New law provides framework for local employment agreements

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Since September 1998, a legislative framework has been in place in Greece for the conclusion of "local employment agreements" (TSAs). These local development and employment initiatives may include labour clauses, governing minimum pay and conditions for the staff employed to carry out the work or activities which the agreements create.

Law 2639/1998, passed in August 1998 (GR9808187N) with the general aim of introducing structural changes in the labour market, has (in Article 4) for the first time provided a legal framework for concluding "local employment agreements". The framework came into force on 2 September 1998. However, preparations for promotion of these local development and employment initiatives had already begun to evolve in practice long before the law came into effect.

Scope and purpose

Local employment agreements (TSA s) are part of a wider endeavour to deal with unemployment and develop depressed areas of Greece. Their objective is to improve vulnerable areas of the country, especially regions or prefectures which show severe problems of unemployment and/or a drop in the level of the active population. TSAs involve programmes aimed at promoting employment in viable, competitive activities, at combating unemployment and at creating new jobs. In particular, TSAs may concern:

• measures to secure and develop employment in general, and for specific vulnerable population groups in particular (young and long-term unemployed people, women);

• measures to develop the education and training sector, with the basic objective of linking it to the needs of local production; and

• actions to boost employment in the framework of national and European Community support for small and medium-sized enterprises and other investment activities.

TSAs can be financed either with national resources or with Community funds, particularly by making use of available Regional Operational Programme resources, but also with private capital.

Parties to the agreements

According to the law, the contracting parties for TSAs are:

• bodies at all levels of the public sector and local government, or local associations of municipalities and communes; and

• social partner organisations as defined in the law regarding the composition of the Economic and Social Committee (OKE). However, participation of trade union organisations is not a prerogative for concluding a TSA. Only when a TSA contains labour clauses must the most representative labour centre in the area affected by the TSA take part in concluding it, so as to ensure its effectiveness.

The law makes no mention whatsoever of the specific procedure to be followed in drawing up TSAs. Thus the procedure to be followed in each instance is a matter for ad hoc agreements between the parties who take part in drafting and signing the specific TSA.

Content of TSAs

The law refers to the content of the special collective agreements constituting the TSAs in a general way as "performance of a specific task or a specific activity of an economic, social or cultural nature". In the TSA operational plans drawn up to date, various actions are specified which refer, for example (as in the draft TSAs for Achaia and Kozani Prefectures), to: the creation of cooperative enterprises; undertakings to provide social services (guarding of schools, protection of students, creation of school lunchrooms, help for working parents, care and creative activities for people with special needs, etc); production of educational material; training of teachers in computer use; development of aerial sports; restoration of traditional settlements; restoration of public and private communal spaces; waste management; and conversion of abandoned schools into hostels.

Each TSA must specify the length of time it will be in force and all conditions for its implementation.

Labour conditions in TSAs

Among other items, TSAs may regulate minimum wages and salaries and general conditions of employment of the staff to be employed in carrying out the work or the activities to which they refer. In any case, inclusion of clauses regarding labour matters is not obligatory, as they follow from the general content of the TSAs.

In particular, TSAs may set minimum wages and regulate general working conditions for the staff that will be employed in the bodies set up to implement them. In principle, these conditions may not infringe on the rules on workers' health and safety or on the minimum levels of protection provided for by the labour legislation in force at any given time.

In addition, labour clauses in the TSAs may co-exist with collective agreements which may already cover the individual labour relationship between workers and the bodies being set up to implement the TSAs. To resolve the issue of this co-existence, the law makes a distinction between: cases where labour clauses in a TSA co-exist with the terms of a National General Collective Agreement, where it specifies that the principle of optimality applies (ie, the more advantageous provision); and cases where TSA labour clauses co-exist with the terms of other categories of collective agreements, where it states that the labour regulations contained in TSAs override all others.

However, for the above labour conditions to be implemented, it is not enough that they be included in a TSA. The necessary preconditions for their validity are as follows:

• the most representative labour centre in the relevant geographical area must have taken part in concluding the TSA;

• the TSA must have been ratified by decision of the Minister of the National Economy and the Minister of Labour and Social Security; and

• the TSA's labour clauses must have been included in the individual employment contracts of persons to be engaged by its implementing bodies.

Commentary

Local employment agreements, which form part of Greece's "active" policies to combat unemployment, are a voluntary scheme for cooperation among local bodies, in which, as mentioned above, various local authorities and local actors in society and industry take part.

Coordination of actions concerning the implementation of TSAs is carried out by an interministerial committee, and a national body to support the agreements has been appointed by the National Institute of Labour. The interministerial committee has already selected several areas of the country in which to develop TSAs. These are areas hard hit by unemployment, which have entered the stage of de-industrialisation. They are located in both northern Greece (the Kozani-Florina zone and Drama and Imathia Prefectures) and the rest of the country (Magnesia, Viotia and Achaia Prefectures), including the western areas of Athens and Piraeus where many companies engaged in traditional industrial activity have closed down.

The social partners and industrial interests have expressed their views on TSAs both in the framework of the "national social dialogue process" (GR9707120F, GR9708122F and GR9708124N) which preceded completion of the legislative framework introducing them, and in the framework of the formulation of an "opinion" by the Economic and Social Committee on the relevant draft bill (GR9808185F).

Although the social partners did not initially take a negative view of the TSAs, they have expressed serious reservations on the specific legislative regulations establishing them. The workers' side in particular was more vehement in its criticism of the regulations. It directed its disapproval mainly at their legislative framework, saying that it makes provision for the replacement of the regulations laid down in sectoral and occupational collective agreements with the most unfavourable labour clauses that the TSAs can possibly contain.

In any event, one point on which all sides are agreed is that the relevant regulations are worded rather carelessly, giving rise to uncertainty about their meaning. Thus the contention is that the law is not clear about the local scope of the TSAs or the bodies participating in them, and that it is particularly ambiguous about defining the legal nature and validity of their terms.

Whatever the difficulties, one could point to the importance of the TSAs on the level of rallying local bodies in society and industry and developing creative and effective dialogue among them, in the various regions of Greece facing chronic problems of development and employment and suffering from high unemployment. Another aspect which should be highlighted is the possibility these agreements offer of effectively taking account, through a "bottom-up" approach, of the specific socio-economic particularities, priorities and comparative advantages of each area when creating and adopting action plans aimed at their development. (Ioannis D Lixouriotis, assistant professor, School of Law, Democritus University of Thrace and mediator/arbitrator, Mediation and Arbitration Service (OMED))