The Municipality of Praia da Vitória, in the Azores, will fire 37 employees of the Praia Cultural cooperative and integrate 91 into the municipality’s staff, hoping to conclude the internalization process by the end of the year, the mayor announced today.
“Subject to the municipality’s financial availability, we will be taking on 91 jobs at the town hall, through a competitive tendering process under the internalization of the Praia Cultural cooperative. This number is higher than what was initially announced in March, which was around 80 employees,” said the mayor (PSD/CDS-PP), Vânia Ferreira, at a press conference.
The municipal executive, which took office in 2021, admitted the possibility of redundancies following an audit of the cooperative’s accounts, which identified liabilities of 33.2 million euros.
The organization had 165 workers on open-ended contracts, but 35 have accepted termination by mutual agreement and two will be absorbed by external entities.
“The number of employees to be made redundant is 37: 10 senior technicians, 15 technical assistants and 12 operational assistants,” she said, adding that some may also “have recourse to termination of employment by mutual agreement”.
According to Vânia Ferreira, the process of internalizing Praia Cultural should be completed by the end of the year and the assumption of the entity’s debt will mean that the municipality’s legal debt limit will be exceeded.
“It’s a situation that was already duly calculated and taken care of in this whole restructuring process, from the moment it was identified that the Praia Cultural cooperative is not sustainable and that it lives totally dependent on transfers from the municipality,” he said.
The mayor therefore plans to call on the Municipal Support Fund for help by the end of the month.
“The municipal adjustment plan will be finalized in the next few days. We really want it to be finished and submitted to the next municipal assembly. We believe that by the end of September it will be completely closed and submitted to the Municipal Support Fund,” he said.
Vânia Ferreira admitted that the reduction in staff might cause “some constraints”, but guaranteed that the services provided “will be guaranteed”, claiming that there were “duplicated areas between the Praia Cultural cooperative and the municipality”.
The mayor reiterated that the reduction in staff at the cooperative was “inevitable”, otherwise it could jeopardize the payment of salaries, bank commitments or debts to suppliers.
“Without financial sustainability, we can’t keep the jobs, and we absolutely cannot keep the business going,” he stressed.
Vânia Ferreira blamed the PS, which governed the executive for 16 years, accusing the party of having used municipal companies, societies and cooperatives to “carry out investments outside the city council’s budget perimeter”.
“This financial engineering, combined with the massive hiring of employees, has skyrocketed the entity’s liabilities and substantially increased the transfers from the city council to the cooperative,” he said.
The number of employees at the cooperative rose from 26 in 2016 to 148 in 2020, and increased further to 178 in 2021.
The mayor argued that this outcome could have been avoided if the Socialist executive had complied with the “recommendations identified in audits by the Court of Auditors”.
“This was always an imposition from the Court of Auditors, which warned that all the transactions that were being made should be rethought. There was time to consider the attitudes that have been taken since 2018,” he said.