New draft bill proposes industrial relations reforms

Download article in original language : GR0012192FEL.DOC

In November 2000, the Greek government issued a new draft bill on "regulations regarding employment and other provisions". The proposals include measures aimed at reforming aspects of industrial relations, such as overtime, working time flexibility, part-time workers' pay and the definition of collective redundancies.

On 20 November 2000, the Minister of Labour and Social Security communicated to the employers' organisations, the trade unions and the Economic and Social Committee (OKE) a new draft bill on "regulations regarding employment and other provisions", following initial proposals issued earlier in the year (GR0007178F).The new draft bill, apart from those provisions relating solely to employment issues, seeks to make changes to the existing legislative framework on industrial relations. In particular, it provides for changes involving: overtime and "overtime exceeding maximum working hours"; working time arrangements; reduction of social insurance contributions; part-time workers' pay; and collective redundancies.

Overtime exceeding maximum working hours

Greek law distinguishes between overtime exceeding maximum working hours and overtime above normal hours but below maximum hours. The new draft bill - in Article 4 on "abolition of overtime – pay for overtime exceeding maximum working hours" - provides that from 1 April 2001, in enterprises implementing a standard working week of 40 hours, the current employees' obligation (as the employer sees it) to work five hours of overtime per week is abolished. In such enterprises the employer will now only have the option to require employees to work overtime exceeding maximum working hours, and employees on their part are required only to provide their labour for three hours exceeding the standard working week (the 41st, 42nd and 43rd hours in the week – known as a "special type" of overtime). In addition, from 1 April 200, additional hours worked by employees in such enterprises in excess of 43 hours per week will be regarded as overtime exceeding maximum working hours, in respect of all the legal consequences, provisions and approval procedures which apply to this form of overtime. Employees working overtime in excess of maximum working hours are entitled, for each hour of special overtime worked up to a limit of 120 hours a year, to 150% of the hourly wage (an increase on the current rate). In all cases where workers perform illegal overtime exceeding maximum working hours, they are entitled to receive compensation at a rate of 250% of the hourly wage.

Working time

Article 5 of the draft bill - on "working time arrangements" - amends Article 3 of Law 2639/1998 on "the regulation of industrial relations, establishment of the Labour Inspectorate and other provisions" (GR9807181F and GR9808185F) as follows:

  1. In enterprises implementing a standard 40-hour working week, it may be agreed that 138 working hours out of the total hours worked annually can be distributed flexibly, with an increased number of hours in specific periods and a corresponding reduction in the number of working hours during the rest of the time, as specifically agreed. For such arrangements to apply, there must be an enterprise-level collective agreement or an agreement between the employer and the works council or between the employer and the employees' associations described in paragraph 3 of Article 1 of Law 1264/1982 "regarding the democratisation of the trade union movement and the safeguarding of workers' trade union freedoms". In all such cases, existing provisions shall be observed regarding workers' compulsory rest time and the current average legal maximum working week, including overtime exceeding maximum working hours. Where such arrangements are agreed, the average maximum number of working hours per week over the one-year reference period is 38. Annual paid leave periods and sick leave periods are either not taken into account, or are regarded as neutral, in calculating this average. This provision is also implemented proportionally for workers under contracts of employment with terms of less than one year. Time off arising from the new working time arrangements is to be granted to workers as either a proportional daily rest period (day off) or a proportional increase in annual paid leave.
  2. The employees' associations mentioned in the preceding point as being empowered to sign agreements on working time arrangements must have been established by at least five workers and in line with the relevant provisions of Law 1264/1982. In enterprises where there is no enterprise-level union or works council or employees' association as described in paragraph 3 of Article 1 of Law 1264/1982, an agreement regarding working time arrangements may be concluded between the employer and the relevant industry-based trade union or union federation. In the event that no agreement is reached between the employer and the industry-based union or federation, the matter is referred for mediation and arbitration to the Mediation and Arbitration Service (OMED).
  3. In implementation of the new working time arrangements, the remuneration paid for the whole time period shall be equal to the pay for eight hours of work per day and 40 hours per week, and no increase or decrease shall be permitted. Where the new working time arrangements are agreed, overtime of the "special" type (see above) shall not be permitted and only legal overtime exceeding maximum working hours shall be allowed, in accordance with current provisions. Additional pay arising from overtime exceeding maximum working hours shall be calculated at the end of the annual reference period and be paid for the hours worked per week in excess of 38, on average.
  4. If for any reason, particularly due to resignation or dismissal of a worker, new working time arrangements are not implemented or not completed in accordance with the new law, this shall not affect the current provisions regarding the statutory pay premium for overtime exceeding maximum working hours.
  5. The relevant provisions of Law 2602/1998 or other special laws aimed at helping public sector organisations in financial difficulties (GR9802155F) will not be affected by the new working time provisions

Social insurance contributions

The draft bill's article on "reduction of insurance contributions" provides for a reduction of two percentage-points in the employer's contribution to the main Social Insurance Foundation (IKA) pension for industry, in respect of full-time workers under a contract of employment and paid by monthly salary or daily wage, provided that they perform a certain number of working days every month. The reduction will be granted when the employee's monthly pay, without taking into account overtime exceeding maximum working hours, does not exceed GRD 200,000. The reduction does not apply to: the public service, public entities or enterprises in the broader public sector; employees insured by the IKA under special insurance arrangements; employees who are paid fluctuating salaries; or working pensioners. The shortfall resulting from the reduction of the employer's contribution will be paid to the IKA by the state. The procedure and manner of collection by the IKA of unpaid employers' contributions shall be determined by a decision of the Minister of Finance and the Minister of Labour and Social Security. The reduction in contributions will run from 1 April 2001 to 31 December 2003. By decision of the Minister of Finance and the Minister of Labour and Social Security, the rate of reduction may be readjusted, and the period of validity of the new provisions may be extended.

Part-time workers' pay

In Article 7 on "increase in part-time workers' pay", the draft bill states that a section shall be added to paragraph 7 of Article 38 of Law 1892/1990 "regarding modernisation and development", as amended by Law 2639/1998, as follows: "part-time workers' pay shall be increased by 7.5%, provided that, in accordance with current regulations, they are receiving the minimum wage and their working day consists of less than four hours."

Collective redundancies

Article 9 of the draft bill amends Article 1 of Law 1387/1983 on "control of collective dismissals and other provisions". In particular, the thresholds beyond which redundancies are considered to be collective redundancies are changed. These thresholds are now to be determined by the number of staff employed on the first day of the relevant month. Whereas a collective redundancy is now defined as the redundancy of five workers for enterprises and operations employing 20-50 people, the threshold will in future be set at four workers for enterprises employing 20-200 people.

For details of trade union and employers' responses to the new draft bill, see GR0012193F and GR0012194F.

Commentary

The new draft bill seeks to make changes to the existing legislative framework on industrial relations. It is aimed at further increasing labour market flexibility, mainly by means of flexible working time arrangements and a substantial increase in the threshold for defining collective redundancies. However, the proposed measures express a significant reversal in relation to the government's initial intentions. This is due both to the strong reactions on the part of the trade unions (GR0012190N) and to the reactions within the governing Pan-Hellenic Socialist Movement (PASOK) itself. The opposition of trade unions and employers' organisations alike to the proposed regulations has created serious doubts about whether the draft bill can be implemented in practice, and this is expected to increase pressures for further changes. (Eva Soumeli, INE/GSEE-ADEDY)

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