Government and Unions Respond to WOW air Bankruptcy
The Icelandic government will allocate an additional ISK 80 million ($652,000/€580,000) to the Directorate of Labour in order to help the institution respond to the mass layoffs that have resulted from WOW air’s bankruptcy. Meanwhile, VR Union is working to ensure its members who have been laid off by WOW will get unemployment benefits immediately, a process that usually takes months.
WOW air’s bankruptcy last Thursday has already led to some 1,500 layoffs so far, the largest mass layoff in Icelandic history. The vast majority of those left unemployed, or around 1,100, were employees of WOW. Another 315 were laid off by Airport Associates, which provides air terminal service at Keflavík Airport. A large construction company in the Keflavík area has let go of 40 employees, while tour bus company Reykjavík Excursions has laid off 59. Keflavík airport’s Duty Free stores have also laid off six employees, citing that around 30% of passenger traffic at the airport was due to WOW air’s flights.
Directorate of Labour gets a boost
The Directorate of Labour mobilised a response team immediately following WOW air’s bankruptcy. “Subsequently, we have been working on measures under the auspices of strengthening the Directorate of Labour, and it was agreed […] that 80 million would be supplied from the reserve fund to support the Directorate of Labour,” stated Minister of Social Affairs Ásmundur Einar Daðason.
The Minister added that the money would be distributed to the directorate’s service centres in Reykjavík and Reykjanesbær, adding that the government would keep an eye on the employment insurance fund, though it was too early to say how much additional funding it may need in light of the layoffs.
VR Union lends to unemployed members
Some 250 workers who lost their jobs as a results of WOW air’s bankruptcy are members of VR Union. The union’s chairperson Ragnar Þór Ingólfsson says VR decided yesterday to lend its members the equivalent of their monthly wages for April in order to bridge the gap until employment insurance kicks in. The loans, Ragnar Þór explained, will be “paid back” to VR from their own employment insurance fund once the pending paperwork comes through. VR also held a meeting yesterday for former WOW employees to inform them on how to fill out the necessary paperwork for claiming unemployment benefits.