EurWORK European Observatory of Working Life

Greece: Impact of the crisis on industrial relations

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  • Published on: 17 June 2013



About
Country:
Greece
Author:
Anda Stamati
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The economic crisis in Greece has hit the country’s workforce hard, with unemployment rising to 21% and wages falling sharply. Moreover a big shake-up in the rules governing industrial relations has led to the restriction of labour rights. These changes were put into practice through the enactment of nine laws (2009–2011) regarding public and private sector employees.

Section 1: Basic data on the impact of the crisis on industrial relations

1.1: Academic studies

The specific studies on the issue are not yet completed at university level. However, university professors have published studies that examine the issue:

1. Robolis S., Economic Crisis, employment crisis and social insurance (Οικονομική κρίση, κρίση απασχόλησης και κοινωνική ασφάλιση), Athens 2011.

2. Kouzis G., Employment in the vortex of the economic crisis and the memorandum, Ten Observations (Η εργασία στην δίνη της οικονομικής κρίσης και του μνημονίου, Δέκα επισημάνσεις), 2010, Utopia issue 97.

3. Gavroglou S., Flexibility perspectives in Greece and in Europe (Οψεις ευελιξίας στην Ελλάδα και στην Ευρώπη), 2009, PAEP (Employment Observatory Research - Informatics) .

1.2: Government and social partner research

1. Bank of Greece, The Economic Crisis in Greece, Causes and Implications, 2012

2. Annual Greek Trade Report 2012, ESEE

3. Annual Report on the economy and unemployment, GSEE Labour Institute 2012

4. Report on the economy, 2012, ΙΟΒΕ

1.3: International comparative research

1. IMF 2011, Achieving sustainable economic reforms in Greece in 2011 and Beyond, 2011, http://www.imf.org/external/np/speeches/2011/060711.htm

2. ILO, 2011, Social security and the role of law, General survey concerning social security instruments in light of the 2008 declaration on social justice for a fair globalization.

3. OECD, 2011, Economic outlook. 89, Paris

1.4: Grey literature

1. Zalouflis K., Glatianos D., The economic crisis and employment relations in Greece, (Η οικονομική κρίση και οι εργασιακές σχέσεις στην Ελλάδα), Doctoral Dissertation, School of Administration and Economics, Accounting Department, 2009. The goal of this dissertation is to study and analyse the causes for the financial crisis and its spreading in Greece. Subsequently, it mentions the impact of the crisis on production and the country's economy in general examining the changes noted in every form of work due to the crisis and to employees themselves.

2. P, Kyriakoulias, Employment relations after the memorandum, (Οι εργασιακές σχέσεις μετά το μνημόνιο), National Institute of Labour and Human Resources, 2012.

1.5: Relevance of debate

Please indicate if this topic is an issue for debate in your country, either in terms academic, political or debate among the social partners. Please tick the relevant box.

 a) academic debate

very relevant

relevant Χ

 not very relevant

 not relevant at all

b) political debate

very relevant Χ

 relevant

 not very relevant

 not relevant at all

c) debate among social partners

very relevant Χ

 relevant

 not very relevant

 not relevant at all

Section 2: Policies, instruments and regulations

This section of the CAR will examine relevant policies, instruments and regulations at EU, national, regional or sectoral level that have been enacted as consequence of the crisis and which may have impacted on national industrial relations.

2.1 EU-level instruments

Troika Memoranda

In Greece the economic crisis led to a bailout package from the European Commission, the IMF and ECB and signing of three memoranda as prescribed by the troika. This resulted in a complete reformation of the labour market in Greece, both in the private and in the public sectors. The context of these changes is along the lines of changes taking place in the country over the last twenty years, but greater in extent and intensity. However, the measures adopted do not constitute an innovation in the European area as to their nature or content. And this because in the all measures introduced as a consequence of the crisis and the memorandum, there is not even the slightest regulation where the Greek labour market is selected as the first field of application.

These are specified with interventions related primarily to shrinking employment and deregulation of employment relations in the public sector in the scope of convergence with the employment relations in the private sector and under terms of total degradation. Deregulation of employment in the public sector creates the appropriate background for extensive deregulation of employment in the private sector by boosting flexible and precarious employment, facilitating redundancies and dismantling the collective bargaining system.

