The Czech government on May 11 approved a special contribution for soon to be redundant employees of the country’s only hard coal miner, OKD, which was declared bankrupt two days earlier.
OKD has around 9,800 permanent employees, 2,500 contractors, and 200 agency workers. Those who have worked 15 or more years will be entitled to CZK8,000 (€296) per month in special state support, Industry and Trade Minister Jan Mladek said following a cabinet meeting, CTK reports.
The government estimates OKD would have to pay CZK5.9bn in severance and other expenses if all its mines close. However, Mladek said Prague is working with the bankruptcy administrator to prevent that. “Maintaining OKD’s operation while in insolvency is a priority for the government,” he said OKD’s collapse could knock 0.4 percentage point from the country’s GDP and cost the state budget CZK33bn (€1.2bn), according to Deloitte, advisor to NWR. In the Moravia-Silesia region, it estimates immediate closure would cut employment by 4% and GDP by almost 5%.
Adding to those figures will be the cost of special payments to redundant OKD employees, who could receive money for up to five years, depending on years worked and their age, Prime Minister Bohuslav Sobotka said. The state granted similar contributions to brown coal miners 15 years ago.
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