LISBON, Dec. 12 (Xinhua) -- Portugese Prime Minister Pedro Passos Coelho confirmed on Wednesday that the government will adopt new redundancy payments in 2013 allowing workers to collect 12 working days salary per year worked instead of 20 days of that.
Speaking to journalists on the sidelines of a working meeting of the National Council for the Social Economy (CNES), the prime minister announced that after nearly a year of negotiations, the government chose to establish a redundancy package of 12 days per year worked.
"We are committed to fix redundancy payment between 8 and 12 days and I can confirm that in the last scheduled Troika assessment, the government undertook to legislate at 12 days," said Passos Coelho.
According to the prime minister, the new legislation must now be formalized, which means that the initiative will be first aired for public debate and later sent to Parliament.
"During December the government will take the initiative to the legislative council of ministers, after which it will be passed on to Parliament and will come into force in 2013," Passos Coelho said, adding that "The exact date will depend on the legislative process."
According to the prime minister, the option for 12 days of compensation is linked to the country's commitment to lower the value of severance pay to "meet the European average."
Despite criticism from Portugal's main Trade Union the CGTP, which called the new law "a fraud", the prime minister claimed that negotiations for the new law were "very detailed", during which the government spoke with its social partners and the Troika, a tripartite committee led by the European Commission with the European Central Bank and the International Monetary Fund, from which Protugal will receive a total of 78 billion euros in bailout under an agreement reached between them in May last year.
"We chose the upper limit so as to cause the least possible controversy regarding the amount of compensation. This is a limit agreed with the Troika based on a number of studies that were conducted," Passos Coelho said.
Moreover, the prime minister revealed that the government intends to address the issue of fund that will support redundancy claims and that will "also include private companies", pointing out that this is a matter which is "consistent with the tripartite social agreement "and is included in its Memorandum of Understanding.
Passos Coelho admitted that the issue of compensation is not an easy one to solve and stressed that the new law would co-exist with "at least three existing regimes during the transition."
Currently, workers contracted as from November 2011 already receive compensation of 20 days of pay per year worked plus seniority-based payouts related to the workers age.