Facilitation of redundancies is attempted in a period of acute unemployment and intensifies the feeling of employment insecurity. Relaxing the protection of employees both at individual and collective level constitutes one more blow on a main pillar of labour law. Under the measures adopted as a result of the first memorandum, the cost of redundancies is reduced by shortening the maximum advance notice period for termination of employment agreements from 24 to 6 months which reduces the redundancy cost by up to 18 salaries for employees with a great length of service. At the same time, employers are facilitated in paying the severance compensation in more and smaller instalments as compared to the past, restricting also the threshold for partial payments of severance pay from the equivalent of 6 months salaries to two months. In addition, the minimum employment period required for payment of severance pay by employers is extended from 2 to 12 months after termination of open-ended employment agreements. Lastly, in relation to collective dismissals, the threshold is increased from 4 to 6 employees for companies which have 20-150 employees and for companies with more employees the threshold is set at 5% compared with the previous level of 2%.

Enhancement of flexible and precarious employment is achieved with a variety of measures under the first memorandum. These include extension of the maximum temporary employment period from 18 to 36 months, extension of maximum temporary employment renewal period from 2 to 3 years, extension of job rotation (4-day, 3-day) period from 6 to 9 months per calendar year, elimination of overtime charges for partial employment and charges for employment of under 20 hours per week.

The degree of centralisation of collective bargaining and wage settings

Dismantling of the collective bargaining and collective employment agreement system is an intermediate stage leading towards individualisation of employment relations and the manner by which salaries are formulated. A basic principle of labour law, that of regulation in favour of employees is invalidated under the first memorandum through legal recognition of the ability to sign enterprise-level collective agreements with an unfavourable content as compared to the content of industry wide agreements.

Under the second memorandum, the minimum wage rate is reduced by 22% (and by 32% for people under 25 years of age), with legislative intervention, which nullified the role of the national collective agreement. At the same time, increases to basic wage/salary under collective terms, maturity and long service allowances are suspended until the unemployment rate drops under 10%, which under the policies implemented is not expected to happen before 2023 according to the opinion of the Greek General Confederation of Labour (GSEE) Labour Institute and the Civil Servants’ Confederation. However, it should be noted that the recent changes in the collective agreement system do not only impact the base wages and salaries; the combined measures under the first and second memoranda are instrumental in sliding salaries to the lowest remuneration for paid employment. This is intended through the following regulations:

  • Through legal introduction of pay increase freeze
  • By suspending the extension of application of industry-wide and occupational agreements for all employees in a sector and occupation which urges enterprises to depart from employment organizations that sign binding collective agreements while others are not obliged to sign binding collective agreements and sign individual agreements which are binding only as to the overall minimum thresholds.
  • By providing the ability to sign enterprise-level collective agreements where the threshold is the minimum wage and which are not bound by the thresholds of the corresponding industry-wide agreements.
  • By shortening the effective time of continuance of collective agreements if they expire or are terminated (fro 6 t 3 months). In this manner, the regulatory power of the content of collective agreements is reduced and their continuance in individual terms of employment is related from now on only to the minimum wage and childcare, education, long service and dangerous work allowances. Being negotiable under new individual employment agreements, these terms lead to the hasted acceptance on the part of unions to sign collective agreements before the three-month period, under the pressure of terms set by employers in order to avoid individualization of pay.

Other

  • Elimination of the ability to seek unilateral recourse to arbitration if intermediation fails. The result of this development is further restriction of the role of arbitration in providing final resolution to collective disputes, leaving the manner of their resolution in limbo and enhancing the insecurity of employees. Moreover, from this point on arbitration is stripped of its power to cover the entire collective dispute and is limited to the minimum wage threshold per bargaining level. These developments discourage employees from seeking arbitration since even if accepted by the employer, it only deals with the minimum wage leaving the framework of allowances, institutional issues and the entire content of achievements of prior collective regulations in a state of uncertainty. These measures promote signing of collective agreements by the unions under conditions of intense pressure.

