GREECE: Annual Review 2011

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  • Published on: 28 November 2012


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The Greek economy was in recession for the fourth consecutive year in 2011.The deepening of the recession was due to the larger reduction of all the components of domestic demand (-9.0% in 2011 from -7% in 2010). The rate of decrease of the Greek economy’s activity accelerated from -3.5% in 2010 to -6.5% in 2011), contrary to the predictions of last year’s same period. The budgetary adjustment continued in 2011, but it was not as efficient as it was expected, mostly, because of the emphasis put to the increase of the revenues rather than on cutbacks in expenditure. Total employment was hit hard in 2011 as, according to estimates, it fell by 5.7% as against a 1.9% decrease in 2010 and an average annual increase of 1.7% during the 2002-2007 period. The fall in employment affected mainly the private sector and was the result of the closing down or the downsizing of many enterprises, as well as of the increasing uncertainty and, consequently, of the rapid decrease of consumption and investment expenditure of households and enterprises.

1. Political and economic developments

Please give very brief details of:

  • The government (s) in office during 2011
  • Any general or significant regional/local elections held in 2011
  • Any other significant political events which took place in 2011
  • Any forthcoming national or important regional/local elections or significant political events
  • Any major economic developments which are likely to impact upon employment and industrial relations.

If a new government took office during the year, briefly summarise the implications for policy on employment and industrial relations.

In November 10th, 2011 Lucas Papademos, former European Central Bank vice-president and currently a visiting professor at Harvard University, was named as Greece's new prime minister, following G. Papandreou resignation and days of negotiations.

Leaders of the three main parties (PASOK, NEW DEMOCRACY and LAOS), making up a new government of national unity, met with the Greek President to try to reach a deal.

For the story, after G. Papandreou surprised European leaders by saying he would put the highly unpopular bailout agreement to a public vote, announcement that led to a blockage of the rescue aid, Greece's rival parties agreed, under pressure from European peers and international lenders, to form an interim, coalition government with the sole aim of ratifying and implementing a new loan and debt agreement that included 130bn euro ($177bn; £111bn) in rescue funds for Athens, plus a 50% write-down of Greek debt in private hands. Athens' creditors, according to all media sources, warned that failure to ratify and enact the new plan would block disbursal of $11 billion in emergency loans from Greece's first international bailout package, which was granted last year.

The new government’s main tasks were to unlock the billions of euros in rescue aid that creditors blocked, to implement the country’s latest loan package and to pass a 2012 budget.

The exact duration of the new administration remains unclear — general elections were tentatively scheduled for mid-February, now, according to press releases, there is a discussion for no later than April, 8th, 2012.

2. Legislative developments

Please give brief details of important legislative developments with implications for industrial relations and working conditions, where these are not covered in other sections of your response. For example, this might include new or amended legislation on issues such as employment rights, working time, pay and conditions of employment, termination of contract, equality, social security (with implications for the employment relationship), training, new forms of work, the labour market, health and safety etc.

To date, two are the laws (for the 2011 time period) that literally change the standards of operation of the Greek labour market (GR 1202019I). More specifically:

Law 3986/2011 entitled “Emergency measures for the implementation of a medium-term fiscal strategy 2012 – 2015”, which was passed according to urgent enactment proceedings and which includes, among other things, also the previous regulations regarding the abolition of the minimum wage provided for by the National General Collective Agreement (EGSSE) for young workers, so that investments become more “attractive”. As for the matters directly regarding the labour relations, the law contains further regulations for the restriction of hiring and the reduction of the existing personnel of State entities and the Public Utilities (expansion of the application of the 1:5 hiring ratio, provision for a retirement procedure through the Supreme Council for Civil Personnel Selection (ASEP); expands the framework for the employment of workers under contracts of limited duration; expands the possibility of implementing the institution of working time arrangements; and, moreover, the possibility of employing young people under 25 years of age for a wage reduced by 20% compared with the one determined by the EGSSE is expanded.

