Unemployed attendance scheme, Czech Republic

A two-year project, ‘Attendance of the Unemployed’, is being used as a control mechanism by the Employment Office of the Czech Republic for selected job applicants who are obliged to attend the Czech POINT contact office at branches of Czech Post three times a week. The project is a joint endeavour of the Employment Office, the Ministry of Labour and Social Affairs and Czech Post, and is financed by the European Social Fund and the Czech state budget.

Background

The reason for implementing the projects was to tackle illegal work done by people who are in the Register of the Unemployed (maintained by Employment Offices) and to make them regularly attend the nearest post office and report at the counter called ‘Czech POINT’. The volume of illegal work has been growing during the crisis in recent years, which is why the state, represented by the Ministry of Labour and Social Affairs (MoLSA), is looking for ways to curtail shortfalls in tax income.

Objectives

The primary aim of this project is to tackle undeclared work as much as possible, with regard to both the unemployed and companies. In the long term, it aims to reduce administrative work in Employment Offices, to enhance the efficiency of inspections for illegal work and to utilise a network of Czech POINT contact offices in the Czech Republic.

The project particularly focuses on selected target groups of the unemployed who are registered with Employment Offices:

• selected long-term unemployed people;
• applicants who have repeatedly registered;
• clients under the age of 26.

The obligation to attend the post office regularly does not apply to re-trainees or people with disabilities.

Specific measures

The ‘Attendance of the Unemployed’ ((Docházka nezaměstnaných, DONEZ) project started on 1 October 2011 and will end after two years, i.e. 30 September 2013.

The number of project participants should be about 170,000 unemployed people. Whether or not to include a job applicant in the system is decided by the Employment Office of the Czech Republic using a system that pre-selects job applicants. The job applicant must observe the set date of his/her visit to the Czech POINT contact office. At the post office, the job applicant submits the invitation card from the Employment Office and his/her identity card. Czech POINT personnel check the identity of the applicant in the software, registers him/her in the computer and issues a certificate of registered visit with a date of the next meeting. The certificate specifies the date of the next visit to the Czech POINT contact office or in the Employment Office. All written excuses that have been submitted at the Czech POINT contact office so far must be brought to each meeting at the Employment Office.

Actors involved

The project relates particularly to selected target clients from the Employment Office register (see above), and also to the personnel of Employment Offices and Czech POINT contact offices at Czech Post.

Outcome of evaluations; lessons and conclusions

Achievement of objectives

For the time being, achievements of project objectives cannot be evaluated – the first evaluation will be carried out no earlier than one year after the project launch. After the first eight months, the MoLSA specified a net benefit of CZK 375 million. However, it is not obvious which target value this benefit relates to (a plan of savings is not known).

Obstacles and problems

During the project, the following problems have been identified:

• Insufficient capacity/overloaded Czech POINT contact offices at post offices (they did not manage to attend to numerous applicants); people must stand in a queue.
• Job vacancies available for the applicants: The public portal of the MoLSA contains information on job vacancies that are no longer valid (updated approx. once a week) and the post office personnel often cannot offer information on job vacancies to the job applicant (more than a half of the job applicants are not offered any job vacancy).
• The post office cannot make up for the contact between the unemployed and the Employment Office personnel.
• Increased costs arise for the unemployed to commute from their home to the post office in the catchment area (especially when they must commute to a post office that is outside their place of permanent residence).
• Incompatible time of the visit to the post office with public transport timetables.
• Post office employees sometimes do not find the applicant in the system. Such applicants then have to go to the Employment Office, which issues a new time for visiting the Czech POINT office.
• Contacts/visits are irregular, although most frequently once every three days (in 60% of the cases).

Lessons learned

The above-mentioned measure will not lead to the expected outcomes, both in terms of declared savings or in terms of reducing the volume of illegal work. The project is not supported by a majority of the Czech population; it is viewed as unlawful and meddlesome.

The conditions and the scope of the project were strongly criticized by the Ombudsman Pavel Varvařovský, whose Brno office has registered 50 complaints. He has demanded a cancellation of the obligation of the respective group of the unemployed to report to the Czech Post offices several times a week. According to the Ombudsman, this obligation goes against human dignity: ‘To come regularly to a place where no assistance in getting a job is provided is a sort of turpitude.’

Impact indicators

The DONEZ project is financed by the European Social Fund and its two-year operation will cost the state CZK 233,720,100. In the first eight months of the project’s existence (i.e. until the end of May 2012):

• 1,113,000 visits to the Czech POINT contact offices were made;
• 51,200 people were struck off the register, of whom 995 were struck off because they got a job;
• administrative proceedings for breaching DONEZ duties were started with 5,733
• persons – these people were struck off the Register of the Unemployed due to their breach of DONEZ duties, with negative consequences for all of them;
• the proportion of people not observing the obligation is, on average, 3.5%.

In total, since October 2011 the project has been attended by 70,000 people. In May 2012, 19,521 people were currently included in the project (the monthly average is around 22,600 people). The Employment Office pays the Czech Post CZK 45 for each visit. From October 2011 to May 2012, the amount spent on these services associated with job applicants’ visits to Czech POINT contact offices was CZK 60 million. This amount was invoiced by the Czech Post based on the concluded contract.

Savings up to the end of May 2012 were quantified by the MoLSA at CZK 435.5 million. The amount for the struck-off applicants was CZK 380 million, and for those who found a job, it was CZK 55.5 million. After deduction of expenses, it means a net saving of CZK 375.5 million.

Transferability

It is probable that a similar project applied in other regions or other Member States would have similar problems and opposition. Its transferability elsewhere is hard to assess.

Contacts

Employment Office of the Czech Republic (Úřad práce ČR, ÚP ČR)

The ESF project website ‘Attendance of the Unemployed’ (Efficient system of employment development, execution of comprehensive audits and fighting illegal work in the CZ, in Czech)

Bibliography

Jungová Alena, Employment Office of the Czech Republic – branch Valašské Meziříčí, Outcomes of the DONEZ system from October 2011 to May 2012.

Ministerstvo práce vyrábí úspory [The Ministry of Labour produces savings] (2012), The E15 Daily, 25 June, available at http://zpravy.e15.cz/domaci/ekonomika/ministerstvo-prace-vyrabi-uspory-776089.

MoLSA (2012), ‘Evaluation of the DONEZ project for the first five months of operation’, press release, 21 March.

Richterová, J. (2012), ‘Akční spolek nezaměstnaných’ [‘Action group of the unemployed’], article of 12 July „Drábek „bojuje“ s nelegální prací – pro nezaměstnané zavádí povinnost hlásit se na poště“[‘Drábek “fights” illegal work – introduces a duty for the unemployed to report at the post office’], available at http://www.akcnispolek.estranky.cz/clanky/odmitame-verejnou-sluzbu-a-donez/donez/drabek----bojuje----s-nelegalni-praci-----pro-nezamestnane-zavadi-povinnost-hlasit-se-na-poste.html.

Sanction for illegal work: http://socialnireforma.mpsv.cz/cs/5#1.6.

ÚP ČR (2011), Press release on the launch of the DONEZ project, 10 August.

Šperkerová, M.A. (2012), ‘Horší než v podmínce’ [‘Worse than under the suspended sentence’], EURO Weekly, 24 June, available at http://euro.e15.cz/archiv/report/horsi-nez-v-podmince-777788.

Petr Pojer, Research Institute for Labour and Social Affairs (RILSA)