated in the collective labour contracts concluded, much lower than for employees dismissed in public companies (End date: 2018).
The main objectives of the legislative modifications are: a) to ensure high quality professional training and competences recognised at national level that promote employment and provide permanent training for youth; b) to ensure the establishment of a qualified and quality labour force, meeting the needs of employers; c) to simplify the attributions of employers who provide apprenticeships at their workplace; d) to increase funds for this type of professional training, including European funds; e) to facilitate social integration of youth in accordance with their professional expectations and labour market needs; f) to increase the contribution to economic growth, to create jobs, social cohesion and personal fulfilment; g) to promote social dialogue.
The Law of External Economic Relations (July 1988) increased the possibilities of companies to engage in foreign trade and abolished the monopoly of the 50 to 60 foreign trade organisations that had controlled trade before.
The state enterprise act of 1988 laid the basis for breaking up enterprises into smaller units.
Act laid the basis for establishing a two-tier banking system by a separation of central bank and commercial banking functions, and provided the central bank with the means to conduct monetary policy and with regulatory authority over the banks.
Introduction of "activation work", voluntary paid participation on public work for the unemployed.
Companies obliged to report vacancies to public employment service
Re-qualification and training programmes were introduced. The financial incentive for those taking part is an increase of unemployment benefits by five percentage points of former salary.
Introduction of special training programmes for school leavers that should prepare them better for the labour market.
Introduction of private employment agencies
The foreign trade law was amended to allow all economic units, including private entrepreneurs, to export their own products and to import inputs for their own production.
The law on private business activities gave all citizens the right to establish their own business, subject only to registration, in almost any sector of the economy. No limitations on the number of employees and the amount of property of the enterprise are contained in this law.
Legal basis for private enterprises created
Private and religious schools introduced to the Slovak education system
Introduction of equivalents of Bachelor's and PhD. programmes
Newly founded private and religious schools allowed to charge tuition fees
To reduce labour supply, the government extended primary education by one year in 1990.
Employment contract can be terminated at once only if the employee's conduct is severely undisciplined. Not in case of repeated minor offences, as it was possible previously.
If employee turns our to be unable to perform assigned task, his employment contract can be terminated even if there are jobs in the organisation suitable to his qualifications
Introduction of casual working agreements outside of standard employment contract
The period of termination of employment contract increased from 2 to 3 months
Severance payment of 5 monthly wages introduced
The law on joint stock companies re-established joint stock companies as a legal form in Czechoslovakia.
Provision for representation of non-unionised workers in unionised companies. (The union with highest number of members in the company represents also interests of non-members).
Provision for bargaining with multiple coexisting trade unions in the company. (Abolition of communist monopoly of single trade union).
After one year, unemployed continue to receive a flat social allowance of 1580 koruny; the same amount is paid to those who have never held a job before.
Small restitution relates to nationalisations which occurred from 1955 onwards, and concerns mostly small property claims, including small businesses which were confiscated against then prevailing law. In total, the government expects to return 70'000 properties under this law. Property is returned in kind and in present condition, except for special conditions, e.g. when the property was significantly altered or a new building was constructed on the land, in which case financial compensation is paid. The deadline for filing claims was 1 April 1990. Restitution for most real estate will be in physical form, with about the same exceptions as in the small restitution law.
The law on cooperatives was amended to establish the right of a member of an agricultural cooperative to get back the land originally contributed, subject to the condition that the land continues to be used for agricultural purposes.
Transformation of the mandatory employment to right to work (i.e. right to either be employed, receive training, or unemployment benefits)
Quotas for a share of employees with impaired capabilities for health reasons introduced. Set to 4 % for companies with 20+ employees by government direction no. 456/1991.
Measures to increase the demand for labour are mainly different schemes for subsidising salaries for those formerly unemployed, the most prominent of which is subsidies for employing school leavers in 1991.
Introduction of requalification programmes and public subsidies supporting them
Severance payment decreased to 2 monthly wages
Two procedures are envisaged in this law. The first applies to enterprises which are insolvent; these are, as a rule, to be liquidated, and control over assets taken away from management. The second applies to enterprises which are illiquid because of delayed payments by customers. In general, these enterprises will be restructured and maintained as going concerns. During a transitional phase, the law is to be applied "selectively".
Created a structured framework for different forms of corporations
Introduction of the concept of subsistence level of income as a socially recognised minimum income level of a natural person below which the condition of material need takes place". The threshold depends on the composition of the household. The benefit amount depends on the difference between the threshold and the income from work and transfers.
Creation of National Property Fund to manage and oversee privatisation of state enterprises
Advisory role of the anti-monopoly office in privatisation introduced
Formalisation of rules for securities trading.
Definition of reserve that companies must set aside from profit to cover for downturns
Discontinuation of previously existing categories of civilian workers for pension purposes
Broadened the list of family benefits exempted from tax duty
A personal income tax was also introduced, with a basic rate of 15 %, rising to a maximum of 47 %. A single person pays income tax on income in excess of 22 800 koruny per annum – around one-third of the average wage. The 15 % basic rate applies to taxable income up to about twice average wages. (Unification of the taxation of various kinds of income. Replacing previously existing separate wage tax, business income tax, and tax from literary and artistic activates).
The Slovak National Health Insurance Fund was established in order to finance health insurance, sickness benefits and pensions.
Definition of state holidays (mostly free days for employees) in Slovakia
During 1993 and much of 1994, there was a significant slowing in the pace of large-scale privatisation, reflecting in part the changes in policy emphasis under the three governments over this period.
Liberalisation of the reporting requirements for companies
Economic competition allowed in previously state dominated sectors (tobacco, alcohol...)
Widening the applicability of the law, precision of definitions, increasing the oversight power of the regulatory office
Public institutions explicitly forbidden to act in a way that would disrupt market competition
Introduced a range of tools to prevent legalisation of funds from criminal activities
Further increase of demand for transparency regarding company performance (Obligation to publish annual finance reports)
Obligation to publish ownership stake above 5 % and every increase/decrease of at least 1 %
Legally defined social health insurance (SHI); SHI was defined as a combination of financial contributions from the economically active population and state contributions on behalf of the non-working population
Foundation of a public health insurance health insurance agency
Creation of environment for creation of several parallel independent health insurance companies (enabled the establishment of other health insurance funds)
Defines structure of contribution to social insurance agency
Registration for this wave took place in October and November 1994, with about 95 % of eligible persons participating and paying the registration fee. In addition, 160 investment funds registered to take part in the round. Shares valued at SKK 51 billion, in 152 enterprises, were to be made available.
Law retrospectively cancelling previously made privatisation decisions
The origin of capital used for privatisation of enterprises in Slovakia has to be documented
Introduces mechanism for SMEs to apply for public funding
The Foreign Exchange Act was passed, providing for the convertibility of the Slovak crown within the current account of the balance of payments according to IMF Article VIII (effective 1 October 1995). The Act permitted the circulation of the Slovak currency abroad and created the legislative preconditions for a successive liberalisation of the capital account of the balance of payments.
Modification of the payments paid by the state for students, retirees etc.
Tightening of state oversight over health insurance companies
Defines specific pension scheme for soldiers
Current government policy is that standard methods, especially in the form of direct sales, are to be the principal means of transferring property and shares to new owners. Investment funds have also been restricted to holding no more than 10 % in a single company, compared with the previous limit of 20 %. Emphasis appears to be placed on promoting local entrepreneurial expertise through sales to domestic managers and employees, both insider stake-holders and outsiders.
The Act on Security of the State Interests in Privatisation of Strategic State Enterprises and Joint Stock Companies was passed (effective 14 September 1995). The scope of privatisation has been narrowed through the designation of strategic enterprises to be excluded from privatisation.
Following its decision to cancel the second round of voucher privatisation, the government decided that individuals who were registered for the second round (and had not reclaimed their registration fee) would instead receive a bond with face value of SKK 10 000, maturing in 5 years, and bearing an interest rate equal to the discount rate (currently 8.8 %). Bonds can be used for the full pay-out of principal and interest, for individuals to buy apartments, complementary health and pension insurance, for companies to self-privatisation, etc. See details in source.
Law declaring the retrospective cancellation of privatisation unconstitutional
The constitutional court declared that state should not have more power than other shareholders in strategic enterprises
Introduction of active programme to retain jobs and facilitate return to employment for vulnerable groups on the labour market.
Cancellation of limits on the export and import of cash (in SKK or foreign exchange) used for travel or contained in postal or other items, and their replacement by a notification requirement for large transactions: – liberalisation of financial loans with 5 or more years’ maturity granted by residents to non-residents in an OECD member state; – liberalisation of financial loans with 3 or more years’ maturity received by residents from abroad; – liberalisation of international trade loans to and from OECD countries; – liberalisation of acquisition by residents of real estate in OECD countries; – liberalisation of direct investment in OECD countries.
An amendment to the Banking Act was passed (effective from 1 March, 1996). This strengthened the banking supervision of the NBS; introduced mortgage business and rules about mortgage bonds (complying with EU recommendations); and covered the restructuring of credit portfolios in the banking sector to deal with the issue of bad debts.
Obliges bank to contribute to a fund, that accumulates money to compensate clients in case of bank insolvency
The National Labour Office was established and governed by tripartite bodies, including its supervisory board and the governing committees of regional and district labour offices.
Growth of minimum wage tied to growth of living cost
Time spent of strike no longer counts as working time for the purposes of tax support
Removed the provision disallowing negotiation of higher wage on company level than the maximum set by higher level CBA
Right to vacation extended from 4 to 5 weeks after 15 years of work
A new supplementary pension insurance was introduced. The scheme covers employees of selected enterprises that enter into an agreement with the newly created pension insurance company (SPIC). Employees and employers contributed a tax-deductible amount equal to 3 % of nominal wages to the scheme.
The new legislation allows financial institutions to deduct outstanding interest receipts as set out in credit agreements from their tax base; previously, they had to pay taxes on both actual and ‘‘notional’’ interest earnings.
A new supplementary pension insurance was introduced. The scheme covers employees of select enterprises that enter into an agreement with the newly created pension insurance company (SPIC). Employees and employers contributed a tax-deductible amount equal to 3 % of nominal wages to the scheme.
Introduced subsidy for participation on lifelong learning for unemployed
Tertiary education institutions can charge administrative fees, particularly for administration of the admission process
Setting maximum price of domestically produced medicines
Exception for entrepreneurs in agriculture from competition legislation
Cancellation of the obligation on resident legal entities to offer to sell foreign exchange to banks; this implies that, after meeting obligations regarding the notification and transfer of funds earned abroad to Slovakia, legal entities are able to use these funds as they wish; Freeing up of the purchase and sale of foreign currencies: the previous limit of SKK 60 000 per year on citizens’ purchases of foreign currencies (e.g. for travel purposes) was abolished; Freeing up trade in foreign securities; this includes purchases and sales by residents, and the flotation of securities on the domestic market, provided the issuer comes from an OECD member country. Trade in foreign securities is subject to the guarantee that only those securities traded on the main stock exchange markets in OECD member countries will be involved; Opening up the possibility for branches of foreign banks to acquire real estate in the form of building to operate as a bank.
Abolition of the 3 % limit to foreign bank ownership stake. Abolition of arbitrary assessment of "economic circumstances" as a requirement for opening new banks.
Ownership of a pharmacy limited to persons with relevant university education
Doctors and pharmacists obliged to inform patients about the co-payment amount
Gradual decrease of social assistance for long term unemployed to initialise them to seek work.
Introduction of special transfer to compensate cost associated with child-rearing
The government introduced the concept of “material distress for subjective reasons” in 1999. Social assistance benefits to such persons are reduced by half. The main criteria for determining a situation of material distress for subjective reasons include: voluntarily leaving a job; refusing to co-operate with the National Labour Office in job-search; failing to participate in public work programmes; staying in the unemployment registry for more than 24 months; having contributed less than 3 months to unemployment insurance; losing a job for disciplinary reasons; refusing to pay child support or alimony; and failing to apply for child allowances. Three months of employment in public works is sufficient to re-qualify such persons as “objectively in need”, entitling them to full benefits.
State aid can be used to provide subsidies conditioned upon hiring disabled workers
Collective dismissals need to be consulted with unions and public unemployment offices in advance
All companies contribute to "guarantee fund" set up to cover unpaid wages of employees in case of a company going bankrupt
Definition of capital requirements for trading in securities
Only major changes in ownership need to be published. Thresholds are 5 %, 10 %, 20 %,30 %, 50 %, and 65 %.
Law limiting ownership of pharmacies to individuals with relevant education declared unconstitutional
Codification of membership requirements for trade unions
According to this Act, the government is obliged to submit for tripartite negotiations in the Slovak Tripartite Economic and Social Concertation Council (RHSD) all proposals for measures which have a significant impact on the living standards of the population.
Introduction of mechanism of minimum wage setting through tripartism
Increased of the number of months of contribution to unemployment insurance to be eligible for benefits from 12 to 24.
Automatic increase of service pensions for armed force members based on growth of general pensions
Allowed partial privatisation of "strategic enterprises"
Created a "tax license" as an alternative to income tax for very small enterprises
Introduced voluntary participation on public works as a source of extra revenue for the unemployed
Reform of schooling for cogitatively impaired children, largely superficial changes (change of terminology)
Creation of private market for insurance products replacing state monopoly
Until 2000, the maximum replacement rate for the first three months was 60 % of average gross income during the last six months of work and 50 % for the remaining entitlement period. A reform at the end of 2000 reduced that to 50 % during the first three months and 45 % for following months. Benefits are subject to a ceiling of 1.5 times the MSI (Monthly Subsistence Income) of a single person, or about half of the average wage. Consequently, the replacement rates for those earning above the average wage are below the 50 % figure set for the first three months.
Introducing voluntary unemployment insurance on the top of compulsory insurance
Early retirement was phased out in 2000.
Cutting to 12% the lowest personal income tax (from 15%)
Working pensioners have to contribute to pension insurance
Regulation of the practical training of persons up to 2 years after their schooling and publicly-funded community service posts for long-term unemployed persons.
Explicit mention of public procurement as an area, where cartels and price agreements are not allowed
It obliges the employer to inform employees in the event of the establishment, alteration and termination of the employment relationship
Trade unions and worker councils have an effective veto over organisational changes and worker dismissals.
It bases the establishment of the employment relationship exclusively on a written employment contract
It comprehensively regulates working time and its structure, and increases the flexibility of the employment relationship by providing employees with a possibility to perform agreed work at home
Removal of barriers for banks from EU countries preventing them from doing business in Slovakia
Introduction of the independence of the central bank in the legal system
Company owners obliged to provide their actual address (not an anonymous mail box)
It increases the powers of trade unions in co-decision making and creates better conditions for the activity of employees' representatives by specifying paid time off for trade union officials and works councils to perform their tasks.
It abolishes the previous limits on the scope of collective bargaining. Employer and trade union representatives in the business sector can bargain now on any issues of common interest.
It provides for employee participation by means of works councils and/or shop stewards in those companies where there are no trade unions present. The Labour Code also lays down employment protection rules applying to employees´ representatives.
Different regulation on collective bargaining for the private and public sectors and civil service: Sectoral collective agreements and collective agreements at enterprises or organisation level may be concluded in the private sector and in the public service. In the civil service, only sectoral collective agreements are possible.
Maximum working hours are set to 40 hours per week with a basic annual holiday of four weeks
School leavers, who had previously been granted full social assistance, were categorised as in need for “subjective” reasons beginning in 2001, leading to a halving of their social benefits and encouraging job search.
In June 2001 social assistance granted to those in distress for objective reasons was frozen and in the future it will not follow the revision of the MSI (monthly subsistence income) each July. When the low level of income is due to “subjective reasons”, the income benefit granted will continue to be set at half the gap between the household income and the MSI. The criteria for classifying a person in need for subjective reasons were widened considerably in 2001. As a result, about half of the recipients of social assistance benefits fell in this category in 2001 compared to 1.5 % in 2000.
It introduces a new statutory 'parental leave' entitlement, which applies equally to both parents after a child is born
Regulation of transfer of state property to NGOs active in provision of social services
Electricity market liberalisation became effective, enabling large corporate consumers to select their suppliers, import electricity from abroad at freely negotiated prices. Medium-size users have obtained the same right from January 2004 and this will be widened to all industrial users in January 2005.
Introduction of simplified procedure in case of mergers of companies with low market share.
Introduction of a clear formula for calculating state subsidies for higher education with particular importance of the number of students
Makes tuition fees for “external” (part-time) students applicable
Implementation of the Bologna system; 3 levels of tertiary education
Authorises the creation of new private universities
Transforms tertiary institutions into non-governmental organisations.
Parliament passes a law increasing parental allowances from SKK 2 740 to SKK 3 790, effective in November 2002.
Parliament passes a child allowance law, effective in July 2002, which does not require testing of family income.
The government approves a 5 % increase in pension benefits, effective in July 2002.
Unified pension system for retired members of military and police
The sale of 49 % shares in each of the three electricity distributors is approved. Zapadoslovenska Energetika (ZSE) is sold to EON of Germany for EUR 330 million, Stredoslovenska Energetika (SSE) to électicité de France for EUR 158 million and Vychodoslovenska Energetika (VSE) to RWE Plus of Germany for EUR 130 million.
The government sealed the largest privatisation deal up to then by selling a 49 % stake in gas utility Slovensky Plynarensky Priemysel to a consortium of Germany-based Ruhrgas, France-based GdF and Russia-based Gazprom.
Hungarian savings bank OTP Bank becomes the owner of 92.6 % of Investičná a rozvojová banka (IRB).
The Anti-Monopoly Office approves the sale of a 66.8 % stake in Slovenska Poistovna (SP), the largest Slovak insurer, to Allianz AG of Germany at a price of EUR 114.9 million.
The corporate income tax rate is cut from 29 to 25 %.
While personal income tax rates are reduced from 42 to 38 % at the high end and from 12 to 10 % at the low end. The number of brackets is lowered from seven to five.
The reform introduced an “activation allowance” – initially Sk 1,000, raised in April 2004 to Sk 1,500 – for which recipients are required to demonstrate effort to improve their situation, for example, participation in community volunteer work or retraining programmes.
The combined welfare and housing benefit will also be paid to successful job-seekers during the first 6 months of gainful employment, boosting their earned income.
Creation of specialised offices for implementation of active labour market policies
Parliament passed a revision to the telecommunications law to unbundle local loops, change license proceedings and strengthen the powers of the market regulator, i.e. the Telecommunications Office.
Financing of the new municipal competencies in education transferred by 596/2003, transfer of funds from state to municipalities
School management competencies transferred from central to municipal level
More flexibility is introduced as regards an employer’s right to terminate an employee’s contract. When terminating an employment contract the employer is obliged to specify the reasons for termination. These are more extensive than previously allowed.
All the above contracts can be concluded for a limited period of time and the employer is given the right to prolong them without being obliged to provide legal justification for doing so up to a maximum three year period. Some categories of employees are exempted from this maximum three year period which means limited period contracts can be prolonged in these cases indefinitely.
Part-time employment contracts for less than 20 hours per week as well as certain types of special agreement on performance of work can be terminated, without the employer providing a reason, on 15 days notice.
In all cases the statutory notice period is reduced to two months regardless of the reason for termination. An employee working for the same employer for more than five years shall be given three months notice, unless a more favourable notice period is agreed in the individual employment contract or a collective agreement.
An employment contract concluded for a definite period can be terminated prior to the agreed upon term without the employer providing a reason. However, the dismissed employee is entitled to receive compensation for future earnings.
Employers are able to choose among five types of labour contracts, depending on their requirements: – Regular employment contract. – Part-time employment contract for less than 40 hours per week. – Part-time employment contract for less than 20 hours per week. – Agreement on performance of work for less than 300 hours per year. – Agreement on performance of work with a student for less than 100 hours per year.
When made redundant, an employee may either accept an agreement on early termination and receive a redundancy payment amounting to at least two-times his/ her average monthly salary, or continue working during the notice period without the right to receive the redundancy payment, unless stipulated otherwise in a collective agreement. An employee working for the same employer for more than five years is entitled to receive a redundancy payment amounting to at least three-times the average monthly salary received by him/her during the notice period.
Obligation of securities traders to retain liquid assets equal to 1/4 of their overhead in the previous year
The overtime limits are increased so that an employee may work up to 400 overtime hours per year (previously the limit was 150 overtime hours). Within this total overtime limit, a maximum of 150 hours may be requested by the employer alone and a further 250 hours overtime is allowed if mutually agreed between the employer and the employee.
Unions lost veto over staff reductions, retained only the right to be consulted
Welfare recipients will be also eligible for a monthly housing benefit amounting to SKK 780 for singles and SKK 1 330 for families.
The welfare benefit for a single adult was unified at SKK 1 450 (about € 35), an amount below the so-called “life minimum” which represents the threshold below which a person is considered to be in “material need”. The maximum welfare benefit for a family with more than 4 children was cut by 60 % to SKK 4 210 (€ 105) per month.
Price changes reflected in calculation of subsistence level of income
The replacement rate is 50 % of past gross income (previously, this had been 55 % for the first six months, falling to 45 % for the last three months).
Benefits remain subject to a ceiling, now being raised: the ceiling had been around half the economy-wide average wage, and was raised to 60 % of the average wage in 2004. The ceiling will increase further in 2005 and 2006.
In addition to the basic social assistance benefit, the previous system included means-tested child bonuses (starting at Sk 270 per child, rising to Sk 890, depending on household income and the age of the child). The new system replaces these with a flat Sk 500 child bonus – conditional on the child being enrolled in school – plus a Sk 400 tax credit. The Sk 500 child bonus is universal.
Unlike unemployment insurance, the activation allowance is payable indefinitely.
An unemployed person is eligible for benefits for up to six months, compared to nine months until end-2003.
The Sk 500 child bonus is universal, but conditional on the child being enrolled in school.
The beneficiary must have contributed for 24 of the previous 36 months to be eligible.
From 2004, the responsibility for paying the first ten days of sickness benefits has been shifted from the public sector (via the Social Insurance Agency) to individual employers.
In the new scheme, several types of income are deemed exempt income in the calculation of the social assistance benefit, including 25 % of individual income from dependent services.
For individuals deemed unable to participate in activation programmes, an equivalent “protective allowance” is paid instead.
Early retirement no longer compatible with regular paid work
Early retirement pensions are allowed but full pension benefits are reduced by 0,5% for each month by which retirement precedes the regular pensionable age.
Closer link between future benefits and contributions
A gradual increase in retirement ages to 62 years for both men and women, from 60 (men) and 57 or less (women) (by 2006 for most men, and 2014 for most women). The first increase in retirement ages was effective from January 2004.
Unification of pension system for different categories of citizens (nonetheless retained different system for soldiers and policemen)
Transfer of state property to regional governments (including conditions for privatisation)
Transfer of state property to municipalities (including conditions for privatisation)
Austria-based Meinl Bank acquired a majority stake in Banka Slovakia.
Discontinuation of separate ministry for privatisation and management of SOEs
State can review privatisation decisions if they ex ante turn out to be based on law being broken within 10 year period after privatisation
Enabling privatisation of "strategic enterprises"
Introduction of flat 19 % corporate tax in Slovakia
Introduction of a unified tax rate at 19 % for PIT, CIT and VAT. Before the reform the PIT had a progressive rate structure with – after the basic exemption – five income brackets with marginal tax rates of 10%, 20%, 28%, 35% and 38%.
The tax credit is payable only to households in which at least one parent is employed, though it is refunded if the overall tax liability is negative (for example, a parent employed on minimum wage).
In the PIT a basic exemption was preserved and has been more than doubled and is now above the minimum wage and above 40% of the average wage. As a result of the basic exemption, the average tax rate increases with higher income although the marginal tax rate remains constant.
The reform also changed the tax base for property taxation from size to value assessments.
Unemployed persons have to regularly prove they are actively looking for work in order to remain eligible for public employment office assistance
Introduction of non-arbitrary rules for active labour market policies accessibility
Public unemployment offices asked to create a career plan for participant in ALMP
Introduction of flexible consideration of abuse of dominant position
Increase the severance of possible sanctions for abusing the dominant market position
Entry into the health care provision market was made more transparent and artificial barriers were removed. The provider must acquire a licence from the specified medical chamber and then acquire a permit from the self-governing region or Ministry of Health.
Creation of an European-style financial oversight with separate unit for banks, insurance companies, investment banking...
Liberalisation of corporations movement inside the EU in line with the EU regulations
The health insurance companies were allowed to selectively contract based on their own structural, procedural and outcome criteria. The health insurance company only had to fulfil the minimum network requirement, which seeks to secure access of citizens to health care through a minimum number of contracted providers in a given geographical area.
Priority diseases (and/or which individuals could not afford to cover) covered by the basic benefit package. In 2004, these represented 41% of all cases and 67% of all costs. The remaining 4300 diseases are on the non-priority list and represented 59% of all cases and 33% of all costs. For these diagnoses, co-payment may be required and set by a government decree. The benefit package can be narrowed or widened by government decree.
