Greece: Impact of the crisis on industrial relations
The economic crisis in Greece has hit the country’s workforce hard, with unemployment rising to 21% and wages falling sharply.Moreover a big shake-up in the rules governing industrial relations has led to the restriction of labour rights.These changes were put into practice through the enactment of nine laws (2009–2011) regarding public and private sector employees.
Section 1: Basic data on the impact of the crisis on industrial relations
1.1: Academic studies
The specific studies on the issue are not yet completed at university level. However, university professors have published studies that examine the issue:
1. Robolis S., Economic Crisis, employment crisis and social insurance (Οικονομική κρίση, κρίση απασχόλησης και κοινωνική ασφάλιση), Athens 2011.
2. Kouzis G., Employment in the vortex of the economic crisis and the memorandum, Ten Observations (Η εργασία στην δίνη της οικονομικής κρίσης και του μνημονίου, Δέκα επισημάνσεις), 2010, Utopia issue 97.
3. Gavroglou S., Flexibility perspectives in Greece and in Europe (Οψεις ευελιξίας στην Ελλάδα και στην Ευρώπη), 2009, PAEP (Employment Observatory Research - Informatics) .
1.2: Government and social partner research
1. Bank of Greece, The Economic Crisis in Greece, Causes and Implications, 2012
2. Annual Greek Trade Report 2012, ESEE
3. Annual Report on the economy and unemployment, GSEE Labour Institute 2012
4. Report on the economy, 2012, ΙΟΒΕ
1.3: International comparative research
1. IMF 2011, Achieving sustainable economic reforms in Greece in 2011 and Beyond, 2011,
2. ILO, 2011, Social security and the role of law, General survey concerning social security instruments in light of the 2008 declaration on social justice for a fair globalization.
3. OECD, 2011, Economic outlook. 89, Paris
1.4: Grey literature
1. Zalouflis K., Glatianos D., The economic crisis and employment relations in Greece, (Η οικονομική κρίση και οι εργασιακές σχέσεις στην Ελλάδα), Doctoral Dissertation, School of Administration and Economics, Accounting Department, 2009. The goal of this dissertation is to study and analyse the causes for the financial crisis and its spreading in Greece. Subsequently, it mentions the impact of the crisis on production and the country's economy in general examining the changes noted in every form of work due to the crisis and to employees themselves.
2. P, Kyriakoulias, Employment relations after the memorandum, (Οι εργασιακές σχέσεις μετά το μνημόνιο), National Institute of Labour and Human Resources, 2012.
1.5: Relevance of debate
Please indicate if this topic is an issue for debate in your country, either in terms academic, political or debate among the social partners. Please tick the relevant box.
a) academic debate
very relevant
relevant Χ
not very relevant
not relevant at all
b) political debate
very relevant Χ
relevant
not very relevant
not relevant at all
c) debate among social partners
very relevant Χ
relevant
not very relevant
not relevant at all
Section 2: Policies, instruments and regulations
This section of the CAR will examine relevant policies, instruments and regulations at EU, national, regional or sectoral level that have been enacted as consequence of the crisis and which may have impacted on national industrial relations.
2.1 EU-level instruments
Troika Memoranda
In Greece the economic crisis led to a bailout package from the European Commission, the IMF and ECB and signing of three memoranda as prescribed by the troika. This resulted in a complete reformation of the labour market in Greece, both in the private and in the public sectors. The context of these changes is along the lines of changes taking place in the country over the last twenty years, but greater in extent and intensity. However, the measures adopted do not constitute an innovation in the European area as to their nature or content.And this because in the all measures introduced as a consequence of the crisis and the memorandum, there is not even the slightest regulation where the Greek labour market is selected as the first field of application.
These are specified with interventions related primarily to shrinking employment and deregulation of employment relations in the public sector in the scope of convergence with the employment relations in the private sector and under terms of total degradation.Deregulation of employment in the public sector creates the appropriate background for extensive deregulation of employment in the private sector by boosting flexible and precarious employment, facilitating redundancies and dismantling the collective bargaining system.
