Telefonica, unions reach agreement to cut 6,500 jobs

News Broadband Spain 8 JUL 2011
Telefonica, unions reach agreement to cut 6,500 jobs
The management of Telefonica de Espana, the Telefonica Group subsidiary responsible for the fixed telephony business in Spain, has reached an agreement with unions on a Redundancy Plan and a new Collective Agreement which runs until 2013. Telefonica Espana will present a Redundancy Plan to the employment authorities affecting up to 6,500 jobs. Telefonica will support all costs related to this Redundancy Plan, including the funds required to pay unemployment benefits to the employees. Consequently, the programme will not involve any cost to the government's employment services, the company said. The Plan includes an individual programme of redundancies with compensation of 45 days salary for every year of service up to a maximum of three and a half years salary plus an additional amount related to length of time with the company. The package also includes a redundancy programme for current employees with at least 15 years service aged between 53 and 60 years old at the time of redundancy offering a monthly income equal to 68 percent of the regular base salary to the age of 61 and then 34 percent until 65, as well as a programme for employees aged over 61. There is also a special programme to help employees join other Telefonica Group companies. Telefonica also commits to create jobs amounting to 7 percent of the workforce that leaves the company under this Redundancy Plan. Over the coming years, the company plans to create up to 680 new jobs. The new Collective Agreement for 2011-2013 aims to provide employment stability for the company's employees over the coming years. Telefonica and the unions have agreed a compensation model based on the company's performance. This new system guarantees a 1 percent annual salary increase for each year of the agreement (2011, 2012 and 2013). Additionally, at the end of each financial year, this salary increase may be revised based on the extent to which the company achieves its OIBDA targets and based on the actual CPI, with the difference being applied to base salaries. Employees may receive an additional payment of up to EUR 630, if OIBDA performance exceeds 100 percent.

Categories:

Fixed

Companies:

Telefonica- Movistar,  Telefonica Espana

Countries:

Spain

Tags:

Voice services, Internet Access

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