Introduction of voluntary private supplementary health insurance
Public health insurance funds had to either turn into joint stock health insurance companies or closed down in 2005. To increase the incentives for good performance of both parties, the legislature allowed them to make a profit
Introduction of user fees: They were set at €0.67 for a doctor’s visit in ambulatory care (both primary and secondary), €0.67 for a prescription, and €1.67 for each day of a hospital stay. The user fee for using the first aid services was set at €2.
The Health Care Surveillance Authority (HCSA) was established to split the legislative and control function in the health care system. The HCSA licenses and monitors health insurance companies. The HCSA supervises the entry of health insurance companies into the market and their exit from it, imposes sanctions when necessary, orders recovery plans in case the health insurance companies do not meet solvency criteria and may even introduce forced management when the health insurance company is unable to manage its financial situation.
The Tripartite Act was abolished in 2004 fall, reducing trade unions and employer's organisations' status in negotiating with the government on key socio-economic policies to an advisory role.
Wider spectrum of actors allowed in tripartism. (Braking the monopoly of big employer and trade union organisations).
Invalidity benefit may be claimed when an employee is assessed as being at least 34% disabled. The amount depends on the degree of disability
The pension reform approved in 2003 reforms the existing public pension system, and introduces a mandatory, privately funded pillar. Young people entering the labour market for the first time were required to use the new system, older citizens could choose between the two. Those reaching retirement age before 2008 could not switch the new scheme.
Linking of voluntary pension insurance to private mandatory insurance option. Private pension savings moved under same framework as the newly established private component of mandatory insurance (constituting the third pillar of the pension reform). More strict regulation for offering private pension insurance).
Transformation of state owned health facilities to separate legal subjects
Transformation of airports to publicly held companies allowing entry of private investor
Introduction of deductions for personal consumption for self-employed
10 % of gross wages go to personal accounts, 10 % to the PAYG system, and 8 % is allocated to pensions for invalids and widows.
1) Tightening of the system for proving active job search by registered unemployed people; 2) Reduction to three months of the sanction period during which unemployed people who were excluded from the register could not register again; 3) Extension from two weeks to one month of the periodicity of visits to the labour office for registered job seekers who access education and retraining individually; 4) Single parents, parents heading large families and foreigners who were granted asylum are now treated as disadvantaged job seekers.
Increase of transparency to protect investors in line with the EU legislation. More data needed to be made public when emitting stock.
State covers health insurance only for the unemployed whose income is under half of minimum wage, instead of all unemployed
Law specifying transformation of formerly state owned arms industries into share companies, while retaining their position in relation to the national defence forces
Fees in outpatient and inpatient care reduced to €0. Fees for first aid visits remained the same (€2) and the fee for a prescription was reduced to €0.17.
Those employed for a certain determined period can receive unemployment benefit for 4 months, if he has been insured against unemployment for at least 2 years within the last 4 years. This provision is related only for workers with fixed-term contract (seasonal workers). Furthermore, it remains the possibility to receive unemployment benefit for 6 months, if the concerned person has been insured for at least 3 years within the last 4 years.
Pensioners with low pension eligible for extra benefit in December.
Introduction of progressive decrease of tax deduction for a spouse
Reinforcing the focus on disadvantaged job seekers, through: 1) More active involvement of labour offices in job search assistance (commitment to offer job seekers suitable employment or participation in ALMP at least once in a month); 2) increased assistance to disabled job seekers (special register keeping records of disabled job seekers); 3) Definition and support to social enterprises.
Legal unbundling of the electricity distribution network of the three biggest distribution companies was implemented in July 2007.
When the working time of part-time workers is shorter than 15 hours a week, rather than the 20 hours specified up to now, the employment contract can be terminated for any reason or even without cause. The period of dismissal notice has been extended from 15 to 30 days.
Definition of conditions when standard employment contract must be used
Defining more precisely the term of dependent employment. This change aims to prevent the situation whereby `economically dependent work' is performed by previous employees who are now working for the employer as self-employed individuals or sole traders.
Limiting the renewal of fixed-term employment contracts: this can be done only once every three years. However, exceptions are allowed, for example, regarding seasonal work and research activities. The probation period for new workers cannot be applied when the contract is extended.
If an employee is entitled to a redundancy payment, he or she is also entitled to receive a wage during the redundancy notice period. Previously, an employee was entitled to receive either redundancy pay or wages during this period.
Simplifies the process of generation and maintenance of capital requirements
According to the Amendment to the Health Insurance Act adopted at the end of 2007, all health insurance companies must use their profit to purchase health care. Profits and administrative spending of health insurance companies were limited to 4 % of their total expenditure.
In 2007 and 2008, the Ministry of Health changed the definition of the minimum network in tertiary care from a minimum capacity into a fixed network of specific inpatient facilities. These facilities, which are all state-owned hospitals, are entitled to obtain a contract with the health insurance companies as they are deemed crucial in guaranteeing geographical accessibility.
A new Act on Minimum Wages in 2007 states that the social partners shall take into account the economic and social situation in the Slovak Republic in the two preceding calendar years when setting minimum wages.
Allowing companies to conclude collective agreements with one or more trade union bodies, as long as they represent the majority of employees. Before, it was impossible to conclude a collective agreement at company level until all trade unions active in the company had come to a mutual agreement.
Introducing the possibility to extend a sectoral collective agreement to other companies in the sector without the consent of the companies' management
Creation of economic and social council as a permanent advisory body of the government on the basis of tripartism
New indexation mechanism, giving social partners room to negotiate the increase. In cases where social partners do not agree, the minimum wage will rise administratively by an average monthly wage increase.
Changing the way in which employees vote to decide on industrial action, from a secret ballot to an open voting system
1) Increase of social allowances for single-parent families. 2) Parental benefits, provided up until the children are three years old, have also increased. 3) A monthly bonus, on top of, child benefits will be provided to pensioners taking care of children.
Increase of working years needed to qualify for state pension from 10 to 15
Transformation of hospitals stopped, state to retain 51 % ownership
Increase of mandatory school attendance period to 10 years
Implementation of performance evaluation of teachers. Another step towards differentiation of teachers salaries, once again with limited effects.
In 2008, no distinction was made between priority and non-priority diseases. All the non-priority diseases are free of charge.
Law increased compulsory length of social insurance to be eligible for unemployment benefits
Practical component of the vocational education regulated in terms of working time, safety requirements etc.
The government has decided on the introduction of an in-work benefit (Employment Bonus) from 2009 onwards.
Abolition of a set time period during which a dominant position can be reported in order for competition laws to apply
Mandatory reporting of dominant position on the labour market for a company taking over another company
Introduction of possibility to report possible concentration of market share even before a merger takes place
Implementation of career paths for teachers (was supposed to lead to pay differentiation based on skills and performance. In reality little effect.).
Creation of united structure of classification for agents in the financial sector
Strengthening of the rights of shareholders of companies on regulated markets
Re-Introduction of vocational training into Slovak educational system
Municipalities can employ long term unemployed to work on projects minimalising impact of natural disasters
Since 2010, the funding rules for universities are reformed and are increasingly based on outcomes (publication, grant-gaining).
Since 2010, the legal extension of collective wage agreements is conditioned to the consent of the employer.
Relaxation of criteria for evaluating dominant position. A company with high share on global market but small presence in Slovakia no longer considered dominant.
Introduction of a more complex evaluation of dominant position in line with European standards.
Extending fixed term contracts (from two to three years)
Narrowing of regulation for temporary work agency jobs.
Abolition of redundancy payments to those dismissed employees who continue working for the employer during the notice period
Introduction of a special bank tax to raise revenue in the midst of the crisis
Increases requirement for information to be provided to investors in regards to the risks
Since April 2011, the out-of-pocket payments for drugs are capped for low income individuals (e.g. pensioners, disabled).
Since end 2011, generic prescription (prescription of substance) has been made mandatory for certain products.
The Constitutional court ruled that the profit restriction was unconstitutional and nullified it.
It was made necessary for any trade union organisation established after 1 September 2011 to prove, at the employer’s request, that it represents at least 30% of the workforce.
Limit to chaining of temporary working contracts
Precision of rules for when a proper employment contract must be in place (not applied in practice).
Limitation of cash payments to 5,000 EUR (15,000 for transaction between private individuals)
Increased the maximum non-employment benefit close to the level of average wage
The reform measures passed in August 2012 including changes in the pension formula through adjustment of coefficients for reduction and increasing average pension point. This will result in gradually increasing of the solidarity element in the PAYG pillar.
The public pension system was reformed in August 2012. The statutory retirement age is set to increase in line with gains in life expectancy and pensions will progressively indexed on retiree inflation only.
Introduction of a second tax bracket (25 % for income over 176,8 times subsistence minimum)
The contribution rate to the second pillar has been reduced from 9 to 4% as part of the government consolidation strategy in August 2012. The contribution rate will start to increase in 2017 by 0.25% each year until it reaches target level of 6% in 2024.
The government takes responsibility over vocational education, replacing industrial associations
Any employable beneficiary is required to take part in minor, mainly community, works for at least 32 hours a month.
Increase in arbitrariness in the provision of active labour market policies. Officials once again asses cases on individual basis.
The required capital for limited companies has to be stored on a separate account
CBAs can be more easily made binding for the whole industry: An amendment to the Act on collective bargaining, which entered into force on 1st January 2014, has changed regulation on extension of sectorial collective agreements. The employer's consent is no longer a condition for extension of the binding force of sectorial collective agreements. Extended sectorial collective agreement binds all employers within the sector regarding to labour conditions. There are some limited exemptions allowed (i.e. employers with fewer than 20 employees, companies existing for a period shorter than 2 years). In this case employers exempted from this collective agreement. The key factor for extension is the SK-NACE code of activity.
Constitutional court disallowed nurses wage hike. Slovak constitutional court suspended the law, which increased pay of nurses arguing that state cannot arbitrarily demand that hospitals pay specific category of employees more than other groups.
Qualifying conditions have been tightened.
Liberalising rules for eligibility of benefits for voluntarily insured. A tolerance limit has been introduced for eligibility check in the case of voluntarily insured persons (it is possible to forgive the amount of €5 in unemployment insurance payments). A determination of the level of benefits for parents taking care of children and parents on maternity/parental leave has been changed.
The Ljubljana Stock Exchange (LSE) was founded on December 12, 1989. The LSE's infrastructure is relatively advanced, even in comparison with stock exchanges in far more developed capital markets. The LSE is characterised by electronic trading, settlement clearing in 2 days (faster than on the New York Stock Exchange), remote trading, and central registry.
By 1990 two government agencies had been established in Slovenia to oversee and assist in the privatisation process: the Agency for Restructuring and Privatisation, and the Development Fund. The former was assigned monitoring and control functions, and, for this purpose, set guidelines for and approved the privatisation programmes of the socially-owned enterprises. The latter was made responsible for the financial restructuring (and subsequent privatisation) of enterprises in its portfolio and was also the temporary depository of the shares of enterprises to be sold to investment funds.
Article 77 of the Constitution of the Republic of Slovenia, adopted on 23 December 1991, states: 'Employees have the right to strike. Where required by the public interest, the right to strike may be restricted by law, with due consideration given to the type and nature of activity involved.' Neither the Constitution nor any other legislation permits employers to use the lock-out as an instrument in the negotiating process or during a strike.
The amount of the financial assistance corresponded to 80% of the legally guaranteed income after taxes are deducted.
The replacement rate of the income restitution payment within the first three months amounted to 70% of the basis, and to 60% later on. The maximum amount of income restitution payment could not be higher than five times 80% of the legally guaranteed income. (The basis = the average monthly salary during the three months prior to the termination of employment. If the salary in the fourth, fifth, and sixth months were higher, these months were used as basis).
The duration of financial assistance benefits for interns and apprentices was 12 months.
Duration of benefits is linked to the period of employment: 3 months: 12 months within the last 18 months; 6 months: 50 months within the last 5 years: 9 months: 5 years and more but less than 10 years; 12 months: 10 years or more but less than 15 years; 18 months: 15 years or more but less than 20 years; 24 months: 20 years and more
Those entitled to financial assistance were also entitled to the additional allowance for the dependents.
Slovenia adopted the Yugoslavian unemployment insurance system. All individuals in a regulated employment relationship are automatically insured against the risk of unemployment, while voluntary insurance is available to the self-employed and independent professions. To receive benefits a minimum of 12 months employment in the last 18 months was required.
Financial assistance was also granted to interns whose temporary internship, not shorter than nine months, was successfully completed and to apprentices who, after finishing their apprenticeship, were not required to do an internship and became unemployed.
After the right to the income restitution expired, the unemployed could apply for means-tested financial assistance. The average monthly income of the unemployed person together with the monthly income of the family members in the months prior to applying for financial assistance must not have exceeded 80% of the legally guaranteed personal income.
A law allowing the sale of socially-owned apartments came into force (aimed in part at attracting foreign currency savings of the population held abroad or at home in order to increase foreign currency reserves).
Privatisation of majority of public firms since 1991
Provisions of the Law on Denationalisation came into force, regulating the restitution of property which was nationalised or confiscated from former owners.
Introduction of a synthetic personal income tax. It has five tax brackets with marginal tax rates of 19%, 28%, 35%, 40% and 45%. The main exemptions are: different transfer income, interest on bank deposits, capital gains on the sale of shares and other securities, including investment coupons. There is no general allowance but there are several other allowances (such as for families, students and older workers).
Laid the basis for the system of compulsory and voluntary health insurance, permitted the privatisation of health care facilities and transferred some administrative functions to the professional chambers.
As services for specific groups and patients are fully covered by the system of compulsory insurance, other services are covered by compulsory insurance only as a certain proportion of the total value of the service (Law on Health Care and Health Insurance). These services thus require co-payments varying from 5% to above 50% (see complete list in source).
The National Board of Health is an advisory body to the government and has been responsible for maintaining health on the agenda in government and parliamentary procedures. As defined by the Law on Health Care and Health Insurance from 1992, the Board’s role is to promote health policy by monitoring the effects of the social and physical environment on health; it assesses development plans and legislative drafts to assess their potential effects on health.
The law also included measures to reduce early retirement.
The law included a phased increase in the statutory retirement age for men and women.
The government initiated a financial and rehabilitation programme for a group of 98 enterprises (generally loss-making and insolvent) which were not subject to the stipulations of the Law on Ownership Transformation. Each enterprise had to be transformed into a commercial company and its shares transferred to the Development Fund.
The law focused on those enterprises classified as socially-owned, and its primary goals were two-fold: (1) to replace social ownership of capital with private ownership, and (2) to achieve a normal corporate structure. The ownership process (the first goal), as described under the law, was initiated in 1993. The law represented a compromise on competing views of privatisation and, therefore, provided for a hybrid approach, with the primary methods being management-employee buy-outs, direct sales to outside buyers, and voucher-based mass privatisation.
The rest (60 %) could be privatised in the following ways: – Internal distribution (up to 20 % of the shares could be distributed in exchange for ownership certificates to employees, former employees and relatives of employees; these shares cannot be transferred for two years from the date the privatisation is recorded in the court register); – Internal buy-out (up to 40 % of the shares can be sold, for cash or ownership certificates, to insiders under a special internal buy-out scheme; employees and former employees receive a 50 % discount on the value of the shares included in the programme); – Sale of the shares of the company (public offering of shares, public tender, public auction); – Sale of all the assets of a company in combination with its liquidation (the Development Fund assumes all the liabilities of the company); – Ownership transformation by raising additional private equity (only if new shares are issued for more than 10 % of the existing equity); – Transfer of shares to the Development Fund.
Part of the social capital (40 %) should be transferred (free) to public funds: – 10 % of the ordinary shares transferred to the Compensation Fund; – 10 % transferred to the Capital Fund of Pension Insurance; – 20 % transferred to the Development Fund, that would later sell this portfolio to Special Investment Funds (which had to be private) for ownership certificates.
A voucher programme was implemented in 1993 by setting up a voucher (or ownership certificate) account for each citizen of Slovenia. Each account had a nominal value of SIT 250.000 - SIT 400.000, with the face value indexed to the age of the citizen. The total nominal value of all voucher accounts was SIT 564 billion, representing 40 % of the book value of social capital as of end-1992. Vouchers could be used only for the purchase of social equity and were not transferable.
The Law on Protection of Competition came into force.
This law regulates information, consultation and also co-determination for workers. This law put into effect Article 75 of the Constitution of the Republic of Slovenia, which states that 'employees shall participate in the management of commercial organisations and institutions in a manner and under conditions provided by law'. However this law – as it is often the case with the relevant legislation or practice in the current EU Member States – does not take into account supranational company structures, which may take away from national-level management responsibility for decisions that have consequences for employees' working and social situation.
According to the 1993 Law on the Representativeness of Trade Unions, only the central umbrella trade union organisations officially recognised as representative at the highest national level (i.e. the most representative organisations) may have representatives on the Economic and Social Council of Slovenia (ESSS). There are four such trade union organisations represented on the ESSS.
Parents are eligible for child allowance if the family income does not exceed 99% of the average salary in the Republic of Slovenia in the previous year.
Children older than 18 years are eligible for the child allowance if they are in regular education up to a maximum age of 26.
The ESSS's field of activity is limited and concerns mainly industrial relations, conditions of work, labour legislation, social rights and employment policy, as well as other broader economic and social issues which concern the interests of workers and their families, employers' interests and government policy. First, the ESSS has a consultative function. This means that it takes an active part in the preparation of legislation and other documents. It can also issue its own standpoints and opinions on different matters, such as working and draft documents (e.g. the state budget and budget memorandum). Second, the ESSS has a 'quasi-bargaining' function (though not collective bargaining in its proper sense). This means that 'social agreements', pay policy agreements and other tripartite accords are negotiated within its framework.
The first agreement about wage policy was signed by representatives of government, employees and employers. The tripartite Economic and Social Council was founded.
The complementary financial allowance for the dependent family members was abolished.
The maximum amount of the income restitution payment is reduced to four times the minimum amount.
The maximum duration of financial assistance was reduced from three years to six months.
Introduction of six tax brackets with marginal tax rates of: 17%, 35%, 37%, 40%, 45% and 50%; introduction of a general allowance and maintaining of allowances for families students and older workers.
The Bank of Slovenia imposed a 40 % interest-free deposit requirement on short-term loans taken abroad by residents.
The Social Agreement for 1995 was signed by the social partners (in force until end-March, 1996).
Since 1995 the minimum wage in Slovenia was based on tripartite agreements on minimum wage increases which were subsequently implemented by law.
This Agreement, which has compulsory coverage, sets out the broad conditions and expectations surrounding labour market developments, including government commitments to particular legislative measures. The main points (relating directly to earnings) from the 1996 Social Agreement include: real wage growth 2 % less than actual GDP growth.
An annual holiday bonus of SIT 102 000 (80 % of the average gross wage) or, if business results permit, an amount equal to one month’s salary
A 4 percentage-point reduction in the employer’s social security contribution rate in the second half of 1996 (lowering the total contribution rate from 42 to 38 %), partially offset by the introduction of a payroll tax (mainly affecting higher salaries).
New customs legislation came into force, applying the combined nomenclature of the EU customs tariff to Slovenia, and reducing tariffs.
The Bank of Slovenia imposed a balancing requirement of foreign exchange accounts, which froze banks' net foreign positions as of end-July 1996. The 40 % interest-free deposit requirement on short-term loans taken abroad by residents introduced in 1995, was extended to include loans with maturities up to 7 years.
The method of determining the pension base for the self-employed was tightened to increase the contributions of the self-employed so as the eliminate the deficit of their insurance system.
The indexation of pensions was changed to include in calculations those periods when wages decline (before, monthly adjustments were made to pensions whenever average wages increased, even after a previous decline).
The law provides for the Securities Market Agency to oversee corporate acquisitions involving (a) more than 25 % of shares of listed companies, (b) companies with more than SIT 1 billion in equity capital, or (c) companies with over 500 shareholders.
The restriction implemented in February was relaxed marginally by exempting from the balancing requirement portfolio investment with a commitment of more than seven years.
All non-resident portfolio transactions were required to be channelled through custodian accounts that were bound by the balancing requirement. The definition of portfolio investment was kept very broad, including any transaction that would result in less than 50 % of total ownership of an enterprise.
Restitution payment recipients must be available for work and be willing to participate in ALMP measures. The definition of an adequate job was extended to one level below the qualification of the unemployed person.
Temporary work agencies were allowed to operate by amendments to the Law on Employment and Unemployment Insurance made in 1998. Through a 'licence agreement', the ministry responsible for labour may authorise a temporary work agency which meets personnel, organisational and other criteria to provide labour (lease workers). The conditions for issuing such licences were defined in the 1999 Rules Regulating the Operation of Employment Agencies. A licence agreement may be concluded for a fixed term (which may be extended for one year), or for an open-ended period if the agency has operated on the basis of fixed-term licences for at least five years and recorded no violations of the rules. The agency may operate only with workers employed by itself. Professional staff in temporary work agencies must have higher education and at least two years of relevant experience, and must pass a professional examination. The other criteria used for granting a licence include the number of people registered as unemployed with the relevant regional public employment services and the number of agencies already holding a licence in a given area. The licence may be withdrawn without notice in cases of violation of regulations.
The minimum benefit level was set at 100% of the legally guaranteed income (minus taxes), and the maximum was fixed at three times the minimum benefit level.
The amended EIUA adopted in 1998 cut the potential period of entitlement to unemployment benefits for some groups of the unemployed (to 3 months for insurance up to 5 years, to 6 months for insurance of 5 to 15 years, to 9 months for insurance of 15 to 25 years and to 12 months [18 months if the insured person is older than 50 years and 24 months if the person is older than 55 years] for insurance of over 25 years)
Duration of financial assistance was increased to a maximum of 15 months (up from six).
Interns and apprentices having paid less than 12 months of unemployment insurance were no longer eligible to receive financial assistance.
The restitution payment would be reduced or terminated in case of working for pay.
Allowed private participation in power generation and distribution.
Reduced the number of controlled prices.
Removed the deposit requirement on non trade-related debt; liberalised foreign currency accounts of residents (restrictions on those of non-residents remain); lowered to 1 year the maturity of portfolio inflows subject to a custodian account requirement, and reduced its cost.
Harmonised legislation with EU directives, allowed foreign bank braches, and introduced a deposit insurance scheme.
Eliminated remaining restrictions on FDI and foreign ownership.
Eliminated barriers to entry of foreign bank branches.
Regulates the securities companies and established a supervisory authority.
Tightened and accelerated the court process in bankruptcy cases.
The major changes in the current pension system are an increase in the reductions in the replacement rate
To reduce the average replacement rate, the current maximum rate of 85 % – for 40 and 35 years of insurance of men and women, respectively – will gradually be reduced to 72.5 %. For persons who are not entitled to pension benefits but fulfil the eligibility criteria, a minimum state pension will be provided, financed from general tax revenues.
For the assessment of the eligibility criteria (but not for the calculation of pension benefits) the so-called additional qualifying period is also taken into account (such periods include, for example, years of university education [up to the number of years necessary to obtain a degree] as well as military service, completed before the year 2000), implying that men obtain a replacement rate of 72.5% when having a pension qualifying period of 40 years and women when having a pension qualifying period of 38 years. Staying active once the criteria for retirement are fulfilled is rewarded by bonuses whilst early retirement is penalised by maluses.
The new PDIA specifies three different pensionable ages at which an insured person acquires the right to old-age pension, depending on the length of the pension qualifying period (Figure 2.4). First, insured persons acquire the right to old-age pension when they attain 58 years of age – henceforth the minimum pensionable age – if they have completed a pension qualifying period of 40 years (men) or 38 years (women). Second, they acquire the right to old-age pension at 63 years of age (men) and 61 years of age (women) if they have completed a pension qualifying period of 20 years. This is the so-called full pensionable age. Third, insured persons acquire the right to old age pension at 65 years of age (men) and 63 years of age (women), if they have completed a pension qualifying period of 15 years.
The major changes in the current pension system are an increase in the retirement age for women, reductions in the replacement rate, and the introduction of minimum state pensions. In particular, the minimum retirement age for women increases gradually to 58 to 63 years by the year 2014, depending on the number of qualifying years; while for men, the range of retirement ages remains at 58 to 65 years.
In addition, there is greater flexibility an the date of retirement, as the insured will be able to choose the exact date around the so-called "full retirement age". The full retirement age for women will be 61 by the year 2023, and that for men 63 by 2009. Pension rights will continue to accrue after the "full retirement age," thus providing financial incentives to remain in work, but disabled and unemployed will be able to retire early without loss of benefits.
The major changes in the current pension system are are the introduction of a minimum state pension
Cleared the way for privatisation of the telecom company.
Provision for competent bodies, agencies and organisations involved in setting standards for professional knowledge and skills, as well as for procedures for obtaining national vocational qualifications
The latter paves the way for the privatisation of insurance companies.