2.2: Governmental instruments

As mentioned above, the Greek Government implements the orders of Troika through legislative interventions. (GR1206019I, GR1203019I, GR1109029I, GR1007019I, GR1006019I, GR1004019I, GR1005019I, GR1003029I)

2.3: Measures from social dialogue and/or bipartite and tripartite bodies

National General Collective Agreement

The National General Collective Agreement (EGSSE) singed in 2010 with a 3-year duration maintained payment of holiday allowances (13th and 14th salary) until its expiration, while after the recent legislative regulation, (Law 4093/2012) in implementation of the third memorandum, the minimum wage in Greece is not anymore the object of collective bargaining but is set by law.

International Labour Conference and GSEE moves

Inclusion of Greece in the list of 25 countries examined for violation of fundamental International Labour Conventions during the 100th session of the International Labour Conference and issuance of the Conclusions on the policy of the Greek Government, concludes the first hearing procedures of the GSEE complaint on unfair and unilateral legislative measures adopted by the Government against workers, which were introduced in January 2010 in implementation of the terms of consecutive Memoranda of Understanding in the framework of the loan mechanism for Greece.

GSEE complaint to the International Labour Organization

At the head of the GSEE complaint to the International Labour Organization are specific state interventions which violate the International Convention (No. 98) and a host of other fundamental Conventions, ratified by Greece (International Conventions No. 87, 154, 81, 95, 100, 111, 122, 138, 150, 156, 102) are detrimental to employment relations and social entitlements with measures that constitute the binding terms of consecutive Memoranda that damage the rights and income of workers.

Among others, GSEE focuses on key issues such as safeguarding/protecting working conditions through collective agreements, unilateral wage and pension cuts, freezing/decrease of remunerations and exclusion of Collective Employment Agreements for Public Utility Corporations, the attempt to impose individual agreements, overturn of CEAs at the detriment of sectoral agreements, the preposterous promotion of individual agreements, discrimination against vulnerable groups such as the young and women. New data corroborates the qualitative and quantitative deterioration of the labour market in the one year of implementation of the measures, which is a drastic disempowerment of the unions and workers. It is stressed that the constant and unequal nature of the unjustified measures is contrary to not only to ILO conventions but also makes wages and rights the main leverage for economic adjustment without the safety net of social protection and under conditions of deteriorating social dialogue.

In support of GSEE in this procedure are the unions of Germany, Spain, France and Venezuela and the International Trade Union Confederation (ITUC), which highlights the international and European dimension of the Greek case used as a dislocation laboratory in other countries as well regardless whether they are threatened by the economic crisis or not. It is also stressed that International Conventions must be observed not only by Greece but by all countries participating in “support” mechanisms.

Conclusions of Committee of Experts on the Application of International Conventions

After extensive discussion and evaluation of the data submitted by GSEE, the Committee of Experts on the Application of International Conventions unanimously adopted the following conclusions, despite the efforts of the government and employer team to postpone the discussion and not issue conclusions:

  1. Reform has long-range implications that surpass the issue under examination.
  2. In exercising its policy, the Greek Government must respect the fundamental principle of the autonomy of the parties to the collective bargaining process and if as part of its stabilization policy government considers that wage rates cannot be settled freely through collective bargaining, such restriction should be imposed as an exceptional measure and only to the extent that it is necessary without exceeding a reasonable period and it should be accompanied by adequate safeguards to protect workers’ living standards. The Government is asked to reply in detail to the present comments.
  3. The Greek Government must proceed immediately to complete, honest dialogue with social partners in order to review the restrictions imposed and those that will be imposed, and re-evaluate their impact on the workers.
  4.  The Greek Government must provide details in 2011 to the Committee of Experts on the Application of International Conventions on the issues submitted by GSEE in July 2010 as well as on the consequences of restrictive measures in application of the Right to Organise and Collective Bargaining Convention No. 98.
  5. The Greek Government must provide the information requested by the High-level Mission of the ILO in Greece, which will also hold meetings with IMF and EC officials.

2.4: Severity of impact of policies, instruments and regulations

EU new economic governance

very severe Χ

 severe

 not very severe

 not severe at all

National governmental instruments

very severe Χ

 severe

 not very severe

 not severe at all

National social partners’ measures

very severe

 severe

 not very severe Χ

 not severe at all

Section 3: Impacts of the crisis

3.1: Impact on industrial relations actors

The impact of the economic crisis on employment relations has also an effect on the social dialogue in Greece, to the extent that its decisions affect post memorandum employment relations. Collective employment agreements (industry-wide, enterprise-level, occupational) signed after the memorandum for the most part stipulate decreases in pay or zero increases.