Law 4024/2011 entitled “Pension regulations, uniform pay scale – rank scale, labour reserve and other provisions for the implementation of the medium-term fiscal strategy 2012 – 2015” changes the regime of collective agreements (article 37), bringing about a further serious shake-up of labour rights, both in the public and in the private sector, through the abolition of the favourability principle, the prevailing of business-level agreements over the sectoral ones, the “freeze” of the expansion of the validity of the sectoral agreements in the entire production sector, but also through the abolition of all the restrictions with respect to the conclusion of business-level agreements. According to an announcement of the Greek General Confederation of Labour (GSEE), business-level agreements do not regard solely the work terms of the employees, but also dramatically affect the right to work. As a consequence, this leads “to the degrading of the living standard of a large category of employees, while the abolition of collective autonomy, brought about by article 37 of the Law, practically favours the negotiation at individual level, where the employer prevails, and leads to the complete deregulation of the labour market, a fact that is expected to cause a further deepening of the recession, taking also into account the high unemployment rates”.

3. Organisation and role of the social partners

Please provide brief details of any major changes in the organisation and role of the social partners in your country during 2011. This might include trade union or employers’ organisation mergers, changes to social dialogue structures, or changes in membership levels and representativeness.

The trade unions made their presence felt in 2011, reacting to the execution of the Memorandum by the government. Both ADEDY (ΑΔΕΔΥ / the Greek Confederation of Civil Servants) and GSEE called a series of strikes after the announcement of the measures regarding the public and the private sector respectively (GR 1111019I) & (GR 110519I).

There were no changes in the structure or in the organisation of the social partners during 2011.

4. Developments in collective bargaining and social dialogue

Please give details of the number of collective agreements negotiated in 2011 by level (eg. national, sectoral, company), compared with numbers of agreements negotiated in 2010. Outline any trends/shifts between levels of bargaining, or changes in bargaining coverage.

  • To what extent are there derogations from collective agreements? Describe any trends in terms of derogations.
  • If there have been any major bipartite or tripartite initiatives at national level, please provide details. (Do not include initiatives which deal specifically with the economic situation as these should be covered in question 5)
  • Other conditions of employment (these might include training and skills, job security, occupational pensions, equal opportunities and diversity issues)

Information on developments in pay and working time in the course of 2011 is being collected in the Annual Updates on working time and pay, and therefore does not need to be reported here.

The economic crisis has brought about an important shake-up in the labour market, where, apart from the daily dismissals, private enterprises established the practice of reduced emoluments, flexible hour-plans with fewer hours or days of work, the suspension of the personnel for three-month periods, as well as work rotation, with the invocation of crisis.

The National General Collective Agreement (Εθνική Γενική Συλλογική Σύμβαση Εργασίας, EGSSE) that concerned the private sector and was signed in July 15th, 2010 is of a three-year term and provided for zero salary increases in 2010 and for nominal increases of 1.5% on the 1st of July 2011 and 1.7% on the 1st of July 2012 (increases that will cover the Euro area inflation). The 13th and 14th salary are preserved by virtue of a legal clause. More specifically: article 1 of the EGSSE provides that the Christmas and Easter bonuses constitute regular emoluments and are paid in full, on condition that the employment relationship lasted throughout the time period from the 1st of January until the 30th of April as regards the Easter bonus, and from the 1st of May until the 31st of December as regards the Christmas bonus; the payment of an amount of 20 Euros per year by each employer, so as to meet the summer camping needs of the children of unemployed and low-paid persons (about 25,000,000 Euros per year); the promotion of a regulation regarding the extension of the time period during which the unemployment benefit is paid by 50%, from 12 to 18 months, with full insurance coverage (proposal to the government).

As for the public sector, owing to the financial crisis, the Government announced measures for (2010 and) 2011, such as the reduction in wages in the public and the wider public sector. The new pay scale that is implemented retroactively from the 1st of November 2011 causes significant income losses, which, in certain cases, exceed even 50% for civil servants who are in the service: According to the new regulations, the initial basic wages start from 780 Euros for public servants of Elementary Education and reach 858 Euros for public servants of Secondary Education, 1,037 Euros for public servants of Higher Education and 1,092 Euros for public servants of University Education. Moreover, no pay raises are allowed to be stipulated, the hiring of personnel has been suspended or restricted, a system of flexible recruitment was introduced, and also public services and Organizations are being merged, downsized or shut down and, as a consequence, thousands of employees are placed in the labour reserve or dismissed. The announcement of these decisions triggered the instant reaction of the public-sector unions, which resulted in several general strikes throughout 2010 and 2011.