Establishment of programmes and financing measures for unemployed persons and for employers
In 2001, a new Telecommunications Act was introduced to complete the deregulation of the market. The 2001 Act opened the fixed-voice telephony market to competition by unbundling the loop, i.e. the lines linking individual subscribers to the network. It liberalised both the construction of networks and the provision of basic telecommunication services.
The 2001 Telecommunications Act also established a regulator, the Telecommunications and Broadcasting Agency (the Agency), which is responsible for monitoring prices, regulating and supervising telecommunications markets, and administering interconnections.
This right was introduced in 2003 and was introduced gradually: 15 days as of 1 January 2003, 45 days as of 1 January 2004, and the whole 90 days as of 1 January 2005. Paternity leave has been designed for the father only. The LPCFCB defines it as his individual and non-transferrable right based on 'the take it or leave it principle'. A father must use a minimum of 15 days of the paternal leave during the period of maternity leave of the mother. These 15 days of leave must be in the form of full absence from the work. A father is not entitled to the paternity leave if he uses maternity leave (which is possible in exceptional cases, such as, if mother dies, abandons the child, is permanently or temporarily unable for independent life and work). The father has the right to 100% wage compensation during the first 15 days (100% of the insurance base). A father can use the remaining 75 days of the paternal leave in the form of a full absence from the work at any time before the child reaches 8 years of age. He retains the status of an employed person during these remaining 75 days when the state pays his social security contributions based on the minimum wage.
Restrictions on portfolio inflows with maturity of 6 months or more were eliminated.
More flexibility in the area of regular employment was introduced by the 2003 Employment Relationships Act (ERA) which relaxed regulations on collective dismissals
Improvement of temporary agency workers labour and social rights, reflecting the practice of most EU Member States: The agency must not assign any workers to replace workers on strike; when the user company has dismissed a large number of workers in the preceding 12-month period; when jobs are dangerous (as defined by EU Directives); and in other cases which may be defined in the sectoral (branch) collective agreements. A contract of employment cannot be terminated before the assignment period has expired, even if the user company no longer needs the worker. The agency may not assign the same worker to a user company continuously – or with a breaks of up to one month – for a period longer than one year for the same type of work.
The new Law on Labour Relations ensures that the temporary agency workers will enjoy labour and social rights in line with the International Labour Organisation (ILO) Convention No. 181 on private employment agencies, reflecting the practice of most EU Member States (see more in source).
More flexibility in the area of regular employment was introduced by the 2003 Employment Relationships Act (ERA) which shortened notice periods
More flexibility in the area of regular employment was introduced by the 2003 Employment Relationships Act (ERA) which reduced the levels of severance pay
In June 2002, the Slovene parliament passed a Law on European Works Councils (LEWC), aimed at transposing the EU Directive on EWCs into national legislation in advance of EU accession. The LEWC can be seen as a natural extension of existing Slovene legislation on employee information, consultation and co-determination, which does not take into account supranational company decision-making (see details in source).
Full or partial liberalisation for road, air, telecommunications, gas (2003) and electricity but incumbent share still high
This model determines the whole care procedure for a particular patient. Thus, for different cases, different payment is ensured that is proportional to the costs. Hence, the payment system is more appropriate for specific health problems and patients' needs. The complexity of the case is determined by the clinical diagnosis, procedures undertaken and the length of treatment. This model classifies the patients in groups of cases which are comparable, according to the diagnoses or standard types of care.
Broadening of tax base by reducing investment and depreciation allowances.
Awarding employers an exemption from paying social contributions for employing worker aged over 55 years, granting a lump-sum subsidy when a long-term unemployed person is taken on and allowing exemption from paying payroll tax as well as refunding contributions levied on the employer for employing a person with a university degree.
Exemption from the payment of social security contributions for employers employing unemployed people over 55 years of age. If employer employ older unemployed person for 2 years, employer don't have to pay social contribution rates for one year.
Definition of the conditions of operation of those companies where at least 40% of employees are persons with disabilities. The subsidy to integrate the pay of persons with disabilities employed in such companies will depend on the achieved work results and can vary from 5 to 20% of the starting wage.
Introduction of measures to reintegrate unemployed persons into the labour market, particularly those from excluded groups such as older workers and those without a vocational education. Measure include one-off subsidies to encourage the employment of long-term unemployed and recipients of social assistance
Introduction of a quota system for normal companies; Incentives for the creation of suitable jobs for persons with disabilities to the benefit of both employers and employees
New programme on improving knowledge, skills and competencies of the unemployed, and developing new jobs in local communities. Measures include the provision of education and training to a target of 30% of participants in the programme. It is foreseen that 10% of participants should gain regular employment at the end of the programme.
The Act defines more clearly the process of granting concessions for health care providers, along with the limitations and validity of the concessions, and introduces the concept of free specialists.
10% cut in the tax burden on labour, to the benefit of people with lower income/ unskilled workers
New active employment policy programme for 2005, aimed at changing the emphasis from preventing unemployment to actively increasing employment levels. In addition to employing disadvantaged groups within the unemployed population – which contribute to structural imbalances on the labour market – the programme also focuses on the narrowing of differences in inter-regional development as a priority issue of national employment policy, thereby further narrowing the differences between unemployment levels among these areas.
Establishment of a fund for the vocational rehabilitation and employment of people with disabilities. Among other things, the fund has the function to gather data, but also to make decisions on the rights and duties of people with disabilities and their employers.
The Act also limits private health insurance companies’ disbursement of revenue surpluses (dividends) to a maximum of 50% of the accumulated surplus, while the other 50% has to be put back into the complementary insurance fund in order to facilitate reducing the premiums. Moreover, each insurance company is obligated to manage their revenue and expenditure from complementary health insurance separately from other insurance businesses, and is not allowed to offer voluntary complementary health insurance to clients in combination with other types of voluntary health insurance.
The Law aims to put an end to “cream-skimming”, which started after general insurance companies entered the VHI market. The main objective of this new concept is to equalise the financial risks that citizens incur when opting for voluntary supplementary health insurance (requiring co-payment). That is, the Act states that each insurance company is obligated to accept any client who wishes to be insured, regardless of her or his age, sex or health status. The premiums are required to be equal for all who take out voluntary complementary health insurance.
Several provisions of the law require implementation through collective agreements, thus having the effect of making collective agreements compulsory in the public sector (see details in source).
The adjustment or indexation of pensions has also been amended several times – the most radical change occurring in 2005. Such changes have resulted in a significant decrease in the value of pensions. As a consequence, the pension fund is currently operating without a loss.
Gradual reduction of the payroll tax, with final abolishment in January 2009 – this helped to constrain labour costs. The initial progressive marginal tax rates were between 0% and 14.8%.
Introduction of five brackets with marginal tax rates of: 16%, 33%, 37%, 41% and 50% (for 2005 16%, 33%, 38%, 42% and 50%).
Withholding tax on dividends, interests and royalties 25%; implementation of EU Directives (Parent-Subsidiary, Merger, and Interest and Royalties); general employment relief, general investment relief, relief applicable to voluntary supplementary pension insurance schemes, relief applicable to donations.
Counselling and assistance for employment
Promotion of employment and self-employment
In 2006, stricter rules were introduced regarding the obligations of unemployed: they are obliged to actively search for employment and after three (six) months of unemployment they have to accept a job offer from the Employment Service for which the education is one level (two levels) below the education level of the unemployed person if the unemployed person does not comply with these rules the cash benefit is cut in half for a period of two months.
Programmes for increasing social inclusion
More recently, the establishment of specialised temporary work agencies was made easier through amendments to the EIUA adopted in 2006.
The main novelties introduced by the Act include the principle of voluntary conclusion, the possibility of subsequent accession to concluded collective agreements, the restriction of the validity of collective agreements to the parties that concluded it or their members, and the regulation that the collective agreement that is most favourable to workers should apply if an employer is bound by more than one collective agreement of the same type.
Wages are limited downwards by the Minimum Wage Act, introduced in 2006. According to the Act the minimum wage is determined once a year by the Minister of Labour based on the forecast of consumer price inflation, after consulting the social partners.
Implementation of the dual income approach with active income (mainly from employment and business) taxed at progressive rates and passive income (capital income) taxed at proportionate rates (interest: 20%, 15% in 2006 and 2007; dividends: 20%; capital gains are taxed from 20% to 5%, depending on the period of holding; full exemption from taxes after 20 years).
Replacement of the previous 5 tax rates (from 16% to 50%) on personal income tax by 3 tax rates (from 16% to 41%)
A new (fourth) valid reason for the ordinary termination of employment contract, namely the incapacity due to the disability to perform a job under the conditions set forth in the employment contract and in accordance with the Old age and Disability Pension Act and with the regulations on rehabilitation and employment of disabled, was included into the Act.
The 2007 amendments to the ERA expanded the possibilities for fixed-term contracts
Fixed-term employment contract to perform work within a project may be concluded for more than two years, under the condition that it is concluded for the whole duration of the project. In other cases the maximum total duration of (successive) fixed-term contract(s) is 2 years.
Introducing a wider definition of work that the worker is obliged to perform. A contract of employment has to contain a job title or type of work. In this way, the possibility to employ workers for a particular type of work is more clearly set out, which enables greater flexibility or movement of workers from one job to another within a company.
Exempted contracts for project work from the two-year time limit for temporary employment
Facilitated the termination of regular work contracts by further shortening notice periods in case of termination due to business reasons (to 30 days for less than 5 years of tenure, 45 days for at least 5 years of tenure, 60 days for at least 15 years of tenure and 120 days for at least 25 years of tenure)
Exempting employers from the obligation to pay severance pay if the employer or the Employment Service offers the employee an employment contract with another employer during the notice period and the employee concludes this contract.
Slovenia enters the European Monetary Union, and thereby adopts the euro as its currency.
The amended Prevention of Illegal Work and Employment Act opened employment possibilities for short-term and small work by considering it as declared work
According to the amendment this time limitation has been changed to 170 hours per year, but upon his/her written consent a worker may perform 230 hours of overtime in a year.
The 2007 amendments to the ERA introduced possibilities for longer overtime work and, so as to make part-time work more attractive to employers, defined the principle of proportionality of rights of part-time employees with respect to the number of working hours.
Reducing the maximum number of overtime hours a year from 180 to 170 hours. With the consent of the worker, overtime work can extend beyond 170 hours a year but may not exceed 230 hours.
Gradual reduction of tax rate: 2007 from 25% to 23%
Gradual reduction of tax rate: 2009 to 21%
Gradual reduction of tax rate: 2008 to 22%
Gradual reduction of tax rate: 2010 and beyond 20%
Reduction of the number of tax brackets from 5 to 3 with marginal tax rates of: 16%, 27% and 41%.
Free inclusion in the pre-school education for every second and further child from the same family, who are in the same time in the kindergarten
Unlimited guarantee for all deposits by individuals and small enterprises until end-2010
The Act mainly stipulates exemptions from co-payments for low-income groups and introduces liability of income from various forms of contract work for contributions to compulsory health insurance.
Providing the most deprived families with free education for all children, while other families pay from 10% up to 80% of the value of the programme in dependence of the payment amount which is conditional on the family income. This increased accessibility to pre-school education particularly in the areas with increased immigration and demographic changes.
Increase of the general and special allowances. New investment incentives for business income.
In 2008, the level of general and special personal income tax allowances was raised, lowering the tax burden, in particular for low income earners, and special allowances were reduced and simplified.
Stepping up public works as an instrument to promote the development of public services: education, social security, care for the elderly, home help, childcare, environmental work.
Graduate students are given 6 months on-the-job training in their field of study. The students then have six months to graduate, after which they return to the same employer. The employer receives a grant of EUR 2,000 for six months to subsidise the wages of the graduate. Employers should cover the cost of a medical examination, the cost of a mentor up to EUR 100 per month, as well as provide a student allowance to cover costs of EUR 3 per hour spent training (up to 100 hours in total). Target was to support 600 graduates.
Providing lump sum subsidies for employment of the disadvantaged, e.g. disabled, or over 50 years and out of work for at least 6 months, or persons entering the labour market for the first time and unemployed for at least 6 months, or long-term unemployed out of work for over a year, or parents. Supported employers are selected based on a monthly public tender. They must employ the persons from target groups for at least one year, in order to receive the subsidy in the amount of 4,000 EUR. The subsidy is EUR 8.000 for employing someone who has ben out of work for more than 24 months – in 2010 about 4,000 persons benefited from Employ.me and Employ.me 2.0.
General measures for the period 2009-2015, targeted at unemployed without adequate education and work experience. The objective is to increase employability by increasing the educational and training level, and by attaining basic skills (key competencies), by offering courses of computer literacy, language courses, courses for driving licenses for trucks/buses, book-keeping and accounting courses etc. organised by external providers. The target for the 2009-2015 period was to include 31,500 persons the programme. Only in 2010 10,669 people were included in the programme, therefore it is expected that the target number will be surpassed.
Employed persons with lower level of education can apply for training subsidies, e.g. for language courses, computer courses as well as preparation to assessment/certification in vocational education. In 2010 6,198 youngsters benefited from the initiative, about 15% of people involved in labour market related training.
Eligible employers can place up to 50% of their workers on a temporary waiting list for work scheme. These workers will not work but they will keep their employment relationship. They will get 85% pay compensation and must devote 20% of the time off to education and training. Of the 85% compensation, the government will refund to employers 50% of the workers’ average pay and employers will pay the remaining 35%. Training costs are refunded up to a maximum of €500 per worker by ESF and the government. Application for the subsidy must be submitted by 31 March 2010. The employer can only apply once for a subsidy lasting at least three months. This period can however be extended by three months several times up to a maximum of 12 months.
As part of the crisis measures, partial subsidy for companies temporarily reducing working time by up to 20%, maintaining the maximum number of jobs by reducing the cost of labour. Private employers as well as cooperatives (except in agriculture) are eligible if they experience a drop in demand by up to 20%. The subsidy amounts to 120 EUR per employee per month, for a maximum duration of 6 months (renewable up to a total of 18 months). This subsidy is given directly to the employer, which is also free to reduce workers' wages up to 10% but they are not allowed to do overtime or pay bonuses to management. The announced cost was EUR 230 million, enough to subsidise the wages of 250,000 workers.
Amendments to the Public Finance Act to empower the government to lend and provide guarantees to financial institutions, recapitalise banks, and purchase bank assets
Issuance of treasury bonds in the amount of €1 billion in January, which were temporarily deposited with the domestic banking system
Provision of up to €12 billion in guarantees on new debt issuance by financial institutions until end-2010, which is estimated to cover all banks’ foreign refinancing needs for the next two years
Announcement of €1.2 billion government guarantees for loans to nonfinancial companies
The growth in wages envisaged for 2009 in the public sector will be reduced from 9.9% to 7.1%. In addition, the total number of employees in public administration will be 2% lower than that projected in the original staffing plan for 2009.
Under the LPSFWT, companies that reduce the working week from 40 to 36 hours will receive a subsidy of €60 for each worker. In order to shorten the working week, a company must conclude a company collective agreement on a shorter working week with the company trade union. Companies are also eligible to receive a further €60 for each worker if they reduce the working week to 32 hours. In such instances, Article 2 of the LPSFWT stipulates that the company must conclude with the representative trade unions an agreement providing for a shorter working week. In this case, the employer is obliged to pay the worker compensation covering the difference between the 32 hours and the full working time. Social security contributions are paid on the latter basis and the labour law status of the worker is not changed. The longest period for which subsidies for a reduced working week can be awarded is six months. During this time, the recipient companies: must pay wages and social security contributions for the workers for whom they are receiving subsidies; cannot lay off workers; are prohibited from ordering overtime work and paying executive bonuses for the whole financial year. The deadline for submitting an application for the subsidy is 30 September 2009.
One-off solidarity assistance for the most disadvantaged, aimed at improving the economic position of individuals and families earning less than 60% or 70% of the minimum wage. The amount of assistance ranges between EUR 120 and EUR 200, depending on the conditions. Assistance for approximately 100,000 people.
As part of a stimulus package (already announced in December 2008 and passed in the form of a supplementary budget in March 2009) the payroll tax was eliminated.
Employers are eligible for a reimbursement of social security contributions if they hire unemployed persons younger than 26 or older than 55 years, whose occupation is in excess supply. In 2006 there was already legislation that made employers eligible for a reimbursement of social security contributions if they hired an unemployed person younger than 26, a first time job-seeker whose occupation is in excess supply.
Various measures aimed to promote flexicurity, with the aim also to extend labour market measures (e.g. career guidance, preparation for employment, etc.) to cover both the unemployed and those who are in the process of losing their employment.
New training programme for unemployed for the academic year 2010-2011. Unemployed will be supported to enter public educational programmes, at all levels of education, from primary, secondary (vocational, general, college) to higher and university education. Participants will also be able to attend other general public adult education programmes for the reintegration of groups with special needs, and to promote further and life-long education. Target was 4,800 unemployed.
Promotion of job rotation and job sharing – according to quotes, these are to be added to active labour market measures
Additional incentives to work past the pension eligibility age. Partial retirement will be extended, allowing for greater flexibility in combining work and pension benefits.
The National Referendum was held on 10 April 2011 and voters were asked whether they were for or against the law on temporary work. The law was decisively defeated in the referendum, with a surprising 80% of votes against from a turnout of nearly 34%.
The new law sets out to regulate, in a uniform way, different forms of precarious work or ‘mini-jobs’ in Slovenia. It defines this kind of work as paid periodical work or permanent temporarily limited work of people such as students, pensioners, and unemployed people. Mini-jobs are performed on the basis of a referral which creates a special contractual relationship between the employer and the employee. This relationship is not an employment relationship; therefore, mini-jobs are not regulated by Slovenian employment law. The law would allow the unemployed, students and pensioners to work up to 60 hours per week and 720 hours per year but with less rights, such as lower pay, no reimbursement of work-related costs (meals during work, travel to and from work, business trips), no remuneration for sick leave or parental leave, no holiday allowance, no severance pay and no annual holidays.
The Act on Corporate Governance of State Capital Investments regulating the governance of state's asset holdings was adopted in April 2010
It also established a central ownership agency responsible for managing such assets. The management of the Agency was appointed in October 2010.
On 14 June 2011 the parliament (the State Assembly) adopted the new Law on Works Councils (LEWC). The new LEWC transfers into the legal order of the republic of Slovenia the Directive 2009/38/EC from 6 May 2009. It defines more exactly the terms information and consultation and eliminates some unclarities. It also gives greater role to the union representatives engaged as outside experts.
The minimum was increased by 23% starting in 2010, significantly lifting the ratios of the minimum to average and median wages
The amount of unemployment benefit was increased in the first three months of receipt to 80 % of the average wage, instead of 70 % so far. The period for determining the average wage was reduced from 12 to 8 months. The minimum (EUR 350 gross) and maximum (three times the minimum) level of unemployment benefits were increased.
Significantly increasing the amount of the minimum income by over 25% to EUR 288.81. A new equivalence scale was introduced to provide work incentives, attributing higher income for those working – and somewhat limited the final impact of the increase in the basic amount. Still, the number of cash social assistance recipients was estimated to double.
The availability of unemployment benefit was extended for older workers by one month, enabling insured persons older than 50 with insurance for over 25 years to receive unemployment benefit for 19 months, and enabling insured persons older than 55 with life insurance for over 25 years to receive unemployment benefit for 25 months
A previously unemployed person can receive a partial unemployment benefit even if she starts part-time employment (for up to EUR 200 per month).
The condition for receiving unemployment benefit has been changed to having an employment record of 9 months in the last 24 months. Previously the requirement was 12 months employment in the last 18 months. Essentially, the law increases the right to UB, especially for young people, who often have little professional experience and are employed on fixed-term contracts.
Setting uniform rules and procedures for the allocation of benefits, also to avoid undue accumulation of or exclusion from benefits, by introducing a simpler (one-stop shop) and more targeted (based on incomes and property) social transfer system. Although these measures were meant to rationalise the number of beneficiaries, no significant reduction was expected in the short term. As the preparation of certain databases took more time than expected, the entry into force was postponed to 1 January 2012.
Gradual extension of the period for calculating the pension base from the 18 best consecutive years to 27 years. The extension will decrease the pension rating base by 12.1 % for men and 10.5 % for women. However, the replacement rate will be capped at 60 %.
Changes in the incentive system. Individuals who are eligible for a pension, but continue to work full time, will be able to claim 20 % of their pension entitlement. The permanent penalty for early retirement will be increased to 0.3 % per month before the age of 65.
Change in the indexation of pension benefits. Instead of only indexing to nominal wage growth, the new approach also links pension benefits to prices (40 % weight until 2015; 30 % thereafter).
Introduction of portfolio choices for workers opting to participate in the voluntary occupation scheme and a revised minimum return guarantee.
Increase in the full and minimum retirement ages. The statutory retirement age will be lifted to 65 and the minimum retirement age will be 60. The gap between the retirement ages of men and women progressively disappears. The retirement age for workers with longer careers also increases to 60 for men and 58 for women.
Financial incentives for employers to employ older workers. Employers will pay 30 % lower social security contributions for workers above the age of 60. Hiring workers with long careers over the transitional period until 2017 results in a 50 % reduction in social security contributions for employers.
Tax relief was increased for low earners: persons with a yearly income below EUR 10,200 (previously EUR 8,300) are entitled to tax relief of EUR 2,000. Persons with yearly income below EUR 11,800 (previously EUR 9,600) are now entitled to tax relief of EUR 1,000.
Rejected by the voters on a referendum (June 5 2011): Additional incentives to work past the pension eligibility age. Partial retirement will be extended, allowing for greater flexibility in combining work and pension benefits.
Rejected by the voters on a referendum (June 5 2011): Gradual extension of the period for calculating the pension base from the 18 best consecutive years to 27 years. The extension will decrease the pension rating base by 12.1 % for men and 10.5 % for women. However, the replacement rate will be capped at 60 %.
Rejected by the voters on a referendum (June 5 2011): Changes in the incentive system. Individuals who are eligible for a pension, but continue to work full time, will be able to claim 20 % of their pension entitlement. The permanent penalty for early retirement will be increased to 0.3 % per month before the age of 65.
Rejected by the voters on a referendum (June 5 2011): Change in the indexation of pension benefits. Instead of only indexing to nominal wage growth, the new approach also links pension benefits to prices (40 % weight until 2015; 30 % thereafter).
Rejected by the voters on a referendum (June 5 2011): Introduction of portfolio choices for workers opting to participate in the voluntary occupation scheme and a revised minimum return guarantee.
Rejected by the voters on a referendum (June 5 2011): Increase in the full and minimum retirement ages. The statutory retirement age will be lifted to 65 and the minimum retirement age will be 60. The gap between the retirement ages of men and women progressively disappears. The retirement age for workers with longer careers also increases to 60 for men and 58 for women.
Rejected by the voters on a referendum (June 5 2011): Financial incentives for employers to employ older workers. Employers will pay 30 % lower social security contributions for workers above the age of 60. Hiring workers with long careers over the transitional period until 2017 results in a 50 % reduction in social security contributions for employers.
New measure ‘50plus’ to improve the employment opportunity for unemployed people over 50 years of age and registered as unemployed for more than 6 months. The measure has two stages: 1) on the job training for 1 month (as unemployed persons); 2) full employment for at least 18 months at the same employer (where on the job training was performed). The employer receives subvention of Eur 8,000 for each unemployed person employed for full time or proportionally less for part-time employment.
General Description Programme “Prvi izziv” (first challenge). It is intended for anyone under 30 years of age who are at least three months registered as unemployed persons. The programme will offer employment for 1 240 young unemployed for a period of 15 months, with a three-month probationary period through subsidies to employers.
“Public work” shall be limited to long-term unemployed persons only, even if they are still entitled to the unemployment cash benefit. In lieu of payment of the unemployment benefit, the Employment Service of the Republic of Slovenia shall pay the wages and reimbursement of expenses related to work (such as meals during work, travel costs to and from work). The objective is to fundamentally change the position of unemployed persons as passive receivers of unemployment benefits and promote active performance of work. Yearly funds planned: EUR 30 million for 4.300 persons to be included in public works.
General Description Second public invitation “Priložnost zame” (Opportunity for me): subsidy for employment of unemployed people from target groups at public invitation of 7.500 EUR for long-term unemployed, disabled and unemployed people of region Pokolpje in the non-profit sector.
Programme “Zaposli.me” intended to promote the employment of difficult-to-employ unemployed persons. The objective of the programme is to provide subsidised employment for 5318 unemployed persons in 2012. For the period 2012-2014.
Second public invitation “Priložnost zame” (opportunity for me): subsidy for employment of unemployed people from target groups at public invitation of 7.500 EUR for long-term unemployed, disabled and unemployed people of region Pokolpje in the non-profit sector.