3.1.1 The industrial relations actors in this section will principally be the social partners at all levels, including national, regional, sectoral and company. Please describe any relevant impacts. This could include impacts such as:

  • Reorganisations of the social partners, including mergers and changes in representation.

Up to present there have been no changes in the social partners due to the economic crisis.

  • Changes in role and visibility of the social partners. Where relevant to your country, please also indicate any changes in the role of the social partners as stakeholders in the Public Employment Services (PES), including:
    • Changes to social partner consultation about the management and operation of the OES (for example, due to the government needing to act quickly in response to the crisis)
    • Changes in the involvement of the social partners in the PES, possibly due to the government wanting to act unilaterally in response to the crisis
  • Trends such as trade union or employer organisation membership (upwards or downwards), and how far this can be attributed to the crisis. Any impacts on other actors, such as central and local government, and NGOs, where relevant.

There is no information evidencing changes in the union membership after the economic crisis. Changes may possible arise during the GSEE Conference in March 2013.

Social dialogue in Greece maintains the same characteristics during and before the crisis, meaning still mostly for the sake of appearance and not substantial.

3.1.2 Overall, how severe do you think the impact of the crisis has been on industrial relations actors in your country? Please tick the relevant box.

 very severe X

 severe

 not very severe

 not severe at all

3.2: Impacts on industrial relations processes

3.2.1 Please describe impacts in the following areas:

Impacts on:

collective bargaining arrangements;

  • centralisation or decentralisation trends;
  • the introduction of opening clauses;
  • changes in the extension of collective agreements;
  • wage setting mechanisms;
  • indexations mechanisms;

arrangements for employee information, consultation and participation;

  • organisation of industrial action;
  • procedures for dispute resolution;
  • changes in the relationship between the social partners, either leading to closer cooperation or more conflict.

3.2.2 Overall, how severe do you think the impact of the crisis has been on industrial relations processes in your country? Please tick the relevant box.

 very severe X

 severe

 not very severe

 not severe at all

  • Centralisation or decentralisation trends- wage setting mechanisms- Impact of crisis on industrial relations.

The economic crisis and passing of laws on the loan support to Greece (Memoranda) brought extensive changes to labour legislation. These changes lead to a dramatic increase of “flexible" employment agreements. This data is based on the last quarterly report (January-March 2012) of the Hellenic Labour Inspectorate (SEPE). For the first time, during the first quarter of 2012, there are more part-time employment and job rotation agreements in the private sector than full-time recruitments with a full pay. Moreover, enterprise-level agreements and adjustment of terms of employment in individual employment agreements are rapidly increasing to the detriment of industry-wide agreements which were in first place for decades until recently. These changes are accompanied by reduced remuneration and an increase of uninsured labour.

According to SEPE data on the first quarter of 2012, recruitments of salaried persons in the private sector, across all specialties, were reduced by 13% (16,320 jobs) in relation to the previous year (2011). Furthermore, the percentage of recruitments with “flexible” agreements (part-time employment, job rotation) is for the first time greater (50.13%) in relation to full-time employment agreements. Out of a total of 104,689 recruitments, 52,485 were with “flexible” employment agreements (39,914 for part-time and 12.571 for job rotation) while full-time recruitments stood at 52,204. In comparison to the corresponding period in 2010, full time recruitments are down by 53.13% (59,413 less jobs).

Another significant increase noted is the conversion of full-time employment agreements to part-time or job rotation agreements (either with the consent of employees or by unilateral decision of the employer) aimed at decreasing the labour cost. Specifically, in relation to the first quarter of 2011, conversion of full-time employment agreements to flexible employment were increased by: a) 48% (3859 conversions) with respect to part-time employment, b) 4% (281 conversions) with respect to job rotation with the consent of employees, c) 157% (2578 conversions) with respect to job rotation by unilateral decision of employers, amounting to a total of 23,101 from 16,338 in 2011, while there were only 3,222 in 2010. Thus, compared to 2010, the increase of employment agreement conversion from full-time to flexible employment stands at: a) 346% part-time employment, g) 1,253% voluntary job rotation and c) 10,460% job rotation by unilateral decision of employers. It should be noted that without providing official statistical data, job rotation according to legislation can be also related to part-time employment for fewer days a week or a month or a combination thereof and for a period of up to 9 months within one calendar year.