5. Responses to the economic situation

With regard to the current economic situation, please give brief details of:

  • cross-sectoral and sectoral level initiatives, the responses of the social partners in your country, with a focus on any bipartite or tripartite initiatives to tackle any economic problems;
  • government responses to the economic situation with an impact on industrial relations and on labour law;
  • and any significant effects of the economic situation on the industrial relations system.

If initiatives have been reported in an earlier Annual Review, please provide an update.

According to the Annual Report on the Greek Economy and Employment (in Greek), published by the Labour Institute of the Greek General Confederation of Labour (INE/GSEE) and the Confederation of Public Servants (GR 1110029I), the government has not managed to reach its goals for the economy, which is in its third year of recession, despite great sacrifices made by employees and pensioners. One particular goal that seems certain to be missed is the return of Greece to the markets in 2012. The recession has led to:

  • a deep difference between the income per capita in Greece (which fell to 2000 levels) and that of the European Union’s 15 most developed countries;
  • a fall in productivity per capita (to 2000 levels);
  • a decline in purchasing power (to the levels of 2001–2002);
  • a rise in the unemployment rate (equalling that of the 1960s);
  • a fall in domestic demand (to the level of 2003)

There were 761,000 unemployed people in Greece in 2011, a 61.5% increase on the 2009 figure of 471,000. The unemployment rate, after decreasing continuously between 2001 and 2009 from 12% to 7.6%, increased dramatically during 2008 and 2011 from 7.6% to 15.2%, whereas in the European Union the unemployment rate rose from 9.0% to 9.5%. The doubling of the unemployment rate between 2009 and 2011, in combination with wage cuts for civil servants, has caused actual wages to fall by 11.5% in the economy as a whole and by 9.2% in the private sector in 2010–2011.

The Greek government, in an attempt to check the country’s course towards bankruptcy, took a series of further economic measures in order to reduce the deficit and the debt. The statutory regulations referred mainly to the public sector (GR 1202019I) & (GR 1109029I) and the industrial relations. The attempt to increase the VAT in several products was also remarkable.

A major shake-up in the rules governing industrial relations has led to the restriction of labour rights. The most important measures include, among others: a cut in the basic pay, bonuses and allowances for public sector workers and pensioners, effective from 2010; the strengthening of flexible forms of employment in the private sector, through the reduction of the cost of part-time employment, the extension of the time period during which work rotation may be implemented, the facilitation of layoffs and the reduction of the cost of layoffs (severance pay); the promotion of privatisation and a radical shake-up of labour laws governing public sector workers.

Finally, the implementation of the Business-level Collective Employment Agreements, should be noted, that are concluded by the employers and the business-level unions or workers’ associations, according to article 37 of Law 4024/2011.52 business-level employment agreements, which regarded a total number of 17,531 employees, were concluded only during the two-month period from December 2011 to January 2012. On the contrary, 12 Special Business-level Agreements, which regarded a total number of 3,550 employees, were concluded during the first ten months of 2011. The business-level agreements provided for wage reductions varying from 5% to 25%.

6. Developments in working conditions

Please report the most important developments in the field of working conditions and quality of work and employment during 2011 in your country. The following topics should be taken into consideration:

  • career and employment security – including job security, income, information, consultation and participation and equal opportunities;
  • health and well-being of workers – including health problems, risk exposure, impact of changes in work organisation, and violence, harassment and discriminations;
  • developing skills and competences – including qualifications, skills and competences, career prospects and training opportunities
  • work-life balance – including issues such as working time, time management at work and social infrastructures.

For answering this question, please make use of all national sources of data on working conditions such as national surveys, quantitative and qualitative research and administrative reports (for example, from the labour inspectorate or health and safety authorities). Please report also on policies, programmes or initiatives implemented at national and regional/local levels by public institutions and social partners. Please make sure you are not reporting the information already provided in question 2.