Prvi izziv (first challenge) programme: employers can obtain a subsidy for the employment of unemployed people receiving social assistance at the social work centres. For the period 2012-2013 € 2 million are available from the state budget to subsidise 440 jobs (€ 4 500 per full time employment for at least one year of employment) for unemployed recipients of social assistance who are: 1) Last 6 months continuously registered unemployed with the Employment Service, or 2) Aged 50 years or more, or 3) Less educated (i.e. have a finished or unfinished elementary school).
EAR-1 introduces: 1) Shortens the period for worker’s application to the open vacancy from five to three days. 2) The new ERA-1 also enables the integration of workers in the relevant active labour market measures during the notice period. The employer must allow to such employee at least one working day a week free for responding to calls from Employment Service of Slovenia for informing, training and attending any job interviews.
A decree on funding of higher education institutions was adopted, which takes into account students’ progress in the variable part of financing. The variable share amounts to 3% and notably takes into account progress in studies and graduation rates.
Bank recapitalisation (largely undertaken in 2013) and transfer of some non-performing loans (NPLs) to the Bank Asset Management Company (BAMC) during 2014 (as of end-September 2014, it received 616 corporate NPLs, with a gross value of €3.5 billion, for which BAMC paid €1.5 billion in bonds (reflected in public debt).
The reforms extend the basis for pension calculations from the 15 best-paid years of service to the 24 best-paid years. Men will be eligible for 57% of their average pay during that period, and women for 60%.
The reforms also introduce incentives for people to continue working after meeting the retirement criteria. A bonus of up to 12% can be earned by those who stay in their job for up to three years after qualifying for retirement on a full pension. Those who continue to work will also be paid 20% of the pension they would have received in addition to their salary.
Despite the increase in the general retirement age, there are certain criteria which will enable individuals to retire earlier. They include periods of care for children, years of military service and also whether the person started work before the age of 18.
Increases the full retirement age for both men and women to 65, or after 40 years of pensionable service provided that a worker is at least 60 years old when they retire. (There will be a transition period for the introduction of the reforms. In 2017, those who wish to retire on a full pension will have to show that they have 40 years’ pensionable service and are not younger than 60; in 2018, any worker wishing to retire on a full pension who does not have sufficient years’ pensionable service will have to be no younger than 65).
Enabling workers to register as unemployed during notice period
Abolishing the compulsory registration of job vacancies with the Employment Service of Slovenia.
In January 2013, a new, independent public agency, the Slovenian Competition Protection Agency (CPA), took over the responsibility for enforcing the competition law. In 2013, the budget of the CPA was increased to address resource issues to a certain degree.
Reducing special legal protection against dismissal for special categories of workers.
In cases of termination of employment due to incompetence or economic reason, the Act omits current legal obligation for an employer to offer an equivalent job to the employee, but simultaneously, it encourages employers to do so by determining consequences for the worker, if he/she accepts an offer for a new employment contract to take another work, or he/she does not accept the offer.
ERA-1 defines an economic dependant as a self-employed person who on the basis of a civil law contract performs work in person; independently and for remuneration for a longer period of time in circumstances of economic dependency and does not employ workers. Economic dependency means that a person obtains at least 80% of his or her annual income from the same contracting authority (Article 2013 of ERA-1). The objective of this provision is to provide a legal path to the person that is an economic dependant for exercising limited labour law protection against the contracting authority. According to Article 214 of ERA-1 the economic dependant can claim prohibition of discrimination, minimum notice periods in the event of termination of a contract, prohibition of termination of a contract in cases of unfounded reasons for termination according to ERA-1 and enforcement of liability for damage.
Stricter conditions for obtaining a permit for carrying out the activity of providing work of workers for another employer (employment agency).
It caps the number of temporary agency workers employed by a company through temporary work agencies at no more 25%, a solution that was hotly contested by employers during negotiations. However, small employers are exempt from this provision.
The reform prevents multiplication of (one or several) successive fixed-term contracts for the same work, the uninterrupted duration of which would exceed two years.
On 27 November 2013 the Slovenian Parliament adopted a number of amendments to the Labour Market Regulation Act to regulate the recruitment and supply of temporary labour, especially among foreign workers. The new regulation implements tougher rules on temporary work agencies (see details in source).
The regulatory framework regarding the powers and tasks of the Labour Inspectorate, the powers of inspectors, the inspection procedure, and inspection measures have been improved. The objective is to increase the effectiveness of the Labour Inspectorate through appropriate punitive policies, staff capacity building and greater cooperation with social partners. The Inspectorate is gaining new powers to take action in the event of more serious or repeated violations of regulations.
Employers will be jointly liable for making sure wages are paid with the agency supplying temporary workers, to curtail this form of abuse of temporary workers.
In the case of termination of employment due to the business reasons the ERA-1 omits the obligation of prior notification of employees of the intended termination of the employment contract.
The maximum notice period has been reduced from 120 to 80 days, a compromise made in exchange for the preservation of unemployment benefits at 80%. A longer notice period (80 days) applies only when the employee completed 25 years of service with the same employer and if the collective agreement at the sectoral level does not specify different notice period (but not less than 60 days).
Introducing severance pay for fixed-term contracts. The amount of severance pay is specifically defined for fixed-term contracts.
Severance pay is reduced on a graded scale depending on years of service: Pay in the amount of 1/5 of the basis for the employment of one to ten years, 1/4 of the basis for the employment of ten to twenty years, and 1/3 of the basis for more than twenty years of service with the employer. The retirement allowance, a special payment that employees are entitled to when they retire, is restricted to those who have been employed by a company for at least five years and can be agreed otherwise by collective agreements.
The ERA-1 defines cases (with the purpose of preserving the employment or providing the smooth running of the working process) and conditions (adequacy of alternative work, restriction to a period of three months, preservation of a more favourable payment for the work) under which an employer can order carrying out alternative work
Allowing employees to extraordinarily terminate an employment contract if their employer does not pay social security contributions for three consecutive months keeping the same rights as in case of terminating an employment contract for business reasons by an employer.
Temporary layoff: Employers can now temporarily lay off workers, paying them 80% of their usual pay during that period instead of their full wages, as they were previously obliged to do. While laid off in this way, workers are obliged to take part in any training required by their employer. An employer may put worker on temporary layoff for no longer than six months in one calendar year.
The reforms strengthen the internal flexibility of a company, making it possible to reassign workers to other suitable posts without their consent.
In 2013, important reforms to facilitate early restructuring of viable companies were introduced. The framework provides for preventive restructuring of large- and medium-sized companies. The overall procedure of court-mandated debt restructuring has been streamlined by broadening the scope of companies eligible for a “simplified procedure” – now besides micro companies, it applies also to small companies.
The new ERA-1 simplifies the defence procedure in the case of termination of the employment contract for the reason of incapacity and culpability and in the case of extraordinary termination of employment contract.
The Act on Emergency Measures in the Field of Labour Market and Parental Care includes temporary measures relating to the payment of unemployment cash benefits: a reduction in the amount of cash benefits is proposed to contribute to a balanced budget. The unemployment cash benefits are to be reduced by 3% but shall not be lower than EUR 350. The proposed measures are of a temporary nature. They are to remain in force for one year following a year in which economic growth exceeds 2.5% of the GDP.
Amendments made to improve the social situation of the most vulnerable groups – single-parent and large families – in terms of increased weighting to calculate the amount of social assistance. Greater access to social benefits is provided even with the changes that affect the amount of assets that are to exercise their right to social assistance and welfare allowance is not taken into account, in cases where the beneficiary otherwise dispose of certain assets – real estate, but cannot dispose of them in terms of improving their social status. Changes in social legislation are bringing new solutions in the area of activation recipients of transfers, while introducing a special bonus for those who are involved in voluntary traineeship and regulated voluntary work. Furthermore, a part of the child allowance in the amount of 20% of it is not counted in financial aid, neither is the parent family allowance for a child who is not enrolled in kindergarten. Changes and amendments have entered into force on 1.1.2014.
The Act on Emergency Measures in the Field of Labour Market and Parental Care includes temporary measures relating to the payment of maternity benefits: In both cases, a reduction in the amount of cash benefits is proposed to contribute to a balanced budget. The maternity benefits shall not be higher than two times instead of two and half times the average monthly salary in the Republic of Slovenia based on the latest official information on monthly wages. The proposed measures are of a temporary nature. They are to remain in force for one year following a year in which economic growth exceeds 2.5% of the GDP. The Act has entered into force on 1 August 2013.
Reservation of unemployment benefits at 80% of basic pay for the first three months, instead of the reduction to 70% that was initially proposed. In the subsequent nine months, the unemployed will receive 60% of their basic pay, and 50% thereafter.
The government froze pensions until end-2015.
15 public companies were identified for privatisation with one privatised in October 2013. (Including one state-owned bank and a major telecom provider. By early 2015, five companies had been privatised and six were in the process).
With regard to temporary or occasional work for pensioners, the amendments of the Labour Market Regulations Act of 2013 propose a reduction of taxes to be paid by employers (from 25% to 3% of the salary for such work). Such a reduction will ensure that this form of work remains a viable option for employers.
According to the Article one, the employer who during the period 1.11.2013 - 31.12.2014 enters into a contract of indefinite duration with an unemployed person under 30 years of age who was registered as unemployed person at least three months before the contract, for the first 24 months of employment shall be exempt from the employer's contributions for pension and disability insurance, health insurance, parental care and unemployment insurance. The Ministry is expecting 5,000 new jobs for young people as an outcome.
Members no longer needed to carry out work in a certain amount in order to satisfy the condition. It was enough being member of the fund for at least twelve months.The maximum period for payment is extended from 150 to 300 days. Members who reached 55 years before the benefit period of 300 days elapsed were reimbursed for 150 days (makes a total of 450 days).
Introduction of tests for both dismissal for redundancy and dismissal for reasons of personal conduct or capability.
Applies to all employees both in the public and private sectors, except for those in managerial and supervisory functions. Increases legal protections for employees generally against arbitrary and unfair exercise of authority by employers. Gives added protection to those groups of workers who are particularly vulnerable.
Abolition of the sickness insurance fee for wage and salary earners.
Increase in sickness benefits and allowances for dental care, financed partly by an increase in employers' fees by 0.6 percentage points and partly by higher individual contributions to the health scheme.
Extension of unemployment insurance to all employees, guaranteeing a basic and taxable benefit of Kr. 35 per day. The reform partly financed by an increase in employers' fees by 0.4 percentage points.
A reduction of the retirement age to 65 years and an improvement in old age and other pensions proposed to take effect during 1975-76.
Marginal tax rates are reduced for middle income brackets.
Abolition of the sickness insurance fee for wage and salary earner.
The reduction in supplementary old-age pensions (wife allowance and municipal housing allowance) due to non-pension incomes above a certain basic amount are reduced from one-half to one-third of the additional income.
Marginal tax rates are reduced for taxable incomes up to Kr. 4'000 per year.
Deductions for savings are increased from Kr. 800 to Kr. 1'600 for married persons.
Reduction in state tax by Kr. 1'600 per year for medium income earners.
Gives unions decisive representation in company boards.
Gives unions decisive co-decision rights at the shop-floor level.
State personal direct tax scales for 1977 are reduced, with maximum adjustment amounting to Kr. 2'350 per year. The costs (Kr. 63 billion) are partly financed by an increase in employers' social security contributions.
Personal income tax scales reduced for 1978 at estimated cost of Kr. 5,5 billion.
Abolition of interest rate regulation on banks' households deposits.
The cash labour market support is to be raised from Kr. 55 to Kr. 65 per day.
In addition to adjustment of the 1979 state income tax scales through indexation, some reductions in the marginal tax rates (estimated cost to revenue Kr. 590 million).
Parenthood insurance extended: for the last 30 days of parenthood leave, the benefit is to be same as in earlier part of this leave, i.e. on a par with sickness benefit.
Extra tax deduction for basic pensioners raised.
Marginal tax cuts approved for income in 1980 as well as a ceiling on combined rate of state and local income tax.
In April 1980, the controls on issuing rates for private bonds were abandoned. Prior to this, the interest rate for industrial bonds had been lU-3U percentage points higher than that of government and housing bonds, but' after the reform the differential increased to 0.9 - 1.6 percentage points.
A decentralization of responsibility for schools to the municipalities. Less targeted state grants and more lump sums, municipalities may choose to allocate resources. Increased private influence in the school in the form of user influence. Mainly national decentralization efforts. To some extent, perhaps the international trend toward decentralization has been significant but this is uncertain.
Security markets partially liberalised (from partially repressed to partially liberalised).
Improved establishment and financing conditions for independent schools. National efforts towards improved conditions for independent schools. A limited liberalisation (very limited number of independent schools increased from approximately 0.5 to 0.7 % of the number of pupils).
Case of "shortage of work" encompasses not only situations where there is no work for employees but also other cases where dismissals are occasioned by decisions made by virtue of the employer's right to manage the business, for economic, organizational and other reasons. Moreover, the last-in-first out principle is applied. Those who are made redundant retain, for the following nine months, a preferential right to re-employment in the enterprise in which they were formerly employed.
The Act includes provisions relating to the unreasonable termination of a fixed-term employment contract. If there are no reasonable grounds for the termination, it be declared invalid and damages be awarded. General legislation on the subject in Sweden nowadays consists in the 1982 Employment Protection Act (widely referred to by the initials LAS), which represents a further development of original legislation dating from 1974. It applies to all employees, except for four small cases. The act applies also to employers of all types. The reform is marginal with respect to the previous legislation. Owed Economic Survey of Sweden (1982) says: "Some measures have been undertaken in order to decrease labour market rigidities, in particular those concerning hiring and dismissal".
In cases of unjustified dismissal the employer also incurs liability in damages towards the employee concerned even if the latter does not contest its validity. Damages be awarded both for financial losses and for the non-material injury suffered. An unlawfully dismissed employee who chooses to let the dismissal stand is entitled to receive, in addition to the normal pay due up to the expiry of the notice period, compensation for financial losses possibly suffered as a result of a reduction in income following dismissal.
Failing any special statutory rule or collective agreement which provides otherwise, contracts for fixed-term employment are permitted only in the cases listed in sections 5, 5a and 6 of the Act. In cases of doubt as to what has been agreed between the parties on the form of employment, the legal presumption is that it constitutes permanent employment of unspecified duration.
Cancellation of the two-days legal authorization in order to receive the sickness benefits.
The main elements are a substantial reduction in marginal tax rates for the majority of full-time wage earners and a limitation of tax credits for interest payments in the new system. Only 5 % of tax payers will have marginal tax rates above 55 %.
In 1983, the principal tool for credit rationing, the banks' liquidity quotas on government and housing bonds, was abolished.
National company tax to be lowered from 40 to 32 %, with reduced opportunities for depreciation.
Capital gains taxation is increased through lower standard deductions, and a new transaction tax (1 % of turnover) is introduced.
Second step in the three-year programme for reducing marginal taxes to 50 % for ordinary income earners is carried through. (financed by increases in energy taxes)
The banks' lending ceilings had been abolished, which substantially increased the scope of market determined credit allocation.
Renegotiation of local government salaries for 1984 leads to an increment of 0.8 % plus Kr 110/month, as of 12'1985.
The third step in the three-year programme for reducing marginal taxes to 50 % for ordinary income earners is carried through.
In 1986 the quantitative investment limits for priority bonds were completely withdrawn.
An agreement is reached on wage increases for public sector employees amounting to 8.8 % for 1986 and 1987 inclusive. The settlement does not include any formal wage-wage links.
Act amending Unemployment Insurance act of 1973: training participation is considered equivalent to work for benefit eligibility purposes.
Government subsidies for the employment of persons between 18 to 20 years of age without work experience.
Under this Ordinance, training allowances can be granted for employment market training occasioned whenever it is considered that the training would lead to permanent employment, a stronger position of the employee or better representation of the members of the underrepresented sex in a particular field of employment. The employment market authorities will either create the training scheme or use the regular educational system. In order to obtain the training allowance, the person shall be 20 years of age or older, be unemployed or likely to become so and shall be seeking a job through the state employment office (special rules for handicapped persons, youth between 18 and 20 years of age and refugees). Normally the training programme is not be received whenever a normal student grant can be obtained. It includes a training allowance consisting of inter alia a daily wage (the same amount as granted under the Public Insurance Act) and the costs of the material for the course.
Changes in health insurance come into force, with new rules for computing daily benefits for the first fourteen days of an illness and the provision of benefit from the first day of an illness.
It amends the Unemployment Insurance Act (sets the limits for daily insurance benefits): unemployment Insurance Benefit is increased by 400 Kr a day.
The waiting day in sickness insurance was removed.
An unemployed person approaching benefits exhaustion is given the right to receive a job offer of a duration that would renew his entitlements.
Semi-retirement pensions are increased from 50 to 65 % of the loss of earned income.
Pensioners obtain compensation for the 1982 devaluation. The base amount is uprated by Kr 400.
9'000 new training places mainly in manufacturing and care occupations
A removal allowance of Kr 5'000 per family in order to increase mobility in the labour market. Danes seeking jobs in Sweden are also entitled to this allowance.
The taxi market was deregulated to increase competition.
A defense of the public governance of the school. Rejection of liberalising efforts in school. A national defense of "the social democratic model for the school." Continued public governance of the school.
A reduction of the marginal tax rate: 3 % for incomes exceeding Kr 75'000. The highest marginal tax rate will be reduced from 75 % to 72 %..
Regional bus- and railroad-transportation was deregulated in 1989 and state-run needs testing and establishment controls abolished. Instead, local authorities were urged to make use of tenders to ensure competition for authorisations.
It introduces a new section 30a in the Act No. 80 of 1982, respecting employers obligation to give notice to concerned trade union in case of termination of fixed-term contracts.
Deregulation of exchange controls is continued by removing all restrictions on: purchasing foreign shares from non-residents, selling Swedish shares to non-residents, purchasing real estate abroad for legal entities, and direct investment.
The Central Bank abolishes most remaining exchange regulations as of July 1989. Private individuals as well as corporations resident in Sweden will be free to: invest in foreign bonds; invest in real estate abroad; borrow and lend abroad, also in Swedish kronor, irrespective of the purpose and maturity; repay foreign loans in advance; undertake leasing and other financial activities abroad; buy foreign currencies from an authorised bank and open interest-bearing exchange accounts; deal in forward foreign exchange contracts and options in Sweden; transfer capital from Sweden in connection with emigration; take all means of payment and securities into and out of the country. Non-residents are enabled, for instance, to invest in Swedish bonds and money-market instruments, as well as to deposit Swedish kronor in a Swedish bank.
The Central Bank complements the liberalisation of the exchange regulations by extending the possibilities of buying and selling currency abroad. As of 1st Jan.,1989: amounts received from abroad 5 be exchanged abroad, without a permit, prior to repatriation; permits will be provided by the Central Bank to transfer amounts abroad for exchange there; permits will not be granted, however, for the transfer of amounts which are to be distributed, after exchange, among several payments abroad; exchange be arranged for Swedish kronor as well as for other currencies and at sight as well as forward or for the regulation of options.
75 days of work would be distributed on at least four months. That replacement rate was lowered from 91.7 % to 90 %.
Municipalities and counties begin introducing competition among public providers. For example Stockholm county began paying hospitals according to the DRG (Diagnosis-Related Groups) system (hospitals are paid for treating a patient according to what illness she or he has and not according to the kind of treatment applied).
The introduction of private school choice and a flat-based government grant system for the school. National aspirations of increased liberalisation of the school.
Restrictions are eased on foreign ownership of financial institutions.
Capital income is to be taxed at a state tax rate of 30 % applied both to interest income and capital gains. Returns on some assets are, however, taxed at lower rates, "allemansparande" at 20 % and certain pension savings at 15 or 10 %. Interest expenses are deductible from capital income up to Kr 100'000 (tax value 30 %) and at 70 % above that sum (tax value thus 21 %).
Income tax scales were adjusted so that the marginal tax declined by 2 % points for incomes up to Kr 75'000 (from 5 to 2 %) and by 7 % points for higher incomes (from 17 to 10 %). The highest marginal income tax rate including local taxes at 31 % declined to 65 %.
New State income tax scales come into force: the state income tax is levied at a single rate of 20 % for incomes above SKr 184'000, and the threshold is to be increased annually by the increase in the consumer price index plus 2 %. Leading to a top marginal rate of 51 %, including flat rate local government taxes at 31 % for individuals subject to State income tax. The threshold at which the State income tax starts to apply is indexed to the annual change of consumer price index plus 2 percentage points.
The dismantling of internal market regulations in agriculture and the food sector is initiated. This implies that all domestic market regulations are to be eliminated before 1995.
This reform may be seen as a clear liberalisation reform. It expanded individual choice, notions of freedom of choice, competition, the individual was central in the policy texts, "deregulated" curriculum (the curriculum was targeted, much less central control / expert rule; the idea was that locally, a meeting between teacher and student would determine the content).
Emphasis of the free choice of school, decentralization and user influence. National aspirations. Private school choice is highlighted as important.
School system is decentralised with municipalities taking over responsibility for employment of teachers from the state.
The previous system of Central Government grants for child care precluded reimbursement for private child care. With the change of the grant system, the main obstacle to privatisation was thus removed and most municipalities are rapidly moving to a voucher system with free entry for private providers.
Restrictions on foreign ownership of Swedish companies are abolished.
Employers now cover the first two weeks of sickness. The average replacement ratios are lowered and employers' contributions to health insurance are reduced.
Parental insurance compensation for caring for a sick child is lowered to 80 %.
The replacement rate in sickness benefit was lowered to 65 % for the first three days of illness, 80 % from the fourth to the ninetieth day, thereafter remaining at 90 %. OECD Economic Surveys Sweden 1992 p115 states: Sickness benefits are lowered to 75 % of wages for the first three days of sick leaves, followed by 90 % up to the 90th day and 100 % thereafter.
Employees' contributions to unemployment insurance is doubled.
The Parliament authorises the sale of government shares in 35 companies. It is the start of a privatisation program amounting to Kr 23 billion by 1994.
A youth traineeship is introduced on a one-year test basis: unemployed between 18 and 24 years of age are offered on-job training while continuing to receive social or unemployment benefits.
Airlines from the EU and EEA countries are allowed to fly domestic.
Modelled on the EU rules prohibiting restrictive agreements and abuse of a dominant position and including merger control.
County councils receive general opportunity to buy health services from private providers.
In the convenience goods sector, entry conditions have been affected by a recent modification of the "Building and Planning Act". When allocating land for different purposes, the local authorities can no longer making distinction between food stores and other retailers, making it less likely that lack of space will prevent new supermarkets from entering the market.
In the textile, leather and footwear sectors, all remaining quantitative import restrictions have now been removed.
The Post Office would be corporatised and the postal monopoly abolished.
Competition between domestic aviation companies is allowed.
The new local government Act (1 1992) does not contain binding requirements but encourages local authorities to use "internal markets", as well as contracting-out solutions and public tenders.
The parliament has also passed a law giving private schools the right to start operating at a reimbursement rate of 85 % of the municipality's average cost per student. Private schools have to follow a national core curriculum, but they will have considerable leeway in establishing their own "profile", for example in the choice of pedagogical approach. Independent schools are guaranteed public funding on an equal basis with municipal schools in the same area. By contrast, independent schools are not allowed to charge tuition fees, and they cannot reject students from within the municipality. Funding for public schools responds automatically to changes in attendance. Choice among public schools across municipalities is also allowed.
One self-financed day is introduced in the health insurance system and compensation levels are, on average, reduced.
Replacement rates in rehabilitation programmes are lowered.
Compensation for partial unemployment is limited to 150 days.
The maximum replacement amount increased.
An own contribution is introduced in the health insurance.
The retirement age is raised from 65 to 66 years and public pensions are reduced starting from January 1993.
Five months of work (at least 75 hours / month) (or at least 65 hours / month for ten months). Re-qualification through labor market training or rehabilitation is limited to one period, then working condition must be met for new benefits.
The public employment service monopoly of formal job brokerages is abolished.
The unemployed are entitled to a slot in a training course that could be used for requalification.
To introduce the possibility of residents being able to choose a familiy doctor.
The Family Doctor’s Act, which had the goal of encouraging primary care physicians to “go private”, introduced a mixed payment system and allowed patients to change their family doctor every 12 months.
To increase the possibilities for establishing private practices.
Private general practitioners are allowed to compete with public services.
The maximum replacement amount decreased. Replacement rate decreased.
One waiting day introduced in sickness benefits and the replacement rate for sick leave above one year lowered to 70 %.
The Unemployment Insurance replacement rate is reduced from 90 to 80 %.
Compensation in the relief work scheme is reduced by 10 %.
A five-day waiting period is introduced in the unemployment insurance.
Rules for early retirement are tightened.
Swedish Telecom was made into a corporation and a telecommunication market was introduced.
With effect from 1995 corporations taxes are lowered from 30 to 28 %.
The tax on distributed corporations earnings is repealed.
The youth practice labour market scheme is phased-out. (11, 1995 1)
Planned deregulation of the railway track network, intended to abolish the monopoly of the state railways (abolished by the incoming government before it took effect).
