Czech state to provide glass makers' employees with CZK 30m subsidy

The state will provide a subsidy of Kc30m to glassworkers of the debt-ridden group Bohemia Crystalex Trading (BCT) and Porcela Plus who have not been receiving wages for several months due to the current crisis, Labour and Social Affairs Minister Petr Necas told journalists on Thursday.

The subsidy will be distributed among the affected employees by trade unions.

Necas has agreed on this aid with Finance Minister Miroslav Kalousek and trade unions leadership.

The subsidy will be provided in March, Necas said.

"It is to solve the most urgent cases when they (employees) have been without any income for three or four months," Necas said.

The law does not make it possible to provide extraordinary social allowances, he added.

Vladimir Kubinec, trade union leader of glass and china makers, has welcomed the subsidy. "As soon as I receive the information officially, I am ready to call off the demonstration we plan to stage in front of the government office on March 31," Kubinec said.

The group consisting of BCT and related Porcela Plus, employing 7,000 staff together, was the largest glass and china maker in the Czech Republic until last year. Since last November the group has been in insolvency proceedings due to a lack of operating capital.

The units Sklarny Kavalier and Karlovarsky porcelan are the only ones of the group to continue producing at present. Other companies had to halt production when banks drew off all cash from their accounts and the firms had no funds to finance further production and pay wages to employees.

About 5,000 people have gradually lost jobs, a number of them remaining without wages for several months.

The Kc30m subsidy is an extraordinary aid. In the future, employees in a similar situation should be protected by an amendment to the insolvency law, which was approved by the government last week. Under the amendment, employees should receive three monthly wages after their employer is declared insolvent.

Necas said he hoped the Chamber of Deputies would pass the amendment as soon as March or April.

The amendment would also allow retrospective payment of wages to BCT and Porcela Plus employees. According to preliminary estimates, the state may pay Kc90-100m in these wage compensations.