In the context of the country’s accession to the Financial Stability Mechanism, which was effected by means of the “Statement on the support to Greece by Euro Area Member States”, radical interventions were performed in the operative institutional framework of individual and collective labour law. The measures adopted through the new law affect the public and the wider public sector as well as the private sector:

Those regarding the public and the wider public sector of the economy are, mostly, measures of immediate budgetary adjustment that aim at the cutback in public expenditure through the reduction in wages and the downsizing (GR 1109029I). The flexible labour relations in the public sector are strengthened (consecutive reductions in the wage of those serving, under any employment relationship, in the core public sector or the wider public sector of the economy). The stipulation of any pay raises for the years 2010 and 2011 is prohibited and any collective employment agreements or arbitration awards or individual employment contracts or agreements that contravene that prohibition are abolished. The aforesaid statutory regulations aim at a further cutback in public expenditure through downsizing, providing for the suspension of hiring by the State (is in effect from 2010), and for the restriction of recruitment in 2011, 2012 and 2013 (according to the latest law about the measures for the implementation of the Medium-term Fiscal Strategy Framework, the application of the 1:5 hiring ratio is extended until the end of 2015, while in 2011 the 1:10 hiring ratio shall apply) through the application of the rule providing for the hiring of one employee for every five employees retiring in all sectors, except for the health, the education and the security sectors. At the same time, the approvals of the hiring of personnel under fixed-term contracts and work contracts are restricted. The law about the measures for the implementation of the Medium-term Framework also introduces a regulation of paramount importance (Law 3986/11, art. 37, paragraph 7), which seems to be aiming at gradually driving public utilities’ employees to retire. This is the regulation according to which any surplus personnel of private law corporate bodies is either transferred to public sector agencies, or takes precedence in being selected to fill up fixed-term or part-time employment positions, or retires immediately in the context of a voluntary retirement programme. As far as the “core” public sector is concerned, a measure of particular importance is introduced, aiming at making hiring more flexible through the lifting, for a three-year period, of the prohibition to hire employees through Temporary Employment Agencies in the public sector.

As regards the measures referring to the private sector of the economy, these mostly lead to a reduction of the labour cost. So, there is a reduction of the worker’s protection in case of termination of the employment contract and implementation of measures that strengthen the flexible work relations. Moreover, the minimum wage provided for by the EGSSE is abolished with respect to young workers, so that investments become more “attractive” (for young workers under 25 years of age the minimum wage is reduced to 80% of the national minimum wage determined by the EGSSE that is in force each time, while, for those aged 15-18, the minimum wage is reduced to 70% of the national minimum wage determined by the EGSSE that is in force each time). An initial bundle of measures provide for the abolition of the arbitration awards and mediation agreements. As regards the law of the employment contract’s termination, a bundle of measures are introduced leading to the reduction of the cost and the facilitation of dismissals. More specifically, zero severance pay shall be paid in case an indefinite-term employment contract is terminated before the completion of a 12-month employment period; the notice period for the termination of the employment contract is significantly abridged; and a worker’s possibility of being submitted to the favourable regime of collective dismissals is restricted to a significant extent. At the same time, the new regulations provide that the severance pay is not obligatorily paid in one installment, but may be paid in two-monthly installments. Furthermore, a series of measures are introduced for strengthening flexible labour relations, such as the extension of the time period during which an employer may impose a work rotation system from 6 to 9 months a year, while the term for the implementation of a working time arrangement system is extended from 4 to 6 months and an arbitration body is no longer able to intervene in case of failure of the negotiations.

In addition to these, of particular importance is a recent survey carried out by Adecco Greece among 500 men and women aged 26 and over, showing that employee expectations change in times of financial crisis. The survey revealed that a sense of security and stability was the most important characteristic that 32% of participants sought during the economic crisis; only 4% considered pay to be important at such a time. The majority (92%) showed a willingness to be flexible over pay during the crisis if other factors were satisfactory (GR1109019Q).

