Government remains committed to respect for law when it comes to former workers of KAP

Podgorica, Montenegro (12 December 2016) - When it comes to the issue of the Law on settlement of liabilities towards employees of the Aluminum Plant Podgorica (KAP), who, due to the bankruptcy of the company, are entitled to a pension, the Government of Montenegro remains committed to the rule of law and respect for the law, the meeting Deputy Prime Minister Milutin Simovic held earlier today with economy and labour ministers, Dragica Sekulić and Kemal Purišić, stressed.

"In order to enable this law to enter into force (it was determined that it is unenforceable), once again we urge MPs, especially the proponents of the law, to take active participation in the work of the Parliament of Montenegro and discuss this matter at a session of the Parliament as quickly as possible," the meeting concluded.

It was noted that the topic is still relevant and that the Government dealt with it for a long time in the past. At today's meeting, all the documents were re-analysed, including the Law and the conclusions of the previous government.

Basic Court in Podgorica's judgement of 18 November 2016 testifies to the correctness of the conclusions of the previous government, according to which the claim of a former employee of KAP, who was on the list of all the workers, was rejected.

We reiterate that, after the introduction of bankruptcy in KAP, workers have had three options, namely: to exercise their right to a pension, to take retirement or to take up employment with a new employer. The social programme stipulates that workers who exercise their right to a pension and workers who become employed by a new employer are not entitled to severance pay. That right belonges only to those who lost their jobs in the process of bankruptcy.

We reiterate that the Government of Montenegro had paid EUR 2.2 million in order to connect tenure to those who have become eligible for retirement.

Subsequently, the Parliament adopted the Law on settlement of liabilities towards employees of KAP, which, due to the bankruptcy of the company, were entitled to a pension, which the Government of Montenegro considered as discriminatory and unenforceable. It is unenforceable because it refers to the social programme, according to which, as already explained, the workers who are entitled to a pension are not entitled to severance pay. The law is discriminatory because of the fact that workers employed in the companies in which they, due to bankruptcy, lost their jobs, and who met the requirements for retirement upon termination of employment due to bankruptcy, did not receive severance pay, which is why the right the employees of KAP have according to the law can be seen as the negative discrimination in relation to other employees.

The Government has on several occasions taken a stance on this issue, calling on the Parliament to withdraw the law, or amend it so that it becomes enforceable and non-discriminatory.

We reiterate that the Government has recommended to the Parliament to examine the fiscal sustainability of the law during the reconsideration of this piece of legislation, propose a viable one-time solution that will not seriously endanger public finances, and examine viability of the proposed solutions from the standpoint of their compliance with the legal system of the state and international conventions.

Ministry of Economy
Ministry of Labour and Social Welfare