Controversy over sectoral bargaining in banking

Since 2006, the procedure for concluding sectoral collective agreements in banking has been unsatisfactory, since several major banks and the Hellenic Bank Association refuse to come to the bargaining table with a view to signing a sectoral collective agreement. While the trade unions have accused the employers of attempting to abolish sectoral bargaining, the decision on pay rises was taken through arbitration procedures in 2008 and 2009.

Legal framework for collective bargaining

Several laws establish the legal framework for collective bargaining in Greece. The Greek Constitution, notably paragraph 2 of Article 22, lays down the practice of free collective bargaining: ‘General working conditions shall be determined by law, supplemented by collective labour agreements reached through free negotiations and, in case of the failure of such, by rules determined by arbitration.’ Article 4, paragraph 1, of Law 1876/1990 on free collective bargaining stipulates that ‘worker and employer organisations and individual employers shall have the right and the obligation to bargain with a view to drawing up collective agreements’. Article 14, paragraph 1, of the same law states that ‘in the event of a breakdown in negotiations, the parties concerned may request the services of a mediator or have recourse to arbitration’.

Thus, in line with the Greek system of collective bargaining, there is not only a right but also an obligation to bargain collectively. However, no provision is made for sanctions in the event of a refusal to bargain. In such an event, the other side may unilaterally initiate a mediation and arbitration process by applying to the Organisation for Mediation and Arbitration (Οργανισμός Μεσολάβησης και Διαιτησίας, OMED). Moreover, strike actions cannot be considered unlawful if they are held to exert pressure on collective bargaining parties to sign a collective agreement.

Ongoing conflict over sectoral agreements

For the first time in 2006, six major banks announced their intention not to enter into sectoral collective bargaining negotiations with the Greek Federation of Bank Employee Unions (Ομοσπονδία Τραπεζοϋπαλληλικών Οργανώσεων Ελλάδας, OTOE). Instead, the banks intended to bargain at company level with the aim of negotiating collective agreements with the respective company-level trade unions. The management of the banks concerned described the process of reaching sectoral collective agreements as outdated, since most banks are no longer in public ownership and important differences exist between the banks in relation to their business plans, geographic location and economic potential. However, following an intervention by the Ministry of Employment and Social Protection (Υπουργείο Απασχόλησης και Κοινωνικής Προστασίας), a tripartite conciliation process was embarked upon, which ended in the signing of a two-year sectoral collective agreement (GR0602105N, GR0701059I).

In 2008, some of the country’s biggest banks refused again to come to the bargaining table with a view to signing a sectoral collective agreement. Meanwhile, two of the banks went ahead and unilaterally granted their employees pay increases, informing each employee individually by email. The trade union movement interpreted this strategy as a provocation that flagrantly struck a blow to the practice of collective bargaining as set out in the Greek Constitution. At the same time, the Hellenic Bank Association (Ελληνική Ένωση Τραπεζών, EET) maintained that it is not an employer organisation and refused to enter into collective bargaining negotiations. However, following a request by OTOE to OMED, an arbitration decision was issued awarding bank employees a pay increase in three instalments – 3.5% with effect from 3 June 2008, 2.5% from 1 September 2008 and a further 2% from 1 December 2008 (GR0807039I).

In 2009, following another refusal of the banks and EET to come to the bargaining table, OTOE applied again to OMED, which issued an arbitration decision providing for two pay increases – an initial increase of 3% with effect from 4 June 2009, followed by a further 2.5% with effect from 1 October 2009. It is noteworthy that the arbitration decision underlines the fact that Greek banks continue to reap profits even in times of economic crisis. More specifically, one provision of the arbitration decision states that ‘the level of profitability and growth rates of the banking sector in Greece in recent years … has put it in first place compared to the other sectors of the economy, despite the relative drop in profitability during the current year due to the economic crisis’.

Question of whether EET is an employer organisation

In 2008 and again in 2009, EET brought proceedings against OTOE and OMED with the Athens Administrative Court of First Instance (Διοικητικό Πρωτοδικείο Αθηνών) requesting that the mediation procedure be stopped. With its statutes expressly stating that it is not an employer organisation, EET argued that it has no authority to conclude collective agreements, nor is OMED justified in issuing relevant arbitration decisions. In both cases, however, the Administrative Court of First Instance ruled in favour of OTOE and OMED. It should be highlighted that these court rulings are not final but were issued following the rapid procedures used for provisional measures. Consequently, the issue of whether EET has the authority of an employer organisation remains outstanding and has not yet been the subject of a final court ruling.

Nevertheless, OMED and practically the entire legal theory are on the employees’ side, the argument being that the definition of employer organisation does not derive from how the organisation defines itself, including in its statutes. Such a definition should rather be based on objective criteria, that is, whether an organisation’s statutory objectives include the promotion and protection of the interests of its members in their capacity as employers. This is in fact the case here, since EET’s statutes indicate that its objectives include keeping abreast of matters of collective interest and formation of common positions of its members on such matters (Article 4b), as well as representation and promotion of the positions of its members (Article 4c).

Commentary

Despite their high profitability even in the midst of an economic crisis, in recent years the banks in Greece have systematically pursued a strategy of casting doubt on sectoral collective bargaining with OTOE and of decentralising bargaining, moving it to the company level. They also extensively implemented individualised pay schemes by awarding bonuses for achieving goals associated with the promotion of banking products and services. In parallel, they have introduced individual flexible employment relationships by assigning whole areas of business to contractors and temporary employment agencies, not all of them operating within the legal framework. The developments in the banking sector are of great importance, and to a large extent they will shape the future of the Greek labour market, given the sector’s significance in the Greek economy.

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

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