Study on collective redundancies

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Greece's legislative framework for collective redundancies, and in particular the system of administrative intervention in the redundancies procedure, have not been notably effective and have no real protective value for workers. The relevant legislation should be amended, notably to bring it into line with developments in European Community law. These are among the findings of an extensive study of the current collective redundancies framework in Greece and its effectiveness in practice, conducted as part of the research activity of the National Labour Institute (EIE) and completed in March 1999.

As part of the research activity of the National Labour Institute (EIE), an extensive study was completed in March 1999, examining Greece's current institutional framework on the protection of workers from collective redundancies, as well as its effectiveness in practice over the past 10 years. The study, conducted by Ioannis D Lixouriotis, senior professor of labour law at the School of Law, Democritus University of Thrace, assisted by a three-member team of key EIE personnel, was in the course of being published in April 1999.

The research

Taking its cue from the important problems created in recent years in the Greek labour market by heightened competition and widespread restructuring of enterprises, leading to large-scale workforce reductions, the EIE study comes to grips with the issue of collective redundancies in Greece by reporting and analysing the regulations of Law 1387/1983, published 16 years ago to bring Greek legislation into harmony with the requirements of the European Community Directive on the approximation of the laws of the Member States relating to collective redundancies (75/129/EEC).

However, the study seeks to go further than making a mere legal analysis. Apart from the legal approach, which, to be sure, is a central orientation of the research, the study looks for and collects data from various sources, in order to draw conclusions on the fundamental efficiency of the implementation of the legislative framework.

The principal sources for collection of such data are: the responses provided to a questionnaire addressed to local Labour Inspectorates nationwide; a study of the files on cases of collective redundancies and on cases of the "conciliation" process carried out between 1990 and mid-1998 in the central office of the Ministry of Labour; and the case law of the Greek courts relative to implementation of the law on collective redundancies.

The data utilised relate to the "quantity" and the "quality" of collective redundancies carried out during the period under examination, referring both to workers affected by them and to companies which have carried out staff cuts (the nature and legal form of the employer, sectors of business activity, size of enterprises, geographical location and so on). Also used were data on the basis of which the fundamental reasons leading companies to choose to eliminate part of all of their staff are identified and categorised - these include economic difficulties arising from higher production costs, decreased competitiveness, restructuring of technology and production, outsourcing, transfer of enterprises and relocation of enterprises or their installations.

Other data were collected for use in assessing the general attitude of employers and workers' representatives towards the current legislative framework on collective redundancies and, in particular, their behaviour during implementation of the specific information and consultation procedure provided for in the relevant regulations (see below).

Current legislative situation

The study touches on all the specific issues regarding the compatibility of the Greek legislative framework with the requirements of the collective redundancies Directive. Of the many issues raised, the most important can be identified as those relating to the scope of the relevant regulations of Law 1387/1983. The key point here is the issue of whether or not enterprises or holdings which discontinue operations are regarded as carrying out collective redundancies. The study shows that on this point Greek legislation has not yet taken account of the changes to Community law brought about by the Directive 92/56/EEC, which amended the 1975 Directive (the texts are now consolidated as Directive 98/59/EC)

Also of particular interest are the individual issues analysed by the study which arise in connection with the employer's obligation to provide for procedures for information and consultation with workers' representatives to investigate ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences. In understanding the Greek legislative framework on collective redundancies, the issue of intervention by the public authority in the relevant procedure is of key importance. The study places particular emphasis on this issue since, according to Greek legislation, when the sides fail to reach an agreement on these matters, the progress of the collective redundancies procedure shifts from the participatory framework to the field of administrative intervention. In such cases, following a completely different philosophy from that governing the Community Directive, it is at the discretion of the Prefect or Minister of Labour to approve or reject in whole or in part the collective redundancies requested by the employer.

Another interesting part of the study examines the correlation between the regulations on collective redundancies and other areas of labour legislation, such as: those regarding protection of workers from unilateral alteration of the terms of the employment relationship by employers; the general provisions against unfair and excessive dismissals; and special provisions regarding protection of specific categories of workers (women, trade union members, people with special needs, etc) from dismissal. Also of interest is the correlation of the collective redundancies rules with provisions on seasonal work, part-time work, and the position of companies in liquidation.

Positions of the social partners and public authorities

As mentioned, apart from the legal approach, a basic aim of the EIE study is to draw conclusions on the effective implementation in practice of the legislation on collective redundancies. Thus an important section is devoted to examining employers' attitudes towards the current institutional framework and the effective utilisation of the procedures the law provides for finding solutions for avoiding collective redundancies or alleviating their adverse effects for the workers affected.

From the processing of the various data collected in the framework of the research, it is clear that employers tend to avoid becoming involved in the legal procedure for collective redundancies, particularly because at the end of this procedure they have the "sword of Damocles" of administrative intervention hanging over them. Thus, for example, in order to avoid implementing the relevant procedure, they usually resort to practices of voluntary redundancy and early retirement or to the method of phasing dismissals, so that they lose their collective character and thus avoid being covered by legislation controlling collective redundancies.

Another important issue highlighted by the study is the low degree of availability and effectiveness of the intervention of workers' representatives in the collective redundancies procedure, and in particular the trade unions' restricted "cooperativeness" on implementation of the relevant legislative framework. The unions usually prefer to take labour disputes involving staff cuts to the "conciliation" procedure carried out through the efforts of an agency of the Ministry of Labour, at which the Minister or Deputy Minister of Labour may sometimes be present.

The study also gives important weight to the question of the practices pursued by the public administration, with regard both to the effective use of the information it receives on planned redundancies, and to its position after consultations between the sides have failed, when, according to current law, it is given the power of deciding whether or not to carry out the redundancies.

Avoiding collective redundancies

The study examines, on the basis of the data collected, all the alternatives that are used in practice as ways of avoiding collective redundancies or at least as ways of limiting the number of wage-earners who will become unemployed because of an employer's financial problems or because of its decision to restructure the technology or the organisation/production of its business. Such solutions include: the practice of suspending part or all of the staff; hiring-out of labour; short-time working or any other form of part-time employment; various individual agreements to change the nature of the employment relationship; employment in "non-typical" locations or "non-typical" types of work (such as working from home or piecework); collective agreements on working time oganisation; and permanent or temporary transfers of staff.

Commentary

The important contribution of the EIE study is that it does not limit itself to a report or even to an extensive analysis of the existing legislative framework, but goes on to draw legal and political conclusions and to submit specific proposals for the orientation of a readjustment of the law on collective redundancies in Greece.

Worth noting is the study's finding that the existing legislative framework and in particular the principal means of "control" chosen by lawmakers - that is, administrative intervention - have not shown any remarkable effectiveness and have no effective protective value for workers.

In terms of proposals, the study points out the need on the one hand to adapt Greek legislation to the specific changes to Community law on collective redundancies brought about by the 1992 revision of the Community Directive (in terms of scope and the concept of collective redundancies), and on the other for Greek lawmakers to make fuller use of the guidelines of Community law. This could be achieved mainly by bringing to the fore "participatory intervention", and therefore consensual resolution of the problem, as the pivotal feature of the collective redundancies procedure, in combination with qualitative improvements in the framework for this procedure of cooperation between the administration and the parties involved, aimed at effective solution-finding. (Ioannis D Lixouriotis, senior professor, School of Law, Democritus University of Thrace, and mediator/arbitrator at the OMED Mediation and Arbitration Service)