The electricity market was established: The grid is still in state ownership.
The probationary periods were shortened from twelve to six months.
The law, effective from January 1994, which stipulated that private doctors could finance treatment of patients with public funds was repealed on November 1995,
Unions' right to blockade single-person companies was reinstalled.
The replacement rate at maternity leave is lowered from 90 to 80 %.
The possibility of acquiring indefinite benefit periods through participation in labour market measures is abandoned.
The tax on private pension schemes is increased.
An employee contribution rate of 1 % to unemployment insurance was established.
The incoming government repealed the amendment that abolished the possibility of indefinitely renewing entitlements to insurance benefits through participation in active programmes.
Membership of unemployment insurance funds made mandatory.
Obligatory unemployment insurance repealed by the incoming government.
The replacement rate is lowered from 65 to 50 %.
The base for pension entitlements will be life-time income (with special provisions for time off-work due to child minding, military service and certain higher education) instead of the best 15 years.
Pensions will be linked to income developments and not only to price developments. The indexing factor is being reduced to the extent that real growth is under a certain norm and increased to the extent that GDP growth exceeds that norm.
Taxation of distributed corporations profits is reintroduced.
The state income tax is raised by 5 percentage points.
Sanctions for not complying with the job availability criteria for unemployment benefits are tightened.
Introduction of a temporary 50 % wage subsidy (to be terminated by end-1997) for companies hiring long-term unemployed person older than 60.
Reduction of the number of almp schemes.
Limits opportunities for the establishment of private practices and for citizens being able to choose a familiy doctor.
The maximum replacement amount decreased. Replacement rate decreased to 75%.
Social security contribution subsidies for hiring an unemployed person.
A substantial privatisation program started amounting to Kr. 50 billion in revenues by 1998. For Nordbanken, which became 100 % state-owned as a result of the banking crisis in the early 1990s, the first steps towards full privatisation were taken in 1995, while during the preceding year the pharmaceutical company ‘‘Pharmacia’’ was sold for SKr 9 billion and 50 % of the forestry company ‘‘AssiDomän’’ for SKr 8 billion.
Benefit sanctions are lengthened from 20 to 60 days if an unemployed person refuses a job or training offer.
Intensified efforts in the sphere of formal education aimed at low-skilled workers, long-term unemployed persons older than 55. They are offered a public work at wage rates equal to unemployment benefits as an one-off measure.
Unemployed person between the age of 25 and 55 receive a one-year education grant.
Activation - either in labour market training or in formal education schemes - has become compulsory for youths 20 to 24 years old with unemployment spells of 100 days.
County public transport authorities were given the right to operate passenger traffic on the main trunk network within the counties.
Competition in the electricity market was introduced in 1996 with the network (the high-voltage national grid) being separated from other activities and organised as a national monopoly, and competition increased with the integration of the Swedish and Norwegian spot markets for electricity. Concentration on the generation side was high at the outset, and has been followed by intense merger and cross-holding activities among power generators in northern Europe.
Local union freely agree on recruitment and dismissal provisions. Economic sanctions to the violation of the norms are to be adapted to the enterprise's capacity to pay.
Enterprises' rehiring obligations vis-à-vis of dismissed workers now expire after nine months instead of twelve.
Workers on replacement contract for three years within a five-year period are to receive permanent contracts.
Twelve-months fixed term contracts are available with no restrictions. All enterprises are allowed to employ up to five persons on such contracts. The fixed term contracts can be prolonged up to 18 months.
Part-time workers are to be given priority for vacant full-time positions.
The replacement rates for median and low-wage earners are reduced from 80 % to 75 %.
The waiting periods of 6 days are introduced.
An increase in the replacement rate in sickness and unemployment benefits from 75 to 80 % from 01.01.1998.
A reduction in the income base for UI and sickness benefits.
The minimum age for eligibility is increased to 20 years of age.
Subsidised jobs no longer qualify for first-time benefits.
Increasing the employers’ obligation to pay sickness benefits in the first part of a sickness period (‘‘the sickness wage’’) from two to four weeks
The minimum age for part-time pensions is raised, the maximum number of hours worked and the replacement rate reduced.
Social assistance recipients under the age of 25 can be required to undertake education or training.
Projects of a more active use of unemployment insurance, focusing on people with weaker position in the labor market: young people, long term unemployed, the elderly, the working disabled and non-Nordic citizens.
Individual action plans for those at risk of long-term unemployment.
The largest adult education program ever in Sweden. It was run through the municipal adult education program (KOMVUX). The objective was to increase the skill level of adult low-skilled workers to the medium skill level (i.e. to a high-school diploma). Unemployed, but also low-skilled employed workers were eligible. The program ended in 12 31, 2002. 10 % of the total workforce participated.
A new telecommunications act which entered into force in mid-1997 seeks to address some of the market imperfections by obliging the network owner to allow other operators access at cost-based prices and by allowing government regulations to impose price caps to prevent it from exploiting its monopoly position.
The Central Bank is prohibited from taking instructions from the Government. The requirement to consult with the Ministry of Finance is modified to a requirement of informing it prior to monetary policy actions. The Governor and the other members of the Executive Board only be removed in the case of serious breach of their duties or incapacity to execute these. Accountability to Parliament is strengthened with biannual testimony of the Central Bank Governor at public hearings of the Standing Finance Committee of Parliament. The decision of the choice of exchange-rate regime reverts from the Central Bank to the Government in line with practice elsewhere in Europe.
The Law regulates how patients should be prioritized according to the type of medical problem. Those patients in greatest need of care should have priority over other patients.
The maximum replacement amount increased. Replacement rate increased to 80 %. Work conditon lowered to 70 days during 6 months.
The maximum Unemployment Insurance (earning-related component) benefit is raised to 80 %.
The possibility of requalifying for benefits through participation in subsidised jobs no longer available. Benefit eligibility is restored conditional upon almp participation.
The qualifying period is increased from 5 to 6 months (instead of the proposed 9 months).
Activation programs for the unemployed under the age of 24 after 100 days and of the older unemployed after 12 months has become compulsory. Most wage subsidy programmes converted to the work-for-benefit principle.
A framework to restrict the wage drift arising from local bargaining (wage drift assumed to fall to a historical low of 1/2 %).
The period of sick leave which employers have to pay was shortened from 28 days to 14.
Refunding of social security contributions for firms hiring the long-term unemployed.
The contribution-based pension will be underpinned by a guaranteed minimum pension.
Future pensions will be based on all income earned from the age of 16. Pensions will be adjusted to take into account changes in the expected remaining life time of pensioners and if income growth falls below or exceeds a given benchmark. Contributions will be earned also for child-raising, military and civil service and by university and university college students.
Partial old-age pension can be taken from the age of 61 years.
The 1990/1991 tax reform which resulted in a flat tax schedule for the median labour income is partially reversed between 1993-1998, resulting in that the total tax relative to wage costs amounts to about 60 % for even the lowest paid.
Free entry to the market for long-distance bus transport
Lower basic pension to married pensioners even if the spouse is not a pensioner.
Compensation, in terms of individual tax discounts, for the employee pension contribution of 7 % of gross earnings.
Six % reduction of early retirement benefits (with compensations of lower income pensioners).
Less favourable indexing of current benefits.
A tax-cut programme is announced in the 2000 budget, consisting of two main elements: First, an increase in the threshold for the state income tax so as to reduce the proportion of taxpayers facing it to 15 %, which was the intended coverage in the 1991 tax reform.
Introduction of an Activity Guarantee Programme, providing support and intensive guidance from counsellors in a small group of 10 or 15 jobseekers while they have at the same time access to the full range of regular labour market policy programmes
Jobseekers who refuse an offer of suitable work or a labour market measures risk a reduction of unemployment benefit. The reduction of benefit increases every time an offer or a measure is refused and after the third occasion in the same benefit period, the right to benefit ceases.
During the first 100 days, the jobseeker can limit the search both occupationally and geographically, but thereafter the jobseeker must be prepared to expand search areas.
Unemployment benefit and social assistance recipients are required to participate in full-time activation after 27 months of unemployment.
Private recruitment firms allowed to operate.
National roaming rights were imposed. This means that a new entrant can immediately offer the same geographical coverage as existing players, without having to install its own network infrastructure to provide it, for the first seven years after a licence is granted.
UMTS mobile telephone licences are awarded to four operators after a “beauty contest”.
Number portability will apply to mobiles from September 2001, which should, in principle, promote greater competition by making it easier for consumers to switch service providers.
Existing operators can be forced to sell excess capacity on “fair market” terms if another party wishes to purchase it.
After ten months of employment, the so-called "guarantee wage" (i.e. the minimum pay perceived, regardless of the number of hours worked) for temporary work agencies will be increased from 75 % 85 to of normal monthly pay. A basic salary system is established, ensuring that the level of the guarantee wage is the same every month.
A new Mediation Authority is established as from 01.07.2000 to help underpin an improvement of the wage bargaining process. The new authority has slightly greater powers than its predecessor. Its role is to mediate in labour disputes and call parties to discussions, or keep informed in other ways about current or future wage negotiations.
Employees and employers may conclude individual local arrangements on the organisation of working hours, even if this latter agreement involves deviations from the sectorial agreement. A local/individual agreement shall rest upon mutual respect and an understanding of the individual's need for more flexible working hours and of the demands of the employer's activities for more effective and flexible organisation. The agreements on individual working hours will be tried out during the period of validity of the sectorial agreement and then be evaluated by the parties. The ceiling on permissible overtime work has been lowered from 200 hours per year to 100 hours.
Increase of the of the maximum and minimum replacement amount
Decrease of the duration of non-employment benefits.
Stricter eligibility for non-employment benefits.
Special employment support measures (sarskilt anstallningstod) in the form of a 75 % reduction in labour costs for employers hiring unemployed over 56 years and who have been unemployed for 24 months and participated in the Activity Guarantee for at least 3 months; Extended recruitment incentives (utökat förstärkt anställningsstöd) in the form of a 75 % reduction in labour costs for those who has been unemployed for 48 months.
Special employment support measures (sarskilt anstallningstod) in the form of a 75 % reduction in labour costs for employers hiring unemployed over 56 years and who have been unemployed for 24 months and participated in the Activity Guarantee for at least 3 months.
Third step of the reform of income tax consists of two parts: 1) removing the effects that the general pension contribution has on both average and marginal taxes and 2) reducing the proportion of income earners that pay state income tax.
First step of the reform of income tax consists of two parts: a) removing the effects that the general pension contribution has on both average and marginal taxes and b) reducing the proportion of income earners that pay state income tax. Second step of the reform of income tax consists of two parts: a) removing the effects that the general pension contribution has on both average and marginal taxes and b) reducing the proportion of income earners that pay state income tax. Green tax swap reform (2001-2006): increased tax on environmentally harmful activities and reduced tax on labour income.
Introducing the possibility for early retired people to return to work.
The second step of the four-year tax-cut programme announced in the budget for 2001. An additional quarter of employees’ pension contributions is offset through individual tax discounts as from 2001.
National Labour Market Board has introduced a procedure to increase employment among part-time workers.
Emergency hospital care is not allowed for the purpose of making a profit.
According to estimates from the Mediation Authority, the branch-level centrally-agreed hourly wage increases in the business sector (i.e. excluding enterprise-level wage talks) amounted to 2.8 % in 2001.
The 2001 bargaining round continued the tendency to decentralise wage talks to individual workplaces, particularly for white-collar workers, while maintaining strong co-ordination of the branch-level negotiations.
The maximum setting during the first 100 days will be increased by SEK 100 a-day (from SEK 580 to SEK 680). After the first 100 days the maximum setting will remain of SEK 580 a-day.
Limitation of the maximum duration of benefit duration to 300 days.
1) Participation in active labour market programmes no longer confers entitlement to a new benefit period for unemployment insurance. Aim of the measure is to break the vicious cycle between labour market measures and unemployment. 2) During the first 100 days, the jobseeker can limit the search both occupationally and geographically, but thereafter the jobseeker must be prepared to expand the search areas. 3) Jobseekers who refuse an offer of suitable work or a labour market measures risk a reduction of unemployment benefit. The reduction of benefit increases every time an offer or a measure is refused and after the third occasion in the same benefit period, the right to benefit ceases.
Unemployment Benefit are extended to part-time workers becoming unemployed.
It is forbidden to social parties to conclude agreements on compulsory retirement before the age of 67. It is also allowed to all employees to stay in employment until the age of 67.
The threshold for the 20 % state income tax is raised, thereby reducing the proportion of taxpayers facing it.
Pilot project with training in health and care services: unemployed can be hired on full time at the same time as they study on the health and care programme up to three semesters. The employer receive a recruitment incentive equivalent to 55 % of the wage costs and reimbursement for the education costs.
The special funds for wage subsidies to employers who employ occupationally disabled was increased with SEK 120 million so that approximately 1'000 more occupationally disabled people can get employed.
Temporary staff reinforcement at the employment services have been made permanent.
Introduction of individual learning accounts giving individual workers the possibility to set aside a maximum of SEK 9'500 per year, including a tax reduction, in a skill development savings account.
Changes in Childcare take effect. The introduction of "Maximum Fee" increases the incentive to move from unemployment to work or to extend working time.
The EU Directive 1999/70/EC on fixed-term work is implemented on the basis of a joint statement signed by many social partners: The measures are aimed at preventing abuse arising from the use of successive fixed-term employment contracts.
The EU Directive 97/81/EC is implemented on the basis of a joint statement signed by many social partners part-time work: it facilitates part-time work by preventing discrimination against workers.
A new system of pharmaceutical subsidies took effect in 2002. A National Pharmaceutical Benefits Board now decides which medicines are to be subsidised and what their price will be (based partly on a proposal from the manufacturer), taking account of cost-effectiveness, both in absolute terms and compared with alternative ways of treating the same condition. All prescriptions must now be replaced at the pharmacy with the cheapest equivalent product unless the patient’s doctor rules otherwise on medical grounds. However, the patient can choose a more expensive product and pay the difference.
Increase of the maximum and minimum replacement amount.
The daily rate of unemployment benefit will be increased to the 80 % of former pay, but subject to a maximum cash figure. The minimum daily rate will be increased from SEK 270 to SEK 320. During the first 100 days of unemployment, the maximum rate will be raised from SEK 680 to SEK 730. From the 101st day onward, the maximum is increased from SEK 580 to SEK 680.
Increasing the temporary employment support given to municipalities and county councils. This will have a positive impact both on employment in the welfare sector and on the quality of services. The subsidy level of the special recruitment incentive was also increased to 85 % of the wage cost and the target group was extended to all participants in the activity guarantee (earlier only people over 57 years old).
Allocating SEK 360 million to give approximately 3'000 employed employment training to prevent bottlenecks (bottleneck training only for employees).
Allocating special funds for employment of the occupationally disabled. The target is to assist 60'000 occupationally disabled people in obtaining employment during 2003. In July 2003, just over 63'000 occupationally disabled people (40'000 men, 23'000 women) were in employment. From July 2003 the funds for these subsidies were increased by SEK 125 million so that approximately 1'100 more occupationally disabled people can get employment.
Electronic Communications Act in July 2003: The new act strengthens the role of the National Post and Telecom Agency in several areas by giving it the powers to instruct the dominant operator to allow competitors access to their networks or limit their prices to the end-customer to what is reasonable. The thrust of these provisions indicates a stronger ex ante regulatory approach than before.
Replacement ratio for sickness is lowered to 77.6 %.
The employers' period for paying sickness benefits is extended by one additional week.
Tax reductions for various forms of SME's, to foster start-ups and to facilitate the transitions between forms of enterprise. The tax on SME leaders is to be reduced by a total of SEK 1 billion (the focus is on improving conditions for small companies) and in autumn 2003, the gift tax is to be modified to simplify generation changes in small family businesses.
Increase in the volume of active labour market training by 15'000 places in 2004. A further increase foreseen in 2005 to cover the broadening of the sabbatical leave scheme to a potential 12'000 places.
Subsidised employment will be shortened from 24 to 18 months.
Allowance of a new "adjustment support" to all workers who have been employed for at least one year by one or more companies covered by the AGB adjustment insurance. This individual form of support for workers of all ages involve help with education/ training, finding a new job or starting an enterprise, or take any other form that the local social partners agree upon.
Extension nation-wide of the sabbatical leave scheme experimented since 2002 for a period of two years in a number of areas. Under the second stage of the scheme, a total of 10'000 workers on open-ended contracts and having been employed for at least two years will be able to take up to one year of sabbatical leave, being temporary replaced by 10'000 persons, among long-term unemployed, immigrant workers or persons with occupational disabilities. During the leave, the employees involved will receive a State benefit equal to 68 % of their normal pay and will not be allowed to take employment elsewhere or work as temporary staff at their normal workplace. Pay and other conditions for the substitute worker are to be regulated in agreement between the employer and the worker.
Parental leave has been prolonged and parental insurance benefit levels raised.
Introduction of a new "adjustment insurance" scheme (more generous), providing for monetary support (AGB) to blue-collar older workers faced by collective or individual redundancy in a situation of "work shortage". In order to receive this support concerned workers must have worked for at least five years with one or more employers covered by the AGB insurance. All workers who have been employed for at least one year by one or more companies covered by the AGB insurance also receive individual "adjustment support" under the new adjustment agreement. Some 950'000 workers in the private sectore are covered by the scheme.
The replacement rate for sickness benefits has been raised from 77.6 to 80 %.
The employers’ period for paying sickness benefits has been reduced from three to two weeks, while a 15 % employers’ co-payment has been introduced for the remainder of the sickness spell.
Employers will pay a contribution based on their wage bill to the insurance scheme, rising in stages from the current 0.03 to 0.3 % in 2009.
Introduction of a new "adjustment insurance" scheme, providing for monetary support (AGB) to blue-collar older workers faced by collective or individual redundancy in a situation of "work shortage". AGB has existed since 1965 and was most recently amended in 2001. In 2004 it has been reformed and made more generous. A condition for receipt of this support is that the concerned workers must have worked for at least five years with one or more employers covered by the AGB insurance. All workers who have been employed for at least one year by one or more companies covered by the AGB insurance may also receive individual "adjustment support" under the new adjustment agreement. Some 950'000 workers in the private sector are covered by the scheme. Employers will pay a contribution based on their wage bill to the insurance scheme, rising in stages from the current 0.03 to 0.3 % in 2009.
Allowance of a new "adjustment support" to all workers who have been employed for at least one year by one or more companies covered by the AGB adjustment insurance. This individual form of support for workers of all ages may involve help with education/ training, finding a new job or starting an enterprise, or may take any other form that the local social partners agree upon.
Cut of income taxes by SEK 200 in 2004 through a tax reduction for the fixed payable amount, in the framework of the green tax shift strategy, whereby taxes on energy are increased while taxes on labour are reduced. The national basic reduction has been raised by SEK 2'400 for all taxpayers with an assessed earned income of between SEK 58'400 and 270'100. The basic reduction has also been raised for incomes in the range SEK 46'000 - 58'300 and SEK 270'200 - 294'100. No change has been made for incomes below and above these brackets.
Rehabilitation measures and wage subsidies can be used to facilitate re-entry into working life for employed men and women who have been on sick leave and need to change jobs.
Introduction of a new three-step model for job-seekers with disabilities. The first step includes intensified orientation and guidance. The second step implies a new form of employment for people with occupational disabilities named “Utvecklingsanställning” (Supported employment) where the participant can be placed at work place with rehabilitation facilities during a trial period. The duration of this support is 12 months and can be combined with other activities such as guidance and training. The third step is a new form of employment for people with severe occupational disabilities named "Trygghetsanställning" (Sheltered employment). The size (percentage) of the wage subsidy depends on the level of disability and the tasks to be undertaken by the participant.
The possibility to direct wage subsidies for people on long-term sick leave is extended from pilot areas to the whole national territory.
Stop of: Creation of "bonus jobs" (or "Plusjobb") to raise quality of publicly financed activities (especially health care, schools and community services). These positions will be used to perform quality-enhancing tasks that are not otherwise carried out. To get a bonus job, a person will have to have been unemployed for more than 2 years. People in bonus jobs must be offered pay at the collective agreement rate. The employers will receive a subsidy of 100 % the cost of wages, up to SEK 1'000 per day.
Creation of "bonus jobs" (or "Plusjobb") to raise quality of publicly financed activities (especially health care, schools and community services). These positions will be used to perform quality-enhancing tasks that are not otherwise carried out. To get a bonus job, a person will have to have been unemployed for more than 2 years. People in bonus jobs must be offered pay at the collective agreement rate. The employers will receive a subsidy of 100 % the cost of wages, up to SEK 1'000 per day.
During 2006-2007 the national labour market administration will be provided with resources to strengthen the control of the unemployment insurance.
The Public Employment Service will be allocated resources for the recruitment of up to 200 additional employment officers over the next two years. One of the objectives of this is to improve contact between the Public Employment Service and employers.
Increase in the grant enabling local governments to provide holiday jobs for upper secondary school students who have difficulty in obtaining such work on their own, such as young people with foreign background or disabilities.
Introduction of education-leave replacement trainee positions, to help people acquire proper education and training in the health and elderly care services and provide jobs for unemployed people. The employer will receive a wage subsidy for the trainee, while the PES can also subsidise the employee's training by up to half the cost (maximum SEK 1'000 per week).
Provision of trainee positions for unemployed graduates, mainly in small business, resulting from a collaboration between the PES and staffing agencies.
Stop of: Introduction of education-leave replacement trainee positions, to help people acquire proper education and training in the health and elderly care services and provide jobs for unemployed people. The employer will receive a wage subsidy for the trainee, while the PES can also subsidise the employee's training by up to half the cost (maximum SEK 1'000 per week).
Rise of the wage subsidy ceiling for occupationally disabled people, from SEK 13'700 to SEK 15'200 per month from 1 July 2005 and to SEK 16'700 per month from 1 January 2007.
Regional hospital should remain public. Hospitals turned private should not be allowed to make a profit.
Fixing the average weekly working time at the most 48 working hours and the night/day rest at least 11 continuous hours. Exceptions are allowed for public tasks (e.g. police, armed forces).
Rise in the ceiling of the income base (from 7.5 to 10 price base amounts), which is applied to calculate income-based benefits during e.g. sickness and parenthood.
Rise in the basic parental benefit (lowest level) from SEK 60 to 180 per day.
Review of men and women who have been absent from work due to sickness for more than two years or have been awarded sickness activity compensation for a limited period. The purpose is to reassess all such cases partly in order to ensure that rehabilitation or other measures are being taken to facilitate the beneficiary’s return to the labour market, and partly to verify that the correct benefit is being awarded. The initiative will be introduced progressively, starting as a pilot project in one region. The intention is to extend the measure to all other regions of the country.
Amendment to the law allowing men and women who have been in receipt of sickness or activity compensation for at least one year to study for a period not exceeding two years, during which time their entitlement to receive sickness or activity compensation will remain dormant.
Employer's SSC and payroll taxes paid by the self-employed have been lowered by 0.18 percentage points as part of the green tax shift strategy to 32.28 and 30.71 respectively.
The basic income tax allowance will be raised (which particularly benefits low and medium income earners) as part of the green tax shift strategy. The effect implies a maximum tax reduction of just above 40 SEK per month.
Tax reduction for income earners, in compensation for personal social insurance contributions. On average, this will lower taxes by approximately SEK 110 per earner per month. Since it began in 2000, this reform has lowered the average tax charged by over SEK 900 per month.
Rise of the wage subsidy ceiling for occupationally disabled people, from SEK 13'700 to SEK 15'200 per month from 01.07.2005 and to SEK 16'700 per month from 01.01.2007.
Provision of apprenticeship positions for unemployed people aged 20 to 24 who lack a complete upper secondary education (employment training at the workplace will be combined with studies in core and vocational subjects).
New subsidies for employers who hire persons who have been out of work for more than a year (new start jobs). New start jobs will involve a subsidy corresponding to employers’ social security contributions for people who have been unemployed, have participated in labour market policy programmes or have been receiving fulltime sickness benefit, or sickness or activity compensation for more than a year. The subsidy will apply for a period as long as the individual in question has been absent from working life, though for a maximum of five years. The new start jobs will include young people aged 20–24 who have been unemployed for at least six months. However, in their case the subsidy will apply for no more than a year. In the case of people older than 55, the subsidy will be available for twice as long as the individual has been absent from working life, though at most 10 years. The subsidy will be available for new start jobs in the business sector and to public sector employers engaging in business activities.
New start job for young people aged 20-24 qualify only after 6 months of unemployment, providing support and increased incentives for unemployed youth to obtain work or engage in further education, but the subsidy apply only for one year.
Substantially reducing the number of people in programmes (from 143'000 in 2006, to 90'000 in 2007 and 64'000 in 2008) and abolishing several measures. Measures that will be abolished are: sabbatical years, bonus jobs, educational leave replacement positions, jobs for recent graduates, computer activity centres, international work placement grants, employment training in the regular education system, and general and enhanced recruitment incentives.
