Lay-off numbers scary -GNCCI recommends furlough ; TUC advocates work-sharing

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Chief Executive Officer of the GNCCI, Mark Badu-Aboagye

The Ghana National Chamber of Commerce and Industry (GNCCI) and the Trade Union Congress (TUC) have expressed worry over the high number of job losses in the country due to impacts of the coronavirus pandemic, hence they are advising companies to devise more innovative measures to keep jobs.

For the GNCCI, it would be better for businesses to resort to furlough – a temporary leave of absence granted to employees – rather than let workers go home permanently, as the Chamber is projecting that more people are likely to lose their jobs in the near-future compared to those that may gain employment during the period.

“From a survey we supported the TUC to conduct, thousands of people in almost all sectors of the economy, especially SMEs, are having a bad time. The hospitality sector, educational sector and many others have ground to a halt. It is very scary; this COVID-19 was not planned for, and per our survey we realised that a lot of businesses don’t have the funds to continue paying workers over the long period they will be staying home.

“If you look at the SMEs – the micro and the small – what we realise is that they are completely laying off people because they have totally shut down. So, for them, all of them are going home,” Chief Executive Officer of the GNCCI, Mark Badu-Aboagye, told the B&FT in an interview.

“With employee management in lieu of lay-offs and redundancies, businesses are strongly encouraged to work with unions and workers to explore alternative strategies to retain their workers. For example, businesses can furlough employees. This will help minimise or eliminate the related costs of rehiring and training, as well as loss of well-trained employees,” he said.

The TUC, on the other hand, is advocating for work-sharing – also known as Kurzarbeit, which literally means short-time work. The system prevents distressed companies from laying off their workers. Rather, workers are made to reduce the number of hours they work per week. The reduction of working time allows other workers who otherwise would have been laid-off to share the reduced volume of work available.

In a document entitled ‘Impact of COVID-19 on Enterprises, Employment and Livelihoods in Ghana; Some Proposed Mitigating Measures’, the TUC is strongly making a case for large enterprises to adopt the German Kurzarbeit as a way of preventing mass lay-offs in the formal sector.

“In recent decades, Germany has fared better in dealing with global crises. The country has recovered faster with fewer job losses from major global economic crises than most other advanced economies. During the 2008 financial crisis, unemployment did not rise in Germany as it did in other major economies around the world. The reason for this superior performance is the German system for supporting distressed businesses and their workers.

“Many European countries have adopted the Kurzarbeit-style arrangement when confronted with crises which threaten employment. Britain, Denmark and France have all adopted similar schemes. In the current COVID-19 crisis, the United States has moved in a similar direction,” the TUC statement said.

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