Collective bargaining in Greece

Before the economic crisis, that is, until 2010, in accordance with the legislation of 1990 (Law No. 1896/90), collective bargaining took place at three levels: the EGSSE set the national minimum wage and conditions of work; sectoral and/or occupational collective agreements set the minimum wage and working conditions for the sectors and occupations in question; and company-based agreements were used at company level. Sectoral/occupational agreements could not set lower wages or less favourable working conditions than those agreed by the EGSSE. In the same way, company-based agreements could not provide for lower wages or less favourable working conditions than those agreed at sectoral level. In addition, at national and sectoral levels, there was an extension mechanism that made the agreements binding for all (employers and employees), while a system of unilateral use of arbitration was in existence.

After 2010, a series of legislative interventions (Law Nos. 3899/2010, 4024/2011, 4046/2012, 4093/2012 and 4172/2013) were made in the established legislative framework of free collective bargaining, radically transforming it.

The changes aimed for full ‘decentralisation’ of collective bargaining. The main intentions of the changes were as follows: to dismantle the ‘hierarchical’ relationship between the bargaining levels in order to weaken the importance and the binding character of intersectoral and sectoral bargaining; to make collective agreements binding only for members of employer organisations and trade unions; to make company-based collective agreements predominant; to abolish the extension mechanism; to establish a voluntary arbitration procedure; and to legislate for a new government mechanism for setting minimum wages (and not the social partners through the EGSSE).

After the end of the Third Economic Adjustment Programme for Greece (20 August 2018), the extension mechanism for sectoral collective agreements and the favourability principle (whereby the most favourable arrangement for a worker applies when an individual contract of employment exists alongside more collective labour agreements) were reinstated. From then until the end of the year, a total of 10 existing national sectoral collective agreements were extended to all employers.

The extension mechanism and the favourability principle have existed since 1990 but had been suspended in 2011. The reinstatement of the expandability of collective labour agreements in 2018 was accompanied by stricter terms and more rigorous checks to ensure that employer organisations cover 51% of the employees in a sector. Moreover, previously, a collective labour agreement that technically expired but was not formally terminated by the employer organisation or the trade union in order to negotiate a new one was considered to have an indefinite duration and validity. The overall result is a significant decrease in the percentage of employee coverage by collective labour agreements after 2012.

Wage bargaining coverage

There are no national data on wage bargaining coverage and there is no monitoring authority or mechanism. The rate of collective wage bargaining coverage is assumed to be very low because of the abolition of the extension mechanism.

Collective wage bargaining coverage of employees at all levels

Note: * Percentage of employees working in local units where more than 50% of the employees are covered by a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013 and 2019 (including private sector companies with establishments with >10 employees (NACE codes B–S), ); the question in the survey was a multiple choice question and multiple answers were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01], Structure of Earnings Survey 2010, 2014 and 2018 (including companies with >10 employees (NACE codes B–S, excluding O), with a single answer for each local unit)

Bargaining levels

Since 2010 and the collective bargaining reforms, the most important/frequently used level of bargaining has been company level.

According to Ministry of Labour data, there is a clear trend across the different levels of collective agreements for decentralisation of collective bargaining.

Since the reintroduction of the extension mechanism for sectoral collective agreements (in August 2018), the situation has changed somewhat. In 2018, a total of 10 existing national sectoral collective agreements were extended to all the employers concerned.

Number of agreements concluded at various levels of bargaining, 2010–2021

Source: Ministry of Labour, INE GSEE, 2023

Characteristics of agreements at different levels of bargaining, 2010–2022

Note: All collective agreements have a maximum period of force of three years.

Company-based agreements are the most common, even though they contain less favourable wage terms than those of the sectoral/professional collective agreements or the EGSEE. However, a company-based agreement cannot set lower wages than those set by the government and must comply with the national minimum wage.

The EGSEE is binding only for members of employer organisations and trade unions.

Regarding working time, the law permits collective agreements on working time arrangements at company level; working time must not exceed 40 hours per week averaged out over one year.

Levels of collective bargaining, 2022

Notes: * Concerns only the working time arrangements within a company without exceeding the total maximum working time set by the law. ** Since 2012_,_ the minimum wage has been set by the government and the EGSSE includes only non-wage issues. In theory_, the EGSSE_ may determine wages_,_ but only for the signatory parties. *** Weekly working time is a term that was first introduced in the 1984 EGSSE, which was ratified by law, and sets the maximum limits.