For people older than 55, the subsidy is available for twice as long as the individual has been absent from working life, though at most 10 years.
Applicant travel for young people: Young people aged 20 to 24 who are unable to obtain employment where they live will be reimbursed for travel costs associated with employment interviews (applicant travel).
Banning dismissal on grounds related to parental leave. However, the ban is not applicable if different conditions or different treatment are a necessary consequence of the leave. Introducing a new rule of evidence that divides the burden of proof between the employee and the employer.
Simplifying the regulations and improving the possibilities of using fixed-term employment. Agreements on fixed-term contracts can be made for general fixed-term employment, for substitute positions, for seasonal work and when the employee has reached the age of 67 years. A fixed-term contract becomes a permanent contract if, during a five-year period, the employee has been employed on such a contract by the same employer for a total of more than two years.
Employees are not any more allowed to count an extra period of employment on reaching a certain age.
The basis for calculation of the level of unemployment benefits that has passed from the last 6 months’ income to the last 12 months.
From 2007, the higher ceiling during the first 20 weeks of unemployment benefits is abolished. The replacement rate is lowered from 80 to 70 % after 40 weeks and to 65 % after 60 weeks (90 weeks for parents with children under 18).
Fixing the maximum unemployment benefit level at SEK 680 a-day (before the maximum setting was SEK 730 a-day during the first 100 days and 680 the following days). The gross replacement rate will decline from 80 to 70 % after the first 200 days. When the benefit period ends, the person will be transferred to a job and development guarantee scheme with a gross replacement rate of 65 %. The basis for calculation of the level of unemployment benefits that has passed from the last 6 months’ income to the last 12 months.
The ceiling in the sickness insurance system will be lowered.
Decrease of replacement rate to 70% after 200 days (after 100 days for the young) and stricter eligibility criterias. Higher membership fees and increased financing fee to the state.
Shorter benefit duration maximum of 300 days, except for those with dependent children who will be able to claim unemployment benefits for 450 days.
Stricter qualification requirements have been introduced for eligibility to receive unemployment benefits. The number of hours worked to qualify for unemployment benefit has been increased from 70 to 80 hours per calendar month over six months within the previous 12 months. Moreover, studying at university no longer constitutes a qualifying factor for eligibility to receive unemployment benefits.
A longer work tenure is now required to qualify for the benefits. Studies will no longer qualify for benefits.
Employers' contributions abolished for people who have been receiving social welfare allowances for more than one year (new start jobs).
The responsibility of employers for co-financing sickness benefit costs for employees who are on full-time sick leave will be abolished.
Membership fees for unemployment insurance are to be increased by up to SEK 300 (around € 32 as at 22.03.2007) a month for employed people.
The government announced in December 2006 that it would undertake the sale of six wholly or partly owned SOEs as part of a larger divestment programme. The programme is estimated to deliver proceeds of around SEK 50 billion (€ 5.3 billion) per year between 2007 and 2011, although this estimate is uncertain and depends on market conditions.
Offering access to a range of labour market programmes, including work training, work placement, subsidised employment and skills enhancement.
Intensified jobseeker activities, including coaching.
Introducing special New start jobs, called 'Well again jobs', for people who have been receiving sickness benefit, rehabilitation benefit, sickness or activity compensation for at least a year. The employer's SSC is reduced to 200 % for as long as the person has been absent. Moreover, those who have sickness compensation, and return to the labour market, will not have their benefits reconsidered. Special conditions apply for youth and elderly.
Giving long-term unemployed people and people receiving social assistance a so-called "job and development guarantee". This programme replaces the previous "activity guarantee" and aims to develop individually designed measures to get participants into employment as soon as possible. The reform includes the following three phases: 1) participants begin with intensified job seeking activities including personal coaching; 2) they then have access to a wide range of unemployment policy programmes, such as job training, a work experience placement or a subsidy for employment and skills development; 3) after 450 days of participating in this programme without having been able to obtain work, they will be assigned an "appropriate" job that corresponds to their personal skills and that is "useful for society". Participants in the programme who have unemployment insurance will receive compensation corresponding to 65 % of their previous wage, up to a maximum of SEK 680 (about ?72 as at June 2007) a day. The others will receive SEK 223 (?23) a day for a period of 450 days at most.
It provides young people with the guarantee of a job (jobbgaranti för ungdomar) and lowers employers’ social contributions for this category of worker.
It amends section 5 respecting employment contracts limited in time. The duration of temporary contracts has been extended (to two years), but this has not been paralleled by any easing of the rules for regular contracts.
It amends section 15 (conditions for employment contracts limited in time) of the Act No. 80 of 1982. Where a seasonal employee, who at the end of the employment has been employed by the employer for a specific season for more than six months during the past two years, will not be given further seasonal employment at the beginning of the new season, the employer must notify the employee to this effect at least one month prior to the commencement of the new season.
Increasing the length of paid parental leave by one month in the manufacturing, mining and construction sectors, and introducing payments on a monthly basis.
Introduction of a gender equality bonus for the parental leave system to encourage parents to share parental leave more equally. Parents may receive a bonus of up to SEK 3'000 (around ? 320) as a credit in their tax account if they share equally the take-up of parental leave benefit.
Repelling the Stop laws. Greater opportunities to convert hospitals into private practices. Greater opportunities for hospitals to make a profit.
From 1 January 2008, the municipalities have the possibility to introduce child-raising allowances, making it possible for parents with children aged between one and three to stay at home a little longer after the end of their parental leave.
The number of benefit days that can be used in case of part-time unemployment has been limited to 75.
Replacement of the earlier "Activity Guarantee": It gives long-term unemployed people and people receiving social assistance a so-called ‘job and development guarantee’ (jobb- och utvecklingsgaranti) which offers reduced social security contributions or payroll tax to employers who provide work for people who have been unemployed for a period from six months to a year.
Reduced social security contributions for young people. To make it more attractive to employ young workers the employers' SSC, excluding retirement pension contribution, was halved for young people. The reduction entered into force on 1 July 2007 and included people aged 18 to 24.
The State has reduced its holdings of Teliasonera, a major telecommunication firm in the Nordic countries.
Third step of the earned income tax credit reform, expected to enter into force on 1 January 2009. As in the first two steps, the aim is both to lower the average tax rate, to reduce thresholds to the labour market, and, to reduce the marginal tax rate for low and medium income earners so that it pays to work more, for example to move from part-time to full-time work. The third step also suggests a limitation of the state income tax for incomes just over the break point, implying increased incentives for people to work more. Possibly, this will also enhance the "education premium" by making investments in education pay better.
Second step of the earned income tax credit reform: To have the maximum possible effect on the labour supply and employment also the second step is aimed at making it more rewarding to take a full- or part-time job relative to staying on benefits. Therefore, the larger part of the second step in the earned income tax credit goes to low- and middle income earners. The levels in the earned income tax credit are raised and a new level is introduced. The measure reduces the tax paid by those affected by it by about SEK 2'400 a year on average. The increase in the net income for low- and middle income earners attributable to the total earned income tax credit will come to at least 6 %. The average tax is being lowered for everyone having earned income and the marginal tax on annual earned income diminishes for incomes up to SEK 280'000.
A return-to-work plan should be drawn up in cases where there is a risk of long-term sickness absence. After no more than three months of sick leave, an assessment must be made of the person’s ability to work in another role with the current employer. If the employer cannot offer suitable work and the case of sickness risks becoming long-term, a contact must be made with the Employment Service.
January 1st, 2008 and a new labour market authority, the Employment Service (Arbetsformedlingen) will replace the previous structure. The Government also intends to improve matching efficiency by increasing the resources for intensified counselling, job-brokering and job search activities.
New legislation came into effect in January 2008 on public procurement and procurement in water, energy, transport and postal services.
The county councils are required to have systems of choice in primary care.
Introduction of free establishment for accredited private providers and capitation payment following the choice of provider by individuals.
Sickness benefit (payable at 80 % of previous income but with a ceiling) will generally remain in place for no more than 12 months. If work capacity is then still reduced, the person will be moved on to “extended sickness benefit”, with lower compensation, payable for a maximum of 18 months.
Disability benefits will only be granted when it can be established that work capacity is unlikely to improve. To extend the possibilities for disability benefit recipients to try out their work capacity, individuals will retain 25 % of their compensation for the first twelve months of gainful employment.
New rehabilitation process for people on sick leave with effect from 1 July 2008. This rehabilitation measure consists of regular reviews during a period of sick leave to assess the person’s capacity, or incapacity, to return to work, more specifically: after three months of sick leave, the person’s status will be re-examined to ascertain whether they can go back to their original work or take up a more appropriate job; after six months of sick leave, the employee is obliged to search for another job; after 12 months on sickness compensation, people can apply for an extension of their sick leave for up to a maximum of 18 additional months. Individuals who are entitled to such an extension are those who require long-term medical treatment and a rehabilitation programme, as outlined in a government document. Initially, the compensation rate should never exceed 75 % of the lost income after 12 months of sick leave, even if supplementary insurances existed. An early retirement pension will only be granted in cases where the ability to work has diminished permanently. People who will be entitled to an early retirement pension will receive SEK 41'000 (Euro 4'368 as at 1 April 2008) a year without reducing their sickness compensation. In addition, the Swedish government has proposed a new law granting employees on long-term sick leave the right to work for a different employer for 12 months without losing their former job. This will enable such persons to find a job where they can work despite their illness, thereby avoiding detachment from the labour market.
The rules of long term sickness absence are tightened, return to employment is encouraged.
Reduction of total levy of social security contributions and the pay roll tax by 1 percentage point; reduction of employers’ Social Security Contributions (SSC) on wages paid to the 26-64-year olds from 32.42 to 31.4 2% in January 2009; reduction of SSC for the youth under the age of 26 (26 later included) from 21.30 to 15.49 % (from 20.45 to 15.07 % for the self-employed).
Reduction of SSC for self-employed also by one percentage point. Reduction of SSC for the youth under the age of 26 (26 later included) from 21.30 to 15.49 % (from 20.45 to 15.07 % for the self-employed.
From 1 July 2008, about 90 % of the members of the unemployment insurance funds have been benefiting from lower membership fees. In general, the fee has been reduced by SEK 70 (about Euro 7.26 as at 24 September 2008) to around SEK 250 (Euro 26) a month. The largest reduction of between SEK 120 (Euro 12) and SEK 140 (Euro 15) concerns members of the Swedish Organisation for Managers, the Union of Civil Servants and the Swedish Union of Local Government Officers. However, in some sectors (Hotels, Restaurants) the fees also increased.
Abolishing any limitations to work for persons in early retirement.
The government has sold its interest in Vin&Spirit, OMX and Vasakronan.
Expanded job-search coaching (to a total of 27'500 places in 2009 and 38'000 in 2010).
Permanently doubled reduction of the employer's contribution in "new start jobs" as of beginning of 2009. The employer will only pay about half the wage cost for a person on a “new start job”. Young people who have not yet turned 26 qualify to a “new start job” already after six months of unemployment. This group and new start jobs already approved are not affected by the increased compensation.
Increase in number of places in work experience programmes (21'600 new places in 2009 and 30'000 in 2010). (Temporary)
The state monopoly for pharmacies (also prescription drugs) will be abolished from January 2009.
The state pharmacy lost the exclusive right to sell drugs.
The automotive inspection was opened for private companies.
In rail transport, private entities can now operate commercially profitable passenger traffic lines.
liberalisation of national rail passenger services.
Rules restricting county councils from transferring the operation of regional hospitals, regional clinics and hospitals to non-public actors have been abolished.
This reform may be seen as a radical liberalisation reform. The social need of skilled labor is the motif that dominates the design of secondary school (for everything: from curriculum and syllabi or for the organization around the secondary school where e.g. work life gets more power over vocational program content). It aims to design different high school programs in relation to labor market needs (e.g. entering entrepreneurship as a key objective of the curriculum).
General agreement on temporary layoffs and training reached between the central social partners in Sweden’s manufacturing industry. Temporary layoffs are normally prohibited in Sweden and the settlement has caused disagreements among trade unions. An agreement was also reached on 10 March 2009 between IF Metall and the Association of Motor Industry Employers. The general agreement allows for shorter working hours, even though layoffs are normally not permitted in Sweden. According to the general agreement, employees can be temporarily laid off from work while keeping their job. During this time, employees will receive a payment of at least 80 % of their normal salary. The salary will be paid according to the time actually worked. The agreement also contains the following provisions: if an employee is free one working day a week, their total salary will be reduced by a maximum of 20 % – in other words, the free day will remain unpaid; employees who work two days a week and are free three days a week during ordinary working hours will have their total salary reduced by a maximum of 20 %; employees with free time for four hours a week will face a maximum reduction of 10 % of their salary; local parties can agree on training provisions for the workers instead of free time.
Introduction of competition across privately owned pharmacy chains and the sale of selected OTC drugs outside of pharmacies.
Limiting the possibility for industrial action against foreign employers. The reforms are seen as necessary because of the implications of the European Court of Justice ruling in the Laval case. The proposed bill stipulates that a collective action against a foreign employer, in order to obtain the same employment and working conditions as laid out in a collective agreement for workers posted in Sweden, may be taken only under certain conditions. Thus, collective action can only be taken to demand improvements in working conditions for workers in a foreign company that: correspond to the terms of a national collective agreement in Sweden for corresponding workers; relate only to the minimum wage or, in some areas, other minimum conditions; are more favourable for workers than conditions provided by law. Industrial action may not be taken if the employer can prove that workers already have access to conditions that are at least as favourable as the minimum conditions in a Swedish national collective agreement. Overall, limitation of trade unions’ right to take industrial action compared with the present situation. Up until now, Swedish trade unions could demand all working conditions to be in line with a comparable collective agreement.
The requirements for a minimum amount of working time in the year preceding unemployment in order to receive benefits have also been abolished.
Stop of: Temporarily modifying the eligibility requirement for individuals on long-term sickness who have exhausted their right to sickness benefits.
Up until now, a worker had to be a member of the unemployment fund for more than 12 months to be entitled to unemployment benefits. This waiting period has now been reduced to six months.
Temporarily modifying the eligibility requirement for individuals on long-term sickness who have exhausted their right to sickness benefits. From January 2010 until January 2013, these individuals may receive unemployment benefits.
Temporary reduction in unemployment insurance fees. In general the membership fee is reduced by SEK 50 (€ 4.86 as at 5 September 2009) a month.
Deferment of tax payments: Employers will be able to obtain a respite in paying employees social security contributions and preliminary taxes for their employees for two months during 2009. The deferment will be for a maximum of one year and will apply to wages paid between February and December.
Stop of: Temporary reduction in unemployment insurance fees.
The membership fee is reduced by SEK 50 (€ 4.86 as at 5. September 2009) a month.
Relaxing membership conditions for unemployment insurance: for each month of membership during 2009 one additional month shall be added, thus enables applicants to fulfil the membership condition in a shorter time, that is, in six moths time. This will only apply in 2009. The conditions for membership of an unemployment fund, which require that the applicant must have performed gainful work for a given time and to a certain extent, will be removed from 1 July 2009. This will make it possible for more unemployed to become members of an unemployment fund.
A member of an unemployment fund can lodge an appeal to the administrative court against a fund’s decision on whether or not they are entitled to benefits.
Enhanced tax deductions for household services in the form of renovations, conversions and building maintenance (RMI services). Like the previous RMI services, the tax reductions for RMI apply in the same way for single-family homes and tenant-owned housing. The proposal also improves property owners’ opportunities to increase energy efficiency in their properties. It is proposed that the level of subsidy be the same as in the current system for household services. This means 50 % of the cost, which may not exceed SEK 100'000. The tax reduction will therefore be a maximum of SEK 50'000 per individual per year.
Third step in the earned income tax credit, introduced in 2009. In relative terms, the earned income tax credit increases the net income of low and middle income earners more than the net income of high income earners. The third step in the earned income tax credit was announced in the 2009 Budget Bill and it had been planned independently of the crisis, but has gained additional importance because of the crisis.
Strengthening vocational higher education and upper secondary vocational education (adult vocational education programmes) by a greater number of places in vocational higher education (1'000 in 2009, 2'000 in 2010, and 1'000 in 2011) and in adult vocational education programmes (3'200 in 2009, 3'900 in 2010, 1'600 in 2011). More people will have the chance to receive higher grant level of financial aid for studies in 2009 and 2010 (supplementary grant about SEK 3'500 per four-week period that leads to SEK 6'300 in all per four-week period).
Temporary increase of 23'000 places in secondary adult vocational education programmes, accompanied by increase of places in labour market training and adult colleges. Targeted opportunities for school drop-outs to complete their studies and for unemployed people over the age of 25 to obtain a higher educational degree.
Stop of the temporary increase of 23'000 places in secondary adult vocational education programmes. (see also line 80)
New activation scheme (Lyft) introduced in 2010 in public sector and non-profit organisations (40'000 new places in 2010). (Temporary)
Qualifying period for entitlement for the programme New Start Jobs has temporarily been reduced from 12 to 6 months of unemployment for people 55-year-old or older.
Public transport is generally liberalised.
The biggest employer organisation in the industry, the Association of Swedish Engineering Industries, has decided to leave the industrial agreement. Since its creation in 1997, the Industrial Agreement has lead to moderate and stable wage increases and no major industrial conflicts. However, some discontent on the employer side emerged in the negotiations of 2004 and grew even stronger in the 2007 talks. This discontent was primarily rooted in the poor implementation of the manufacturing sector’s role as a norm-setting partner. This problem was further highlighted in this year’s negotiations, when the Swedish Paper Workers’ Union did not follow the norm-setting agreement signed by the Union of Metalworkers (IF Metall) and the employer side. The step away from the practice stipulated in the Industrial Agreement angered several organisations on the employer side, particularly the Association of Swedish Engineering Industries. When the bargaining round was over, the association declared that it would be leaving the Industrial Agreement from 31 October 2010.
For the first two years after a new business start-up is launched, the employer may receive unemployment benefit based on their previous income as a dependent employee.
Ill self-employed workers are guaranteed at least 7 days of sick leave.
The Swedish industrial workers trade union (IF Metal) signed an agreement in November 2010 with several employer organisations to create a ‘vocational introduction’ scheme for industry. The purpose is to reduce the high rate of Swedish youth unemployment, to help improve the skills of people aged under 25 years and to help them enter the labour market. Those on the scheme will have the right to receive at least 75 % of any minimum wage agreed nationally plus tutoring and training. The so-called ‘youth agreement’ will be used to help people under the age of 25 years who lack relevant work experience to improve their skills and enter the labour market. The length of the contract is at a maximum of 12 months but it can be extended by a further 12 months.
Reduction in length of membership of an unemployment insurance fund required to draw on unemployment insurance leading to an easing of the access to it.
Doubling of the subsidy for the employment incentive scheme (Nystartsjobb).
In order to improve the coordination between various authorities and increase the efficiency of the measures the Government has assigned the Swedish Agency for Public Management to survey the municipalities' and the Public Employment Service's initiatives and coordination to promote employment among people receiving social assistance. Additional resource to Public employment office to follow up job search for recipients of social assistance is also planned.
Stop of opportunity to participate in labour market training. (see also line 85)
To raise the standard of the employment phase in the job and development guarantee scheme (jobb- och utvecklingsgaranti), participants have been given the opportunity to participate in labour market training. This opportunity has been extended through 2012. There will be also increased supervisory support for participants in the employment phase. [In this scheme participants begin with intensified job seeking activities including personal coaching, they then have access to a wide range of unemployment policy programmes, such as job training, a work experience placement or a subsidy for employment and skills development. After 450 days of participating in this programme and if participants have not been able to obtain work, they will be assigned an ‘appropriate’ job that corresponds to their personal skills.]
Since 1997, the Industry Agreement (Industriavtalet) of the manufacturing industry has set the norm for wage increases in Sweden. In 2010 there were various special agreements that made the wage norm less clear. To avoid further uncertainties, the social partners in the manufacturing industry agreed on a new revised version of the industrial agreement. It says mediators in industrial sectors will get additional powers to make sure the agreements concluded are effectively coordinated. If two parties fail to reach an agreement in time, they can be summoned to a joint meeting where the other social partners in the sector will discuss appropriate solutions to the dispute. The new agreement also contains strong calls for all parties involved to promote the industrial agreement’s norm-setting role. However, there are no formal obstacles for parties to demand wages that deviate from the sectorial norm.
The Swedish Parliament decided on changed rules regarding overtime in June 2011. The new rules will enter into force on 1 August 2011. The changes to the (1982:673) Working Hours Act and the (1977:1160) Work Environment Act are part of the Government’s general efforts to simplify rules and regulations. For example, the requirement to apply for an exemption from the Swedish Work Environment Authority has been removed from the rules on extra overtime and instead, an explicit regulation on the issue has been inserted into the Act.
The Budget Bill for 2013 has increased the number of sanctions for not complying with obligations but has decreased their severity. Unemployed will have to provide evidence of their job-search activities. An “activity report” is introduced for this purpose.
Youth package’ of 8.1 billion to tackle youth unemployment and create more jobs for young people in 2013–2016. The ‘package’ encompasses, for example, investments in apprenticeship education and active labour market measures.
The government has announced an increased level of appropriation in already existing ALMP programs, with as usual a strong emphasis towards labour supply oriented matching measures and towards vulnerable groups such as young drop out, foreign born and disable.
The government intends to temporarily increase the number of places in adult vocational training, apprenticeship training for adults, vocational higher education, folk high schools, and universities and other higher education institutions (a temporary increase of 18'000 full time equivalent in 2013, 16'350 in 2014 and 9'200 in 2015). It is expected that a large share of these training measures will benefit young people, but also foreign born and long-term unemployed. Furthermore, in order to meet the increase needs of technicians and civil engineers, the Swedish Government intends to increase permanently the number of university places for these two occupations (a permanent increase of 3'100 places between 2013 and 2016).
Increase in the number of places in traditional labour market training, workplace experience and wage subsidies targeted to job seekers at risk to become long-term unemployed (an increase with 9'500 in 2013 and 4'750 places in 2014).
Agency Work Directive is to be implemented through legislation and the creation of a new Act on Temporary Agency Work. The Act shall take the form of a regulatory framework, and some of its provisions be made ‘semi-compelling’, allowing for deviations by way of collective agreements. It shall apply to temporary agency workers employed both in the private and public sector. Exceptions to the principle of equal treatment shall be possible with regard to pay in accordance with Article 5(2) of the Temporary Agency Work Directive on the condition that the temporary agency worker is permanently employed by the temporary work agency and is paid between assignments. In addition, the Act shall contain a provision to the effect that the social partners may, in accordance with Article 5(3) of the Temporary Agency Work Directive, enter into collective agreements concerning working and employment conditions which deviate from the principle of equal treatment, provided that the overall protection for workers from temporary work agencies is respected.
Amendments to the regulation of fixed-term employment contracts in the Higher Education Ordinance. The Higher Education Ordinance regulates employment in universities and higher education bodies. The amendments inter alia introduce a new provision on fixed-term employment, the so-called employment for qualification.
The government is supporting an employment contract for youth developed by social partners in 2012. The contract combines 75 % of the time on the job and 25 % in education with compensation at 75 % of the minimum wage.
In order to reduce the marginal effect associated with short-term jobs and/or the incentives to work longer the Government has modified the calculation of income support (social assistance), so that only a part of labour earnings is included in the assessment regarding eligibility for social benefits. The main objective of the reform is to strengthen incentives for social assistance recipients to start working or to extend their current working time. The modification of social assistance has been adopted in December 2012.
Strengthening the apprenticeship training programmes by permanently extending the provider allowances for apprentices and raising the part of the allowance paid to employers. The measures will take effect in early 2013 conditional to the adoption of the parliament at the end of this year.
In the wake of the tripartite talks initiated by the Government in 2011, the Government proposes to introduce a state subsidised short-time working system. A state support for short-time working in case of severe economic downturn has been therefore announced in the 2014 Budget Bill. The state, the employers and the employee will share the cost of short-time working, the contribution of the state being one third of the total cost.
Support to employers who employ young people in jobs where training is combined with work.
This scheme results from earlier tripartite consultations, aimed, inter alia, at tackling youth unemployment. According to the scheme, an employer who hires a young person in line with a collectively bargained ‘Introduction Agreement’ or a similar arrangement may be granted a wage subsidy of up to EUR 650 per month. In addition, a monthly economic supervisory support is proposed. This support can be provided for a maximum of 12 months.
To encourage employers to recruit long-term unemployed persons, the government has announced amendments to the already implemented wage subsidy targeted to long-term unemployed (Särskilda anställningsstöd): the maximum period of subsidy will be extended from one year to 2 years and that the already existing state support to supervisors will become permanent.
Bill on sanctions in the working environment and the working time area. The Report proposed an increase, for example, of the scope for and use of administrative sanctions such as sanction fees. Injunctions, prohibitions and fines were deemed efficient sanctions, and ought to be used to a greater extent.