Facilitation of redundancies is attempted in a period of acute unemployment and intensifies the feeling of employment insecurity. Relaxing the protection of employees both at individual and collective level constitutes one more blow on a main pillar of labour law. Under the measures adopted as a result of the first memorandum, the cost of redundancies is reduced by shortening the maximum advance notice period for termination of employment agreements from 24 to 6 months which reduces the redundancy cost by up to 18 salaries for employees with a great length of service. At the same time, employers are facilitated in paying the severance compensation in more and smaller instalments as compared to the past, restricting also the threshold for partial payments of severance pay from the equivalent of 6 months salaries to two months. In addition, the minimum employment period required for payment of severance pay by employers is extended from 2 to 12 months after termination of open-ended employment agreements. Lastly, in relation to collective dismissals, the threshold is increased from 4 to 6 employees for companies which have 20-150 employees and for companies with more employees the threshold is set at 5% compared with the previous level of 2%.
Enhancement of flexible and precarious employment is achieved with a variety of measures under the first memorandum.These include extension of the maximum temporary employment period from 18 to 36 months, extension of maximum temporary employment renewal period from 2 to 3 years, extension of job rotation (4-day, 3-day) period from 6 to 9 months per calendar year, elimination of overtime charges for partial employment and charges for employment of under 20 hours per week.
The degree of centralisation of collective bargaining and wage settings
Dismantling of the collective bargaining and collective employment agreement system is an intermediate stage leading towards individualisation of employment relations and the manner by which salaries are formulated. A basic principle of labour law, that of regulation in favour of employees is invalidated under the first memorandum through legal recognition of the ability to sign enterprise-level collective agreements with an unfavourable content as compared to the content of industry wide agreements.
Under the second memorandum, the minimum wage rate is reduced by 22% (and by 32% for people under 25 years of age), with legislative intervention, which nullified the role of the national collective agreement. At the same time, increases to basic wage/salary under collective terms, maturity and long service allowances are suspended until the unemployment rate drops under 10%, which under the policies implemented is not expected to happen before 2023 according to the opinion of the Greek General Confederation of Labour (GSEE) Labour Institute and the Civil Servants’ Confederation. However, it should be noted that the recent changes in the collective agreement system do not only impact the base wages and salaries; the combined measures under the first and second memoranda are instrumental in sliding salaries to the lowest remuneration for paid employment. This is intended through the following regulations:
- Through legal introduction of pay increase freeze
- By suspending the extension of application of industry-wide and occupational agreements for all employees in a sector and occupation which urges enterprises to depart from employment organizations that sign binding collective agreements while others are not obliged to sign binding collective agreements and sign individual agreements which are binding only as to the overall minimum thresholds.
- By providing the ability to sign enterprise-level collective agreements where the threshold is the minimum wage and which are not bound by the thresholds of the corresponding industry-wide agreements.
- By shortening the effective time of continuance of collective agreements if they expire or are terminated (fro 6 t 3 months). In this manner, the regulatory power of the content of collective agreements is reduced and their continuance in individual terms of employment is related from now on only to the minimum wage and childcare, education, long service and dangerous work allowances. Being negotiable under new individual employment agreements, these terms lead to the hasted acceptance on the part of unions to sign collective agreements before the three-month period, under the pressure of terms set by employers in order to avoid individualization of pay.
Other
- Elimination of the ability to seek unilateral recourse to arbitration if intermediation fails. The result of this development is further restriction of the role of arbitration in providing final resolution to collective disputes, leaving the manner of their resolution in limbo and enhancing the insecurity of employees. Moreover, from this point on arbitration is stripped of its power to cover the entire collective dispute and is limited to the minimum wage threshold per bargaining level.These developments discourage employees from seeking arbitration since even if accepted by the employer, it only deals with the minimum wage leaving the framework of allowances, institutional issues and the entire content of achievements of prior collective regulations in a state of uncertainty. These measures promote signing of collective agreements by the unions under conditions of intense pressure.
