PAM demands full compensation for loss of earnings due to Covid-related lay-offs
New restrictions are being prepared for restaurants. PAM President Annika Rönni-Sällinen says that these threaten to drive large numbers of workers into unemployment. “They are unable to influence a situation that will drastically cut their earnings. Their loss of earnings should be fully compensated”
Just under one year ago, in March 2021, when the pandemic seemed to be easing up, PAM conducted a survey of members in the hospitality sector. Then, just under half of members who responded had been unemployed or laid off.
Now things have got worse for them. In a members’ survey in November 2021, over 80 per cent of those working in the restaurant sector said they had been unemployed or laid off since the start of 2020; 94 per cent said this was due to Covid. In November a full 78 per cent reported having financial difficulties and over 20 per cent were in serious difficulties.
“The situation is now deteriorating further with restaurant restrictions being extended unreasonably. There will be a huge wave of lay-offs. Workers must now be compensated for their loss of earnings in full because the situation is not their fault”, says PAM President Annika Rönni-Sällinen .
For companies, losses due to the restrictions have been compensated through various types of support, and so far over one billion euros of support has been provided. This has kept companies afloat and therefore helped to preserve jobs.
However, up to now no direct support package has been provided for the restaurant workers suffering directly from the restrictions. Dealing with their situation has been left to social security, which is built around managing the regular risks in life. There is the risk of falling ill, having an accident, becoming unemployed. If the risk is realised, social security helps you out.
“A global pandemic is not one of life’s normal risks. Unemployment security is the wrong tool in a situation where a person has no real chance of applying for work if the entire sector is closed down. Workers in sectors affecting by these restrictions have been through this. Their finances can’t cope”, says Rönni-Sällinen.
For low-paid workers, unemployment leaves a huge gap in their income. For a full-time restaurant sector worker on average wages of 2000 euros, earnings-related benefits are around 1300 euros. After taxes, they are left with around 1000 euros.
In November, half of restaurant workers (52%) said they had dipped into savings to cope with their financial difficulties. There were also those receiving support from family (37%), selling property (13%) or taking out loans or pay-day loans (12%). 13 per cent had received social assistance.
The situation is acute, so new actions are needed; PAM demands a new support model to fully compensate loss of income for those laid off or becoming unemployed due to the new Covid restrictions.
“This sort of ad hoc model might work initially in preparing for future crises. But we need to get away from a model based on unemployment security because then responsibility for a crisis affecting all of society is shifted on to workers in particular occupational groups. Restaurant workers have run out of road and can’t take any more” Rönni-Sällinen says.
The five-day waiting period in unemployment security should also be scrapped immediately so that anyone who is laid off or made unemployed gets some income straight away. The practice of calculating maximum amounts of unemployment security should also be suspended.
“The waiting period means that workers who are laid off or made unemployed due to the new sweeping restrictions are left with nothing – again, or their right to unemployment security ends. This situation is not their fault. They have just been doing their job as normal”, Rönni-Sällinen says.