Several changes to the Social Services Act aimed at strengthening the opportunities for those receiving social assistance to support themselves through work and to extend the social services’ possibilities to stimulate, encourage and support those receiving assistance to support themselves. In particular, a new incentive to seek work is introduced that entails changing the basis for calculating social assistance so that part of the earned income is not included in the assessment of entitlement. For those having received income support for six consecutive months, 25 % of the income from employment will not be taken into account when assessing their entitlement to social assistance. The calculation rule is to apply for two years.
To improve the efficiency of the current reduction of social security contributions for young people, the government has announced in the 2014 Budget Bill that social security contributions for people younger than 23 years old at the start of the year will be reduced to 10.21 %, while the current reduction will no longer be provided for those who have reached the age of 25. The prevailing reduction (15.49 %) will remain in effect for individuals who have reached the age of 23 but not 25 at the start of the year.
Abolishing the differentiated unemployment contributions. The proposal implies that for around 2.2 million members of unemployment insurance funds the fees will be reduced.
The Budget Bill for 2013 includes a reduction of the corporate income tax rate from 26.3 to 22 %, starting in January 2013.
A fifth step in the already existing earned tax credit is proposed in the 2014 Budget Bill. The Government also intends to increase the lower income threshold for state income tax (from currently SEK 433'900 to SEK 449'000) and reduce taxes for pensioners to consolidate their financial position.
The bill generated federal grants to hire unemployed to local government offices if unemployment is greater than 6.5%. Additionally, it consolidated man power programmes and created an oversight board for these programmes.
This court case determined that only indirect evidence of discrimination was necessary to prosecute a discrimination case.
This court case extended Title VII protection to non-citizens.
This bill toughened consumer protections against unfair billing practices and prohibit discriminatory lending based on sex or marital status.
This bill extended three "temporary" benefit increases, allowed men to receive full benefits starting at 60 if they had put in 30 years of service, shift the tax burden to employers, and promoted speedier procedures.
Antitrust suit against AT&T by the U.S. Department of Justice which was filed in 1974 and settled in early 1982. As part of the settlement, AT&T agreed to divest itself of the local portions of its twenty-two Bell operating companies, which were restructured into seven separate regulated monopolies. These seven new operating firms were permitted to buy terminal equipment from any source they chose (not just AT&T), and (after a modification of the decree) they were allowed to market (but not manufacture) the equipment as well. AT&T can continue to provide long-distance service and to manufacture terminal equipment, but customers can choose any long-distance carrier they wish.
This bill changed antitrust laws in the US by increasing penalties and increased required public disclosure.
The bill gave the Federal Reserve board the power to control certain securities, regulate debt obligations, and setting of interest rates for a certain time frame. It was a response to the sale of variable interest rate notes by Citicorp.
This bill made minor changes to regulations of banks in the US. It raised the amount that a bank had to reimburse given a number of circumstances in an attempt to raise public confidence in the banks.
This established bargaining rights for employees of non-profit hospitals.
This amendment to a pre-existing piece of legislation raised the minimum wage.
Extended unemployment compensation by 13 weeks.
Unemployment coverage extended to include 12 million more families. $4 billion was appropriated to fund three emergency funds that were aimed at providing jobs for the unemployed. This increased funding for CETA.
This bill amended the 1972 bill that had introduced increases in Social Security benefits. This bill accelerated those increases and enlarged the increases. To pay for these additions, the payroll tax was increased. It also postponed the implementation of new federal regulations on how states administered and regulated SSI benefits.
Introduction of Personal Retirement Accounts.
Requires that a joint and survivor annuity be provided to an employee who retires at normal retirement age, unless such annuity is waived.
Requires more disclosures regarding a plan to participants and the government such as a summary plan description, material modification notices, annual reports and a statement of the participant’s accrued benefits upon request
Establishes the Pension Benefit Guarantee Corporation to provide mandatory insurance for defined benefit plans.
Sets fiduciary standards for plan sponsors.
Sets minimum funding rules for plans, including rules for past credits.
Limits annual contributions by employees to profit-sharing and money purchase plans to the lesser of 25 % of the employee’s annual compensation or $25,0000, as adjusted for cost-of-living.
Establishes vesting rules as follows: full vesting after ten years; graded vesting, achieving full vesting after 15 Phased Retirement years; and the rule of 45: at least 50 % vesting when the employee’s age and service add to 45, increasing by 10 % each succeeding year.
Limits the annual pension benefit that may be paid to a highly compensated employee to the lesser of $75,000 (as adjusted for cost-of-living) or 100 % of average compensation for the three years of such individual’s highest career earnings.
Strengthens participation requirement by requiring that employees of 25 years of age and older with one year of service may not be excluded from a pension or retirement plan (as long as they are in a job category covered by the plan and meet all other eligibility requirements).
Establishment of minimum requirements for private pension plans in order to ensure employees' rights to receive their benefits. The Act de iure makes what was already true de facto: voluntary private pension schemes are the main source of retirement security for US employees.
It instituted a requirement that to receive benefits for more than 39 weeks an individual must participate in job training programmes.
Introduction of import fees on crude oil ($1 per barrel) and oil products.
Increase in import fees (doubled: to $2 per barrel).
Lifting price limits and import fees on fuel.
Promotion of domestic energy sources through subsidies, particularly coal production.
Establishing of standard fuel consumption rates for different types of cars, to be met by carmakers.
The Department of Energy obtains "authority to develop, revise, and implement minimum energy conservation standards for appliances and equipment."
This bill provided a guarantee that all handicapped children in the US would receive a free and adequate public education.
This was identical to the collective bargaining agreement struck between the railroad workers and the employers. This increased unemployment benefits, increased the amount workers that could be paid for other work but still be eligible for unemployment benefits, and eliminated the paying of unemployment benefits for strikers until the strike goes past a week.
Increased the number of weeks in which unemployment compensation could be paid from 52 to 65 weeks. It extended such coverage to farm workers.
Provided a 10 % rebate on 1974 individual income taxes up to a maximum of $200, and increases the standard deduction for 1975.
Provided a 10 % rebate on 1974 individual income taxes up to a maximum of $200.
Increased the low-income allowance from $1,300 to $1,600 for single persons and $1,900 for joint returns during 1975.
Allowed a $30 credit against taxes owed on 1975 income for each taxpayer and dependent.
It reduced the normal 22 % corporate income rate during 1975 to 20 % on the first $25,000 in income.
This bill introduced significant changes in the antitrust laws. It authorised state attorneys general to bring antitrust suits on the behalf of citizens, required notification of the government of mergers, and strengthened investigatory power.
This bill was a nudge toward an overhaul of the system constructed to help college and vocational students finance their education. It devolved some power to the states and encouraged them to erect their own agencies and loan offices.
Title VII prohibits racial discrimination against whites as well as blacks.
This act overhauled the unemployment compensation system. It extended compensation coverage to 8.5 million non-elected government employees, raised unemployment compensation tax rates, and increased checks to ensure the "correct" individuals were receiving the aid.
Extended through 1977 the temporary 1975 law that increased the amount of corporate income exempt from the corporate surtaxes, and also reduced the normal 22 % corporate income rate to 20 %.
Increasing in the percentage of standard deduction to 16%.
Creation of a unified rate schedule for estate and gift taxes, with an exemption of $175'000.
Extended through 1977 a general tax credit against taxes owed equal to $35 per individual or 2 % of the first $9,000 of taxable income.
Made the 1975 tax law changes permanent that raised the standard personal deduction and minimum standard deduction.
Increasing in the minimum tax rate for capital gains, from 10% to 15%.
This bill increased funds for veterans seeking an education after leaving the military. It also transformed much of this into matching grants between the federal government and the state governments.
Provides for employment and training opportunities for youth.
This bill formally created the Department of Energy as its own cabinet level agency. This consolidated many of the regulatory mini-agencies that previously operated under a number of other cabinet level agencies.
The court ruled that after a plaintiff proves that discrimination occurred, all affected class members are entitled to relief.
The court ruled that a plaintiff can establish a prima facie case of hiring discrimination through the use of statistics.
The court ruled that Title VII applies to discrimination based on religion as well and that an employer must reasonably accommodate an employee's religious needs.
Aimed to ensure credit availability for low and moderate income neighbourhoods, avoiding the so-called practice of 'redlining'.
Increase in the federal minimum wage through stages up to 1981, to $3.35 per hour.
Increase in social security payroll taxes.
Rights and benefits based on disability are granted; determination of disability or blindness criteria is laid out.
Deregulation of airline market, fares and routes. And, as a consequence, powers granted to the Civil Aeronautic Board of antitrust and regulatory power for the new market.
The price standard for firms for their next accounting year was set at a half percentage point below the 1976-1977 average annual rate of price increase, subject to a 9.5 % ceiling. Greater deceleration would be required if wage rates decelerate by more than a half percentage point. Any very important acceleration of other costs would be allowed to lead to price rises over the standard provided that profit margins did not exceed the average for the best two of the last three fiscal years.
This bill provided new funds for those from the middle class to go to college.
This bill introduced a new formula to calculate the distribution of Head Start funds.
Banned discrimination on the basis of pregnancy for the hiring of women and required disability and health insurance plans to cover pregnancy.
Federal Reserve Board authorised plans allowing individual customers of member banks to transfer funds automatically from savings to checking accounts. The new service was approved as from 1 November 1978. The principal features of the new service are: a) Customers of banks offering arrangements for the automatic transfer of funds from savings to checking accounts may make an agreement with their bank for the transfer of funds to cover their checks or to maintain a pre-determined amount in their checking account. This means that without further instructions funds may be withdrawn from savings accounts and transferred to checking accounts to pay for checks for which there are insufficient funds in the customers' checking accounts. b) No penalty such as a forfeiture of interest or a service charge is required for automatic transfers, at least initially. c) Arrangements may be made between thrift institutions, such as savings and loan associations, and member banks for the automatic transfer of funds from the thrift institutions to checking accounts in the commercial bank.
Establishment of collective bargaining rights for federal public servants equal to private rights, i.e. to the National Labour Relations Act. The main difference lays in the scope of bargaining, much narrower: public servants cannot negotiate wages, working hours, benefits and jobs classifications. Also, the right to strike and picketing remains severely restricted.
A voluntary standard of 7 % for annual increases in wages and private benefits was set. Existing wage contracts, wage increases which maintain a close historical relationship with other wage levels agreed before the programme, and wage rates of less than $4 per hour are exempt from the wage standard; the ceiling was raised to 8 % for the first year of a multi-year contract, and demonstrable productivity improvements were deemed acceptable justification for increases above the standard.
Newly discovered oil and 80 % of oil from marginal wells can be sold at world, uncontrolled prices. Increases in production from wells using enhanced recovery techniques decontrolled.
Taxing oil production and helping 'Energy Conservation' through subsidies.
The court held that private employers and unions may implement voluntary affirmative action plans.
Agreement between government and AFL-CIO on balanced budget, use of counter-cyclical programmes focused on the poor and the unemployed, "responsible behaviour" in price and wage setting in exchange.
The amount of capital gains which can be excluded from ordinary income was raised from 50 % to 60 %, and the 25 % alternative tax for the first $50 000 of capital gains was repealed.
Cutting the number of tax brackets from 15 to 6 and widening the brackets.
This bill raised the COLA allowance for veterans taking advantage of their education benefits.
This bill was designed to make antitrust trials move faster.
Congress approved a bill making it easier for foreign manufacturers to assemble cars in the United States and for United States producers to meet gasoline consumption standards over the next few years.
This bill set the price of sugar and accepted the treaty that did this.
Windfall profits tax, composed by two elements (1) 50 % of any increase in oil company revenue attributable to the price of any category of oil rising above the current landed price of imports and above the world oil price; (2) 50 % of any revenue revenue increase due to decontrol would be taken up in tax. The receipts would go into a proposed Energy Security Fund, and used to provide assistance to lower income groups, public transport and energy-saving investment.
Remaining 20 % of marginal oil decontrolled. Producers investing in advance recovery techniques can sell a limited proportion of old oil at world prices.
New legislation required government agencies to publish semi-annual agendas of rules to be issued during the following six months that affect small business. This will give businesses a chance to comment on the proposed regulations and participate in their final drafting. Regulatory agencies were also required to issue an analysis justifying any regulations they put into effect. A systematic review of existing regulations which might have harmful effects on small businesses was started. New legislation required government agencies to publish semi-annual agendas of rules to be issued during the following six months that affect small business. This will give businesses a chance to comment on the proposed regulations and participate in their final drafting. Regulatory agencies were also required to issue an analysis justifying any regulations they put into effect. A systematic review of existing regulations which might have harmful effects on small businesses was started.
Train regulation is maintained where captive markets (i.e. no possible competition) exist, and liberalised in the rest of them, allowing competitions from trucking. However, publicly owned firms still exist.
The U.S. trucking reform liberalised entry policies by shifting the burden of proof to opponents to show that entry of new firms would be harmful to consumers.
This bill reauthorised the federal higher education programmes. Additionally, it restricted the programme of aid to developing institutions, established a new programme of grants for projects seeking solutions to urban issues, increased interest rates on student loans, established a new loan programme, and increased limits on education grants to students.
Increase in social security tax base from $22'900 to $25'900.
Drastic cut in the provision of training and extended benefits for workers under the Trade Adjustment Assistance.
This bill allowed for longer radio and television license terms to be issued. This relaxed regulations that dictated programming.
President Reagan eliminated remaining federal controls on the production and marketing of oil in the US.
This portion of the budget bill cut sharply federal aid to college students.
Reduced the lowest corporate rate gradually on the first $25,000 of income from 17 % to 15 % in 1983, and from 20 % on the next $25,000 to 18 % in 1983.
Indexing individual income tax parameters.
Allowed two-earner married couples filing joint returns to deduct up to $1,500 from income in 1982 and up to $3,000 in 1983 and after. Allowed two-earner married couples filing joint returns to deduct up to $1,500 from income in 1982 and up to $3,000 in 1983 and after.
10% exclusion on income for two-earner married couples with a cap at $3'000.
23% across-the-board cut over three years: top rate is reduced from 70% to 50%, bottom rate from 14% to 11%.
This bill increases taxes and cuts in government spending. Allows AFDC individuals to participate in job searches. This increased requirements for those participating in the relevant programmes and increased penalties for frauds.
This bill loosened requirements for payment of vocational programmes and established a national employment and training programme for veterans.
Regional Bell Operating Companies cannot offer long distance service, being under the monopoly of Bell System.
This bill eliminated the right of foreign governments to recover triple damages in US antitrust suits.
The D.C. Circuit Court "Executed Rulings" extended freedom of entry and allowing direct competition with AT&T on long-distance service.
Requires that all long-distance companies get (by 1986) the same connection to local networks in order to to equalise them to AT&T's connectivity capacities. In return, the government has removed the restrictions limiting AT&T to provision of common carrier services, and has permitted AT&T to enter the information systems area.
Interstate Bus deregulation: to maintain the monopol,y firms have to proof that competition is harmful for the consumer.
New guidelines were issued setting out revised criteria for judging whether mergers were anti-competitive. Under these, industrial concentration remained an important factor; but also to be considered were the responsiveness of demand and supply to price increases, the relevance of foreign competition, barriers to entry (such as import controls or regulations), technological change and and the creation of possible efficiencies
New Office of Information and Regulatory Affairs has power to review (not to veto) new regulation on markets. Also, the Government cuts budgets of Regulatory Agencies.
Legislation passed in 1982 started a gradual process of deposit rate decontrol, which by 1986 left commercial banks and thrifts free to set their own rates on essentially all categories of deposits.
Authorised thrifts to engage in commercial loans up to 10 % of assets and offer a new account to compete directly with money market mutual funds. The new expanded powers allowed thrifts to act more like a bank and less like a specialised mortgage lending institution.
The social security tax rate was raised from 13.30 % to 13.40 %, and the income threshold ' from $29,700 to $32,100 and to $34.800 by January 1983.
Increase the rates of dependency and indemnity compensation for surviving spouses and children.
Repealing of accelerated depreciation reductions.
An increase in the wage base and tax rate for unemployment taxes.
Provision of a pre-employment skills training programme for young people between 14 and 21, prioritising those without any academic achievement.
Public-funded "education for employment" programme centres in specific locations.
Provision of entry employment experience programme for youth, as well as school-to-work transition scheme.
Taxing half of social security benefits for single people with other income over $20 000 ($25 000 for married couples).
One-half of the value of social security benefit is made potentially taxable income. If the taxpayer's combined income (total of adjusted gross income, interest on tax-exempt bonds, and 50% of Social Security benefits and Tier I Railroad Retirement Benefits) exceeds a threshold amount ($25,000 for an individual, $32,000 for a married couple filing a joint return, and zero for a married person filing separately), the amount of benefits subject to income tax is the lesser of 50% of benefits or 50% of the excess of the taxpayer's combined income over the threshold amount. The additional income tax revenues resulting from this provision are transferred to the trust funds from which the corresponding benefits were paid. Effective for taxable years beginning after 1983.
Extending social security coverage to new federal employees and employees of non-profit organisations.
The Social Security Amendments of 1983 amend the Social Security Act to gradually raise the normal retirement age from 65 to 67. For all individuals born after 1959, normal retirement age is age 67. (For example, following the graduated system, for individuals born in 1959, the normal retirement age is 66 and 10 months.)
Congress guaranteed that anti-trust action would not interfere with legitimate co-operative research.
Elimination of barriers to international trade in U.S. wine
The court ruled that coerced financial support of union activities (ex. political and ideological contributions) beyond what is needed to function are illegal.
Amends survivor rules for pension plans by providing pre-retirement death benefits to all vested employees, spousal consent for pension plan distributions other than qualified joint and survivor annuities.
Slightly restricts rules on determining disability insured status for young workers who became disabled before reaching the age of 31 years.
Extends the Code’s anti-cutback provisions (meaning that these benefits, once accrued, may not be reduced by plan amendment) to optional forms of benefits, early retirement benefits, and retirement-type subsidies
Strengthens participation rules by lowering the minimum age that a plan may require for enrolment from age 25 to age 21, and lowers the minimum age for vesting service from age 22 to age 18.
Adds break in service rules under which an employee may have a break in service of up to five consecutive years, or the period of eligibility for vesting service accumulated before the break, without losing accumulated pre-break service.
This bill overhauled vocational education programmes. It increased funds for partnerships with the private sector, increased funds for training for under represented groups, and decreased funding for the maintenance of programmes.
Establishes an Emergency Veterans' Job Training Programme under the Emergency Veterans' Job Training Act of 1983. Eligible unemployed veterans are assisted in obtaining training for employment in permanent jobs. Employers who employ and train veterans in such jobs receive payments from the Veterans' Administration towards the cost of training.
State assistance to post-secondary and vocational institutions for programmes of post-secondary, vocational, technical or continuing education for handicapped young persons.
This bill began the process of taking down all trade barriers between the US and Israel.
President Reagan broadened the OMB's watchdog authority by issuing another Executive Order which required each federal agency and department to publish a regulatory programme in advance, listing all significant regulatory actions that it planned to initiate during the coming year, the purpose being to forestall uneconomic regulatory action before they got started. The OMB also received broad authority to review existing rules and regulations on a continuous basis. President Reagan broadened the OMB's watchdog authority by issuing another Executive Order which required each federal agency and department to publish a regulatory programme in advance, listing all significant regulatory actions that it planned to initiate during the coming year, the purpose being to forestall uneconomic regulatory action before they got started. The OMB also received broad authority to review existing rules and regulations on a continuous basis.
The Act will cut loan rates for wheat and corn (the two major commodities) by 15 to 18 % in 1986 and empowers the Agriculture Secretary to reduce them by an additional 10 %. After 1987, loan rates will be set at 75 to 85 % of average market prices received in the previous five years, excluding the lowest and highest years. If a stock build-up is expected, the Secretary of Agriculture can lower loan rates further, or raise the amount of land that eligible farmers must withdraw from production.
State and local government employers can compensate employees' overtime hours through paid time away from work instead of paying for it.
Permits the employment of individuals whose earning or productive capacity is impaired by age, physical or mental deficiency, or injury, at wages which are (1) lower than the applicable minimum wage, (2) commensurate with wages paid to non-handicapped workers in the vicinity for the same type, quality and quantity of work and, (3) related to the individual's productivity. Such payment may be made only pursuant to special certificates issued by the Secretary of Labour, who shall not issue a certificate unless the employer agrees to review the wage levels every six months and to adjust them every year. Any employee receiving a special minimum wage may petition for its review by the Secretary, in accordance with the procedures set forth in the Act.
Newly hired employees who are within five years of normal retirement age may not be excluded from a pension or retirement plan.
Tightens the average deferral percentage (ADP) non-discrimination test for Code Section 401(k) plans, which tests the amount that highly compensated employees elect to defer.
Establishment of a Personal Retirement Account with strong tax incentives, income-based. It is taxed once the money is withdrawn.
Limits all annual additions to defined contribution plans to $30,000.
Limits the amount of compensation that may be considered in contribution or benefit calculations to $200,000, the same as for top-heavy plans.
Adds the average contribution percentage (ACP) test to make sure that employers matching contributions do not discriminate in favour of highly compensated employees
Employers with pension and retirement plans must provide pension accruals or allocations for employees who work beyond age 64.
Establishes a uniform rule for taxing early distributions from qualifying retirement plans (including employer plans, tax-sheltered annuities and IRAs) for all individuals, including instituting a 10 % tax penalty on distributions made prior to age 59 1⁄2 (which previously applied only to IRAs).
Introduces new non-discrimination coverage rules, under which one of the following three tests has to be satisfied: percentage test: The plan must cover at least 70 % of all non-highly compensated employees. Ratio test: The percentage of non-highly compensated employees covered under a plan must be at least 70 % of the percentage of highly compensated employees covered. (The percentage and ratio tests are effectively combined later in the regulations.) Average benefits percentage test: the plan must cover a non-discriminatory classification of employees and the ratio of employer-provided benefits or contributions to the participant’s compensation for non-highly compensated employees must be at least 70 % that of highly compensated employees.
Modifies the required minimum distribution rules to require that all participants must begin the required minimum distributions by the April 1 of the year following the year in which the individual reaches age 70 & 6 months, regardless of whether the individual has actually retired.
In CIT, depreciation is accelerated, but less favourable for structures and motor vehicles, more favourable for most equipment.
The 6 to 10% tax credit on equipment investment is repealed with a 5-year phase-in.
Top corporate rate is dropped from 46% to 34%.
Interest payments are now only deductible for mortgage on principal and second residence.
Capital gains rate had a 60% exclusion, now it has none.
Increased the standard deduction, which would be indexed for inflation beginning in 1989.
Increased personal exemptions gradually over three stages and the exemption amount would be indexed by inflation beginning in 1990.
Personal exemption of PIT is raised from $1'080 to $1 900 in 1987 rising to $2 000 in 1989 (indexed thereafter); phased out for high-income taxpayers.
Lowering income tax rates from 50% to 28% at the top rate, and raising the bottom rate from 11% to 15%, rising the upper income level of the bottom rate from $5,720 per year to $29,750. Brackets are reduced from fifteen to only two. Although in fact there was a 'bubble rate' effect, leaving with the following rates: 15%/28%/33%/28%.The 33% 'bubble rate' was a perverse effect from the deductions system.
The existing $2,000 provision for individual retirement accounts is eliminated except for workers with no pension plan.
Partnerships for Economic Development and Urban Community Service", aims at encouraging the involvement of postsecondary educational institutions with units of government, labour unions, business, industry and community organisations in order to expand employment opportunities.
The Supreme Court rules that the "grey market" is legal. Stores can buy products overseas and sell them in the U.S. without the permission of the American trademark owners.
This bill enacted permanent educational-benefits for those who serve in the military as a way to induce more young people to enlist.
Increase the rate of disability compensation for disabled veterans
Requires that employers provide full pension service credits for participants who work beyond normal retirement age.
It began the JOBS programme, intended to avoid long-term reliance on cash transfers.
Transforms welfare financial support system from a means-tested entitlement to a comprehensive scheme to alleviate the short-term problems of poverty. It stipulated that recipients must engage in job search or education/training or they risk losing some of their benefits.
Improves services and programmes in relation to employment opportunities, counselling and job training for veterans.
This bill began the process of dismantling trade barriers between the US and Canada
Requiring employers with more than 100 employees to provide 60-day notification on mass layoffs and plant closings (above 49 layoffs and above 33% of a plant between 50 and 499 employees). Exceptions are made if the firm is in a situation of a natural disaster, faces unforeseeable business circumstances, or is a faltering. The same applies, if layoffs are below 6 months or if the firm reduces monthly hours less than 50% of any six-month period.
This court case held that disparate impact analysis can be used to prove discrimination.
This bill increased the civil and criminal penalties for insider trading and put new demands on companies to ensure that insider-trading does not occur.
Amends Executive Order No. 12171 to exclude certain employees of the Federal Aviation Administration, Department of Transportation from the Federal Labour-Management Relations Programme, allowing them to freely associate. Particularly, truck drivers.
