Recession
110% increase in redundancies to end October
By
Nov 10, 2009 - 9:57:03 AM

Commenting on the 110% increase in redundancies to end October in figures released by the Department of Enterprise, Trade & Employment this evening, the Director of the Small Firms Association, Patricia Callan, said that “there is a clear need for the Government to take decisive action in stemming the spiralling jobs crisis.” An additional 6,561 people were made redundant in October, bringing the running total for the year to 67,207.

“The government are taking heart from the flattening of the live register index in recent months, yet the redundancy figures clearly demonstrate that the jobs crisis is very real and is spiralling out of control. The reason that the live register is flattening is two-fold; firstly, many companies put their staff on 3-day weeks this time last year, so they were counted on the live register figures from that date. What is now happening is that in order to safeguard their 5-day a week salary for the purposes of statutory redundancy payments (which only continues for 12 months after an employee goes on a 3-day week), these employees are now moving from their 3-day a week job into absolute unemployment and consequently are claiming their statutory redundancy entitlement. This movement is not accounted for within the live register data collection exercise, but the reality in terms of employment prospects and the ongoing costs to the Exchequer is devastating”, commented Callan. “The second reason the live register is flattening is significant levels of emigration – a veritable brain drain of our young talent is going on, with no active government policy in place to counteract it – this is shocking!” stated Callan.

“Under the government’s “Work Placement Scheme”, which is only open to 2,000 people, and thus a “drop in the ocean”, a company is ineligible if it employs less than 10 people (which is 90% of all businesses in Ireland) and has made someone redundant in the last 6 months (50% of all businesses, according to the SFA’s Autumn Employment Survey). There is no net cost to the Exchequer in facilitating such schemes as they would be paying the social welfare entitlement anyway, but there is potential tremendous benefit to small companies, who cannot afford to hire in expertise such as in design, marketing, innovation, but who would provide a fantastic training ground and a mechanism for recently unemployed highly skill personnel to maintain their skills. If they make a substantial contribution to the bottom line of the business, then the business will be able to grow and from that the temporary placements could become permanent jobs. This is a very simple and only realistic job creation plan in the near future”, commented Callan.

“All of the other supports announced to date are restricted to the same 800 Enterprise Ireland client companies, which while vitally important to these internationally trading companies, will do nothing to stem the job loss tide in the other 249,200 companies, who traditionally have employed half the private sector workforce, some 800,000 people”, stated Callan.

“The jobs crisis is very real and the government must take immediate action to create opportunities for people and to allow businesses to sustain employment by mainstreaming existing pilot schemes into the broader business community. It is vitally important that we don’t allow a whole new generation to be lost to long-term unemployment or emigration; instead we should allow them to maintain their skill base and add to the competitiveness of smaller enterprises by matching the two on mainstream work placement programmes”, stated Callan.

Callan said that the outlook for the next quarter remains poor, with 20% of respondents to the SFA’s own Autumn Quarterly Employment Survey, expecting to implement redundancies in the next 3 months. In addition, two-thirds of respondents expect to freeze recruitment in the next three months, which means very limited opportunities for those people who have been made redundant to get alternative employment. “On the basis of this barometer, the jobs crisis is only set to worsen in the immediate future”, concluded Callan.