Portugal bans TAP laying off personnel en masse

Portuguese flagship carrier TAP has been banned from firing employees as long as the state is a shareholder, the government announced on Thursday.

The government said that the new owner of TAP is banned from firing workers en masse, while the state is a shareholder and during the first two years and a half following the sale.

The decision was taken after 9 of TAP's syndicates agreed to negotiate with the government, following strikes by employees over the Christmas period which affected thousands of passengers.

TAP decided to relaunch the concession in November, selling off 66 per cent of TAP. The sale was stalled in 2012 because the sole bidder didn't meet necessary banking requirements on time.

The government will retain a 34-percent stake which it can sell two years after the sale.

Other conditions agreed at a cabinet meeting on Thursday include that the company's headquarters remain in Portugal and the government will evaluate the project's contribution to the national economy's growth.

The government says it will take the bidder's technical experience into account and management in the aviation sector, as well as its financial competency.

TAP's sale is one of the terms set in the 78 billion euro bailout program Portugal signed in 2011 with its troika lenders, the European Commission, the International Monetary Fund and the European Central Bank.

Privatizations are a way to boost the Portuguese economy after years of struggling with austerity measures throughout the financial crisis, but the sale of assets like TAP have drawn criticism.

Portugal's opposition Socialist party has claimed that the sale is "illegitimate," but Prime Minister Pedro Passos Coelho has insisted that TAP will not survive without a concession, which will rid the company of around 1 billion euros in debt. Enditem