Employing people on a cash-in-hand basis is already illegal in 17 of the European Union's 27 member states. Now, the Labour Minister, Petr Necas, wants to clamp down on the practice here in the Czech Republic too. He plans to punish employers who fail to declare members of their workforce. How? By levying them with heavy fines or even sending them to prison.
Trade unions representing state sector employees failed to reach agreement on a wage increase for next year in talks on Friday, although negotiations are set to continue. Workers in the sector would like to see an increase of about six or seven percent, something opposed by Labour and Social Affairs Minister Pet Necas and Finance Minister Miroslav Kalousek, who do not want to go beyond 1.5. Mr Necas has said a quicker pay increase is unacceptable for the government, aiming to tackle the public finance debt.
In Business News: uncertainty remains about when the Czech Republic will introduce the euro, after the government approved an adoption plan - without a target date; the central bank surprised many with a second quarter-point interest rate hike in two months; the average salary was 7.4 percent higher in the second quarter than in the same period in 2006; changes to the labour code are intended to increase flexibility; power giant CEZ hooks up with Hungary's MOL; and Ikea plans to double its regional presence over the next decade.
Average wages in the Czech Republic grew by 7.4 percent in the second quarter of this year. The average salary stood at CZK 21,462 (just over USD 1,000) in the April to July period. Accounting for inflation, the real wage increase is 4.9 percent. Analysts have put the rise down to a shortage of labour in many sectors of the Czech economy.
Czech teachers unions announced on Tuesday that they are telling their members to be ready to go on strike over government spending cuts in education. They say the move is in response to the government's failure to react to a petition they submitted to it at the end of June with over 64,000 signatures protesting about the government's management of the country's education system. Among other things the unions are unhappy at plans to cut university budgets by a billion Czech crowns or over 50 million US dollars and the low level of teachers' wages. A spokesperson for the Education Ministry said the government understood the unions' position but that the planned spending cuts would have to be respected.
In this week's business news Irish low-cost airline Ryanair arrives in Prague; a growing number of companies have problems finding employees; the price of cigarettes expected to rise; the Czech mineral water producer buys stake in Austrian soft-drink company and the poultry meat prices are expected to rise considerably.
In protest against the planned reforms, trade unions staged a mass demonstration outside of the lower house on Tuesday afternoon. Several hundred people took part in the protests. Shortly before the government started their debate on the reforms, union representatives handed over a sack of letters lobbying individual MPs. Trade unions say that the proposed reforms will benefit the rich and hurt the middle and lower classes.
Trade unions are planning a mass protest against the planned reforms outside Parliament on Tuesday, the day the lower house is due to start debating proposed amendments to the reform package. The organizers say they expect several hundred people to take part. Trade unions say the planned reforms will benefit the rich and hurt the middle and lower classes.
In Business News: Heineken - Krusovice merger okayed by the anti-monopoly office; Czech foreign trade heading for a record surplus; an unexpected fall in inflation; a downturn in the consumption of electricity; Czechs busted claiming sick-leave; road tolls might apply to vans; and Czechs' tipping habits explored.
Unemployment in the Czech Republic grew slightly in July, according to figures released on Wednesday by the Ministry of Labour and Social Affairs. Unemployment rose from 6.3% in June to 6.4% the following month. The rise was predicted by analysts, who cited the new wave of graduates from Czech universities as one of the major reasons for the upturn in the number of unemployed. The unemployment rate is at its second lowest since July 2004, when the current measurement system was adopted.
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