Labour Force Employment Organisation restructured

Download article in original language : GR0110106FEL.DOC

In October 2001, the Greek parliament passed government legislation restructuring the Labour Force Employment Organisation (OAED), the public body responsible for employment policy and services. The changes aim to address new requirements for flexibility and swift action, not least in the context of the EU employment strategy. The reform creates a number of new bodies linked to the OAED, with social partner involvement in their administration.

In July 2001, the government issued a draft law on the restructuring of the Labour Force Employment Organisation (OAED), the public body responsible for Greek employment policy and services. The law was passed by parliament on 19 October 2001.

Background

The Greek social partners have drawn attention to the fact that the system implemented by the OAED to address unemployment and monitor the labour market and vocational training is out of date. It was designed to deal with lower, shorter-term levels of unemployment and less demanding labour problems than those constituting present-day reality, which above all requires flexibility and quick action. In addition, the European Union's 'Luxembourg process' of annual Employment Guidelines and National Action Plans (NAPs) on employment has required Greece to restructure its public employment services, which are an important instrument for addressing unemployment and improving workers' employability.

The OAED is an instrument for implementing government policy to promote employment and combat unemployment, strengthen and facilitate the integration of the country's labour force in the labour market, provide unemployment insurance, promote vocational education and training and link them with employment. The OAED helps to implement the Greek NAP (GR0104107F), including its social integration programmes.

The major weaknesses of the OAED have lain in: the promotion of employment through integrated operations (training, subsidies – ie help in finding work); linking labour market supply with demand; and the lack of policies to reduce the level of long-term unemployment, which has risen to unprecedented levels (56% of all unemployed people).

The rationale of the reform is that society and unemployed people in particular need a public employment organisation that is free of bureaucratic inflexibility, 'citizen-friendly', staffed with specialised personnel, equipped with modern technological means and adequately funded.

In this framework, the Greek government has decided to reorganise the OAED. After examining the issue in depth, in early July 2001 the Minister of Labour and Social Security issued a draft law containing the pivotal features of the operation of the new OAED. According to the draft, the reorganised OAED will remain the central instrument for mapping out government employment policy and combating unemployment. Alongside this, three separate subsidiary public limited companies will be established for the purpose of providing expanded, high-quality employment and vocational training services.

The publication of the draft law was followed by consultation with the social partners on this matter, both in private meetings with the Minister of Labour and in the framework of the Economic and Social Committee. Parliament passed the draft law on 19 October 2001, but the success of the reorganised OAED will also depend on whether there is an increase in the funds provided by the state.

The New OAED

The reformed OAED is designed to operate on a new basis, which, briefly, is as follows.

The OAED remains the central instrument for setting government policies on employment and combating unemployment, as well as providing unemployment insurance. In particular, the following are among the OAED's concerns:

• monitoring conditions on the labour market and effectively linking labour supply and demand;

• registering unemployed people at the national and local levels;

• implementing measures to boost entrepreneurship and facilitate the mobility of the labour force;

• providing support for the creation and preservation of jobs;

• supporting unemployed people financially by providing regular benefits to people who are out of work;

• conducting benefits policy (providing family benefits, seasonal benefits etc); and

• cooperating with the National Careers Education Centre (EKEII).

At the same time, three separate subsidiary public limited companies are being established for the purpose of providing expanded, high-quality employment and vocational training services. These companies are supervised and monitored by the OAED, which is their sole shareholder. They are the following:

• Labour Force Support Services SA whose object is to support the members of the labour force by integrating them in business life, integrating or reintegrating them in the labour market and generally improving their employability. It will do this particularly through individualised operations by employment promotion centres (KIIAs), which will cover the whole country;

• Vocational Training SA, which is responsible for setting up and running vocational training centres and for adapting the qualifications and skills of the labour force and bringing them up to the level now demanded by the labour market and technological advances; and

• Employment Observatory Research-Informatics SA, whose objective is to develop research and studies and provide information technology services and technical support to the OAED and its other subsidiaries.

These public limited companies are owned by the OAED and are administered by an independent board of directors in which the social partners participate. These companies are run on separate budgets, on the basis of a four-year strategic plan prepared by the OAED and the individual company and approved by decision of the Minister of Labour and Social Security, who can also revise the plan if there is good reason to do so.

Commentary

Although the process of reorganising the OAED began in 2000, the social dialogue between the government and the social partners on the issue was of a limited duration. As a result, many secondary problems whose elimination might facilitate this otherwise serious undertaking have not been resolved. A precondition for the success of the restructuring being attempted is the consent of all the parties involved, including the OAED's workforce, so as to avoid problems arising from confusion of competencies and overlapping of responsibilities between the OAED and its subsidiaries.

Important problems still remaining for the newly organised OAED are the lack of necessary resources as well as the effective use of resources already available. Nowadays, the OAED's resources come mainly from workers' and employers' contributions, and secondarily from European Community funds, whereas the Greek state contributes very little. A common finding among the social partners and a demand addressed to the Ministry of Labour and Social Security is the need to allocate new resources from the state budget for the purpose of further developing infrastructures and active employment policies.

A divergence of opinion has also been observed between the employers' and workers' representatives regarding the running of the three subsidiary companies, which will operate complementarily to the OAED. Unlike the General Confederation of the Greek Labour (GSEE), the Federation of Greek Industries (SEV) and the other employers' organisations contend that these subsidiaries should operate as public limited companies and be supervised by the Ministry of Labour and Social Security. If the OAED has complete, exclusive control of them, as set out in the new law, this would in the employers' opinion bring a state, bureaucratic mentality to the new organisation. By contrast, the workers' representatives are in accord with the restructuring and believe that the leading role of the OAED will permit it to make good use of its many years of valuable experience. (Anastasia Koutsivitou, SEV)