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The Government of the Republic of Serbia

In the service of citizens

Realisation of “Severance to Job” project begins in January 2007

Belgrade, 19 December 2006

The Serbian Minister of Labour, Employment and Social Policy Slobodan Lalovic said today that the realisation of the “Severance to Job” project will begin from January 2007.

Lance Clark, left, and Slobodan Lalovic

Lalovic told a press conference that this project will be financed by the Austrian Development Agency (ADA) through the United Nations Development Program (UNDP), which secured initial funds worth €2 million.

According to Lalovic, the basic idea of the “Severance to Job” project is that those who have lost their jobs are enabled to use their severance pay to subsidise their new jobs through various services and incentives.

He pointed to the fact that the initiation of the project is in accordance with one of the aims of the Ministry, which is to use severance funds for new employment opportunities.

The Minister said that, according to data based on information regarding those who received severance payments in the period from 2001 to 2002, 96% of the money was used for expenses, due to which these people become a social problem.

He recalled that from 2002, when the transition fund began to function in Serbia, more than RSD 26 billion was paid to some 170,000 workers who lost their jobs.

Considering the fact that the process of restructuring and privatisation of companies is not complete and it is expected that more workers will become redundant, it is necessary to create a mechanism which could help these workers to use their severance payment for gain a new source of income, said Lalovic.

According to Lalovic, the Serbian government has brought a decision to reduce funds for subsidies for socially-owned companies, and increase the funds for severance payments, which is shown by the fact that the transition fund consisted of RSD 6.5 billion this year, and a sum worth RSD 9 billion will be allocated to this fund through the 2007 budget.

Lalovic recalled that 13 transition centers were also founded in Serbia which should help people who have lost their jobs, and during the previous three years important changes were made in employment policy through reforms in the National Employment Service and by introducing more active measures in this area.

Director of the National Employment Service Radovan Ristanovic said that this project will allow for the passive measure of severance pay to be transformed into an active employment measure, adding that the project will be carried out through business centres in the next two years.

Ristanovic said that privatisation of some 800 companies is expected in 2007, so the expected number of redundant workers, according to estimates of the National Employment Service, is 65,000.

Austrian Ambassador to Serbia Gerhard Jandl said that the "Severance to Job" project is an innovative approach to the labour market and its development and added that the application of this project will add to more efficient functioning of the labour market and a better labour force supply.

UNDP resident representative in Serbia Lance Clark said that the general aim of this project is to create a wealthier society in Serbia, underlining that its successful implementation will provide a model for the implementation of similar projects in Serbia.