Unions object to labour reserve plan in public sector

As part of the EU/IMF financial support programme for Greece, the government agreed to cut the cost of the public sector by reducing staff. To do this, a labour reserve will be introduced for 30,000 employees with a view to saving €300 million in 2012. Unions have been extremely critical of the plan. They intend to appeal to Greek and European courts, saying the measures conflict with the Greek constitution and EC law. They are also threatening to strike at sectoral and national level.

Background

One of the measures put into place to deal with the financial crisis that followed Greece’s accession to the Financial Stability Mechanism in March 2010 (GR1005019I) was a promise to cut back on government spending on the public sector.

Trade unions have reacted strongly to plans to cut spending through the downsizing of both the core public sector and organisations such as public utilities and services that are supervised or financed by the state.

Law 3986 enacted on 30 June 2011, ‘Emergency measures for the implementation of a medium-term Fiscal Strategy Framework 2012-2015’, envisages the formation of a labour reserve, through which employees considered to be ‘surplus’ are expected to be removed from the broader public sector.

The legislation provides for the assessment of ‘surplus’ personnel against a series of criteria such as education, experience, family situation, age, seniority and special skills. These workers will be paid 60% of their basic wage by their respective employers for twelve months.

During that period, they may be transferred to other public sector agencies or the broader public sector, provided that:

• the agencies file requests to fill vacancies for regular personnel;

• that such employees take precedence over all other candidates for part-time employment.

They may also choose to retire according to a special voluntary retirement programme.

Organisations asked to submit numbers

On 12 September 2011 the Ministry of Finance called on the managing directors of 151 organisations to submit, by 26 September 2011, an estimate of the surplus personnel that could be placed in the labour reserve. Submissions have to be sent to the Special Secretariat for Public Utilities.

The agencies that were asked to place personnel in the labour reserve included:

• transport companies such as ATTIKO METRO S.A., Road Transports –OSY S.A., Athens Urban Transport Organization S.A., Hellenic Railways Organization S.A. and TRAINOSE S.A.,

• the country’s Port Authorities

• Hellenic Aerospace Industry S.A.

• Hellenic Vehicle Industry S.A.

• Hellenic Radio & Television (ERT)

• other organisations such as research institutes including the Research Centre for Matters of Equality and the Institute of Geology and Mineral Exploration, etc.

However, when the deadline expired on 26 September, many of the 151 organisations said they had no excess personnel and, on the contrary, had staff shortages. Some organisations demanded further explanations, and those who replied indicated a number of surplus posts without delivering a list of employees that could be characterised as ‘excessive personnel’.

Cabinet approves new proposal

On 2 October 2011 the Cabinet approved a new proposal on the labour reserve, drawn up by a committee composed of the Ministers of Finance, Administrative Reform, Interior, Education and Labour, the Deputy Minister of Administrative Reform and the Secretary General of the Ministry of Finance.

The new proposal establishes that 30,000 public sector employees must be placed in the labour reserve with a view to saving €300 million in 2012. It was reiterated that those in the reserve would continue to receive 60% of their basic wage. The proposal, as it was presented and approved, consists of two stages.

First stage: 2011

• All civil servants and those employed under permanent private contracts in the public and the broader public sector, and who will have earned the right to a full pension in the next 12 to 24 months, shall be placed in the labour reserve. At the end of the labour-reserve period, they will retire on full pension, the amount of which will not be affected by having been in the labour reserve. It is estimated that 18,000 – 20,000 employees may be placed in the labour reserve in this way.

• Employees of organisations in the broader public sector that are abolished, merged or downsized shall be placed in the labour reserve. Those who are qualified will be repositioned. The remainder, an estimated 1,000 employees, will be offered retraining programs under the supervision of the Greek Manpower Employment Organisation (OAED).

• Employees who have already earned the right to a full pension but who are still employed will be sent into retirement immediately, thus lowering the age limit for compulsory retirement.

• Procedures for identifying administrative departments of central government agencies that are redundant or employ excessive personnel will be accelerated, as will the restructuring of public and private legal departments that are to be abolished or merged. It is estimated that this may identify a further 6,000–7,000 candidates for the labour reserve.

Second stage: 2012-13

During the second stage, the structure, powers and personnel of public services will be assessed in the context of the findings of a recent OECD study on the Greek public administration. The goal is to reduce the number of existing administrative departments by about 30%. Technical assistance will be given by the EU with the participation of external experts and the OECD.

The personnel assessment procedure will be supervised by the Supreme Council for Staff Selection (ASEP). Any surplus workers who cannot be transferred to other public sector posts will be placed in the labour reserve, retrained or placed in alternative social employment programmes.

Trade union reaction

On 3 October, one day after the new proposal was approved, the Greek General Confederation of Labour (GSEE) hosted a conference with the federations of the public utilities and of the organisations and agencies of those parts of the broader public sector affected by the labour reserve proposals.

In a press release (in Greek), the GSEE said: ‘The trade unions reject the labour reserve as an arbitrary and antisocial measure, despite the government’s effort to present it as a supposed remedy for the crisis and the debt.’

A statement released (159Kb DOC in Greek) by the Confederation of Civil Servants (ADEDY) in response to the Cabinet’s decision of 2 October 2011 declared:

The mergers and abolitions of public sector organisations and the dismissal of employees are executed only with a view to cutting spending, without taking into account the actual manpower requirements of the public services or the enormous social cost they will cause, affecting mainly the lower and middle classes.

At the same time, the GSEE and the ADEDY announced their intention to appeal to Greek and European courts of law, claiming that the labour reserve proposals contravene the Hellenic Constitution and European Community law. The two confederations also announced the continuation of industrial action by calling a general strike for 19 October 2011, having already called a general strike for 5 October 2011 to protest against dismissals.

Sofia Lampousaki, Labour Institute of Greek General Confederation of Labour (INE/GSEE)