Closure of chemical plant averted following protest action

After around 10 months of industrial action, workers at Phosphoric Fertilisers Industry (BFL) in Thessaloniki have succeeded in preventing the closure of the plant. A draft bill is expected to be submitted to parliament specifying the terms of exit for redundant and resigning employees.

Company profile

The company Phosphoric Fertilisers Industry S.A. (BFL) was formed as a result of a merger between BFL Kavala and Chemical Industries of Northern Greece, based in Thessaloniki in northern Greece. Apart from its monopoly position in the Greek market, BFL had another strategic advantage, namely that 87.3% of the company was controlled by three substantial banking groups, Commercial Bank (44.2%), National Bank (24.2%) and Alpha Bank (18.9%). In the light of these circumstances, BFL’s future looked promising.

Financial difficulties

Notwithstanding, late in 2005, BFL requested its creditors, who were also its shareholders, to convert its short-term loans worth €100 million into medium-term and long-term loans, and to provide new financing, since its financial situation was rapidly deteriorating. On their side, the banks tied the provision of finance to the implementation of a large-scale programme of restructuring and downsizing the company’s production structure. The company is trying and, to some extent, succeeding in offsetting its losses in the Greek market by increasing exports, and expects to sign an agreement with China on resumption of exports.

Moreover, BFL faces three further problems: its accumulated debt of around €50 million to the Public Gas Corporation; the establishment of Agros – which imports and supplies cheap fertiliser to farmers – by the Panhellenic Confederation of Unions of Agricultural Cooperatives (PASEGES) and Cooperative Unions; and its inability to collect the amounts owed to it from previous years, which stand at €120 million.

Protest over decision to close plant

On 9 January 2006, the Deputy Minister of Rural Development and Food, Alexandros Kontos, promised workers at BFL that quality controls would be introduced to monitor cheaper competitor products. However, the next day, at an extraordinary meeting, BFL shareholders decided to close down the Thessaloniki plant, leaving 420 employees and 180 people who regularly collaborate with the company without jobs. On 11 January 2006, the workers occupied the plant and continued to work, using the remaining raw materials.

The trade union representing employees maintains that BFL is viable and that the plant was closed down in order to make the package for the sale of Commercial Bank more attractive. Apart from the occupation of the plant, the workers have carried out protest marches, boycotts of branches of Commercial Bank and demonstrations. The Greek General Confederation of Labour (GSEE) has supported the workers’ ongoing efforts throughout 2006.

Government consultation

On 1 February 2006, at a meeting at the Ministry of Employment and Social Protection, it was decided not to close the plant until a new general meeting was held. Representatives of the company promised not to carry out any dismissals and to pay workers’ wages regularly. They also proposed to absorb some of the Thessaloniki workers in the Kavala unit. However, at another general meeting on 10 February 2006, the shareholders ratified the decision taken on 10 January to close the plant.

At a meeting with the trade union at BFL in April 2006, the Greek Prime Minister, Kostas Karamanlis, guaranteed that the plant would not close if a viable solution could be found, and it was decided to set up a committee acceptable to both sides that would examine the union’s proposals. On 25 April, the occupation of the plant ended. In a meeting at the Ministry of Employment and Social Protection in August 2006, it was proposed that the plant remain in operation with 120 staff of the previous 357 employees and that the remainder of the workers be included under Law 2941/2001 (Regulation of issues regarding Hellenic Shipyards S.A.), which provides for a special employment subsidy scheme.

Return to operation

On 21 August 2006, the Deputy Minister of Development, Giannis Papathanasiou, made a commitment that no employees would lose their insurance or employment rights; on 29 August, it was finally decided that the plant would return to operation with one third of its staff. A document was signed providing for a special employment subsidy scheme on the model of Law 2941/2001 and regulating the question of compensation.

Nonetheless, on 4 September 2006, at a tripartite meeting at the Ministry of Macedonia and Thrace, worker representatives refused to agree in writing to the dismissal of about 230 colleagues. Moreover, they denounced the position taken by the Deputy Minister of Employment and Social Protection, Gerasimos Giakoumatos, who – in order to force a decision – spoke of activating Law 1387/83 on collective [dismissals](/search/node/areas OR industrialrelations OR dictionary OR definitions OR dismissals?oldIndex) and withdrawing the more favourable proposals for people losing their jobs. Finally, a memorandum was signed, setting out the positions and omitting the clause referring to the operation of the plant with 120 employees.

Before the end of 2006, a draft bill will be submitted to parliament, specifying the terms of exit for the workers made redundant or resigning from the plant in Thessaloniki.

Elena Rapti, Labour Institute of Greek General Confederation of Labour (INE-GSEE)