Undeclared work is one of the issues that continue to bedevil the Greek labour market. At a theoretical level, the basic reasons for the birth and institution of this phenomenon are on the one had the increased payroll cost and on the other the protective regulations of labour law, which have been compromised to a great extent during the last two years. At the same time a new, contemporary framework of operation was instituted at the Hellenic Labour Inspectorate in order to make control of the labour market more efficient. However, undeclared labour is not restricted but on the contrary, it has taken new, very troublesome dimensions and forms in an expanding recession environment.

The 2011 Annual Report of the Hellenic Labour Inspectorate mentions that the percentage of uninsured employees for the year is determined at 30%. Specifically, audits in 20,246 enterprises, which represent 2.5% of the country’s enterprises, found 19,968 uninsured employees on a total of 66,615 employees (29.98%). Under the nationality criterion, 40% were uninsured aliens compared to 26% Greek uninsured employees.

Practically identical conclusions are drawn from the data published by the Special IKA_ETAM Insurance Audits Service (EYPEA). A total of 20,567 uninsured employees were found (8,225 aliens - 12,342 Greeks) over a total of 68,345 employees recorded in on-the-spot checks (30.2% uninsured employees).

Of the uninsured employees recorded by EYPEA, 40% are aliens who evade any type of official record thus justifying the disproportion between work permits and legalization applications by a large number of immigrants who continue to live and work in the country illegally.

Both studies conclude that the sectors most likely to harbour uninsured labour are:   food and beverage service occupations (restaurants/taverns, party halls, cafeterias, bars, night clubs), Industrial Parts, Industrial zones, Hair Salons, Gas Stations, Automobile Service Stations, Transport Companies, Cleaning companies, Construction, hospitality, Security services).

Therefore, the size of uninsured labour in Greece can be safely determined and draw the conclusion that one in three employees is employed under conditions of fully undeclared work.

  • of industrial action;

The 2010–2011 Greek protests were a series of demonstrations and general strikes taking place across Greece with an unprecedented –for Greek standards– participation of citizens. In this context, a “barrage” of strike action was called by GSEE and ADEDY, in protest against the changes in public-sector and private-sector labour relations brought about by the Memorandum.

On 23 February 2011, a 24-hour general strike, called by GSEE and ADEDY, for both the public and private sector takes place, involving up to 100,000 people, as German Chancellor Angela Merkel called for a renewal of the loan programme to Greece that had been conditioned on fiscal tightening. The measures adopted by Greece were considered harsh by the protesters.

On 11 May 2011, GSEE and ADEDY stage a strike in the private and the wider public sector, protesting against the government’s economic policy. The entire Public Sector, the public utilities, the revenue departments, the social security funds, the public transports, the employees of Public Hospitals, the bank employees, the crews of all categories of ships (Pan-Hellenic Seamens’ Federation), the mass media employees (Pan-Hellenic Federation of Journalists Associations) participate in the strike.

On 25 May 2011, and for 3 consecutive days, the Indignant Citizens Movement (Greek: Κίνημα Αγανακτισμένων Πολιτών), started demonstrating in major cities across Greece. Sparked by the 2011 Spanish Protests, these demonstrations were organized entirely using social networking sites, which earned it the nickname "May of Facebook".

On 28 June 2011, Greek unions, including those in health, transportation, education, and government jobs began a 48-hour strike, in protest against the deteriorating economic situation and suggestions on the part of the government of Journalists and a number of artists also stopped working in solidarity with the protest. That day, demonstrations turned violent as protestors clashed with police in front of the Greek parliament and other areas of central Athens. Violence continued during the night and on 29 June, the day when a new package of deeply unpopular austerity measures was passed.

