Debate heats up over labour relations changes in public enterprises

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In February 1998, a law was passed by the Greek Parliament under which labour relations may be altered in public enterprises in financial difficulties. The Government subsequently decided to implement a package of measures on public enterprises, one of whose aims, according to the Prime Minister, is Greece' s immediate integration and participation in EU Economic and Monetary Union. These developments have sparked opposition from the trade unions, and Greek General Confederation of Labour has drawn up alternative proposals.

Government plan for public enterprises

On 3 February, a law concerning the regulation of labour relations in public enterprises in financial difficulties (GR9801150N) was passed in the Greek Parliament, with a vote of 142 in favour and 121 against. Under the new legislation, labour relations in "lame duck" public utilities and services will be regulated in future by law and not by agreement between management and staff.

In a meeting on 10 February with the ministers and party cadres concerned, the Government reached a decision on a plan for public enterprises (both those showing a profit and those in financial difficulties) which it is determined to implement, either through dialogue or unilateral administrative decisions. According to the Prime Minister, one of the aims of the package is Greece' s immediate participation in EU Economic and Monetary Union. The Prime Minister ordered the ministers to begin immediate, rapid implementation of the relevant package of measures, which include:

  • economic restructuring of public enterprises, at the Government's responsibility;
  • drafting of an operational plan to modernise public enterprises, primarily at the responsibility of their administrations, in collaboration with the three ministries jointly responsible; and
  • drafting of general employee regulations for each public enterprise, for which the trade unions will bear an equal share of responsibility.

Priority, with a specified timetable, will be given to five public enterprises in financial difficulties: Olympic Airways (OA), the Athens Public Transport Organisation (OASA), the Hellenic Railways Organisation (OSE), Hellenic Posts (ELTA), the Hellenic Aerospace Industry (EAB) and the Hellenic Arms Industry (EBO). For Olympic Airways, the rescue process is set by legislative regulation at two months. For the other public enterprises, two months will be needed to draw up an operational plan and four months to carry out the dialogue.

Reaction of the unions

In a joint statement, the Greek General Confederation of Labour (GSEE) and the trade union federations in the public enterprises expressed their opposition to government policy. They stressed that: "For us, this law will contain no Article 31 [which contains the provisions on labour relations]. We will not allow labour relations in public enterprises to be changed by law." At the same time, the GSEE has not ruled out the possibility of new coordinated strike action, in the event that unilateral government decisions are attempted in some public enterprises, or the possibility of another general strike. The GSEE has assured workers that "no enterprise will be left on its own." Regarding the appeal by the Minister of Labour and Social Security for a consensual change in labour relations in public enterprises through dialogue, the GSEE announced that "the public enterprise unions will take part in processes of dialogue to draw up new operational plans for the development of the public enterprises, but will not take part in dialogue to renegotiate collective agreements." The GSEE chair also underlined that the unions are seeking to rescue public enterprises; in some, workers have already drawn up rescue proposals/plans. He noted, however, that a condition for dialogue is that the Government and the administrations should register their proposals, which will then be discussed by all sides.

The unions' alternative proposals

In brief, the principal union proposals for the rescue, development and modernisation of public enterprises are the following.

  • Given the problem of the inefficiency of the public sector and the poor quality of the services it provides, it is agreed that there is a need to put forward a plan for reforms and changes, as a topic for broader dialogue and consent.
  • It is agreed that there is a need to increase efficiency in public enterprises. To achieve this goal, their viability should not be tied to state subsidies, apart from that part involving the exercise of a public social policy. A social budget should be drawn up in each public enterprise, setting out expenditure not related to its usual activities, but to activities of a social nature, to be paid for by the state. At the same time, the possibility of introducing indices to measure the response of public enterprises and the public sector to the needs of the consumer and the citizen, in the framework of a transparent evaluation system, should be examined.
  • Long-term operational plans should be drawn up for all public enterprises, through dialogue between the administrations and social agencies of each enterprise. An account should be made of actions taken, and three- or five-year plans elaborated.
  • There is a need to take all necessary measures to upgrade the workforce in the public sector so that it can adapt to new conditions (introduction of training, performance incentives and "meritocracy"), and speed up the introduction of information technology as a condition for curtailing bureaucracy and improving efficiency.
  • Public enterprises should be administratively independent of the state, but provisions that safeguard their public and social character should also be retained.
  • The role of public enterprises as independent economic units should be reinforced by developing operational planning to improve the manner in which public enterprises are managed and administered.
  • Organisational, administrative and structural changes should be made in relation to provision of services, so that they respond to new labour market trends, in the framework of the new operational plans.

Commenting on this, the financial secretary of the GSEE said that if the Government wants to provide public enterprises with a development perspective, it should follow the pattern of the Hellenic Telecommunications Organisation (OTE); on the basis of three operational plans, this enterprise has achieved competitiveness inside and outside of Greece. He stressed that the changes in the general employee regulations should be made with the intention of adapting them to the new conditions, but after agreement by the unions.

Finally, the financial secretary pointed out that the GSEE is not opposed to the Government's decision to announce vacancies for five external advisors responsible for monitoring and supervising the largest public enterprises, provided that this will be a auxiliary mechanism that will serve to meet specialised needs.


With a view to bolstering market confidence in the Greek economy and by extension in the drachma, the Government appears to be determined to carry out structural changes in the labour market, privatisation and reforms of the institutional framework of labour relations in public enterprises. The outcome of the impending dispute over the changes in labour relations in public enterprises is expected to have a decisive influence on the future correlation of forces between the government and the workers' unions - not only in the public sector of the economy but also in the private sector, since the public enterprise unions form the core of the GSEE. (Eva Soumeli, INE/GSEE)

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