2.2: Governmental instruments
As mentioned above, the Greek Government implements the orders of Troika through legislative interventions. (GR1206019I, GR1203019I, GR1109029I, GR1007019I, GR1006019I, GR1004019I, GR1005019I, GR1003029I)
2.3: Measures from social dialogue and/or bipartite and tripartite bodies
National General Collective Agreement
The National General Collective Agreement (EGSSE) singed in 2010 with a 3-year duration maintained payment of holiday allowances (13th and 14th salary) until its expiration, while after the recent legislative regulation, (Law 4093/2012) in implementation of the third memorandum, the minimum wage in Greece is not anymore the object of collective bargaining but is set by law.
International Labour Conference and GSEE moves
Inclusion of Greece in the list of 25 countries examined for violation of fundamental International Labour Conventions during the 100th session of the International Labour Conference and issuance of the Conclusions on the policy of the Greek Government, concludes the first hearing procedures of the GSEE complaint on unfair and unilateral legislative measures adopted by the Government against workers, which were introduced in January 2010 in implementation of the terms of consecutive Memoranda of Understanding in the framework of the loan mechanism for Greece.
GSEE complaint to the International Labour Organization
At the head of the GSEE complaint to the International Labour Organization are specific state interventions which violate the International Convention (No.98) and a host of other fundamental Conventions, ratified by Greece (International Conventions No.87, 154, 81, 95, 100, 111, 122, 138, 150, 156, 102) are detrimental to employment relations and social entitlements with measures that constitute the binding terms of consecutive Memoranda that damage the rights and income of workers.
Among others, GSEE focuses on key issues such as safeguarding/protecting working conditions through collective agreements, unilateral wage and pension cuts, freezing/decrease of remunerations and exclusion of Collective Employment Agreements for Public Utility Corporations, the attempt to impose individual agreements, overturn of CEAs at the detriment of sectoral agreements, the preposterous promotion of individual agreements, discrimination against vulnerable groups such as the young and women. New data corroborates the qualitative and quantitative deterioration of the labour market in the one year of implementation of the measures, which is a drastic disempowerment of the unions and workers. It is stressed that the constant and unequal nature of the unjustified measures is contrary to not only to ILO conventions but also makes wages and rights the main leverage for economic adjustment without the safety net of social protection and under conditions of deteriorating social dialogue.
In support of GSEE in this procedure are the unions of Germany, Spain, France and Venezuela and the International Trade Union Confederation (ITUC), which highlights the international and European dimension of the Greek case used as a dislocation laboratory in other countries as well regardless whether they are threatened by the economic crisis or not. It is also stressed that International Conventions must be observed not only by Greece but by all countries participating in “support” mechanisms.
Conclusions of Committee of Experts on the Application of International Conventions
After extensive discussion and evaluation of the data submitted by GSEE, the Committee of Experts on the Application of International Conventions unanimously adopted the following conclusions, despite the efforts of the government and employer team to postpone the discussion and not issue conclusions:
- Reform has long-range implications that surpass the issue under examination.
- In exercising its policy, the Greek Government must respect the fundamental principle of the autonomy of the parties to the collective bargaining process and if as part of its stabilization policy government considers that wage rates cannot be settled freely through collective bargaining, such restriction should be imposed as an exceptional measure and only to the extent that it is necessary without exceeding a reasonable period and it should be accompanied by adequate safeguards to protect workers’ living standards.The Government is asked to reply in detail to the present comments.
- The Greek Government must proceed immediately to complete, honest dialogue with social partners in order to review the restrictions imposed and those that will be imposed, and re-evaluate their impact on the workers.
- The Greek Government must provide details in 2011 to the Committee of Experts on the Application of International Conventions on the issues submitted by GSEE in July 2010 as well as on the consequences of restrictive measures in application of the Right to Organise and Collective Bargaining Convention No. 98.
- The Greek Government must provide the information requested by the High-level Mission of the ILO in Greece, which will also hold meetings with IMF and EC officials.