Articulation

Since the changes introduced to the system in August 2018, the national minimum wage has been set by the government and this is obligatory for all employers. The sectoral/occupational agreements are obligatory only if they cover 51% of the employees in accordance with the special extension mechanism process provided by the law.

Company-based agreements apply to the employees of the company and prevail if the sector does not have an obligatory collective agreement.

Timing of the bargaining rounds

Traditionally, negotiation of the EGSSE starts at the beginning of the year after the expiration of the agreement. Sectoral and company-based collective bargaining starts when the previous agreement has expired. There is no specific or fixed period/timing for bargaining rounds.

Coordination

There are no specific coordination mechanisms.

Extension mechanisms

From 1990 until 2011, in accordance with Law No. 1876/90, the Minister of Labour could extend and declare as compulsory a collective agreement for all workers in the industry, if the agreement covered employers that employed 51% of the workforce in the sector in question. The extension could be requested by the competent trade union or the employer organisation.

This extension was suspended while Greece was implementing the bailout agreements (Law No. 4024/2011). With the enactment of a new law (Law No. 4472/17), the extension mechanism was set to be re-established after the end of the support programme in place at that time.

In August 2018, after the suspension period (2012–2018), the extension mechanism was re-established. The new legislation introduced the terms and processes of the extension of the sectoral collective agreements. If the member companies of the sectoral employer organisation that has signed the agreement employ at least 51% of the employees in the sector in question, then the agreement becomes obligatory for the whole sector by a ministerial decision. For this reason, the employer organisations must submit their members’ register voluntarily. If the employer organisations do not submit the register, the obligatory extension of the collective agreement is not possible.

In October 2019, the government revised the extension mechanism once again. According to the newest legislation in force (Law No. 4635/30-10-2019), the extension of a collective agreement or arbitration decision requires the following process.

• Any of the signatory parties can submit an official application to the Minister of Labour (and send notification to the ASE), accompanied by documentation on the impact of the extension on competitiveness and employment.

• A reasoned opinion is then sent from the ASE to the Minister of Labour, taking the above into account, together with a substantiated attestation from the competent department of the Ministry of Labour that the collective arrangement is binding for employers of more than 50% of the workers in the sector.

• The Minister of Labour then issues the extension.

Furthermore, in the new law, there are exceptions provided for companies facing serious financial difficulties and in a state of bankruptcy or negotiating an out-of-court settlement or financial restructuring. These companies may be exempt if a reasoned opinion is provided by the ASE on the terms or conditions or on the entire collective employment agreement being declared obligatory. In addition, further to a decision by the Minister of Labour and subject to an opinion from the ASE, it is possible for specific companies to be exempted and any relevant issue regarding the implementation of this provision to be identified specifically for each enterprise, especially measures to protect existing jobs.

Derogation mechanisms

Law No. 3845/2010 and subsequent legislation set out the possibility for company-based agreements to derogate from the sectoral/professional collective agreements in question, as well as from the EGSEE. The lower limit is the national minimum wage set by the government.

Since August 2018, however, if a sectoral collective agreement has been made obligatory, the derogation by a company-based agreement is not possible.

In the case of working time issues, lower-level agreements (company-based agreements) can derogate from the higher-level (sectoral) agreements, but, in line with the EGSEE and legislation, the weekly working time cannot exceed 40 hours.

Expiry of collective agreements

According to Law No. 4046/2012, collective agreements can only be fixed-term agreements, with a minimum duration of one year and a maximum duration of three years. Previously, provision was made for the ability to conclude collective agreements of indefinite term as well.

With the same law, the pre-existing system of ‘extension’ and ‘after effect’ of collective agreements changed. Now, when a collective agreement has expired without renewal, only a part of the collective agreement remains in force. The existing framework provides for an extension period of three months for the old collective agreement until the signing of a new one; the new ‘after effect’ regime does not oblige employers to pay the entire amount of employees’ remuneration, but only the basic salary (of the sector, occupation or firm) and four specific allowances related to seniority, children, studies and hazardous work. These reductions can be imposed unilaterally by the employer and without the employee’s consent until replaced by a new collective employment agreement or until a new individual contract is concluded between the employer and the employee, which might contain even more disadvantageous terms. Provision is made to freeze increases following the completion of one year at the same employer, that is, the ‘service maturity’, with suspension of the effect of any relevant law, provision, collective agreement or even arbitration decision.