Provides that a company which has petitioned for bankruptcy under Chapter 11 of the Bankruptcy Code shall continue to pay retiree benefits pursuant to a policy of life, health or disability insurance. If representatives of the beneficiaries agree to modifications in benefits during the pendency of a bankruptcy petition, they may be made. Where the representative and the bankrupt company cannot reach agreement, the presiding judge may decide. A labour organisation shall, unless it opts not to, represent persons receiving benefits negotiated under a collective agreement.
Creation of the Job Opportunities and Basic Skills Training Programme (JOBS): a welfare-to-work programme, requiring states to offer recipients basic education and training for employment in exchange for receiving federal money to cover welfare costs. In two-parent families on welfare, either the father or the mother will be given 60 days to search employment; if none is found he or she will be required to work at least 16 hours per week in unpaid community or local government service. Most welfare recipients with children aged three or older will have to participate in education, training or employment programmes; child-care assistance will be provided. In addition, the law requires the states to automatically deduct court-ordered child support payments from the wages of an absentee parent. The various measures are to be phased in over a period ending October 1994.
This bill lifted wellhead price controls from natural gas.
This court case held that age-discrimination does not extend to fringe-benefits that may be attached to a job.
Increase of the Federal Agency capacity to review financial institutions in order to ensure that credit arrives to poor neighbourhoods.
Increase in the federal minimum wage through stages to $4.25 per hour.
Training wage is established at 85% of the minimum wage for workers under the age of 20 years. It can be paid up to 90 days.
This bill focused on those unlikely to go to college (the mentally handicapped, non-native English speakers, and the poor). It relaxed the mandatory divisions of funds, provided for technical prep, increased money to the states for such programmes, and decreased direct federal money for such programmes.
This bill raised antitrust penalties and eased constraints on interlocking corporate directorships.
This bill provided for the largest expansion of Head Start since the programme's inception.
Explicit prohibition of discrimination in any job-related process of "a qualified individual with a disability".
President Bush signs bill (HR 1278-PL 101-73) dealing with the Savings and Loan Bailout. Under the law, more than 250 insolvent thrifts that were put into conservatorships by the Federal Deposit Insurance Corporation since January 1 are immediate candidates for liquidation or sale to healthy thrifts, banks or other investors. The bill provides $20 billion to be spent by October 1, and another $30 billion to be spent over the 1990-91 period for additional closings. The bill also raises capital standards; thrifts must have tangible or cash net worth equal to 1.5 % of total assets by December 7, and , counting "good will" and other "intangibles", thrifts must have a net worth of three % of assets. Thrifts are given 5 years to divest themselves of "junk" bonds. The bill also seeks to concentrate thrift activities on home-mortgage lending.
This bill gave regulators more authority.
Increase in the alternative minimum tax rate to 24 % from 21 % for high-income taxpayers.
This bill coordinated federal, state, and local efforts to eliminate illiteracy among adults and children. It authorised funding from adult education and literacy programmes.
Reversed a USSC decision that had made it harder for individuals to bring discrimination lawsuits to court and win.
Banks are to be divided into five categories based on various measures of their capital relative to assets. Those in the first two meet international requirements. Sanctions begin to be imposed when a bank misses one or more of the capital standards. These "undercapitalised " banks – the third group – are required to submit a plan to the FDIC (or other primary regulator) explaining how they intend to meet the capital standards. Only those in the top category will be allowed to pay interest rates more than 75 basis points above those prevailing in their local market, while undercapitalised banks will be prohibited from paying dividends and, in general, from expanding. "Significantly" undercapitalised banks face additional restrictions, and the primary regulator can, if it chooses, replace the management or other officers of such a bank or force its sale. Finally, the days of "critically" undercapitalised banks – with less than 2 % equity capital – are numbered. The primary regulator must shut down or force the sale of such institutions within 90 days unless it can explain why not doing so will save money for the relevant fund [either the Bank Insurance Fund (BIF) or the Savings Association Insurance Fund (SAIF)]. While capital is to provide the main indicator under early intervention, regulators will also have the authority to downgrade banks by one category for other reasons, such as perceived riskiness of operations, but may not use this power to downgrade a bank to the "critically undercapitalised" category.
Changes the definition of disability for widows, widowers and surviving divorced spouses from one based on the inability to do any "gainful activity" to the same definition used for all other claimants for disability benefits under title II of the Social Security Act, i.e., inability to engage in any "substantial gainful activity."
Establishes programmes to prepare youth and adults facing serious barriers to employment for participation in the labour force, by providing job training and other services that will result in increased employment and earnings and increased educational and occupational skills.
This bill simplified the way Native Americans receive federal job training assistance.
Policy about horizontal mergers was systematically elaborated in the regulatory agencies’ 1992 Guidelines, which codify concerns about how mergers could facilitate co-ordination or increase a firm’s unilateral market power. The enforcement stance is tolerant. Mergers are not challenged if there is no barrier to entering the market, and the agencies will listen to claims that mergers increase efficiency. Acquisitions of “failing firms” are treated leniently, which facilitates exit (and hence entry).
This created a government loan programme to help pay for college that all students regardless of income could apply for. Additionally, it began a process of eliminating banks as middlemen for this type of loan.
This bill expanded the Head Start programme.
Certain workers employed in computer-related occupations to be exempted from minimum wage and overtime compensation requirements.
20 % mandatory withholding tax on lump-sum distributions that are not rolled over into qualified retirement accounts
Requires plan sponsors to transfer eligible distributions directly to an eligible plan if requested by a participant.
FCC issued a regulation that prevented any single cable operator from owning systems that reached more than 30 % of the country.
Most wireless spectrum has been assigned by a competitive auction process: legislation required the Federal Communications Commission (FCC) to auction new frequencies where there was more than one company that wanted to use the frequency. The sales are not of a revenue-maximising form, as the FCC must consider other objectives such as giving access to small- or minority- or female-owned enterprises. The licensees are permitted broad flexibility the use that they make of a frequency provided that they do not create interference with other users. Such freedom contrasts with earlier FCC practice that restricted the use of a given frequency band to a particular service – a similar strategy to that adopted in Europe for third-generation mobile (3G) services.
This bill passed through NAFTA creating a free-trade area throughout North America.
This portion of the budget reconciliation bill overhauled the nation's student loan programme and created a new system that cut out the banks.
Employees are granted unpaid leave for qualified medical and family reasons, including personal or family illness, family military leave, pregnancy, adoption or the foster care placement of a new child. Leaves are up to 12 work weeks during any year period. To qualify, the employee needs to have been working for at least 12 months during at least 1'250 hours.
New Federal hires are required to be through the national Social Security system.
This bill guaranteed pension benefits to (former) employees of troubled airlines.
Raises the share of social-security (public pension) benefits subject to tax from 50 to 85 % (treatment similar to private-pension income) for couples with income over a ceiling of $44 000 ($34 000 for individuals) in order to generate $25 billion over the next five years.
Raised the corporate income tax rate from 34 to 36 % for the approximately 2 700 largest corporations with taxable income exceeding $10 million.
Created a new fourth bracket for the corporate income rate at 35 %.
Added a new tax bracket so that the top marginal rate was 36 %. A 10 % surtax was imposed on taxable income above $250,000, creating an effective top rate of 39.6 %: "Modified for a taxpayer with combined income exceeding a secondary threshold amount ($34,000 for an individual, $44,000 for a married couple filing a joint return, and zero for a married person filing separately), so that the amount of benefits subject to income tax is increased to the sum of (1) the smaller of (a) $4,500 for an individual, $6,000 for a married couple filing a joint return, or zero for a married person filing separately, or (b) 50% of the benefit, plus (2) 85% of the excess of the taxpayer's combined income over the secondary threshold. However, no more than 85% of the benefit amount is subject to income tax. The additional income tax revenues resulting from the increase in the taxable percentage from 50% to 85% are transferred to the HI Trust Fund. Effective for taxable years beginning after 1993."
Created two brackets for the alternative minimum tax: 26 and 28 %, increasing the rate from 24 %.
Revamping Trade Displacement Job Assistance. Training, counselling, career advice and needs-related payments (to decide by the States) for workers who have lost their jobs and are unlikely to return to their previous industries or occupations are eligible for the programme.
This bill provided funding for states to design and implement programmes that help students not bound for college find a job.
This bill stripped away barriers remaining to owning and operating banks across state lines.
Permitting interstate branching, and allowing banks to merge separate units after 3 years into a unified system, subject to individual states' legal requirements.
This bill helped retirees whose pension benefits were endangered by the insolvency of Executive Life Insurance Company.
This bill cracked down on underfunded pension schemes.
Encourages the development of a national system of State-run, local partnerships of employers, educators and others in order to build school-to-work programmes. The goal is to offer young people access to education and training programmes that lead to certificates of competence that are widely recognised by employers, while also increasing their opportunities for further studies.
Further increase of the Federal Agency capacity to review financial institutions in order to ensure that credit arrives to poor neighbourhoods.
Federal contractors cannot replace permanently striking workers any more.
This bill provided block grants to states for job training. Additionally, it allowed participation in job training programmes to count towards the work requirement of many of the welfare programmes. Finally it provided assistance (ex. childcare) to expand the pool of potential job training participants.
Required the electric utilities to functionally unbundle their transmission operations from their generation and distribution services and to provide open access to the interstate transmission grids for all producers. This deregulation happens state by state.
(De)regulation of the emerging telecommunication market (internet, mobile phone networks).
Elimination of most crop planting restrictions on farmers with Production Flexibility Contracts.
Regional Bell Operating Companies can now offer long distance service.
Existing carriers should facilitate the entry of new competitors through the wholesale-based pricing of necessary elements for competition.
Allowing media cross-ownership on cable services.
Increases the link between market conditions and planting decisions by de-coupling crop payments from current production, ending mandatory set-asides, phasing out dairy price supports.
Allows children between 16 and 18 years of age to load materials into balers and compactors that meet American National Standards Institute design safety standards.
Entry barriers for competitors in the financial sector are partially eliminated.
This bill consolidated and streamlined state and federal regulations of securities and reauthorised the SEC.
Tipped employees are detached from future minimum wage increase, hence frozen at $2.13 per hour.
Increase in the federal minimum wage through stages to $5.15 per hour.
Faith-based and community organisations are allowed to compete with the government in the provision of social services.
This bill raised the Social Security earnings limit.
Repeals the minimum participation rules for defined contribution plans, which had required that a plan must cover lesser than 40% of all employees or 50 employees; modifies the rule for defined benefit pension plans to require that the plan cover lesser than: 1) 50 employees; or 2) the greater of 40% of all employees or two employees (unless there is only one employee).
Repeals the Code Section 415 limit for employers who maintain both a defined contribution plan and a defined benefit plan.
Creates a new type of simplified retirement savings vehicle for small businesses (those with fewer than 100 employees) as an alternative to a qualified 401(k) plan, which does not need to meet many of the requirements applicable to qualified plans but does require that the employer make matching contributions up to 3 % of compensation (up to the $6,000 limit on elective deferrals) or a non-elective contribution of 2% for all eligible employees (whether or not they elect to defer).
Amends the definition of compensation for purposes of allocations to a defined contribution plan and benefits under a defined benefit plan to include salary deferrals under Code Section 401(k) and cafeteria plan elections
Simplifies the definition of highly compensated employee to mean an employee who: 1) was a 5% owner of the employer at any time during the year or the preceding year; or 2) had compensation for the prior year in excess of $80,000 (to be indexed for inflation) and was in the top 20% of employees by compensation for the year.
Restores the TEFRA rule that a participant, other than a 5% owner, in a qualified plan need not commence distributions until the April 1 of the calendar year following the later of the year in which the participant attains age 70 & & 6 months or the year in which the participant retires.
Repeals the family aggregation rules, which had required that family members be combined for discrimination and compensation limitation purposes.
Increase of exemption on estate ($1M) and residence sale ($500'000 for couples, $250'000 for singles) taxes.
The lowest PIT bracket rate was lowered to 10% from 15%.
Top capital gains tax rate fell from 28% to 20%.
Roth IRA: a new type of Personal Retirement Account free of taxes at withdrawal, but the assets included are not tax-deductible.
Institution of Temporary Assistance for Needy Families, which ends welfare provision for poor families as an entitlement programme and requires recipients to be working after two years of receiving benefits, which have a limit of five years.
This bill consolidated 60 programmes into block grants to the states.
Allows employees who are 17 years of age to drive automobiles or trucks for work purposes under certain conditions. Inter alia, the driving by such young employees must take place during daylight hours, the truck may not exceed 6,000 pounds, and the driving may not involve towing, route deliveries, transportation of passengers, and urgent or time-sensitive deliveries.
This case held that sex discrimination consisting of same-sex sexual harassment is covered by Title VII.
This bill allowed credit unions to continue expanding their membership bases.
Inclusion of business in the delivery of workforce training through Workforce Investment Boards chaired by private sector members of each local community.
This bill banned the practice of "cyber-squatting".
This portion of the omnibus budget bill gave local school systems greater autonomy in how they use federal education money.
National banks are now authorised to own or invest in "financial subsidiaries", which can participate in financial and non-financial activities (except underwriting and real state development, as well as investment).
Creation of a new financial holding company structure (FHC), a firm engaging into non-banking financial activities which does not need previous Fed approval to do so, as well as non-financial activities if the Fed rules that such activity is complementary and does not pose a substantial risk to the FHC commercial banking affiliate: real estate management, commodity trading, leasing, etc.
Removes barriers for financial institutions to merge and pursue at the same time commercial, insurance and investment activities.
This bill banned the sale of alcohol and liquor on the internet within the continental US from distributors to individuals.
Deregulation of the so-called over-the-counter derivatives (OTCs). The act clarified the law so that such transactions are not considered as futures nor as securities, but as a separated particular case.
This bill eliminated the cap on outside income retirees under 70 could earn and still collect full Social Security benefits.
This bill introduced a major overhaul of the 1965 Elementary and Secondary Education Act of 1965. The most significant change was the tying of federal funds for elementary and secondary schools to students' test scores.
Creation of the White House Office of Faith-Based and Neighbourhood Partnerships to support faith-based and community organizations expanding also their capacity to provide federally funded social goods and services.
Adds “catch-up contributions” that allow individuals aged 50 and older to make additional contributions (above the otherwise applicable limits) to Section 401(k) plans as follows: $1,000 in 2002 with $1,000 increments each year thereafter rising to $5,000 in 2006 (with future indexing).
Increases the maximum annual contributions to defined contribution plans from the lesser of $35,000 (in 2001) or 25% of compensation to the lesser of $40,000 (with future indexing) or 100% of compensation beginning in 2002.
Employees over 50 can make additional contributions to their retirement plans over the normal limits in order to catch up.
Modifies the rollover rules to permit rollovers among Section 403(b) plans, Section 457 plans, qualified plans under Section 401(a), and IRAs and provides that after-tax employee contributions from plans may be rolled over to other plans and IRAs.
Increases vesting on matching contributions: the 5-year cliff or 7-year graded is replaced by a 3-year cliff or 6-year graded vesting.
Increases the maximum annual benefits under a defined benefit plan from $140,000 (in 2001) to $160,000 for limitation years ending after December 31, 2001 (with future indexing).
Increases the compensation limit taken into account in determining benefits from $170,000 (in 2001) to $200,000 beginning in 2002 (with future indexing).
Changes the rules that permit plans to cash-out, without consent, terminated participants with benefits valued between $1,000 and $5,000, to require that such payments be rolled over to an IRA, unless the participant directs otherwise.
Increase in pre-tax contribution limits for private pension plans, as well as in defined benefit compensation limits and larger flexibility for fund management, giving incentives to move towards individual retirement accounts and qualified plans.
Replaces the “same desk rule” that had prevented 401(k) plan distributions after a business acquisition with a "severance from employment" standard.
Changes the suspension of elective deferral (and after-tax) contribution rules for participants who receive hardship withdrawal to allow such participants to resume making elective deferrals (or after-tax contributions) six months after receiving such a distribution, rather than one year after the distribution.
Increases the individual elective deferrals that may be made to a Code Section 401(k) plan from $10,500 per year (in 2001) to $11,000 in 2002, then increasing $1,000 each year until $15,000 in 2006 (with future indexing).
It provided marriage penalty relief through 2010 by increasing the standard deduction and expanding the 15 % bracket for couples filing joint returns.
Provided a tax rebate of $300 for individuals, $500 for single parents, and $600 for married couples filing jointly.
Increased the limit for individual alternative minimum tax exemptions, effective 2001 to 2004.
Replaced the five existing individual tax brackets (15, 28, 31, 36, and 39.6 %) with six lower brackets (10, 15, 25, 28, 33, and 35 %). These rate reductions began in 2001, fully phased in by 2006, and were scheduled to expire 2011.
For those in the 15% income tax brackets the capital gains tax was reduced from 10% to 8%.
Child tax credit would double to $1,000 by 2010.
The new farm bill is a return to policies pre-dating the FAIR Act of explicit income support payments.
This bill reduced the securities transaction fees.
Expansion of the Trade Adjustment Assistance programmes with added provisions due to the signature of NAFTA with Mexico and Canada.
This bill greatly increased penalties for fraud concerning the management of pensions and put in place regulations for the management of pension funds.
This bill eliminated almost all tariffs on goods moving from Chile and Singapore to the US.
Low level supervisors are reclassified as "executives", hence losing rights to overtime limit and compensation.
The tax rate reductions scheduled for 2004 and 2006 were brought forward to 2003, lowering brackets from 27, 30, 35, and 38.6 % to 25, 28, 33, and 35 %, respectively. However, the rates would revert to pre-2001 levels after 2010. The expansion of the 10 % income bracket scheduled for 2008 was also brought forward to 2003 but would expire after 2007.
Extended through 2010 the expanded 10 % individual income tax bracket. The bracket amounts would be adjusted for inflation beginning in 2004.
Extended the marriage penalty provision enacted in 2003 through 2008.
Extended the $1,000 child tax credit through 2009.
Extended the increased limit for the alternative minimum tax enacted in 2003 through 2005.
Capital gain taxes reduced from 5% to nothing, from 8% to 5% and from 20% to 15%.
Repeal of the Export Tax Incentive in a gradual manner over a period of 3 years, cushioned by US production tax breaks of around 9% on domestic production and business tax relief provisions.
This bill reduced the amount employers were required to contribute to employee retirement plans.
Favourable tax conditions, incentives and subsidies for oil and gas producers, including the increase of biofuel that has to be included in the mix with gasoline sold in the US.
Authorisation of subsidies for wind and other renewable energy production. Tidal and wave energies are included for the first time.
This bill implemented a free-trade pact with Oman.
This bill limited and highly regulated the internet gambling industry.
Allows for a distribution from a defined benefit plan to an individual whose age is 62 and has not terminated employment
Requiring firms who have underfunded plans to compensate now through the payment of higher premiums to the Pension Benefits Guarantee Corporation.
Closing loopholes used by firms to skip certain payments.
Increasing the cap on the amount employers can invest in their plans, allowing them to deduct more money.
Allows for automatic enrolment in Code Section 401(k) plan features
Makes EGTRRA’s compensation and contribution limits permanent
This bill implemented a free-trade agreement with Peru.
Increase in the federal minimum wage through stages up to 2009, to $7.25 per hour.
Guaranteeing up to $300B in mortgages for the so-called subprime borrowers through the Federal Housing Administration in case lenders write-down loan balances to 90% or more of current appraisal value, particularly Fannie Mae and Freddie Mac public lenders.
Extension of the Unemployment Insurance.
The Treasury can spend up to $700 billion in the bailout of financial institutions (the first $250B are immediately available, the next $150B should be approved by the President and the lasting $350B by the Congress), mainly through a Troubled Assets Relief Programme directed to purchase distressed assets. A newly created Office for Financial Stability within the Treasury Dept. will carry on the actions.
Firms with distressed assets cannot offer incentives encouraging risks to their senior executives.
This bill expanded the veterans education programme.
A general requirement for making any public project to use only manufactured goods produced in the US.
This bill set new restrictions on when credit card interest rates could be increased.
Creates the National Council on Federal Labour-Management Relations to allow for managers, employees and trade unions to discuss Government operations and promote labour relations, in complement to the existing collective bargaining process.
The 180-day statute of limitations established by the Civil Rights Act to fill a lawsuit to get equal pay will now restart after each new pay check incurring in discrimination.
Federal support was strengthened by increasing the benefit levels .
The period of eligibility for unemployment benefits was increased in steps from 26 weeks to 99 weeks.
Extension of Trade Adjustment Assistance programme.
Expansion in the net entitlement for NEB recipients.
Expanded expenditure in vocational training.
Amends the Supplemental Appropriations Act, 2008, to apply to claims for EUC payments the terms and conditions of state unemployment compensation law relating to availability of work, active search for work, and refusal to accept work
Ending the public subsidising of private student loans, using all available funding for direct loans.
Expansion of students' Pell Grants and tie increases of grants' maximum values to annual evolution of inflation.
Tighter regulation of the asset-backed securitisation process, forcing the securitisers to retain the risk with the referred assets, retaining no less than 5% of the credit risk.
Introduction of a Volcker rule: banks cannot own more than a 3% of a hedge or private equity fund. Also, such a bank cannot enter into a transaction with the given fund without the express, ex ante authorisation from the regulation agency.
Reduction and limitation of scope of funds used since October 2008 for bailing out financial institutions: scaled back to $475B from $700B, mandating that unused funds will not be used to fund new programmes. The sale of securities purchased will have to be used to deficit reduction and not as an offset for revenue reductions or spending increases.
Credit rating agencies are put under tight surveillance of a newly created agency. They are now required to keep an internal control structure, submitting an annual report on it to the new agency.
The financial institutions are required to verify potential mortgagers to pay and are forbidden to offer them additional benefits as an incentive. Specific high-cost mortgages should be preceded by counselling from a certified counsellor coming from the new Office of Housing Counselling; also, the transaction has to be oversight by both systems of automatic valuation and the personal observation of specific standards.
Increased protection for whistle-blowers and the use of risk-related surveillance and other oversight activities.
Increased capacity of publicly forced liquidations of financial firms: including in the classification insurance companies and non-bank financial companies. The Executive power has the capacity to appeal to the private opposition to its own liquidation.
Creation of several oversight mechanisms for the Treasury actions in the bailout: a Financial Stability Oversight Board composed by the Chairman of the FED, the Secretary of the Treasury, the Director of the Federal Housing Finance Agency, the Chairman of the Securities and Exchange Commission and the Secretary of the Department of Housing; a Congressional Oversight Panel formed by five outside experts appointed in a bipartisan manner by the Congress; and an Office of Special Inspector General appointed by the Executive and confirmed by the Senate.
Creation of the Federal Insurance Office to monitor insurance industry, insurance coverage.
Final rules have been issued on the submission of resolution plans (“living wills”) for SIFIs, and the criteria behind the designation of non-bank SIFIs and Financial Market Utilities (FMU) for enhanced supervision and prudential standards. Initial rulemakings to implement the orderly liquidation authority, which enables the FDIC to place SIFIs into receivership, have been promulgated.
Bureau of Consumer Financial Protection is established. Its role is to supervise and enforce fair lending practices, monitoring financial markets at the consumer level and encouraging consumer education and engagement.
Creation of an Orderly Liquidation Fund to support publicly-forced liquidation of private non-bank financial firms. The fund will be capitalised by collecting risk-based assessment fees on any financial company with assets starting at $50B.
Amends the Unemployment Compensation Extension Act of 2008 to exempt weeks of unemployment between enactment of this Act and April 30, 2011, from the prohibition in the Federal-State Extended Unemployment Compensation Act of 1970 against federal matching payments to a state for the first week in an individual's eligibility period for which extended compensation or sharable regular compensation is paid if the state law provides for payment of regular compensation to an individual for his or her first week of otherwise compensable unemployment (thus allows temporary federal matching for the first week of extended benefits for states with no waiting period).
Amends the Assistance for Unemployed Workers and Struggling Families Act to extend it until December 1, 201. It requires as well that federal payments to states cover 100% of it.
Amends the Supplemental Appropriations Act, 2008, with respect to the state-established individual emergency unemployment compensation account (EUCA). Extends the final date for entering a federal-state agreement under the Emergency Unemployment Compensation (EUC) programme through November 30, 2010. Postpones the termination of the programme until April 30, 2011.
Payroll tax cuts/credits for those employers hiring in 2010 to people unemployed for more than 59 days. If the contract goes beyond a year, the employer will get also business tax breaks of the lesser between $1000 or 6.2% of wages paid for 52 weeks.
This bill implemented a free-trade agreement with Panama.
This bill implemented a free-trade agreement with Colombia.
This bill implemented a free-trade agreement with South Korea
The maximum period of eligibility for NEB moves down gradually from 99 to 73 weeks.
Top income taxes raised through expiration of Bush era tax cuts: top rate up to 39.6% from 35%.