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Leoni recognizes all obligations towards employees

According to Leoni Serbia, the company has duly informed the public about its earlier announcement that they would gradually halt production at its branch in Malošište by the end of the year.

As Leoni stated, the contracts of the first group of employees terminated at the beginning of September under the conditions set out in the redundancy program.

Also, the company explained in their press release that the information appeared in the media was inaccurate or misleading, and highlighted that Leoni has, from its very first day of operations in Serbia, regularly met all obligations towards employees, including the payment of salaries, salary-related compensation, as well as taxes and contributions.

According to the company, on 18 July employees got the advice at the Malošište branch to check their employment records at the nearest PIO office and notify the HR department without delay in case of any technical error.

Leoni stated that most of employees followed the advice and the relevant services at the Malošište branch helped them resolve any uncertainties directly.

Also, the company pointed out that, under the Labour Law, they can grant severance pay only “for each completed year of employment with the employer”, and months beyond a full year are not included in this provision.

As they explained, the company will provide employees whose contracts are being terminated with severance pay for each full year of service in the amount of 50 percent of the average monthly wage (‘gross 1’) earned over the last three months. This payment exceeds the minimum severance pay prescribed by law by 50 percent.

According to Leoni’s further promises, they delivered severance pay to nearly 420 people following contract terminations at the Malošište branch in September. Meanwhile, less than one percent of workers (only four employees) lodged objections to how the severance pay was calculated.

Nevertheless, a further 1,500 people at the Malošište branch will have become unemployed by the year’s end. According to Leoni announcement made in July, loss-making operations were the reason of the closure of this branch.

The costs are also rising at the company’s other sites in Serbia – Prokuplje, Niš and Kraljevo. However, all these three factories have a clear goal of improving business operations and are working on their projects.

Currently, around 8,500 people are working for Leoni Serbia, but after the closure of the Malošište branch, the number of employees will fall to nearly 7,000.

The company started its business in Serbia in 2009.

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