It is noted that Law No. 4331/2015 re-established the six-month period, but later, through Law No. 4336/2015, the three-month period was established again.

The current situation therefore is that, as each separate collective agreement expires, the agreement remains in force for a three-month period during which it can be renegotiated (in accordance with the most recent version of the law in place (Law No. 4336/2015)).

Peace clauses

As a rule, an obligation to maintain industrial peace is inherent in collective agreements and results from the obligation to implement agreements in good faith. The peace obligation prohibits the parties to the collective agreement from collectively using instruments such as strikes or lockouts during the period of its validity in order to overthrow or modify what was agreed.

Restrictions on the peace obligation may arise from previous collective agreements or arbitration decisions, which are also constitutionally protected. A peace obligation does not have to be agreed solely by a collective agreement but can also be agreed upon by a simple agreement between a trade union and an employer.

Other aspects of working life addressed in collective agreements

Collective labour agreements in Greece traditionally and mainly address salary issues, together with benefits and allowances and other work-related issues such as leave. After removing the ability to fix the minimum salary and wage from the scope of the EGSSE (Law No. 4093/2012 and Act No. 6 of the Cabinet of Ministers), the social partners at national level started to deal with broader issues regarding the labour market and to develop common actions.

In the 2016 EGSEE, the social partners committed to the following:

• ensuring the continuation of institutional conditions established by previous versions of the EGSSE and reaffirming that, in the case of the provisions on intervention in the EGSSE being lifted, they will begin direct negotiations to determine the pay terms of the agreement – including the minimum wage

• agreeing that ‘after exploring the possibility of cooperating with the International Labour Organization, they will take the necessary steps for the implementation of actions to help tackle the refugee immigration problem’

• deciding on the incorporation of the European framework agreement on inclusive labour markets into Greek law, signed on 25 March 2010 by the ETUC, BusinessEurope, UEAPME (now SMEUnited) and the European Centre of Employers and Enterprises providing Public Services

• agreeing to develop an action plan to assess obstacles and implement actions to promote active inclusion in the labour market, for example, looking at issues such as access and reintegration

In the 2017 EGSEE, the social partners agreed to:

• cooperate under the aegis of the Ministry of Labour to combat undeclared work, building on ILO proposals in the 2016 diagnostic report on undeclared work in Greece

• adopt new measures to combat racism and discrimination in the workplace

• approve the text of the National Strategy on Health and Safety at Work from the Hellenic Institute for Occupational Health and Safety (Ελληνικό Ινστιτούτο Υγιεινής και Ασφάλειας στην Εργασία, Elinyae)

• and submit it jointly to the government for adoption

In the 2018 EGSEE, the social partners agreed to set up joint technical study groups on the following topics:

• the Occupational Social Security Fund (Ταμείο Επαγγελματικής Ασφάλισης)

• business restarts – rescuing jobs

• guidelines for effective collective bargaining

They also agreed to undertake joint projects on the following topics:

• the future of work

• vocational training

Finally, they requested that the government set up a permanent tripartite consultation council, as provided for in ILO Convention No. 144.

The 2018 EGSSE was extended by a decision of the Minister of Labour, firstly until 31 December 2019 and then later in 2020 until 31 December 2020 because of the COVID-19 pandemic.

In the 2021 EGSEE, the social partners agreed to the following:

• to adopt the European framework agreement on digitalisation at work that was signed by the European social partners in June 2020 and to develop activities on developing digital skills, continuing vocational training and certification, and the just transition of workers to a low-carbon economy

• to reaffirm support for the ratification of ILO Convention No. 190 and Recommendation No. 206 on combating violence and sexual harassment at work

The 2022 EGSSE extended the content of the 2021 EGSEE until 30 June 2023. It also included the establishment of a working group with the aim of formulating a proposal for the non-profit legal entity under the Special Account for Vocational Training (Ειδικός Λογαριασμός Επαγγελματικής Κατάρτισης, ELEK), which the national social partners will govern autonomously.