Almost 7,000 public sector jobs cut

Hungary’s public sector is losing nearly 7,000 jobs as the government aims to reduce the budget deficit, develop an efficient state and encourage private sector employment. Around 4,260 employees are going, and 2,440 vacant posts will not be filled. Unions are angry because the news was first posted in the official gazette, Magyar Közlöny, and there has been no consultation with the social partners. Employer organisations fear the dismissals will affect public services.

Background

According to the Hungarian Central Statistical Office (KSH), 677,000 employees worked in the public sector at the end of 2011, of whom 250,000 were in the central institutions – nine ministries, National Tax and Customs Administration, KSH and the National Development Agency. European Central Bank data show that Hungary has the highest proportion of public servants in its workforce in Europe at 18%, while Greece has 17%, followed by Romania with 13%, and Austria and Germany each with 11%.

There had been earlier indications of possible layoffs before the 2010 parliamentary election, when Sándor Demján, President of the National Association of Entrepreneurs and Employers (VOSZ), talked about the need to cut 300,000 public sector jobs.

Hungary’s population is just under ten million and among those of working age, the employment rate stands at just 50%. Of the 3,791,000 people with jobs, almost 20% work in the public sector. Sándor Demján said that local authorities and publicly-owned companies were so oversized that a mass layoff was inevitable. Most local authorities and economists have also talked about the need for massive layoffs.

Help for dismissed workers

The cabinet’s decision to cut almost 7,000 jobs was announced on 11 January 2012. The decision came into effect on 18 January, by which time all affected employees had been informed.

A total of 2,826 people will be laid off in the Ministry of Public Administration and Justice and associated areas. The Ministry of National Resources will lay off 903 people and the Ministry of Rural Development will lose 742. The National Tax and Customs Administration will cut 577 jobs. Only the Ministry of Defence is unaffected.

The cabinet has launched a free voluntary Career Bridge Programme to help those who have lost their jobs find employment in the private sector, offering consultations on matters such as submitting curriculum vitae and cover letters and preparing for a job interview. The state also aims to stimulate the private sector into employing ex-public sector workers with tax and contribution benefits.

Consultation with unions

A week after the announcement, the government convened the National Public Service Interest Reconciliation Council (OKÉT) where Government Commissioner András Levente Gál told the unions about the job losses and the Career Bridge Programme. The commissioner said that the government had already informed the trade unions about its intention to cut jobs in the public sector in November 2011, so the announcement was legally correct.

Social partner response

The Trade Unions’ Cooperation Forum (SZEF) said that the layoffs were astonishing. It said that the dismissals would reduce the quality of the public service, and there had been no information or consultation before the announcement. The employer organisations also voiced concerns saying that the new round of dismissal endangers the competent functioning of the public service. The SZEF pointed out that before the 2010 election the parties that form the present government had in fact promised to create one million new jobs.

János Árva, President of the Trade Union of Hungarian Civil Servants and Public Service Employees (MKKSZ) was angry at the lack of consultation. He also criticised the Career Bridge Programme which he said could be useful for younger employees, but was unlikely to help the majority of those laid off since most were over 50 and had spent most of their working life in the public sector.

Lack of jobs

Given the economic crisis, neither employers nor unions expect that many of the dismissed employees will find a job. Most are over 50, few have foreign language skills and most of their work experience is within the public sector. Former Interior Minister Mónika Lamperth, of the Hungarian Socialist Party (MSZP), said that the labour market would not be able to absorb them, leaving families in crisis.

Katalin Szekeres, a recruitment expert at ManpowerGroup, said it would be tough for redundant civil servants to find work because of the differences between the public and private sector. They would have to be ready for the competition in the job market, and learn how to sell themselves.

Commentary

There is much criticism of the government’s announcement, the lack of consultation with unions and the layoffs themselves. Although the public sector is too big, the chance of redundant workers finding a job is slim. The government wants to support new employers who employ the redundant workers with tax incentives, but only time will tell whether employers will want to hire someone just because they attract tax and contribution allowances.

The former public service employees need to receive not only training in how to apply for jobs but also need well-tailored individual professional and vocational training. There are doubts about whether the Career Bridge Programme can provide the support that is needed.

Máté Komiljovics, Solution4.org