Sector fund

Collective labour agreements may contain a provision for payment of an allowance to employees who have been made redundant. This allowance (formerly called reduced pay) is paid from a sector fund and is usually takes the form of a supplement to the unemployment benefit or partial disability benefit (WGA). The premium paid by employers in a certain sector is called the sector premium. The amount of this sector premium depends on the risk of becoming unemployed in the sector in which the company is classified.