Hundreds of thousands of protesters, including employers, took part in a national 48-hour strike organised by the Greek General Confederation of Labour (GSEE) and the Confederation of Civil Servants (ADEDY) on 19 and 20 October 2011. The strikers, from both public and private sectors, were protesting against a draft law by the Ministry of Finance. It includes cuts in pay, jobs and pensions, and has been brought in as part of Greek’s financial bail-out deal with the EU, IMF and ECB (GR1111019I).

Finally, new strike action was taken by the trade unions, as GSEE and ADEDY held a 24-hour nationwide strike on the 1st of December, protesting “against the measures described in the 2012 budget” and the “‘pro-memorandum’ policy of the new Government”.

3.3: Industrial relations outcomes

3.3.1 Please describe any impacts on collective agreements at national, regional, sectoral or company level.

These impacts could take the form of agreements of shorter length, non-renewal of collective agreements, pay pauses, or the implementation of parts of collectively agreed increases only.

3.3.2 Overall, how severe do you think the impact of the crisis has been on industrial relations outcomes in your country? Please tick the relevant box.

 very severe Χ

 severe

 not very severe

 not severe at all

In Greece, the enactment of Law 4024/2011 made it possible for Collective Employment Agreements (CEAs) to be drawn up at business level, even in very small enterprises. These agreements take precedence over the sector-level CEAs, even if imposing less favourable terms for employees.

In accordance with the new law, 53 business-level agreements were drawn up in January 2012, of which 44 were made with collective industrial organisations and primarily concerned small enterprises. These collective industrial organisations, also introduced under Law 4024/2011, are temporary workers’ unions composed of three-fifths of employees. The representatives are entitled to enter into a CEA at any company where there is no trade union.

This regulation created a new trend in the field of collective bargaining. Many business-level agreements are now being drawn up by informal associations of workers established under the provisions of the new rules.

Further legislation, Law 4046/2012 implementing Memorandum 2 agreed with the Troika – the International Monetary Fund (IMF), European Union (EU) and European Central Bank (ECB) (GR1203019I) – allowed companies to reduce lower national wages by 22%, effective from 14 February 2012.

Between 14 February 2012 and 14 May 2012, 263 business-level agreements, affecting 13,829 employees, were brought in across Greece. The Labour Inspectorate data show that these new business-level agreements introduced an average wage reduction of 21.35%. In the same period, data for the personnel lists of 16,338 enterprises registered with the Labour Inspectorate revealed a similar reduction of wages, an average drop of 22.9% affecting 64,201 employees.

3.4: Severity of impact on industrial relations

Overall, how severe do you think that the impact of the crisis has been on industrial relations in your country? Please tick the relevant box.

 very severe Χ

 severe

 not very severe

 not severe at all

Section 4: Views of the social partners

GSEE believes that their programme has destroyed the labour market in Greece and the country itself by pushing the Greek economy into recession; it has also created huge problems to the Greek society, the first being the growing unemployment. Persistence on a programme of salary, pension and social benefit cuts will push the Greek economy into further recession and will widen the problems that exist right now.

The National Confederation of Greek Traders (ESEE) estimates that “The measures package depletes the Greek market from the last liquidity reserves, which would allow rudimentary business activity. The on-going “hammering” of Greek citizens at an economic and psychological level, deprives even the most dynamic layers of Greek society from the dream, vision and will for a better future".

The General Confederation of Greek Small Businesses and Trades (GSEVEE) announced that 100,000 businesses have closed down in just two years, resulting in the destruction of approximately 500,000 jobs while the safety net of social protection is non-existent and therefore the economic crisis has become a humanitarian crisis”.

Lastly, the Foundation for Economic and Industrial Research (IOBE) announces that the economic crisis has significantly worsened the economic climate in Greece.

Section 5: Commentary

Whether the government and/or the social partners have, in your view, been successful in any efforts they have made to try to mitigate the effects of the crisis on industrial relations.

Greece’s new economic landscape, shaped by the financial crisis and deep recession, has brought not only high unemployment rates of around 23%, but also triggered extremely negative changes in labour relations and a significant reduction in workers’ wages.

The aim of the new measures under the provisions of Memorandum 2 was the recovery of Greece’s economic competitiveness, a target that is underlined in all the recent legislation and memoranda. In practice, however, they have achieved the opposite and the recession has deepened.

Anda Stamati, INE/GSEE

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