“Insolvencies are being abused more and more often as a business model,” said AK expert Karin Ristic on Tuesday at a press conference in Vienna. The entrepreneurial risk is “passed on to the general public”. This will continue to work “as long as there is no first-party liability,” said the head of the AK Vienna insolvency protection department.
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Ristic, for example, refers to a case involving a real estate developer in Vienna – not Signa, which “developed into a crime thriller”. The real estate developer’s network of companies includes 20 companies, some insolvent, some already identified as shell companies, with always the same people in management, according to the AK expert. Full-time construction workers were registered as employees at a marginal level or just above the marginal earnings threshold. The AK has long been calling for the initial client to be liable for wages and more controls in order to curb wage and social dumping as well as undeclared work.
Subcontractor chains
According to the Chamber of Labor, it is not only common practice in the construction industry to award contracts to subcontractors and sometimes from these to sub-subcontractors. “As a result, the initial clients get rid of their responsibility and subcontractor chains are created, which form an ideal breeding ground for social fraud, undeclared work and wage dumping,” says the AK criticism.
However, the Chamber of Labor does not want to cast the majority of bankruptcies in a negative light. “Insolvencies and failures are part of the reality of business,” says Ristic. According to AK, the largest bankruptcies this year in terms of number of employees included the bankruptcy of the Austrian subsidiary of the Polish textile discounter Pepco with 627 employees, followed by the Lower Austrian insulation producer Brucha (572 employees), the Salzburg heating manufacturer Windhager (453 employees) and the Vorarlberg engine components -Manufacturer König (362 employees).
Record number of company bankruptcies
The creditors’ representative AKV expects a record number of corporate bankruptcies to be opened this year. By the end of September, over 3,000 companies had already become insolvent. The record of 3,364 bankruptcies for the entire year was only set last year and will probably fall in October. In view of the increasing number of insolvencies and unemployment, the AK once again called for financial improvements in unemployment insurance in order to avoid poverty. Unemployment benefit must be increased from 55 to 70 percent of the final net income and the family allowance must be “significantly increased,” said the head of the AK Vienna department Silvia Hofbauer at the press conference. The family supplement for unemployment benefits has been 97 cents per child per day since 2001. In general, unemployment insurance benefits must be adjusted to inflation, demanded the AK representative.
