Companies, firms, NGOs and some news and advertising agencies are dismissing staff in growing numbers due to the sharp decline in the volume of business in Beirut alone, the head of Beirut Traders Association said Friday.
“In the first seven months of 2016, companies and businesses in Beirut alone terminated the services of 2,181 staff. I am afraid that these numbers will snowball at the end of this year,” Nicolas Chammas told The Daily Star over the telephone.
Chammas and the heads of business associations and hospital owners met with Labor Minister Sejaan Azzi to discuss the growing trend in dismissing staff across the board, with some of these employees expelled without even receiving their full salaries or severance.
The economic slowdown, political bickering, failure to elect a president and the spillover of the raging Syrian war have all taken their toll on business activities in general.
According to Byblos Bank-AUB Consumer Confidence Index, the mood of consumers continued to fall in the second quarter of 2016 due to poor economic performance.
Retail activity in the second quarter of 2016 plunged 4.68 percent as the purchasing power of the Lebanese shrinks, according to another recently released report.
“The overall consolidated activity of all retail commercial sectors has declined nominally by 5.61 percent during the second quarter of 2016 in comparison with the second quarter of 2015. This trend appears to have remained also negative even after applying the Consumer Price Index for this concerned period as the real decline reached 4.68 percent,” the second quarter report for the Beirut Traders Association-Fransabank Retail Index said.
Chammas said that that the layoffs have also spread to international organizations based in Beirut.
“We are only talking about administrative Beirut and not the rest of the country,” he explained.
Chammas said that Azzi called the meeting to verify reports that some firms terminated the services of staff in an arbitrary manner.
“We explained to the minister that some of the people were laid off because of the economic slowdown and a drop in business activities. The business sector in Lebanon has been struggling over the past five years and some were compelled to take this action,” he added.
Chammas gave the example of France. “In France, the new labor law states that if you have two consecutive quarters of decrease in activities, then you can end the services of some employees on the grounds of the economic situation,” he said.
Chammas admitted that some firms have terminated the services of their staff without giving them their full rights. “But most of the firms who lay off their staff give them all their legal rights,” he added.
After the meeting, Azzi said it had focused on the phenomenon of collective arbitrary layoffs by some companies. “Previously, when the economic sectors were in crisis, the state would step in to bail them out and when the state was in dire straits the private sector took an initiative to help it. But today, no one can help the other, and consequently, the ones who pay the price are the staff and laborers,” the minister said.
He added that some institutions are paying half a salary to their staff while others resort to arbitrary layoffs with no compensation.
Azzi said that the Labor Ministry would do its utmost, with the help of the private sector, to address the problem of arbitrary layoffs.