2.4: Severity of impact of policies, instruments and regulations
EU new economic governance
very severe Χ
severe
not very severe
not severe at all
National governmental instruments
very severe Χ
severe
not very severe
not severe at all
National social partners’ measures
very severe
severe
not very severe Χ
not severe at all
Section 3: Impacts of the crisis
3.1: Impact on industrial relations actors
The impact of the economic crisis on employment relations has also an effect on the social dialogue in Greece, to the extent that its decisions affect post memorandum employment relations.Collective employment agreements (industry-wide, enterprise-level, occupational) signed after the memorandum for the most part stipulate decreases in pay or zero increases.
3.1.1 The industrial relations actors in this section will principally be the social partners at all levels, including national, regional, sectoral and company. Please describe any relevant impacts. This could include impacts such as:
- Reorganisations of the social partners, including mergers and changes in representation.
Up to present there have been no changes in the social partners due to the economic crisis.
- Changes in role and visibility of the social partners. Where relevant to your country, please also indicate any changes in the role of the social partners as stakeholders in the Public Employment Services (PES), including:
●Changes to social partner consultation about the management and operation of the OES (for example, due to the government needing to act quickly in response to the crisis)
●Changes in the involvement of the social partners in the PES, possibly due to the government wanting to act unilaterally in response to the crisis
- Trends such as trade union or employer organisation membership (upwards or downwards), and how far this can be attributed to the crisis. Any impacts on other actors, such as central and local government, and NGOs, where relevant.
There is no information evidencing changes in the union membership after the economic crisis.Changes may possible arise during the GSEE Conference in March 2013.
Social dialogue in Greece maintains the same characteristics during and before the crisis, meaning still mostly for the sake of appearance and not substantial.
3.1.2 Overall, how severe do you think the impact of the crisis has been on industrial relations actors in your country? Please tick the relevant box.
very severe X
severe
not very severe
not severe at all
3.2: Impacts on industrial relations processes
3.2.1 Please describe impacts in the following areas:
Impacts on:
collective bargaining arrangements;
- centralisation or decentralisation trends;
- the introduction of opening clauses;
- changes in the extension of collective agreements;
- wage setting mechanisms;
- indexations mechanisms;
arrangements for employee information, consultation and participation;
- organisation of industrial action;
- procedures for dispute resolution;
- changes in the relationship between the social partners, either leading to closer cooperation or more conflict.
3.2.2 Overall, how severe do you think the impact of the crisis has been on industrial relations processes in your country? Please tick the relevant box.
very severe X
severe
not very severe
not severe at all
- Centralisation or decentralisation trends- wage setting mechanisms- Impact of crisis on industrial relations.
The economic crisis and passing of laws on the loan support to Greece (Memoranda) brought extensive changes to labour legislation. These changes lead to a dramatic increase of “flexible" employment agreements.This data is based on the last quarterly report (January-March 2012) of the Hellenic Labour Inspectorate (SEPE). For the first time, during the first quarter of 2012, there are more part-time employment and job rotation agreements in the private sector than full-time recruitments with a full pay. Moreover, enterprise-level agreements and adjustment of terms of employment in individual employment agreements are rapidly increasing to the detriment of industry-wide agreements which were in first place for decades until recently.These changes are accompanied by reduced remuneration and an increase of uninsured labour.
According to SEPE data on the first quarter of 2012, recruitments of salaried persons in the private sector, across all specialties, were reduced by 13% (16,320 jobs) in relation to the previous year (2011).Furthermore, the percentage of recruitments with “flexible” agreements (part-time employment, job rotation) is for the first time greater (50.13%) in relation to full-time employment agreements. Out of a total of 104,689 recruitments, 52,485 were with “flexible” employment agreements (39,914 for part-time and 12.571 for job rotation) while full-time recruitments stood at 52,204. In comparison to the corresponding period in 2010, full time recruitments are down by 53.13% (59,413 less jobs).