IN THE PUBLIC sector it is near impossible to fire staff. Pubic employees might be totally unproductive, unreliable and incompetent but unless they commit a disciplinary offence there is no way they can lose their job. They also might have nothing to do all day, through no fault of their own, but because their department’s responsibilities have been taken away, but redundancy is never on the cards.
There were also SGOs that for years had no job to do because of opening up of the market, such as the Dairy Industry Organisation, the Grains Commission and the State Fairs Authority, but they remained in operation. The staff, although technically unemployed, carried on drawing a salary for doing nothing. After many years of inactivity, some of these SGOs closed down and the workers that did not take voluntary retirement were moved elsewhere in the public sector.
In the public sector the concept of redundancy does not exist. When the state or SGOs hire people it is until retirement age regardless of changing conditions and needs. The only way for this sector to get rid of staff is through so-called ‘voluntary retirement’ which also involves big compensation to encourage people to ‘volunteer’ to leave. This is a direct consequence of the excessive power wielded by the public sector unions and the cowardice of politicians, who happily waste the taxpayer’s money to avoid union pressure.
Oddly, the Bank of Cyprus, a public company, is behaving in exactly the same way as the state. It recently announced a voluntary retirement scheme, because it wants to get rid of some 300 workers, but according to reports there have been fewer than 100 applicants. Admittedly, the bank employees’ union ETYK is very powerful, but we would have thought the arrival of foreign shareholders, a foreign chairman and a foreign CEO would have led to a more resolute and rational way of dealing with the union. In the case of redundancies, a business should choose the workers that are not performing well or meeting targets and give them their notice.
In the rational world, it is the employer’s right to decide the employees that will be made redundant, because in the rational world a business that needs to cut staff numbers will want to keep its good workers and get rid of the unproductive ones. With voluntary retirement, this right is taken away from the employer and the business runs the risk of losing its good workers who are confident of finding alternative employment, and being left with the unproductive, unmotivated staff.
So why has the Bank of Cyprus opted for an absurd voluntary retirement scheme when it has no legal or moral obligation to do so? What hope is there of ending the union abuses if the biggest businesses in the private sector adopt the farcical concept of voluntary retirement. It is just another way in which unions have disempowered employers.