Also, the rise in flexible forms of employment contract as it is recorded by the Labour Inspectorate in the first five months of 2011, according to which 5.6% fewer companies than in the corresponding period of 2010 concluded new contracts of any form. Furthermore, there was a 27.7% reduction in full-time employment contracts and the percentage of part-time employment contracts fell by 0.3%. Contrary to this, shift work contracts increased by 11.0%. In addition, there was a substantial increase in the number of full employment contracts converted into part-time and shift work contracts in the first five months of 2011 compared with the corresponding period in 2010. There was a 166% increase in the number of full-time contracts being converted to part-time employment, a 668% increase in the number changing to shift work following agreement with employees and a 5072% increase in the number altered to shift work following a unilateral decision by the employer (GR1105029I).

7. Industrial action

Please give brief details of strikes and other industrial action during 2011, including:

  • statistics on the number of strikes, workers involved and working days lost (absolute number and per 1,000 workers) for as much of 2011 as is available (please indicate briefly what types of action are or are not included in these figures – eg. are only strikes with a minimum number of workers or days lost included, or is only “official” action included?), and how this compares with previous years; and
  • any particularly large or significant strikes/lockouts or other disputes;

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 (GR 1105019I).

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 (GR 1111019I).

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”.

8. Restructuring

Please give brief details of major and significant incidences of company restructuring and workforce reductions in 2011 and how they were dealt with, especially where these led to important industrial disputes or collective agreements, or had other notable industrial relations implications.

2011 was a year of significant reforms and changes, given that Greece remained under the support mechanism and had to follow a strict timetable for the implementation of the statutory regulations, under the supervision of the IMF, the ECB and the European Commission. Their strict implementation was a prerequisite for the granting of the loans, and therefore there was no room for delay.

One of the most important reforms was the restructuring of public utilities, including the Hellenic Railways Organisation (GR 110939Q) & (GR 1105039I), with a transfer of affected workers and a consequent change in individual and collective employment contracts. Moreover, the recent restructuring plan provides as follows:

A reduction of the personnel by 2,000 people, through transfers or retirement. Any employees who are not transferred to a Host Organization are deemed to accept any changes to collective and individual agreements. Engine drivers and those employees who establish pension rights within the year will be excluded from the said transfers.

Enactment of new internal rules of operation for the group’s companies, which may be modified unilaterally by the Management. The new rules will regulate the working terms and conditions for the personnel of the group’s companies.

Additionally, an amendment – supplement to Law 4002/11 of the Ministry of Finance entitled “Amendment of public-sector pension legislation – Regulations for the development and fiscal consolidation” provides for the restructuring of the public and wider public sector through the shutting down or merger of tens of agencies and services. This measure leaves thousands of employees in a state of suspension, while the government maintains that priority is given to the voluntary retirement or pensioning. The amendment also provides for the non renewal of contracts, for transfers of employees and for the labour reserve regime. In the amendment publicized by the Ministry of Finance it is underlined that the shutting down and merger of agencies that fall within the jurisdiction of various ministries “aim primarily at the restructuring of the public sector, with a view to reducing its size, so that it is managed in a more efficient manner and it does not burden the state budget”.

9. Other relevant developments

If there been any other significant developments affecting employment relations in 2011 that have not been mentioned above, please give brief details.

A new round of social reaction is triggered by the “agenda” of the IMF/ECB/EU representatives, who begin (December 2011) a new round of inspection and assessment of the Memorandum’s course in Greece. The reaction is centered, among other things, on the annulment of the pay raises provided for by the National General Collective Agreement, the reduction of minimum wages, as well as on the abolition of the 13th and 14th salary in the private sector. At this stage, the social dialogue between the “social partners” with respect to these issues is under way and, so far, it seems to lead to a “partial agreement” on three points (the preservation of the minimum wage at current levels, the non intervention with respect to the 13th and 14th salary, the non abolition of the grace period of collective agreements (namely their continuing to be effective for a six-month period after they expire) and to a failure to reach an agreement on the “freeze” of pays is the private sector.

Elena Kousta, Labour Institute of Greek General Confederation of Labour (INE/GSEE)

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