Labour Ministry drafts bill which would enable thousands of miners to go into early retirement

10-10-2014

The Labour and Social Affairs Ministry has drafted a bill which would allow thousands of miners to go into early retirement, thereby easing the social impact of the planned closure of the Paskov black-coal mine in north Moravia. The gradual phase-out of the coal mine and its eventual closure is expected to place a heavy social burden on a region where unemployment is traditionally high.

Photo: Daniel BurdaPhoto: Daniel Burda The future of coal mining in Moravia, where the country’s deposits of brown coal are concentrated, is uncertain both due to falling coal prices on world markets and the government’s long term-energy plan which envisages phasing-out coal mining in the coming decades. NWR, one of Central Europe’s leading producers of hard coal for coke, has said it is considering selling its daughter companies because of financial problems and one of those daughter companies, the Ostrava-based coal producer OKD, which runs four mines in the Czech Republic, is taking similar steps to offload unprofitable businesses. Its decision to close down the Paskov mine in North Moravia which employs close to 3,000 people, was only postponed to 2017 following government intervention.

At the end of the year OKD is planning to lay-off 250 workers at the Paskov mine and in view of the mine’s slated closure another 50 leave of their own accord every month. Paradoxically, the mine which is in the process of phasing-out, now needs to take on new miners on a short-term basis. The fact that laid-off miners are hard to place on the labour market and that few people today are interested in the profession has led the Labour Ministry to consider renewing the one-time special status that miners enjoyed.

The proposed legislation should enable up to 4,000 miners to go into early retirement – by up to five years earlier than the present pension law allows and sets a special norm for calculating their pensions.

The set criteria for early retirement include the number of hours spent working in difficult conditions below ground with a minimum limit of 3,300 work shifts. Although the present legislation allows some miners to retire up to five years early in view of the exceedingly harsh working conditions in shaft mines the new draft bill would significantly expand their numbers. In effect a miner could retire after 15 consecutive years of working below ground. According to the daily Mlada fronta Dnes, the new conditions would concern 3,500 thousand miners of the 8,000 miners that OKD employs and any newcomers that fulfill the required conditions in the course of time.

The financial impact of such a move on state coffers would depend on the phasing out and closure of coal mines in the region in the coming decades and the number of miners who would fulfill the respective criteria over that time. Between 2015, when the proposed amendment is expected to come into effect, and 2063 which is the end line in the ministry’s calculations, the state would pay out an additional 16 billion crowns to cover early pensions. Between 2015 and 2017 –it would be just over 100 million crowns.

The Social Democratic Party backs the proposal on the grounds that what the state spends on early retirement for miners it will save on unemployment benefits for them. However the bill is likely to spark heated debate in the cabinet where Finance Minister Andrej Babis from the ANO party has repeatedly expressed the view that the state should not bail out an ailing private company –even if it is one of the largest private employers in the country.

10-10-2014